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$31 Million In Tokens Stolen From Dollar-Pegged Cryptocurrency Tether
Mark Wilson shares a report from BetaNews: All eyes may be on the meteoric rise of Bitcoin at the moment, but it's far from being the only cryptocurrency on the block. Startup Tether issued a critical announcement after it was discovered that "malicious action by an external attacker" had led to the theft of nearly $31 million worth of tokens. Tether is a dollar-pegged cryptocurrency formerly known as Realcoin, and it says that $30,950,010 was stolen from a treasury wallet. The company says it is doing what it can to ensure exchanges do not process these tokens, including temporarily suspending its backend wallet service. Tether knows the address used by the attacker to make the theft, but is not aware of either who the attacker is, or how the attack took place. The company is releasing a new version of its Omni Core software client in what it says is "effectively a temporary hard fork to the Omni Layer."
"Is bitcoin secure because those involved in the administration of it are honest?"
Bitcoin is secure because administration of it is completely decentralized so that nobody has to trust anyone. The entire thing is set up so that any point you are depending on the consensus of lots of random third parties who have no way to know what they are giving an opinion on, no way to influence what comes their way, and nothing to gain from the outcome. At every point it uses insane and impossibly large numbers rather than tricks or secrets and assumes everyone is greedy. How do you get lots of people to volunteer to verify transactions they can't cook for personal gain? Call it mining and give them the new chunks of bitcoin plus the transaction fees. Solid strategies with mathematical proofs, a total lack of trust, and no assumption but a general tendency toward self-interest. That is the bitcoin way.
The other thing it does is shift a lot of the burden of "security" onto the users. Bitcoin makes sure that you can trust the bitcoin I just gave you is real, I actually had it in my pocket, and that I can't somehow take it back afterward. It entirely shifts the burden to you to care or not care about whether I got it clubbing seals or helping old ladies cross the street and to me to make sure I'm not buying the Brooklyn bridge. I tend to agree with the makers of Bitcoin, it isn't that those things are important but they aren't the responsibility of the dollars in your wallet.