Live data from Hacker News

Tokyo-based cryptocurrency exchange hacked, losing $530M: NHK

reuters.com

181–190 of 312 posts

Re: Tokyo-based cryptocurrency exchange hacked, losing $530M: NHK

#181

Earlier quoted context omitted.

What happens when your hardware fails or is destroyed? Or someone just forces you to give up the info?

You store the seed phrase securely as well somewhere, and if the hardware wallet fails, you can still access your coins.

So then the chain continues: You need another hardware wallet to secure the seed phrase?

As someone said earlier in this thread - Hardware wallets are simply another computer that stores your private key. There is nothing inherently different about its "Hardware".

Re: Tokyo-based cryptocurrency exchange hacked, losing $530M: NHK

#182

Earlier quoted context omitted.

Do you honestly believe Tether has 2.2 billion dollars in a bank account? Tether is a huge red flag to me..Enron level.

Yes, the I believe the sum of fiat deposited on bitfinex, bittrex, huobi,... is close to that amount. I even see people from high school "investing" in crypto now. It's really not hard to believe when you consider how many millions of people are on these exchanges. Binance touts 3 million users, and has 425,819,642 tethers. 141$ average a user is completely believable.

You're being taken in by a basic accounting trick.

Let's suppose I buy 100 USDT on an exchange.

What Tether claims happens:

0. Bob and I own $100. Tether and Bittrex own nothing.

1. Bob sends $100 to Tether Limited.

2. Tether limited sends Bob 100 USDT. They now have $100 in their bank account.

3. Bob transfers 100 USDT to bittrex.

4. I send $100 to bittrex. I buy 100 USDT using that $100 from Bob.

5. Bob withdraws his $100 from Bittrex. I withdraw my 100 USDT from Bittrex.

6. Now, I own 100 USDT, Bob owns $100, Bittrex owns nothing.

7. Tether Limited has to hold $100 in reserve. It's not their money - it's supposed to be backing USDT. In addition to having assets of $100, they also have $100 of liabilities.

The reality:

Steps 0-6 are the same.

Step 7: Tether Limited buys a vacation to the Bahamas with their $100, and ignores the $100 liability. They are actually insolvent, and I have no recourse against them, because the Tether TOS make it very clear that I cannot redeem my USDT for USD from them.

The whole point of tether is that it is supposed to be backed 1:1 with USD in Tether Limited's accounts. They have not proven to anyone that this is actually the case. For all we know, all that money went to the Bahamas, or a Swiss bank account, and they are just issuing USDT, pocketing what people pay them for it, and keeping none of it in reserve.

Re: Tokyo-based cryptocurrency exchange hacked, losing $530M: NHK

#183
post #180

Earlier quoted context omitted.

NEM (the cryptocurrency that was stolen) isn't decentralized.

Why not using a web site built on postgres or mysql database to track balances then, instead of using blockchain and call the thing "cryptocurrency"?

One could argue that it offers more transparency.

Re: Tokyo-based cryptocurrency exchange hacked, losing $530M: NHK

#184

Earlier quoted context omitted.

Somebody has to guarantee that the the USD are actually there to perform a trade. There's no other way to guarantee that that doesn't imply going off-chain.

MakerDAO uses collateralized smart contracts to provide stability to their Dai token. Right now, only ETH can be used as collateral, but in Q2 they are starting multi-collateral support. https://makerdao.com/ https://coinmarketcap.com/currencies/dai/

Their whitepaper's explanation of how this works is horrendously complicated. There's no way you can encode that sort of logic into a cryptocoin in a bug-free manner. Steer clear of this.

Re: Tokyo-based cryptocurrency exchange hacked, losing $530M: NHK

#185

Posting this as a top level comment as well (probably a better idea): The coins stolen are XEM ( https://nem.io/ ) not Bitcoin. They're currently tracking the stolen coins to ensure they are not sold. Preliminary evidence suggests that it was a private key stolen and not a network problem. Disclaimer: Am somewhat associated with the team, and I hold a small amount of XEM. Feel free to ask questions.

Bitcoin and All crytocurrency is nothing but Pyramid scheme!!!!!!

Re: Tokyo-based cryptocurrency exchange hacked, losing $530M: NHK

#186
post #25

Earlier quoted context omitted.

The reason why fiat currencies are main-stream is because there's trust. People trust they can deposit and withdraw their money to and from banks w/ some semblance of protection and have transactions with little friction. News like this signals that you really shouldn't trust any crypto-currency exchange yet (just browse r/coinbase and people are waiting 1+ month to receive funds) , and I'll see a headline like the a…

That's because people should stop using centralized exchanges that don't have their funds insured, and should instead investigate using decentralized exchanges. Cross-blockchain ones are currently being developed, with OmiseGO and KyberNetwork competing to be the first to launch. On Ethereum this ecosystem is much more developed, and you can choose between EtherDelta, IDEX, 0xProject and Radex. These exchanges elimin…

You have to be able to explain this in a way that normal people are going to understand and care about. Whenever issues with cryptocurrency come up the true believers trip over themselves to post how it will all be solved if everyone just does this one additional thing nobody outside of the community understands, or if you just use this other cryptocurrency that solves this problem (but probably has other problems that are solved by this third cryptocurrency).

Re: Tokyo-based cryptocurrency exchange hacked, losing $530M: NHK

#187
post #52

Earlier quoted context omitted.

Bruh if it's accepted then why did people just lose over a half a billion $ storing their cryptocurrency in one.

I don't hold a lot of crypto or anything but one of the most repeated sentiments in communities, guides etc is "don't store money in an exchange". People do it, just like people sometimes buy drugs on DNMs without using PGP encryption, and /usually/ it doesn't end badly for them, but the worst-case scenario (exchange hacked or exit scams and arrest respectively) is pretty bad.

The worst-case scenario of losing access to your personal wallet is pretty bad, too.

Re: Tokyo-based cryptocurrency exchange hacked, losing $530M: NHK

#188
post #180

Earlier quoted context omitted.

NEM (the cryptocurrency that was stolen) isn't decentralized.

Why not using a web site built on postgres or mysql database to track balances then, instead of using blockchain and call the thing "cryptocurrency"?

Why is "Statistics" called "Machine Learning" ? $$hype$$

Re: Tokyo-based cryptocurrency exchange hacked, losing $530M: NHK

#189

Posting this as a top level comment as well (probably a better idea): The coins stolen are XEM ( https://nem.io/ ) not Bitcoin. They're currently tracking the stolen coins to ensure they are not sold. Preliminary evidence suggests that it was a private key stolen and not a network problem. Disclaimer: Am somewhat associated with the team, and I hold a small amount of XEM. Feel free to ask questions.

Over 100 Million XRP ( Ripple ) worth 130 Million USD was also allegedly stolen.

Source:

Here's the original tweet from Bloomberg Tech Reporter in Toyko, Yuji Nakamura. https://twitter.com/ynakamura56/status/956790270036619265

Tweet In English:

> Japanese crypto exchange Coincheck halts withdrawals, deposits, trading in NEM. Rumors is a big chunk was moved from their wallet. Also seems >$130m of XRP moved out too. I called Coincheck, but they wouldn't answer questions and asked me to email them

Here's the actual Ripple XRP Transaction that is moving the 101-ish Million XRP out of the Coincheck account. https://xrpcharts.ripple.com/#/transactions/FC32DBF1C0CE6780...

Here's a news page / story that is following this and updating it frequently. It mentions that XRP was also stolen in addition to NEM. https://bitpinas.com/news/coincheck-suspends-nem-trading-rum...

Re: Tokyo-based cryptocurrency exchange hacked, losing $530M: NHK

#190

Earlier quoted context omitted.

Somebody has to guarantee that the the USD are actually there to perform a trade. There's no other way to guarantee that that doesn't imply going off-chain.

MakerDAO uses collateralized smart contracts to provide stability to their Dai token. Right now, only ETH can be used as collateral, but in Q2 they are starting multi-collateral support. https://makerdao.com/ https://coinmarketcap.com/currencies/dai/

And who will abitrate the collateral? While it's smart wallets and crypto currency it can be enforced by cryptographic proof but when the collateral is USD then it's going to have to exist somewhere.
Post reply on HN