Computer compromise leads to theft of bitcoins valued at $500,000 USD • Hacker News Board

Re: Computer compromise leads to theft of bitcoins valued at $500,000 USD

#31

Post by mrvc » Tue, Jun 14, 2011, 2:57 PM UTC

roel_v wrote: post #25

mrvc wrote: post #15

It's not really $500,000 though is it? As soon as you exchange a small amount of that into dollars you crash the exchange and the value drops significantly. I'd estimate it at about $30,000 worth.

Can you elaborate on how to came to the discount factor you used?

Without knowing how much real backing the exchanges have it's hard to get a figure on what effect a large dump would have on the market. Additionally, you'll get shock dumpers who do a run on the exchange once they see value erosion. $30,000, although fabricated, feels right. Although i'd add that's probably an upper bound rather than expected value.

Re: Computer compromise leads to theft of bitcoins valued at $500,000 USD

#32

Post by jaysonelliot » Tue, Jun 14, 2011, 2:57 PM UTC

recoiledsnake wrote: post #19

Maybe there's value in creating a BitCoin bank that will hold money for people, just like real banks?

Mt. Gox and Bitcoin Market already do that.

Re: Computer compromise leads to theft of bitcoins valued at $500,000 USD

#33

Post by makmanalp » Tue, Jun 14, 2011, 2:58 PM UTC

sp332 wrote: post #14

This reminds me of the "come from" statement. COMEFROM is a long-running joke, it's a flow control statement which is intentionally confusing. It works like a GOTO but backwards. There is no indication in the area being jumped from that flow control is about to go somewhere else in the program. https://secure.wikimedia.org/wikipedia/en/wiki/COMEFROM I think, when parts of your currency start to resemble any part of I…

What, you don't read your code in reverse chronological order?!

Re: Computer compromise leads to theft of bitcoins valued at $500,000 USD

#34

Post by joeyh » Tue, Jun 14, 2011, 2:58 PM UTC

IMHO the shadiest side of the bitcoin daemon is that it discovers peers by connecting to an irc channel. Just like a typical virus botnet handles command and control. Connecting these two uses of IRC is pretty obvious, and then you get a virus that attacks windows machines running bitcoin and steals wallets.

Re: Computer compromise leads to theft of bitcoins valued at $500,000 USD

#35

Post by byrneseyeview » Tue, Jun 14, 2011, 3:00 PM UTC

tybris wrote: post #20

I now understand that BitCoin is actually an experiment to teach people basic economics and why many of today's rules and institutions (e.g., banks) exist. Sorry for criticizing it. BitCoin is an awesome educational tool.

What prevents you from setting up a BitCoin bank?

More interestingly: are the features that let you set up a dollar-denominated bank features or bugs?

Re: Computer compromise leads to theft of bitcoins valued at $500,000 USD

#36

Post by cheez » Tue, Jun 14, 2011, 3:01 PM UTC

joeyh wrote: post #34

IMHO the shadiest side of the bitcoin daemon is that it discovers peers by connecting to an irc channel. Just like a typical virus botnet handles command and control. Connecting these two uses of IRC is pretty obvious, and then you get a virus that attacks windows machines running bitcoin and steals wallets.

What... That's like saying the shadiest part of the BTC daemon is that it uses computers because botnets use computers.

Re: Computer compromise leads to theft of bitcoins valued at $500,000 USD

#37

Post by cheez » Tue, Jun 14, 2011, 3:02 PM UTC

Third sentence:

> If only the wallet file was encrypted on the HD.

Yep. Anyone who doesn't do this is stupid.

Re: Computer compromise leads to theft of bitcoins valued at $500,000 USD

#38

Post by pygy_ » Tue, Jun 14, 2011, 3:03 PM UTC

mrvc wrote: post #15

It's not really $500,000 though is it? As soon as you exchange a small amount of that into dollars you crash the exchange and the value drops significantly. I'd estimate it at about $30,000 worth.

If you try to cash them out all at once, yes.

On June 12th, $3,5M were exchanged on MtGox. For 8 of the last 10 days, the daily volume has been above $1M. I think that you could get these $500K in small chunks in a few days, provided you do it full time.

Edit -- Source: http://bitcoincharts.com/charts/mtgoxUSD#rg30zigDailyzvzcvzl...

Re: Computer compromise leads to theft of bitcoins valued at $500,000 USD

#39

Post by llimllib » Tue, Jun 14, 2011, 3:03 PM UTC

Anybody have the text of the post available? The site's not working for me.

Re: Computer compromise leads to theft of bitcoins valued at $500,000 USD

#40

Post by amalcon » Tue, Jun 14, 2011, 3:03 PM UTC

BigZaphod wrote: post #8

StavrosK wrote: post #2

The worst part of this is how irreversible it is. With a bank you might be able to get it back, with cash nobody can just siphon the actual paper money remotely, but with bitcoin you're out of luck.

Nobody would keep $500,000 in cash sitting around their house, but that's essentially what this guy did.

But what would be the other options for a normal user? You could completely hand over your wallet to someone else, but that sort of defies the point of Bitcoin: they could log transactions, be raided by authorities, etc. You could store your wallet in a way that's physically secure (say, on a flash drive), but this just requires the hacker to insert software that waits until you try to spend some of that bitcoin. You could maintain many separate wallets on separate flash drives, so you would only lose part of your savings to this sort of attack, but that is inconvenient.

The only solution I'm coming up with would be to hand over control of your wallet to an anonymous-yet-trusted third party who's hidden behind Tor or such. The difficulty is in finding (or creating) an anonymous-yet-trusted party in the first place.