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

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

#61

Post by ch0wn »

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.

Bitcoin is not money on the bank, but cash. If your wallet is stolen, the bank will not refund you, either. You can, however, go to the police and that is what the victim here is doing as well. There is, of course, a much lower chance of catching the thief than there would be with real cash.

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

#62

Post by DrewHintz »

llimllib wrote: post #39

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

I just got hacked - any help is welcome! allinvain June 13, 2011, 08:47:05 pm

Hi everyone. I am totally devastated today. I just woke up to see a very large chunk of my bitcoin balance gone to the following address:

1KPTdMb6p7H3YCwsyFqrEmKGmsHqe1Q3jg

Transaction date: 6/13/2011 12:52 (EST)

I feel like killing myself now. This get me so f'ing pissed off. If only the wallet file was encrypted on the HD. I do feel like this is my fault somehow for now moving that money to a separate non windows computer. I backed up my wallet.dat file religiously and encrypted it but that does not do me much good when someone or some trojan or something has direct access to my computer somehow.

The transaction sent belongs rightfully to this address: 1J18yk7D353z3gRVcdbS7PV5Q8h5w6oWWG

Block explorer is down so I cannot even see where the funds went.

I tried restoring an earler backup of my wallet but naturally that does not work because the transaction has already been validated.

Needles to say I feel like I have lost faith in bitcoin.

Anyone have any ideas what I can do besides just jump off a bridge?!

--------------- [snipping out posts that don't contribute much] --------------- Re: I just got hacked - any help is welcome! June 13, 2011, 09:05:04 pm allinvain

First thing that I noticed is that my slush's pool account got hacked into and someone changed the payout address to this:

15iUDqk6nLmav3B1xUHPQivDpfMruVsu9f

I then changed the password and proceeded to run some antivirus and anti malware scans. Some stuff was found, but they were all cleaned up and they were all in my windows user profile temp dir which I deleted all the temp files. God I can't even type properly. Sorry folks I'm a bit emotional now.

I then left another virus scanner running and went to sleep. When I woke up I check my bitcoin wallet. I leave the client running to help the network, and I notice -25,000 (and a transaction fee) gone.

Fuck, I really should've moved the coins to a vmware linux session I have running. But the question is was it already too late? Could someone had my access to my wallet.dat for a long time and now just decided to "cash out"

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

#64

Post by Tichy »

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.

Perhaps that was the reason for the black friday.

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

#65

Post by recoiledsnake »

timbowhite wrote: post #54
recoiledsnake wrote: post #45

Earlier quoted context omitted.

Banks are regulated by law and have the funds insured by FDIC. i.e even if the bank goes belly up, the FDIC will make sure the depositors get the money. With BitCoin, how do you trust a bank? Even if it's just by word-of-mouth trust, eventually the bank will be taken over or run by non-trustworthy people. The threat of federal prison keeps most real banks honest. Nothing like that exists in the BTC world.

Banks also inflate the money supply using fractional reserve banking, effectively diminishing the value of every other dollar in active currency. If you think that is honest behavior, then bury all your money for 10 years and then try to spend it. Suprise! You've been robbed. If I'm not mistaken, there is an eventual limit on the amount of bitcoins that can ever be created.

>If you think that is honest behavior, then bury all your money for 10 years and then try to spend it. Suprise! You've been robbed.

That does induce people to spend,invest or save(savings in banks are loaned out to others by the banks) which drives the economy.

The problem with bitcoin right now is that it's being thought of an investment to hold on to, instead of a currency that must be exchanged for goods.

Imagine if the dollar was appreciating in value big time every week and month. People would stop spending and just hog them. The economy as we know if might collapse and lead to a full blown depression.

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

#66

Post by gacek »

timbowhite wrote: post #54
recoiledsnake wrote: post #45

Earlier quoted context omitted.

Banks are regulated by law and have the funds insured by FDIC. i.e even if the bank goes belly up, the FDIC will make sure the depositors get the money. With BitCoin, how do you trust a bank? Even if it's just by word-of-mouth trust, eventually the bank will be taken over or run by non-trustworthy people. The threat of federal prison keeps most real banks honest. Nothing like that exists in the BTC world.

Banks also inflate the money supply using fractional reserve banking, effectively diminishing the value of every other dollar in active currency. If you think that is honest behavior, then bury all your money for 10 years and then try to spend it. Suprise! You've been robbed. If I'm not mistaken, there is an eventual limit on the amount of bitcoins that can ever be created.

Banks inflate the money without creating (printing) it physically. I guess a bank taking deposits and giving loans in bitcoins would do just the same.

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

#67

Post by stef25 »

brk wrote: post #21
BigZaphod wrote: post #8

Earlier quoted context omitted.

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

Completely untrue. I've witnessed stacks of cash far in excess of that. However, when it is done, there is usually a fair bit of armament around the cash, and the kinds of people that keep that sort of cash on hand are also not the sort you want to commit an amateur robbery against.

We're not all criminals. Civilians keeping 500K in their house is plain stupid.

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

#68

Post by byrneseyeview »

staktrace wrote: post #43
byrneseyeview wrote: post #30

Earlier quoted context omitted.

It's interesting to consider why that is. I could start a BitCoin deposit insurance company, for example: you'd pay me X% of your balance each month, and I'd make you whole in the event of fraud. Of course, I'd want all sorts of regulations on how you set this up; I might sell you some kind of extra-secure system for managing your balance, for example. At that point, the market would basically be putting a price on B…

Wouldn't this also defeat the purpose of BitCoin in the first place? And by "purpose" I'm referring to the whole "anonymous, untraceable" aspect of it. It's very much like cash - it's anonymous, yes, but also if it gets stolen there's not much you can do about it.

It would be nice to have that option. "Anonymous, untreacable, and un-recoverable, or not-so-anonymous, somewhat traceable, and recoverable."

Plus, I'd bet that you could create an onion router-style arrangement with multiple off-shore banks in different jurisdictions.

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

#69

Post by DrewHintz »

cheez wrote: post #37

Third sentence: > If only the wallet file was encrypted on the HD. Yep. Anyone who doesn't do this is stupid.

I doubt that encrypting the wallet on the HD would have helped much. It sounds like allinvain's computer was compromised. The attacker could have copied the decryption key when it was used legitimately by allinvain.

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

#70

Post by Ixiaus »

astrodust wrote: post #26
ansy wrote: post #11

I'm a BitCoin skeptic with the best of them. But this is breathtaking. That's one thing about bitcoins. There's no FDIC or SIPC watching your back. It's the wild west with train robberies and stage coach heists in all.

The thing I find more dangerous than that is anyone with your wallet.dat file can go and do whatever with your account. There really should be additional checks. Having to sign your transfer requests and allow people to impose a voluntary delay on their transactions to allow time for cancellation would help significantly.

My wallet is on an IronKey - in order for me to use it I have to plug it in and decrypt it. I also backup my wallet on a NAS server but the wallet is encrypted with GPG.

Gotta protect your data!!

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