Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

forum.bitcoin.org

Post reply on HN
Print view View original

101–110 of 146 posts

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

#101

Post by drblast »

krschultz wrote: post #95
byrneseyeview wrote: post #35

Earlier quoted context omitted.

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?

This is one of the casualities of the Bitcoin monetary policy. (Obviously I'm simplifying, your money gets pooled with others and deposits and withdrawls happen from a pool of money, you don't get your own money back when you withdraw, but lets compare two hypothetical banks with only 1 customer each) A dollar denominated bank takes your money and invests it. They use it for mortgages, or they put it in bond markets…

What you described is not how banks or money work.

Below is an entertaining, albeit slightly alarmist, educational video on how the money system works today. This should be required viewing for anyone considering using money:

http://www.youtube.com/watch?v=vVkFb26u9g8

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

#102

Post by Groxx »

recoiledsnake wrote: post #81
Ixiaus wrote: post #70

Earlier quoted context omitted.

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!!

And it's simple to run a keylogger after a brower/flash/pdf/java exploit to grab your password, isn't it? Not even admin/root access is needed.

Not if you have a secure means of input in your OS. OSX does, for instance, you can turn it on in the Terminal application and no loggers will see what you type.

Unless they install as a kernel extension, then you're screwed. But that requires a password.

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

#103

Post by jarin »

dminor wrote: post #74
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…

Maybe I'm missing some detail of the scheme you're proposing, or have some fundamental misunderstanding of bitcoin, but if bitcoin is anonymous and untraceable, how do you prevent insurance fraud?

You could only insure bitcoin that is stored in a wallet that you control (i.e. act as a bank).

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

#104

Post by Jetlag »

hugh3 wrote: post #88
ch0wn wrote: post #61

Earlier quoted context omitted.

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.

Yep, which is why if you have $500K you keep it in the bank and not in your wallet. (Err, not that $500K would fit in your wallet, but anyway...) Bitcoin has no "bank" equivalent.

Except you can put a wallet on a thumb drive, and literally put it in a bank (safe deposit box).

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

#105

Post by jarin »

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.

Isn't that why Mt Gox has a dark pool?

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

#106

Post by Ixiaus »

recoiledsnake wrote: post #94
Ixiaus wrote: post #75

Earlier quoted context omitted.

I put my wallet on an IronKey - I imagine that helps the situation.

Until you plug into a compromised computer and type the password? Or does it include protection against that?

Well then I'm buggered. But the plan is to not plug into a compromised computer...

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

#107

Post by jonknee »

Ixiaus wrote: post #106
recoiledsnake wrote: post #94

Earlier quoted context omitted.

Until you plug into a compromised computer and type the password? Or does it include protection against that?

Well then I'm buggered. But the plan is to not plug into a compromised computer...

Sounds like a plan... Why bother with the IronKey?

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

#108

Post by nokcha »

mootothemax wrote: post #10
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.

With a bank you might be able to get it back I'm not sure that's true. As I mentioned in another comment, the CHAPS payment system doesn't allow transactions to be reversed, and the other major system in the UK, Faster Payments, I believe has a 24 window for banks to request a reversal, usually in case they transmit something by mistake. Honestly, I think we place too much faith in banks sometimes.

In the US, consumer liability for fraudulent withdrawals from bank accounts is generally limited to $500 by federal law, provided that the consumer detects the fraud and notifies the bank within 60 days. The bank is responsible for the amount in excess of $500. Many banks even have a policy to refund the entire amount fraudulently deducted.

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

#109

Post by Jach »

mrcharles wrote: post #44

Correct me if I'm wrong, but given the P2P nature of bitcoin, wouldn't it effectively give someone interested in malicious activity a list of target IP addresses? In theory he could set up his own P2P, watch for large transactions, and then he has an ip running a bitcoin client who (potentially) has a large wallet. Then it's just a matter of running common exploits (or new ones, if you have them) in order to access t…

I've thought about that as well. But I would imagine if you have the technical chops to do that (I'd be interested in seeing a distribution of Mac/Linux/Windows users for BitCoin as well), you'd have the technical chops to get more money from other ways than stealing a few bitcoins. That said if I were a botnet master I'd put in some code to search for a wallet as a 'bonus'.

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

#110

Post by [deleted] »

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.

[deleted]
Post reply on HN