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

forum.bitcoin.org

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

#111

Post by thomasz »

drblast wrote: post #101
krschultz wrote: post #95

Earlier quoted context omitted.

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

I don't want to risk wasting 45 minutes listening to a crackpot, and honestly, there are quite a few indicators for lunacy in the first few minutes. Can you give a few bullet points to help me decide if it's worth to watch?

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

#112

Post by nkohari »

jaysonelliot wrote: post #32
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.

They're just exchanges though -- they don't offer incentives (e.g. interest) for depositing.

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

#113

Post by abofh »

Jetlag wrote: post #104
hugh3 wrote: post #88

Earlier quoted context omitted.

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).

Though interestingly, your bank isn't generally required to repay you for losses in your safe deposit box unless it arises from their negligence.

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

#114

Post by burgerbrain »

Jetlag wrote: post #104
hugh3 wrote: post #88

Earlier quoted context omitted.

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).

Exactly, make sure the only copies of the wallets with your money are on non-networked, non-running hardware, preferably just straight up storage media, and secure it physically. You can make it as secure as you can possibly make anything. Hell, you could even get it insured.

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

#115

Post by abofh »

nkohari wrote: post #112
jaysonelliot wrote: post #32

Earlier quoted context omitted.

Mt. Gox and Bitcoin Market already do that.

They're just exchanges though -- they don't offer incentives (e.g. interest) for depositing.

Since you can't manufacture bitcoins, I think guaranteeing interest would be difficult at best

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

#116

Post by edw »

This guy's experience reads like something out of a William Gibson novel. If BTC takes off, I wouldn't be surprised if the world got several orders of magnitude nastier, malware-wise. If the value of breaking into someone's machine is not merely the computer's connectivity or, worse, information to enable identity theft but actual, untraceable value-holding currency, you know the incentive to compromise computers is going to skyrocket.

Are we prepared to live in that world?

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

#117

Post by abofh »

william42 wrote: post #63
lukejduncan wrote: post #51

BitCoin has an analog in cash. Yes, it's anonymous but there are things you simply dont do with it.

Yes, but there's no FDIC-insured BitCoin bank, and there's no way to write a virus that steals cash.

And there really can't ever be one. A bank requires some way to offset risk (insurance, etc); If it gets robbed, the insurer pays out; In this case, an insurer would need to physically keep more bitcoins than the insured on hand in order to handle a payout situation. Since bitcoins can't be 'printed' like dollars, there's no way to simply have an 'FBcIC' without allowing them to substitute something for those bitcoins in a payout situation (e.g., the USD cash value).

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

#118

Post by mbreese »

jasongullickson wrote: post #57
imjustatechguy wrote: post #3

Earlier quoted context omitted.

Traceability in the real world banking institutions has its advantages. As a business owner I've once had a mistaken transactions that resulted in erroneous withdrawal of +10,000 from business bank account. A phone call to the bank and a bit of investigation fixed things and I don't think the bank was out any money either, it was just a wrong account number issue. With bitcoin, things are not at all reversible. Also…

Also I expect bitcoin to be shutdown because it could be a great way to fund terrorist activities. So is cash :)

It's pretty hard to move large quantities of cash around... it's pretty easy to move a flash drive with a bitcoin wallet around.

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

#119

Post by trotsky »

Groxx wrote: post #102
recoiledsnake wrote: post #81

Earlier quoted context omitted.

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.

or a bog standard privilege escalation bug
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