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Did I just lose half a million dollars?

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Re: Did I just lose half a million dollars?

#491

Post by thinkmassive »

Rastonbury wrote: post #403
nickjj wrote: post #381

Here's an unrelated but related question: How do you store your wallet / private keys where you would be comfortable storing an amount of money that's important to you? It feels like a bunch of consumer grade options we have are kind of flaky: Flash drives are extremely undependable. I've had a few fail to read after sitting in a closet for a year. SSDs can supposedly have data loss pretty quickly if left unpowered (…

This is what stresses me out the most about crypto. The supposed gold standard is a hardware wallet and access is done via 12-word recovery phrase but even that is sketchy. If I'm not wrong all an attack has to do is get recovery phrase and load it into another hardware wallet if they don't have mine, this is functionality is there if the hardware wallet fails. If I've been doxxed and have several mil in crypto, thie…

The gold standard is multi-sig with at least 3 hardware signing devices.

Devices can be permanently geographically distributed, protecting from disaster in any single location. This is superior to shamir’s because it never requires the single all-powerful private key to exist, removing that as a single point of failure/compromise.

So far this is only 100% achievable with Bitcoin as far as I know.

Re: Did I just lose half a million dollars?

#492

Post by johnchristopher »

sanderjd wrote: post #327
noduerme wrote: post #41

Earlier quoted context omitted.

Wait. I'm not letting anyone off the hook for not knowing the above if they put $5 into something, let alone $500k. But even as a coder and someone who was deeply involved in crypto at one point (2011) I find it hard to make heads or tails of wtf this means. All I hear are a lot of acronyms and bizarre edge cases upon edge cases. It sounds like those arguments you'd hear between kids in junior high over magic cards o…

I think this is a symptom of the general problem of calling everything "cryptocurrency", which anchors people on the mental model of Bitcoin. You were involved in "cryptocurrency" 2011 when everything was Bitcoin or essentially just a fork of Bitcoin and all of the stuff in the comment you replied to was a few years away from existing. I think it would be like writing "applications" in the early 90s in Visual Basic a…

It goes to show that cryptomoney has not yet a settled common set of words to describe what's happening, unlike applications which have "gui, compilers, loop, trees, objects, etc.".

It's still to much specialized to follow what's going on from a higher viewpoint.

Re: Did I just lose half a million dollars?

#493

Post by sfe22 »

pjc50 wrote: post #473
nickjj wrote: post #381

Here's an unrelated but related question: How do you store your wallet / private keys where you would be comfortable storing an amount of money that's important to you? It feels like a bunch of consumer grade options we have are kind of flaky: Flash drives are extremely undependable. I've had a few fail to read after sitting in a closet for a year. SSDs can supposedly have data loss pretty quickly if left unpowered (…

> where you would be comfortable storing an amount of money that's important to you? I wouldn't. I'd give it to an insured institution in my local jurisdiction to look after. It's not a perfect solution but it doesn't rely on the horrible impermanence of IT.

But then cash, gold, stocks are all better options to hold, since you lose the only apparent benefit of crypto.

Re: Did I just lose half a million dollars?

#494

Post by kristjansson »

capableweb wrote: post #431
hootbootscoot wrote: post #342

Earlier quoted context omitted.

an immutable black hole might as well be a shredder. the OP in the reddit did precisely that. that money is GONE. locked away forever. it has not been transferred to anyone else.

Indeed, an "immutable black hole" could be described as a shredder, agree. But that's not what that address is. The semi-official "black hole" address for Ethereum is 0x0000000000000000000000000000000000000000 ( https://etherscan.io/address/0x00000000000000000000000000000... ), currently has $29,461,295.02 worth of ETH in it. Any other (valid) address is just another address on the network.

Why do you see a difference between colloquial usage of ‘black hole’ and ‘valid address from which tokens cannot be retrieved’?

Re: Did I just lose half a million dollars?

#495

Post by capableweb »

ClumsyPilot wrote: post #463
capableweb wrote: post #430

Earlier quoted context omitted.

The only thing you're showcasing here is the lack of understanding of what happened. This transfer was a transfer from one address to another. No one has ever wanted to do that? It's the entire point of cryptocurrencies!

Sticking your dick into a socket results in transfer of electrons from one object to another, thats the entire point of the electric grid! Clearly it's designers had no need to design circuit breakers, ground fault circuit interrupters, etc.

I can feel your fists of fury through the screen!

Listen, in this case, there already is circuit breakers, ground fault circuit interrupters and more to prevent problems to happen in the first place. The wallet is the first guard against this, the UIs the various services provide is another, and so on.

But when the user bypasses those and interact directly with the chain, which is not recommended for people who don't know what they are doing, problems can happen.

The same as if someone bypasses all those checks you wrote about, and then complains that they got a ton of electricity zapped into them. Why doesn't the grid just know that it was a human and not something else and stopped sending electricity?!

Reality is not that simple.

Re: Did I just lose half a million dollars?

#496

Post by jethro_tell »

robbiepapiere wrote: post #477
CydeWeys wrote: post #397

Earlier quoted context omitted.

Paper backups are the best option for this. Private keys are simple enough that a whole wallet can be printed to a single piece of paper using an OCR-friendly font.

I wouldn‘t send it to a printer (and certainly not generate the passphrase on a computer that is connected to the internet). Write by hand, it is only 12 to 24 words.

You can get a printer without a network port.

You can skip the hardware wallet and print the whole key as a qr code or just text in an ocr font.

Then there's no chance for hardware failure.

Re: Did I just lose half a million dollars?

#497

Post by capableweb »

HWR_14 wrote: post #382
wbl wrote: post #281

Earlier quoted context omitted.

If this happened at a bank everyone involved would fix it and have a nice laugh the next day.

If this happened at a bank, you would be told you submitted the wrong form to withdraw foreign currency from your account (closest analog I can think of) and be given the correct form before it even started getting processed.

A better analogy would be that you sent the money to a bank account you thought belonged to X, but X can no longer prove that they actually are X, so the bank are not allowing them to withdraw the money anymore. Would the bank still send back the money, even though the recipient was technically correct?

Re: Did I just lose half a million dollars?

#498

Post by UncleMeat »

capableweb wrote: post #331
zkldi wrote: post #316

Earlier quoted context omitted.

So your definition for "valid action" is just that the eth network lets them do it? They clearly didn't want to burn £500k, and that is now irrecoverable, alongside 260 other people who made the same mistake, on a smart contract that forgoes validation for gas fees. How is this not invalid?

> So your definition for "valid action" is just that the eth network lets them do it? Yes, this is indeed the definition for "valid", that the protocol allows them to do it. It was a valid action, but not the action the user actually wanted to perform. There are two ways of avoiding these scenarios: A) use UIs and don't interact with the protocol without safeguards, as the UI will prevent you from making mistakes (th…

> Yes, this is indeed the definition for "valid", that the protocol allows them to do it.

I believe that this, right here, is the core disagreement surrounding the utility of cryptocurrencies. There are two orientations to think about software. One is the software orientation and one is the human or problem orientation. "It did what the software says" is a defense often used by crypto advocates who point out, rightly, that there are very strong guarantees that cryptocurrencies provide and other things that they completely do not guarantee. Other people point to the mismatch between the guarantees that cryptocurrencies provide and the actual failure modes that are very common in the real world and complain that advocates seem to be completely ignoring these issues.

I think a relevant comparison is security vulnerabilities in traditional software. If you've got a program that is exploitable through a buffer overrun that enables arbitrary code execution, the program is behaving precisely as programmed. From the perspective of the program and the computer, there is no difference between ordinary operation and the exploit. But from a human perspective one of these behaviors is expected and one is both unexpected and undesirable. And the "well, just don't fuck up your C program" argument is basically failed at this point, for good reason. I would expect to see the same in the crypto space.

Re: Did I just lose half a million dollars?

#499

Post by dahart »

bigtex88 wrote: post #468
hughrr wrote: post #26

Earlier quoted context omitted.

The problem with crypto is despite your explanation, I have no idea what any of your post means. Not any of it.

Ok so the problem then seems to be with your understanding of the space, not with crypto itself. I don't go to a geneticist and go "the problem with genetics is I have no idea what any of it means".

This isn’t genetics, it’s money. Crypto needs to be simple enough for everyone to understand before it can be adopted by everyone. My kids understand stocks and back transfers, while incredibly smart and savvy people are getting confused about crypto and losing money accidentally (it’s not just this single incident, it’s a common story). This isn’t good, and shouldn’t be dismissed as people having unreasonable expectations.

Re: Did I just lose half a million dollars?

#500

Post by danielvf »

nickjj wrote: post #381

Here's an unrelated but related question: How do you store your wallet / private keys where you would be comfortable storing an amount of money that's important to you? It feels like a bunch of consumer grade options we have are kind of flaky: Flash drives are extremely undependable. I've had a few fail to read after sitting in a closet for a year. SSDs can supposedly have data loss pretty quickly if left unpowered (…

I work for a crypto company. This is actually a solved problem. The solution is to use multi-sig wallets - at least for amounts that would be missed.

A company might have a "5 of 8" multi-sig. This means that to move money, five of the eight team member accounts with keys have to agree and sign off on each transaction.

This is massively better than secret sharing - once a secret is put together, that secret then works for all time and could be stole by the person that put it together. By using multi-sigs, every new transactions has to be agreed on.

With a multi-sig, if you forgot your hardware wallet's PIN, or lost it, then other team members can remove the old account from the multi-sig and add the new account. You are back in business.

When you backup a single account's key to paper or other computers, then anyone getting access to one backup compromises the entire thing. However, with a multi-sig, an attacker would have to gain access to many of the signing account keys to steal funds.

This scheme works for individuals too. You could have a 2 of 4 multi-sig wallet, two hardware wallets that you usually use for authentication, and then two backup paper keys stored in different locations. For your normal use, you just use your two hardware wallets. If you forget a password / lose one, then you can use one of the paper wallets, plus your remaining hardware wallet to get it back. If you loose both, use both paper keys. You can also rotate the paper key backups if you want, by removing the old and adding the new.

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