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Bitcoin payment processor BIPS compromised, 1295 BTC stolen

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Re: Bitcoin payment processor BIPS compromised, 1295 BTC stolen

#51
Pretty sad, especially for folks who lost coin.

The part that intrigues me is the whole security aspect of it. Take your average bright guy and say "Lets set up a place where people can store and move around gold coins. All the gold coins are going to sit in your living room, and of course if anyone were to get there hands on those coins they could melt them down into pieces and resell them so that you never knew where they went. There is going to be more than a million dollars worth of coins in your living room, do you think you're door lock is up to it?"

Ok so its a stretch, but Bitcoin has two interesting properties, one it is pretty fungible, and two most if not all governments consider it about as 'real' as the gold in World of Warcraft. If CFAA doesn't apply (say the server is outside the US) then what exactly would you even charge someone with who "stole" 1000 BTC? It isn't recognized as currency by any jurisdiction on the planet as far as I can tell, so what got stolen? Numbers? Block chain data?

This fairly unique combination of properties quite possibly make Bitcoin the ideal target for thieves. Better than cash, better than raw gemstones, better than pretty much anything except possibly bearer bonds [1]. Have you seen how much security there is around vaults that hold bearer bonds?

And yet people create exchanges or wallet services or whatnot and then seem shocked when they get compromised by very sophisticated programmers [2], that steal all their BTC? You are surprised?

Given these huge thefts where is the money going? I mean is there a steady stream of redemptions at exchanges? Is there a note in the chain when the coin is transacted for cash? Should there be?

[1] http://www.investopedia.com/articles/bonds/08/bearer-bond.as...

[2] When the payoff is huge, the risk small, you can pay someone a lot of money if they are good to get you the coins.

Re: Bitcoin payment processor BIPS compromised, 1295 BTC stolen

#53
post #17

Earlier quoted context omitted.

I don't think they're suggesting that, more just gross incompetence on the part of the developer, and a little bit of liberty about how "secure" the systems they have created actually are. It's a lot like inputs.io, a web wallet compromised because the developer used Linode to protect millions of dollars. The developer of that particular service paid back about the half the funds then disappeared. > BIPS was built by…

Double salted?

Seriously, I did a double take when I read that.

Re: Bitcoin payment processor BIPS compromised, 1295 BTC stolen

#56

1295 bitcoin stolen with a value of x dollar. See, they didn't care about the bitcoin they cared about the dollars behind it. As long as a bitcoin its value is measured in dollars and accepting bitcoin is merely done because it is at a high dollar rate, how can this possibly be a viable alternative currency? Apart from the whole fluctuation on steroids, bitcoin is nothing more than a wrapper for American dollars. Bec…

The submitter is doing this. The person representing BIPS on the forum is speaking in terms of Bitcoins. Probably makes it easier to downplay because even the most avid bitcoin users perceive it as a secondary currency.

Re: Bitcoin payment processor BIPS compromised, 1295 BTC stolen

#57

Hey, how about just disconnecting the critical machines from the network when under such an attack?

The idea that airgapping during DDoS attacks will prevent intrusions is laughable.

For those of us who aren't laughing, how does the intruder bridge the air gap?

Re: Bitcoin payment processor BIPS compromised, 1295 BTC stolen

#58

Earlier quoted context omitted.

The idea that airgapping during DDoS attacks will prevent intrusions is laughable.

For those of us who aren't laughing, how does the intruder bridge the air gap?

> For those of us who aren't laughing, how does the intruder bridge the air gap?

Waits until you plug it back in.

Chances are they have more time than you do to play the game of attrition.

Re: Bitcoin payment processor BIPS compromised, 1295 BTC stolen

#59

Pretty sad, especially for folks who lost coin. The part that intrigues me is the whole security aspect of it. Take your average bright guy and say "Lets set up a place where people can store and move around gold coins. All the gold coins are going to sit in your living room, and of course if anyone were to get there hands on those coins they could melt them down into pieces and resell them so that you never knew whe…

>This fairly unique combination of properties quite possibly make Bitcoin the ideal target for thieves

Or someone who runs an online wallet service with a privacy policy, who can pretend to have their hands tied when people ask where the money went.

Re: Bitcoin payment processor BIPS compromised, 1295 BTC stolen

#60
post #4

That technical explanation sounds almost like word salad. How did a DDoS hit your SAN in the first place and how did your SAN blowing up allow a compromise?

How can we be sure that the attack wasn't inspired/originated by the site itself? Similar to how an EVE bank exited with everyone's funds after operating for almost a year[0]

[0] http://massively.joystiq.com/2011/08/12/biggest-eve-online-s...

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