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Given illegal nature of Silk Road 2, I can't help but be suspicious of this explanation of the hack. If someone's sufficiently willing to flaunt laws as to operate a site devoted to selling contraband, what stops them from taking advantage of their position of power and stealing from their users?
I see your point, but stealing from drug dealers is usually a dangerous business.
Given illegal nature of Silk Road 2, I can't help but be suspicious of this explanation of the hack. If someone's sufficiently willing to flaunt laws as to operate a site devoted to selling contraband, what stops them from taking advantage of their position of power and stealing from their users?
That is roughly what I thought when I saw this. These people are dealing with criminal enterprises. What do they expect?
Earlier quoted context omitted.
The fact that they would be cutting their own revenue stream? I'm not saying its not possible but really this is just speculation. I could just as easily surmise that it was from a government or banks who feel threatened by bitcoin...
With any other business I would agree, but a $90k+ payout would probably be very attractive for someone running a clone of a drug site that got publicly busted just months before. I would imagine these guys have a countdown to when they get arrested ticking in their heads...
Given illegal nature of Silk Road 2, I can't help but be suspicious of this explanation of the hack. If someone's sufficiently willing to flaunt laws as to operate a site devoted to selling contraband, what stops them from taking advantage of their position of power and stealing from their users?
Also, it hasn't really happened yet, but vigilantes.
Wow, it really is the wild west out there right now... I wish that some of the "post-mortem" reports I've seen were this good and detailed with problem, explaination, resolutions. I don't have a horse in this race so people affected probably feel differently.
Not having very much knowledge about the financial industry - is this also an issue with marketplaces that deal with fiat monies? i.e. Dwolla, Balanced, Stripe, Venmo, all serve as intermediaries for moving money - do these companies have bank accounts that hold onto massive sums of money? What protections would go into keep those accounts secure?
The solution the industry has is not to hold cash.
Since no one has money, and all the banks have insurance, they just reverse the transactions in 90% of cases, and in the other 10, like ATM fraud, use insurance. But seriously, go to a bank and try to withdraw $90K in cash.
Also, if you make off with 90K in cash the finance industry has people with guns to go and get the cash back.
The claim that this was caused by transaction malleability rings hollow. The reference client (github.com/bitcoin/bitcoin) does not resend transactions because of malleability. The only way you can have double transfers due to malleability is if you are manually reviewing transfers and re-sending them yourself manually. This seems like a very convenient scapegoat.
I thought the 'malleability' problem only resulted in miners being DDOS'd. The transactions themselves were supposedly still 'intact' - i.e., inputs, outputs, addresses were not modified. So.... what are SR2 saying happened here? - Is it a double spend using SR2 escrow bitcoins? - How was the malleability introduced?
The second issue is a bug that was discovered in the reference client where if you try to spend coins you sent to yourself before they are confirmed a bug in the wallet causes your balance to be off.
Neither problem inherently allows theft but if you aren't careful the first can open your to social engineering. The reason they are calling this a dos as far as I can tell is because they are preventing you from spending your money until the bug is fixed with the accounting in the reference wallet.
SR2 is probably full of crap but there is a small possibility that they some how automated re-sending of failed transactions w/o properly accounting for malleability in which case you might be able to steal a multiple of the actual amount of money in your account over a few days. The sheer size of this though would make me skeptical of that scenario.
The claim that this was caused by transaction malleability rings hollow. The reference client (github.com/bitcoin/bitcoin) does not resend transactions because of malleability. The only way you can have double transfers due to malleability is if you are manually reviewing transfers and re-sending them yourself manually. This seems like a very convenient scapegoat.
I thought the 'malleability' problem only resulted in miners being DDOS'd. The transactions themselves were supposedly still 'intact' - i.e., inputs, outputs, addresses were not modified. So.... what are SR2 saying happened here? - Is it a double spend using SR2 escrow bitcoins? - How was the malleability introduced?
Given illegal nature of Silk Road 2, I can't help but be suspicious of this explanation of the hack. If someone's sufficiently willing to flaunt laws as to operate a site devoted to selling contraband, what stops them from taking advantage of their position of power and stealing from their users?
There is a huge moral difference between the sort of victimless-crime-contraband that is on SR (especially since SR1 at least, not sure about SR2, actively filtered out child porn, weapons, assassinations and all of the other truly scary things that you can potentially sell on an anonymous market), and stealing millions of dollars from people at least a few of whom are dependent on substances and desperately need the…
Except for when they needed those things.
http://www.cryptocoinsnews.com/2014/02/13/silk-road-2-0-has-...