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Bitstamp Accounts Frozen

news.ycombinator.com

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Re: Bitstamp Accounts Frozen

#91

Post by tlrobinson »

FatalLogic wrote: post #62

https://Bitstamp.net is now showing this message Bitstamp Service Temporarily Suspended We have reason to believe that one of Bitstamp’s operational wallets was compromised on January 4th, 2015. As a security precaution against compromises Bitstamp only maintains a small fraction of customer bitcoins in online systems. Bitstamp maintains more than enough offline reserves to cover the compromised bitcoins. IN THE MEAN…

"IN THE MEANTIME, PLEASE DO NOT MAKE DEPOSITS TO PREVIOUSLY ISSUED BITCOIN DEPOSIT ADDRESSES. THEY CANNOT BE HONORED!"

Shouldn't deposits go directly to cold storage addresses for exactly this reason, and in case someone makes a large deposit that exceeds their desired hot/cold wallet ratio?

Re: Bitstamp Accounts Frozen

#92

Post by tlrobinson »

tedunangst wrote: post #71
csomar wrote: post #67

Earlier quoted context omitted.

I think he means you use a new address for each deposit.

How is this supposed to work in the real world? Imagine if you had to mail the payment for your electric bill to a different address every month.

I believe the "Payment Protocol" is supposed to help solve this. Look up BIP 0070 if you're interesdted.

Re: Bitstamp Accounts Frozen

#93

Post by mikeash »

tedunangst wrote: post #89
mikeash wrote: post #88

Earlier quoted context omitted.

If the analogy is accurate, then the pre-addressed envelope that comes with your bill already has the unique address on it, so you don't have to do anything special. What's the problem?

Ah, good point. I said electric bill, but was mentally focusing on the few checks I still hand address, for which I don't necessarily receive monthly bills (rent, etc.).

For that scenario, you'd presumably have some system worked out where you can quickly say, "hey, what's the address for this payment?" And being on the internet instead of going through the mail, you don't have to wait a week for the answer.

Re: Bitstamp Accounts Frozen

#94

Post by sp332 »

tlrobinson wrote: post #91
FatalLogic wrote: post #62

https://Bitstamp.net is now showing this message Bitstamp Service Temporarily Suspended We have reason to believe that one of Bitstamp’s operational wallets was compromised on January 4th, 2015. As a security precaution against compromises Bitstamp only maintains a small fraction of customer bitcoins in online systems. Bitstamp maintains more than enough offline reserves to cover the compromised bitcoins. IN THE MEAN…

"IN THE MEANTIME, PLEASE DO NOT MAKE DEPOSITS TO PREVIOUSLY ISSUED BITCOIN DEPOSIT ADDRESSES. THEY CANNOT BE HONORED!" Shouldn't deposits go directly to cold storage addresses for exactly this reason, and in case someone makes a large deposit that exceeds their desired hot/cold wallet ratio?

Each user needs their own deposit address, for bookkeeping. If the cold storage is really offline, you'd have to manually create a new address for each new user.

Re: Bitstamp Accounts Frozen

#95

Post by natrius »

tedunangst wrote: post #83
csomar wrote: post #78

Earlier quoted context omitted.

The site gives you a new address for each deposit. You are not going to remember the address anyway. So it doesn't matter if it changes.

More generally, though. "Bitcoin core discourages address reuse." I work for the company of the future and I get paid in bitcoins. I'm supposed to log into the payroll system and enter a new address every two weeks?

There are two similar methods for generating addresses for a recipient.

Hierarchical deterministic wallets (HD wallets, BIP 32): https://github.com/bitcoin/bips/blob/master/bip-0032.mediawi...

Stealth addresses: http://sx.dyne.org/stealth.html

The former is more broadly supported.

Re: Bitstamp Accounts Frozen

#96

Post by tlrobinson »

sp332 wrote: post #94
tlrobinson wrote: post #91

Earlier quoted context omitted.

"IN THE MEANTIME, PLEASE DO NOT MAKE DEPOSITS TO PREVIOUSLY ISSUED BITCOIN DEPOSIT ADDRESSES. THEY CANNOT BE HONORED!" Shouldn't deposits go directly to cold storage addresses for exactly this reason, and in case someone makes a large deposit that exceeds their desired hot/cold wallet ratio?

Each user needs their own deposit address, for bookkeeping. If the cold storage is really offline, you'd have to manually create a new address for each new user.

"Hierarchical deterministic wallets" (BIP0032) support parallel generation of public and private keys on different systems.

The bookkeeping system can generate an unlimited number of addresses from the public "seed" that corresponds to the private keys that will eventually be generated using the private key seed stored in the cold wallet.

However, I didn't consider that the hot wallet needs to be replenished as people withdrawal, which would require a steady flow of bitcoins from cold to hot storage. I think it would make sense to have a "warm" wallet for all deposits, then immediately send deposits to hot or cold wallets depending on withdrawal demand.

Re: Bitstamp Accounts Frozen

#97

Post by debacle »

im3w1l wrote: post #75
grondilu wrote: post #52

Earlier quoted context omitted.

Just checked my email again, and indeed I have received it now.

Got it now too (about 2.5 hours after grondilus post). I wonder why it is happening so slowly... Are they mailing us manually?

They are probably using the same queue that they use to send other email, which is likely rate limited.

Re: Bitstamp Accounts Frozen

#99

Post by pseudoscops »

tlrobinson wrote: post #91
FatalLogic wrote: post #62

https://Bitstamp.net is now showing this message Bitstamp Service Temporarily Suspended We have reason to believe that one of Bitstamp’s operational wallets was compromised on January 4th, 2015. As a security precaution against compromises Bitstamp only maintains a small fraction of customer bitcoins in online systems. Bitstamp maintains more than enough offline reserves to cover the compromised bitcoins. IN THE MEAN…

"IN THE MEANTIME, PLEASE DO NOT MAKE DEPOSITS TO PREVIOUSLY ISSUED BITCOIN DEPOSIT ADDRESSES. THEY CANNOT BE HONORED!" Shouldn't deposits go directly to cold storage addresses for exactly this reason, and in case someone makes a large deposit that exceeds their desired hot/cold wallet ratio?

This sort of bad PR for Bitcoin and crypto in general could all be avoided if decentralized exchanges became a bit more fashionable.

I posted a link to http://bitshares.org earlier but now realise that there isn't that much information immediately obvious there on how the decentralised BitShares exchange works.

This episode from BitShares.tv provides a bit more information than the homepage on the main website:

https://www.youtube.com/watch?v=TtCVRIwcBYU&index=1&list=PLj...

Check it out if you're looking for a solution that avoids the risks associated with deposting to a centralized exchange such as Mt. Gox or Bitstamp.

Re: Bitstamp Accounts Frozen

#100

Post by tedunangst »

natrius wrote: post #95
tedunangst wrote: post #83

Earlier quoted context omitted.

More generally, though. "Bitcoin core discourages address reuse." I work for the company of the future and I get paid in bitcoins. I'm supposed to log into the payroll system and enter a new address every two weeks?

There are two similar methods for generating addresses for a recipient. Hierarchical deterministic wallets (HD wallets, BIP 32): https://github.com/bitcoin/bips/blob/master/bip-0032.mediawi... Stealth addresses: http://sx.dyne.org/stealth.html The former is more broadly supported.

Thanks. That's interesting, though I have to admit I'm not excited about the prospect of using it.
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