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I just lost 1,400 BTC

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Re: I just lost 1,400 BTC

#101

Post by Canada »

herpderperator wrote: post #85
jkepler wrote: post #82

Earlier quoted context omitted.

No. One can store keys offline. That's what hardware wallets do.

In order to do anything with Bitcoin, which appears to be what the author wanted, you would have to be connected to the Internet. Keys being stored in hardware wallet sure, but the gold bars are still in public view. Hardware wallets aren't without their flaws. With an application-level vulneravility in a hardware wallet, you are still screwed. Here is just one example: https://www.ledger.com/improving-the-ecosystem-…

It just doesn't work that way. The wallet has a secret which can be used to sign a transaction to spend the balance. It doesn't need to be connected to do this. The transaction is a serialized piece of data which can be broadcast to the network. The size varies depending on certain factors, but it's usually about 250 bytes. Electrum can create this transaction and show you a hex dump of it which you could copy off and submit to the network from a different system that is online. An attacker who controls the online system would be unable to modify the transaction. With more than $10M at stake it is prudent to do that, just like it would be best to use an armored truck to move $10M in cash.

Re: I just lost 1,400 BTC

#102

Post by tialaramex »

google234123 wrote: post #31
thebean11 wrote: post #21

Earlier quoted context omitted.

I completely disagree, only the first $250k is insured. I would never store $16M cash in a bank. You aren't protected against the bank becoming insolvent.

Isn't it 250k per account?

No. FDIC is per depositor, per bank, per ownership category.

So if you have $300k in Bank A, and $180k in Bank B, and then suddenly both Bank A and Bank B fail, the US Federal Government promises you'll get $250k from Bank A and $180k from Bank B, and pretty quickly - but the remaining $50k from Bank A depends on what happens when they try to wind up Bank A, if it's a complete wreck you may see nothing or almost nothing back or it may take years to get 10¢ on the dollar for the remaining amount.

In some cases you may be able to create multiple ownership categories that help you, and I guess if you really had $16M you might do stuff like set up a multi-beneficiary trust fund that can have $1M in it with four beneficiaries for an additional $250k per person FDIC insured.

Re: I just lost 1,400 BTC

#103

Post by sidewndr46 »

google234123 wrote: post #31
thebean11 wrote: post #21

Earlier quoted context omitted.

I completely disagree, only the first $250k is insured. I would never store $16M cash in a bank. You aren't protected against the bank becoming insolvent.

Isn't it 250k per account?

FDIC is presently $250,000 lifetime limit.

Re: I just lost 1,400 BTC

#104

Post by Hackbraten »

nodesocket wrote: post #61
nemothekid wrote: post #4

As far as I can understand 1. The user had 1,400 BTC in an old wallet using this software 2. An old version of the software was vulnerable to phishing 3. The user attempted to use the software, and was phished 4. Massive payday for the scammers Really unfortunate - and goes to show with software you manage yourself you need to be diligent about making sure it's updated. For all the shit coinbase gets, it's difficult…

How do we confirm this actually happened? Perhaps I am being cynical, but people have been know to embellish and lie on the internet before? Shouldn't we be able to follow these funds on the ledger?

https://news.ycombinator.com/item?id=24334393

Re: I just lost 1,400 BTC

#105

Post by nyghtly »

rjkennedy98 wrote: post #51
gota wrote: post #5

I've said this time and time again: 'be your own bank' is a terrible design error, not a feature, for 99.99% of users. This guy is most likely somewhat technically literate, and this happened to him.

There is no mandate in Bitcoin to 'be your own bank' - its just an option. It is a feature and a very good one for people who are afraid of government intrusion into how they use their money. If you don't care about this "feature" you can turn it off by putting your crypto in Coinbase or other exchanges where it will be insured.

> Satoshi Nakamoto stated in his white paper that: "The root problem with conventional currencies is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust."

https://en.wikipedia.org/wiki/Bitcoin

It's clear that the purpose of Bitcoin is to replace existing banking institutions by providing a trust-less alternative. This means that using an exchange to store Bitcoin is essentially useless. If your purpose is to protect your money by handing it over to a trusted institution, then you're better off putting it into a bank that's FDIC insured.

Of course, the real reason that people store their Bitcoin on Coinbase is so that they can easily profit from speculation by exchanging their coin for USD.

Re: I just lost 1,400 BTC

#106

Post by zajio1am »

herpderperator wrote: post #78
tootie wrote: post #59

Earlier quoted context omitted.

In an investment account with a reputable brokerage.

What's the difference between that and a bank?

AFAIK, the underlying assets in investment accouns are owned by their account holders, the broker just manages them. If the broker becames insolvent, these assets are not part of insolvency proceeding.

For regular bank account, there are no other underlying assets, it is just the sum bank owes to the account holder. If the bank becames insolvent, outside of insurance limits, these are just claims against the bank.

Re: I just lost 1,400 BTC

#108

Post by stnmtn »

rjkennedy98 wrote: post #51
gota wrote: post #5

I've said this time and time again: 'be your own bank' is a terrible design error, not a feature, for 99.99% of users. This guy is most likely somewhat technically literate, and this happened to him.

There is no mandate in Bitcoin to 'be your own bank' - its just an option. It is a feature and a very good one for people who are afraid of government intrusion into how they use their money. If you don't care about this "feature" you can turn it off by putting your crypto in Coinbase or other exchanges where it will be insured.

Was Mt Gox insured? Why should I trust anything after that?

Re: I just lost 1,400 BTC

#109

Post by Hackbraten »

phedboi wrote: post #86
jkepler wrote: post #81

Earlier quoted context omitted.

Even a single hardware wallet would have been risky - loss or damage, or theft. For high values, set up multi signature hardware wallets, at least a 2 of 3 scheme, each stored in different geographic locations.

That's overly complicated. A single hardware wallet in a fire proof safe or a safe deposit box in a bank vault is sufficient for this use case. If a hardware wallet were stolen, the thief would still have to guess the password. q.v. https://xkcd.com/538

A single hardware wallet is not sufficient for any use case because no matter how safely you store it, it can fail anytime.

Re: I just lost 1,400 BTC

#110

Post by nyghtly »

rabidrat wrote: post #20
ztratar wrote: post #6

Many folks shit on the modern financial system, with its centralization and Government-coupling, but things like this are actually trackable and reversible in that ecosystem. The safeguards have evolved over centuries. I am curious when crypto will get there. Maybe 10 years or so?

It is impossible by design. Adding that 'feature' takes away the core principle of decentralized currency. Allowing government to reverse transactions will also allow them to seize assets. Then it is just a regular currency (for better and worse).

It becomes a regular currency... that consumes huge amounts of electricity for no reason whatsoever.

https://www.vox.com/2019/6/18/18642645/bitcoin-energy-price-...

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