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Computer compromise leads to theft of bitcoins valued at $500,000 USD

forum.bitcoin.org

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Re: Computer compromise leads to theft of bitcoins valued at $500,000 USD

#121

Post by phlux »

ch0wn wrote: post #61
tybris wrote: post #20

I now understand that BitCoin is actually an experiment to teach people basic economics and why many of today's rules and institutions (e.g., banks) exist. Sorry for criticizing it. BitCoin is an awesome educational tool.

Bitcoin is not money on the bank, but cash. If your wallet is stolen, the bank will not refund you, either. You can, however, go to the police and that is what the victim here is doing as well. There is, of course, a much lower chance of catching the thief than there would be with real cash.

I have spent very little time thinking about bitcoin, so I really am not qualified to say anything for or against it - however I have a question that seems ridiculously obvious:

WHY would you implement the digital version of cash, as it seems you just stated -- WHY would you create a digital currency with no ability to really track and disable and refund?

Re: Computer compromise leads to theft of bitcoins valued at $500,000 USD

#122

Post by imjustatechguy »

jasongullickson wrote: post #57
imjustatechguy wrote: post #3

Earlier quoted context omitted.

Traceability in the real world banking institutions has its advantages. As a business owner I've once had a mistaken transactions that resulted in erroneous withdrawal of +10,000 from business bank account. A phone call to the bank and a bit of investigation fixed things and I don't think the bank was out any money either, it was just a wrong account number issue. With bitcoin, things are not at all reversible. Also…

Also I expect bitcoin to be shutdown because it could be a great way to fund terrorist activities. So is cash :)

That is why people who try to bring into the US large amounts of cash through border control have it confiscated if they don't declare it.

http://www.ehow.com/about_5445167_laws-bringing-cash-america...

Re: Computer compromise leads to theft of bitcoins valued at $500,000 USD

#124

Post by [deleted] »

phlux wrote: post #121
ch0wn wrote: post #61

Earlier quoted context omitted.

Bitcoin is not money on the bank, but cash. If your wallet is stolen, the bank will not refund you, either. You can, however, go to the police and that is what the victim here is doing as well. There is, of course, a much lower chance of catching the thief than there would be with real cash.

I have spent very little time thinking about bitcoin, so I really am not qualified to say anything for or against it - however I have a question that seems ridiculously obvious: WHY would you implement the digital version of cash, as it seems you just stated -- WHY would you create a digital currency with no ability to really track and disable and refund?

[deleted]

Re: Computer compromise leads to theft of bitcoins valued at $500,000 USD

#125

Post by nhaehnle »

thomasz wrote: post #111
drblast wrote: post #101

Earlier quoted context omitted.

What you described is not how banks or money work. Below is an entertaining, albeit slightly alarmist, educational video on how the money system works today. This should be required viewing for anyone considering using money: http://www.youtube.com/watch?v=vVkFb26u9g8

I don't want to risk wasting 45 minutes listening to a crackpot, and honestly, there are quite a few indicators for lunacy in the first few minutes. Can you give a few bullet points to help me decide if it's worth to watch?

I haven't checked the video (can't watch it here), but there are indeed many misconceptions about how the banking system operates.

In particular, banks do not lend out deposits, at least not in any meaningful way, and the so-called money multiplier is non-existent.

To get up to speed on such things, I would recommend the blogs of economics professor Bill Mitchell. His style is a bit rambling without much polish, since he writes one entry every day, but I found it very worthwhile for getting a deeper understanding. Consider looking for entries with "money multiplier" in the title in the index here: http://bilbo.economicoutlook.net/blog/?page_id=1667

Re: Computer compromise leads to theft of bitcoins valued at $500,000 USD

#126

Post by wmf »

phlux wrote: post #121
ch0wn wrote: post #61

Earlier quoted context omitted.

Bitcoin is not money on the bank, but cash. If your wallet is stolen, the bank will not refund you, either. You can, however, go to the police and that is what the victim here is doing as well. There is, of course, a much lower chance of catching the thief than there would be with real cash.

I have spent very little time thinking about bitcoin, so I really am not qualified to say anything for or against it - however I have a question that seems ridiculously obvious: WHY would you implement the digital version of cash, as it seems you just stated -- WHY would you create a digital currency with no ability to really track and disable and refund?

Overhead is (supposed to be) lower with cash.

Re: Computer compromise leads to theft of bitcoins valued at $500,000 USD

#127

Post by noglorp »

hugh3 wrote: post #88
ch0wn wrote: post #61

Earlier quoted context omitted.

Bitcoin is not money on the bank, but cash. If your wallet is stolen, the bank will not refund you, either. You can, however, go to the police and that is what the victim here is doing as well. There is, of course, a much lower chance of catching the thief than there would be with real cash.

Yep, which is why if you have $500K you keep it in the bank and not in your wallet. (Err, not that $500K would fit in your wallet, but anyway...) Bitcoin has no "bank" equivalent.

What do you call exchanges that hold an on-site balance?

I'm also fairly sure there are several brands trying to provide a "bitcoin banking service".

Re: Computer compromise leads to theft of bitcoins valued at $500,000 USD

#128

Post by wmf »

edw wrote: post #116

This guy's experience reads like something out of a William Gibson novel. If BTC takes off, I wouldn't be surprised if the world got several orders of magnitude nastier, malware-wise. If the value of breaking into someone's machine is not merely the computer's connectivity or, worse, information to enable identity theft but actual, untraceable value-holding currency , you know the incentive to compromise computers is…

What's the cyber-analog of those "driver carries no cash" signs?

Re: Computer compromise leads to theft of bitcoins valued at $500,000 USD

#129

Post by rick888 »

noglorp wrote: post #127
hugh3 wrote: post #88

Earlier quoted context omitted.

Yep, which is why if you have $500K you keep it in the bank and not in your wallet. (Err, not that $500K would fit in your wallet, but anyway...) Bitcoin has no "bank" equivalent.

What do you call exchanges that hold an on-site balance? I'm also fairly sure there are several brands trying to provide a "bitcoin banking service".

not decentralized?

Re: Computer compromise leads to theft of bitcoins valued at $500,000 USD

#130

Post by edw »

wmf wrote: post #128
edw wrote: post #116

This guy's experience reads like something out of a William Gibson novel. If BTC takes off, I wouldn't be surprised if the world got several orders of magnitude nastier, malware-wise. If the value of breaking into someone's machine is not merely the computer's connectivity or, worse, information to enable identity theft but actual, untraceable value-holding currency , you know the incentive to compromise computers is…

What's the cyber-analog of those "driver carries no cash" signs?

Funny. More seriously, this reminds me of the difference in deterrence value between Lojack and The Club:

Lojack makes it little less likely that any particular car will get stolen but increases the likelihood that a car thief will be caught.

The Club basically says, "Go steal someone else's car."

"Driver carries no cash" is well intentioned but says, "Go rob someone who does have cash." It has a local deterrent value perhaps, but is of limited value as a deterrent from robbing people who drive delivery trucks.

All of this gets me wondering? Does UPS still do COD? And if so, do they accept cash?

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