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Bitcoin Payment Processor BIPS Attacked, Over $1M Stolen

coindesk.com

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Re: Bitcoin Payment Processor BIPS Attacked, Over $1M Stolen

#21

Post by Sae5waip »

jzwinck wrote: post #11
executive wrote: post #6

Earlier quoted context omitted.

yes. events like this encourage better security.

If that's true, why did we see three significant Bitcoin services get hacked in basically the same way in the last year? I'm talking about the Linode ones. Events like this encourage better thieves.

Because the people running these services apparently cared more for quick money than for security. Or running their own server. I mean, who runs that kind of thing on a cheap rented server? No pity here.

They took a risk, and one don't always win when taking a risk. (You startup folks should know.)

Re: Bitcoin Payment Processor BIPS Attacked, Over $1M Stolen

#22

Post by ars_technician »

fat0wl wrote: post #8
pallandt wrote: post #4

Earlier quoted context omitted.

They seem to be currently worth more than $1 million USD though. Maybe the USD equivalent was chosen for the title because more people would be able to immediately relate to it as a value.

this is common linkbait tactic now. They take the current high trading value of BTC & multiply by the number of BTC involved to get some crazy-high-looking USD price. It's not money in hand, the reality of getting that money out of BTC can be pricey.

That's the point of the market-depth charts.

You can see the cumulative bids for the price as it moves down so you can pretty easily see what kind of loss you would take if you needed to sell a few thousand coins and it's not currently that bad.

For example, you could unload 1295 BTC without pushing the price below 760, and that's if you just dumped it all at once. http://bitcoinity.org/markets

Re: Bitcoin Payment Processor BIPS Attacked, Over $1M Stolen

#24

Post by M4v3R »

aviraldg wrote: post #14
fat0wl wrote: post #8

Earlier quoted context omitted.

this is common linkbait tactic now. They take the current high trading value of BTC & multiply by the number of BTC involved to get some crazy-high-looking USD price. It's not money in hand, the reality of getting that money out of BTC can be pricey.

Correct me if I'm wrong, but if someone tries to convert stolen BTC into USD, it'll show up as a public transaction? (hence making it useless to steal BTC)

Yes and no. While all transactions are public, you can use a "mixing service" that will mix your Bitcoins with other people's Bitcoins, effectively covering their origin.

Re: Bitcoin Payment Processor BIPS Attacked, Over $1M Stolen

#25

Post by punjabisingh »

aviraldg wrote: post #14
fat0wl wrote: post #8

Earlier quoted context omitted.

this is common linkbait tactic now. They take the current high trading value of BTC & multiply by the number of BTC involved to get some crazy-high-looking USD price. It's not money in hand, the reality of getting that money out of BTC can be pricey.

Correct me if I'm wrong, but if someone tries to convert stolen BTC into USD, it'll show up as a public transaction? (hence making it useless to steal BTC)

If they made a transaction with the exact amount stolen, maybe we could say it is the same wallet as the one stolen, but it could also be a false positive.

I would think the thieves are smart enough to make multiple transactions to move this money, in which case they won't get caught at all.

Re: Bitcoin Payment Processor BIPS Attacked, Over $1M Stolen

#27

Post by VMG »

fat0wl wrote: post #15
pistle wrote: post #10

Earlier quoted context omitted.

Which is why bitcoin is secure and liquid - great as a utility currency. So you're saying the transaction costs of converting from bitcoin to any useful currency is really high and that we should see the unattractiveness of money-servicing costs as a security-assurance since script-kiddie criminals don't like seeing any portion of their free "money" siphoned away by the money-changers in the temple.

heh they DO hate that ;) my point was simpler tho which is just that the real numbers being applied to these amounts rely on ecosystem stability and the market cap (a term a trader helpfully pointed me to in order to understand their favorite stat, which these "multiply by exchange rate" figures are an extension of) really doesn't represent the real world value of assets in Bitcoin since the value declines as money i…

Why would early adopter cash out instead of keeping their savings in a deflationary currency that is gaining value? They didn't in the April crash.

Re: Bitcoin Payment Processor BIPS Attacked, Over $1M Stolen

#29

Post by dragontamer »

M4v3R wrote: post #19

Ugh. There are much better solutions than keeping user funds in the hot wallet (fully cold storage with manual withdrawals, multi-signature wallets), but many "reputable" businesses STILL uses them. I don't understand why. If you want to store your customers funds online, do it the right way, or don't do it at all.

You cannot automate a cold-wallet scheme.

Any automated website or tool will require a "hot wallet" of some kind. The more funds in the hot wallet, the longer the website / BTC Bank can go automatically.

Customers like having funds available to them immediately... among other things.

Re: Bitcoin Payment Processor BIPS Attacked, Over $1M Stolen

#30

Post by M4v3R »

dragontamer wrote: post #29
M4v3R wrote: post #19

Ugh. There are much better solutions than keeping user funds in the hot wallet (fully cold storage with manual withdrawals, multi-signature wallets), but many "reputable" businesses STILL uses them. I don't understand why. If you want to store your customers funds online, do it the right way, or don't do it at all.

You cannot automate a cold-wallet scheme. Any automated website or tool will require a "hot wallet" of some kind. The more funds in the hot wallet, the longer the website / BTC Bank can go automatically. Customers like having funds available to them immediately... among other things.

> You cannot automate a cold-wallet scheme.

That's why I said that it would be manual. Actually, it could be semi-automatic - a script could generate all relevant transactions, and a human operator could simply confirm them few times a day by signing the transaction with his password protected private key.

> Customers like having funds available to them immediately... among other things.

Either security or convenience. This service was aimed for merchants, which are used to get their funds from payment processors much slower than in a matter of hours.

Also, that's only one of the solutions that I mentioned. Second one, which is convenient and more secure at the same time, is using multisignature wallets.

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