Bitcoin Sinks After Hackers Steal $65M from Exchange • Hacker News Board

Re: Bitcoin Sinks After Hackers Steal $65M from Exchange

#51

Post by vectorpush » Wed, Aug 03, 2016, 8:57 PM UTC

devishard wrote: post #45

vectorpush wrote: post #40

Earlier quoted context omitted.

> this is good for Bitcoin ... The answer is, don't do that ... Make cold storage paper wallets and keep your Bitcoin there. Only in bitcoin land is theft considered good for the ecosystem. Only in bitcoin land does it make sense to blame laypeople for storing their money with financial institutions. Only in bitcoin land is it a best practice to secure your money using a password written on a piece of paper. Only in…

> Only in bitcoin land does it make sense to blame laypeople for storing their money with financial institutions. Uh, yeah. That's the entire point of Bitcoin. > Only in bitcoin land is it a best practice to secure your money using a password written on a piece of paper. God no, at least not a password intended for human consumption. That's not what a cold wallet should be. It should be a key. > Only in bitcoin land…

> Uh, yeah. That's the entire point of Bitcoin.

The entire point of bitcoin is to avoid financial institutions? That sounds like a pretty big disadvantage compared to other forms of money that work well with financial institutions.

> That's not what a cold wallet should be. It should be a key.

A distinction without a difference as far as it relates to having all your money stolen.

> Sure, it makes Bitcoin a poor choice for speculators looking to get rich quick

It makes bitcoin a poor choice for the general population since most people fall into the category of "outsiders who don't understand the tool and aren't on board with the philosophy of why Bitcoin is important"

Re: Bitcoin Sinks After Hackers Steal $65M from Exchange

#52

Post by Aelinsaar » Wed, Aug 03, 2016, 9:36 PM UTC

Karunamon wrote: post #26

Aelinsaar wrote: post #21

Earlier quoted context omitted.

Real world banks are backed by the federal government, both in terms of the FDIC, and the FBI and broader DOJ. Robbing a bank is a federal offense, and that is frankly why "big heists" tends to be such great fiction. Mostly.

I'm pretty sure that stealing hundreds of thousands of dollars worth of a "thing", regardless of what that "thing" is, is a federal offense thanks to CFAA, if nothing else.

The attempt to rob a bank, even a failed attempt as most are = federal prison. You don't need to steal hundreds of thousands of dollars from a bank for it to become a federal case, which was my original point.

Re: Bitcoin Sinks After Hackers Steal $65M from Exchange

#53

Post by zekevermillion » Thu, Aug 04, 2016, 1:10 AM UTC

onestone wrote: post #48

mrb wrote: post #25

Earlier quoted context omitted.

Correct. Here is the source: "CFTC Regulation Prevented Bitfinex From Using Cold Storage" http://imgur.com/O46UNix

Actually it is incorrect. Source - Zane Tackett (Director of Community and Product Development at Bitfinex): https://np.reddit.com/r/BitcoinMarkets/comments/4vtv1m/bitfi...

I think you are probably right, the CFTC is not going to mandate a specific technical approach. Still, an exchange could very well make a poor choice in an attempt to comply with regs whose intent is focused on something very different from the risks of wallet theft.

Re: Bitcoin Sinks After Hackers Steal $65M from Exchange

#54

Post by mrb » Thu, Aug 04, 2016, 2:07 PM UTC

teod wrote: post #32

mrb wrote: post #23

Interesting: the thief is currently attempting to launder a fraction (1000 BTC, worth ~$550k) through a giveaway: https://www.reddit.com/r/Bitcoin/comments/4vykkr/1000_btc_gi... https://bitcointalk.org/index.php?topic=1574127.0 He is sending the coins as we speak: https://blockchain.info/address/1BfxSuxJqXuizBbTcP238JZY9DT4... As a contingency, to plan for his possible arrest/death/etc, he signed a NLOCKTIME transact…

Is it possible to verify that these coins are among the ones stolen?

Yes, and his coins turn out to not be related to the hack: http://blog.zorinaq.com/bitfinex-hack-2016/

Re: Bitcoin Sinks After Hackers Steal $65M from Exchange

#55

Post by devishard » Thu, Aug 04, 2016, 3:39 PM UTC

afreak wrote: post #49

devishard wrote: post #47

Earlier quoted context omitted.

I don't understand why every hacker tries to come up with a novel way of laundering bitcoins or tries to launder them all at once. Is there something urgent they need to spend thousands of bitcoins on right now that they can't just launder a hundred bitcoins a day through tumblers over the next few years?

You're assuming that they have a vested interest in holding their Bitcoins for some greater good.

I don't know how you came to that conclusion.

My assumption is that they're selfish assholes who want to successfully launder stolen Bitcoins. Holding on to Bitcoins and laundering them through tumblers gradually would allow them to do that. But it seems like every time a thief steals a large amount of Bitcoin, they try to put it through a tumbler all at once or come up with some other scheme that doesn't work to launder it all at once.

Re: Bitcoin Sinks After Hackers Steal $65M from Exchange

#56

Post by devishard » Thu, Aug 04, 2016, 3:42 PM UTC

vectorpush wrote: post #51

devishard wrote: post #45

Earlier quoted context omitted.

> Only in bitcoin land does it make sense to blame laypeople for storing their money with financial institutions. Uh, yeah. That's the entire point of Bitcoin. > Only in bitcoin land is it a best practice to secure your money using a password written on a piece of paper. God no, at least not a password intended for human consumption. That's not what a cold wallet should be. It should be a key. > Only in bitcoin land…

> Uh, yeah. That's the entire point of Bitcoin. The entire point of bitcoin is to avoid financial institutions? That sounds like a pretty big disadvantage compared to other forms of money that work well with financial institutions. > That's not what a cold wallet should be. It should be a key. A distinction without a difference as far as it relates to having all your money stolen. > Sure, it makes Bitcoin a poor choi…

> The entire point of bitcoin is to avoid financial institutions? That sounds like a pretty big disadvantage compared to other forms of money that work well with financial institutions.

It is a huge disadvantage for some purposes, but there are plenty of advantages to avoiding financial institutions.

If you want to work with financial institutions, there are plenty of ways to do that already. Go get a savings account or a mutual fund; it's not complicated.

If you want to transfer money at low fees across national boundaries, or make your money harder for governments to seize, or make your money anonymous, Bitcoin can do those things better than other financial vehicles. And that's because it's not tied in with financial institutions.

> A distinction without a difference as far as it relates to having all your money stolen.

It's a huge difference. Humans are notoriously bad at creating secure passwords. A SPRNG-generated key is far more secure.

> It makes bitcoin a poor choice for the general population since most people fall into the category of "outsiders who don't understand the tool and aren't on board with the philosophy of why Bitcoin is important"

True. The same can be said of almost any investment vehicle--most people have very little understanding of most investment vehicles. I'd also say that for example futures and options are much harder to leverage well than Bitcoin. That doesn't mean they aren't useful, it means you have to know what you're doing to use them.

As Warren Buffet said, "Don't invest in things you don't understand."

I have no problem with people investing in Bitcoin purely for speculation to make money, but I'm also not going to cry if they make a bad investment because they can't be arsed to understand what they're investing in. I wouldn't invest in mining futures because I don't know how to leverage mining futures, and they shouldn't invest in decentralized currencies if they don't understand the implications of decentralization.

If you keep your money in an exchange, you're gonna have a bad time. Lots of people (myself included) were saying this before even the Mt. Gox stuff happened, so it's not like this isn't predictable.