Bitcoin Thefts Surge, DDoS Hackers Take Millions 305
CowboyRobot writes "In November, Denmark-based Bitcoin Internet Payment System suffered a DDoS attack. Unfortunately for users of the company's free online wallets for storing bitcoins, the DDoS attack was merely a smokescreen for a digital heist that quickly drained numerous wallets, netting the attackers a reported 1,295 bitcoins — worth nearly $1 million — and leaving wallet users with little chance that they'd ever see their money again. Given the potential spoils from a successful online heist, related attacks are becoming more common. But not all bitcoin heists have been executed via hack attacks or malware. For example, a China-based bitcoin exchange called GBL launched in May. Almost 1,000 people used the service to deposit bitcoins worth about $4.1 million. But the exchange was revealed to be an elaborate scam after whoever launched the site shut it down on October 26 and absconded with the funds. The warnings are all the same: 'Don't trust any online wallet', 'Find alternative storage solutions as soon as possible', and 'You don't have to keep your Bitcoins online with someone else. You can store your Bitcoins yourself, encrypted and offline.'"
A limited number of Bitcoins (Score:5, Insightful)
Pretty soon they'll all be stolen, kinda like land
Re:A limited number of Bitcoins (Score:5, Insightful)
Then someone will invent a new currency and the cycle repeat itself.
Savings Accounts (Score:4, Insightful)
Ever wonder why banks can pay less than inflation for savings accounts and still get customers? Government insurance against the bank getting robbed / going broke / just absconding with the cash lets them provide a service that's worth a small cost.
In a way, Bitcoin is a bet that the risk of the government itself being the ones to take your money exceeds the risk that individuals will do so. History shows plenty of risk both ways, but I could certainly see the value in banks offering Eurobitcoin [wikipedia.org] accounts.
Bitcoin hype over? (Score:2, Insightful)
Are we seeing the Zenith of Bitcoin? Is it all downhill from here?
I'm not anti-Bitcoin philosophically, but I have worked in academic level IT & networking so I know what's going on...
The problem is exchanging Bitcoin for real currency...there is no accountability for the value exchange. Mt. Gox? Seriously? How do you even pronounce it? "mount Gox"? "M. T. Gox"? Who do you call if you have a problem? Bank Of America even has a brick and mortar location at least...
These aren't trivial issues.
In order for Bitcoin to work, people have to believe it is a trustworthy place to abstract and store economic value.
People have to **USE** Bitcoin or Bitcoin dies...until you can directly exchange Bitcoin to currency this will just be an elaborate hoax.
Idiots (Score:4, Insightful)
I do. Encrypt and backup your wallet.dat file. When you restore it, even if it is old, you can rescan the block chain and have all your funds. Except for transfers, why hand your entire wallet to someone? Would you do that on the subway, or in walmart?
Re:Bitcoin hype over? (Score:5, Insightful)
but I have worked in academic level IT & networking so I know what's going on...
Only at the level of how you store it, not in any aspects of how it works as a currency.
The problem is exchanging Bitcoin for real currency
But in theory you don't need to do that often, the idea is that it is a currency you can accept and use for payments.
It's a bit tricky for me to convert USD into some other currency also, but since I don't do so very often it doesn't matter.
As more places accept BitC for payment that concern becomes much less an issue.
Re:A limited number of Bitcoins (Score:5, Insightful)
a reported 1,295 bitcoins — worth nearly $1 million
No they aren't really worth that much. Sure, you can extract $1 million from the market now, but if everyone does that the prices will fall to zero, the liquidity is pathetic compared to the $15 billion capitalization. And the only reason people don't run to crash the market is because they hope they will be able to earn even more in the future - a.k.a "The Greater Fool Game".
Already done (Score:3, Insightful)
Then someone will invent a new currency and the cycle repeat itself.
It has already been done. And far more than once [coinmarketcap.com].
The Real World (Score:5, Insightful)
***UNLESS I CAN SEE IT PLACED IN MY $$$ BANK ACCOUNT IN REAL TIME***
Which goes to show you are missing the point of using it as a currency. A real currency is something you hold onto, not exchange at first opportunity.
You only think you need to do that because you think the exchange rate of BitC against some other currency is too high. Why? Are you SURE about that? Because lots of people were saying the same thing all along, at much lower values. What if BitC doubles in value again? Then you would have been an idiot to exchange it away.
I'm not even a huge BitC proponent, I have only a tiny amount myself. But I can see that worry about the value of BitC against other currencies seems overblown, and there is a constant track-record of underestimating BitC, with every action that is supposed to bring the hammer down on exchange rates (like the closure of Silk Road) having the opposite effect instead. And I see real merchants slowly adopting payment using this currency. If there are enough real objects I can use BitC to buy then I am insulated from swings in value, and it makes more sense to hold than to get rid of right away.
Re:The Real World (Score:2, Insightful)
hey thanks for the comment...
I wanted to address this part specifically b/c there's some important distinctions.
I don't "think" the exchange rate of BTC is "too high"....I know this.
I know because I don't know. What I mean is, the ammount of uncertainty in BTC is much, much higher than in dollars. Uncertainty in every way. From it's relative value to its ability to be exchanged w/o electronics. There is just too much uncertainty.
The **CORE** of that uncertainty is the number of BTC awarded per transaction mined.
That number is set arbitrarily...by unknown actors.
You tacitly acknowledge this, I just want to draw attention to how important this is...you make BTC by mining BTC....when you mine BTC you compete by using an algorythm to find a number for a transaction...the number of BTC awarded to who finds the proper number/transaction is arbitrary.
I'm not saying I wouldn't be messing around w/ BTC if I was like, an independent day trader or wealthy or w/e but that's not really at issue here.
Re:Something I've been ruminating about all day (Score:5, Insightful)
Look at it this way, computers get better all the time. If you wait a while, you can get better value for your money. Somehow, people still buy computers all the time.
Re:A limited number of Bitcoins (Score:4, Insightful)
Re:A limited number of Bitcoins (Score:5, Insightful)
Re:The Real World (Score:5, Insightful)
Which goes to show you are missing the point of using it as a currency. A real currency is something you hold onto, not exchange at first opportunity.
Um, no. A currency is, by definition, a medium of exchange. "Something you hold onto" is an investment vehicle, not a currency. Bitcoin is supposed to be a currency, not an investment vehicle.
Re:A limited number of Bitcoins (Score:2, Insightful)
So what is a bitcoin? Is bitcoin supposed to be a fluid currency or an investment? It seems that answer depends on who you ask and when. That is not a good thing for either side. If it's an investment, there is no way around it being a pyramid scheme because you are not investing in anything real, only some fake thing. No ones pays their electric bill or buys anything from a store with a stock certificate. If it is a currency, it's not going to go well if the main incentive of everyone that has it is holding on to it and waiting for the value to go up. Why spend it now if the value will be more tomorrow? The funny thing is everyone that has bitcoins always talks about how great it is in theory and the utopian version of what they vision it will become but they themselves are not actually using it and spending it. They are holding on to it waiting for everyone else to start using it and just talking about what they could do with it. When is this group of people going to come in that do not think like the existing users wanting to cash in?