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Bitcoin Crime

Bitcoin Thefts Surge, DDoS Hackers Take Millions 305

Posted by samzenpus
from the all-your-bitcoin-are-belong-to-us dept.
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.'"
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Bitcoin Thefts Surge, DDoS Hackers Take Millions

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  • by fustakrakich (1673220) on Sunday December 01, 2013 @06:09PM (#45570297) Journal

    Pretty soon they'll all be stolen, kinda like land

    • by kthreadd (1558445) on Sunday December 01, 2013 @06:10PM (#45570303)

      Then someone will invent a new currency and the cycle repeat itself.

      • by Anonymous Coward on Sunday December 01, 2013 @06:33PM (#45570443)

        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".

        • by daninaustin (985354) on Sunday December 01, 2013 @08:15PM (#45571025)
          If you can sell them for $1 million, then by definition they are worth $1 million.
          • by schnell (163007) <me.schnell@net> on Sunday December 01, 2013 @10:10PM (#45571661) Homepage

            If you can sell them for $1 million, then by definition they are worth $1 million.

            It seems pretty simple on the surface but it's actually not. The point that the GP post was trying to make is that in a small or illiquid market, large sales volumes can actually depress prices by introducing too much inventory to sell vs. people willing to buy. This is a somewhat different example, but back in the day when Bill Gates still had a meaningful percentage of all Microsoft's shares, he would be said in the media to be worth "[his share total] x [current MSFT quote]." But people who knew the market actually understood that if he ever decided to liquidate his shares all at once they would be worth far less because he would actually flood the market (leaving aside the fact that if people figured out that Bill Gates was selling all his MSFT shares, they would flee the stock in droves assuming he knew something they didn't.)

            So long story short - if I have a trivial number of [shares, rare items, whatever] compared to the market size, then, yes, they are worth [quantity] x [going price]. But if I have a quantity that is significant to the size of the ability to make markets and I try to sell it all at once, it will invariably be worth far less.

          • by sg_oneill (159032)

            If you can sell them for $1 million, then by definition they are worth $1 million.

            Except its *really* hard to turn bitcoin to actual coin, compared to the other way around. Most of the sites have huge waits, or pathetic maximum transferal amounts,

        • 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".

          How is that different from the stock market?

          • Re: (Score:2, Insightful)

            by Anonymous Coward

            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

      • Already done (Score:3, Insightful)

        by DrYak (748999)

        Then someone will invent a new currency and the cycle repeat itself.

        It has already been done. And far more than once [coinmarketcap.com].

      • Then someone will invent a new currency and the cycle repeat itself.

        With blackjack, and hookers...

      • by luther349 (645380)
        you mean naimecoin and lightcoin. lol.
  • by astralagos (740055) on Sunday December 01, 2013 @06:14PM (#45570325)
    Somebody more familiar with bitcoin can answer this for me, undoubtedly, but based on my limited understanding, if the wallet file is lost or destroyed, the coins within it are effectively gone, correct? If so, then at some point there's an expected loss over time (fraction of the population who don't back up their wallet, expected size of wallet, drive failure rate), and at some point that's going to intersect with the size at which the pool expands, so that the total supply of bitcoins over time actually decreases. Theoretically, we'd hit some point where bitcoins are just being destroyed through loss. The situation will be exacerbated with thefts and personal storage.
    • by rasmusbr (2186518) on Sunday December 01, 2013 @06:17PM (#45570347)

      Somebody more familiar with bitcoin can answer this for me, undoubtedly, but based on my limited understanding, if the wallet file is lost or destroyed, the coins within it are effectively gone, correct? If so, then at some point there's an expected loss over time (fraction of the population who don't back up their wallet, expected size of wallet, drive failure rate), and at some point that's going to intersect with the size at which the pool expands, so that the total supply of bitcoins over time actually decreases. Theoretically, we'd hit some point where bitcoins are just being destroyed through loss. The situation will be exacerbated with thefts and personal storage.

      Yep, that's correct. Bitcoin is designed to be ridiculously scarce in the long run.

    • by Anonymous Coward on Sunday December 01, 2013 @06:27PM (#45570409)

      obligatory xkcd

      Extrapolating
      http://xkcd.com/605/

      Without knowing rate of loss vs rate of pool expansion there is no way to theoretically mark a point where bitcoin loss>bitcoin gain. Theft still leaves bitcoins in the system, so no real loss there (to the system). I can see a clever developer/maker creating a usb/sd bitcoin wallet. Keep the assets stored off the computer, in a safe place and no risk of government seisure.

      • by Anonymous Coward on Sunday December 01, 2013 @07:05PM (#45570643)

        We don't need to know the rate of pool expansion. We already know that there is an upper limit to the number of available coins. When that limit is reached we will only lose bitcoins due to the exact reasons the GP raised.

        So your "obligatory xkcd" is not appropriate at all. Back to your drawing board.

      • by LocalH (28506)

        Keep the assets stored off the computer, in a safe place and no risk of government seisure.

        Yeah, like cash that is stored outside of a bank, in a safe place, has no risk of government seizure...

      • The rate of production is laregely known and is not significantly affected* by changes in mining power.

        The rate of loss is a trickier one, it is not possible for an analysist to tell the difference between a permanently bitcoins (one where all copies of the private key have been destroyed), temporally lost bitcoins (where the private key still exists and may be found but the owner has forgotten where it's stored or is having difficulty remembering the passphrase or whatever), and hoarded bitcoins (where the owner knows how to access the bitcoins but has decided not to do anything with them).

        * Short term fluctuations can happen since the difficultry takes time to adjust.

      • Given the fact that the gain will reach 0 one day. Its built in that it will happen.
        That day the bitcoins will slowly get eroded away and lost in the big bucket in the sky.

        In the end most bitcoins will mostly be nothings - lost bitcoins that will never be recoverable and the total worth of the bitcoin market will be highly exaggerated without anyone knowing if they still exists or are lost.

    • by shaitand (626655) on Sunday December 01, 2013 @06:32PM (#45570437) Journal
      Of course. That's why bitcoin divides to trillions of units. The idea that trade will involve smaller and smaller units. For instance when the price hit $1000 for a BTC it made more sense to think of Bitmils .001 than Bitcoins for transactions because a bitmil was essentially a dollar.
      • So if I hoard my bitcoins, I'll make lots of money.
        Why would I ever want to sell them? They'll be worth more tomorrow.

        • by fastest fascist (1086001) on Sunday December 01, 2013 @07:51PM (#45570899)
          They *might* be worth more tomorrow. There's no guarantee of that. You will, however, definitely need to eat regularly. Usually spending money is involved in that.

          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.
          • by Alioth (221270)

            The problem with Bitcoin at this moment is that it is in a period of hyperdeflation, so much so it's useless for anything other than either speculation or the black market. If Bitcoin was stable relative to other currencies, it would be useful. And I wish it were, and soon, because it means the possibility of ditching PayPal forever.

    • Mostly, yes (Score:5, Interesting)

      by DrYak (748999) on Sunday December 01, 2013 @07:39PM (#45570835) Homepage

      As a small addendum to what rasmusbr has already said:

      if the wallet file is lost or destroyed, the coins within it are effectively gone, correct?

      The short answer is yes. The long answer is a little bit more complicated.
      If hacker still has copy of the wallet.dat file, the coin could still be stolen (in theory the file can optionnally be encrypted. In practice we all know how good humans are at picking good passwords).

      key pairs in a wallet can also be generated using passphrases (so called brain wallet).
      in theory the owner is the only one to know the passphrases generating the key pair and thus the only one able to use the private key.
      in practice, again, we all know how good humans are at that task
      (and before you ask: yes someone has decided to make a keypair using xkcd's "correct horse battery staple" comic).

      worst citizens are the web services. they use their own wallet to process coin. you sent an amount to them, and then they process on your behalf. (some even allow you to upload key pairs). You have to trust that they are honnest people. You have also to trust their security measures that their key don't get stolen.

      So out of all the various "lost" coins, some are possibly going to re-appear due to poor password strategies, or due to less scrupulous online companie which will decide to re-purpose un-claimed bitcoin account, or outright scam people into giving them coins and then running away with them.

    • by mysidia (191772)

      Somebody more familiar with bitcoin can answer this for me, undoubtedly, but based on my limited understanding, if the wallet file is lost or destroyed, the coins within it are effectively gone, correct?

      If the private key is lost or destroyed, then yes, those bitcoins are essentially dead for all intents and purposes; you need the asymmetric private key (encryption key) to sign a transaction using those bitcoins, and there is no recovery in that case.

      However, the total number of bitcoins in the sys

  • Savings Accounts (Score:4, Insightful)

    by lgw (121541) on Sunday December 01, 2013 @06:15PM (#45570331) Journal

    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.

    • Less than inflation is still > 0.
      If you stick your cash in your mattress, you get 0%.

      • Re:Savings Accounts (Score:5, Interesting)

        by lgw (121541) on Sunday December 01, 2013 @07:13PM (#45570679) Journal

        There are many other choices than "savings account" or "mattress". There are a wide variety of bond investments, bond ETFs and mutual funds, money market accounts, and so on. But you pay a lot for safety, and you also pay for the convenience of liquidity, trading in very small amounts, and retail convenience.

        The Internet has nearly removed those last two concerns, however. If you educate yourself on the risks of bonds (both inflation and default risks), which is no harder than educating yourself about how bitcoin works, it's easy to match inflation with funds with daily liquidity, ability to move small amounts, and really quite small risk. But if you want that government backing against default risk, you're going to lose vs inflation - you have to pay for that insurance.

        • Re:Savings Accounts (Score:4, Interesting)

          by Anonymous Coward on Sunday December 01, 2013 @07:51PM (#45570895)

          In the UK you can save with the government and cut out the middle man. The UK government owns a bank named the National Savings Bank (actually they own several banks, but this is the only one that offers savings accounts to regular people) which offers a middling interest rate and various long-term bonds. When you "invest" in the government's bank instead of it lending the money to somebody else like a regular bank it just spends it on government projects. The money to pay you back later comes from taxation. So in effect it allows the government to borrow from the ordinary consumer at a better rate than they'd get from a foreign bank, and it lets the consumer save with a 100% trustworthy bank.

          Anyway, for long term savings the National Savings Bank will give you points over inflation. They will promise to track better than the rate of inflation in interest. They can do this because they are, after all, the government, if they can't make it worthwhile to borrow money at points over inflation they definitely shouldn't be borrowing from foreign banks! Of course "worthwhile" gets to be over a long view when you're a government. Money spent today ensuring a five year old is healthy and well educated pays off twenty, forty, sixty years down the line.

          (You might say, what if the government can't pay it back? Maybe the tax base collapses, or the country is invaded or something. But in this case the country will default, EVERYBODY in the UK gets screwed if that happens, regardless of whether they use the government owned bank).

          • by lgw (121541)

            Anyway, for long term savings the National Savings Bank will give you points over inflation. They will promise to track better than the rate of inflation in interest. They can do this because they are, after all, the government, if they can't make it worthwhile to borrow money at points over inflation they definitely shouldn't be borrowing from foreign banks! Of course "worthwhile" gets to be over a long view when you're a government. Money spent today ensuring a five year old is healthy and well educated pays off twenty, forty, sixty years down the line.

            America has bonds like this too (TIPS). However, "inflation adjusted" is based on inflation numbers that the government has a huge incentive to understate. IMO the only way our government can avoid fiscal collapse is to do just that. Again, it's just your judgment call on how much you trust the government that backs this stuff.

  • Bitcoin hype over? (Score:2, Insightful)

    by globaljustin (574257)

    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

    • by SuperKendall (25149) on Sunday December 01, 2013 @06:21PM (#45570371)

      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.

      • dreamworld (Score:2, Interesting)

        by globaljustin (574257)

        The problem is exchanging Bitcoin for real currency

        in theory you don't need to do that often

        in theory...

        when I only need to pay my bills "in theory" then you might have made a productive statement...

        I know **all about** how Bitcoin works, not just how you store it. I have a business that sells online and have considered accepting Bitcoin. I researched it through and through.

        **that** combined with my other skills & the fact that I have common sense means that I'm a fool to accept Bitcoin at these exchan

        • Re: (Score:3, Informative)

          by Ambvai (1106941)
          Interestingly enough, a lot of the small/medium businesses I work with that do business internationally have the exact same concerns with international currencies. (Dollar, Yen, Euro, Pound are accepted as safe... but even a currency as significant as Renminbi makes some people skittish.)
        • The Real World (Score:5, Insightful)

          by SuperKendall (25149) on Sunday December 01, 2013 @06:57PM (#45570593)

          ***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: (Score:2, Insightful)

            by globaljustin (574257)

            hey thanks for the comment...

            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 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

            • Re:The Real World (Score:4, Interesting)

              by SuperKendall (25149) on Sunday December 01, 2013 @07:22PM (#45570729)

              I know because I don't know. What I mean is, the ammount of uncertainty in BTC is much, much higher than in dollars.

              Really? I actually don't know that at all. In fact the value of USD could go haywire in a lot of ways, in case you hadn't noticed the price of metals like gold and platinum has skyrocketed, meaning a lot of other people think so too.

              Just because the USD HAS been more stable, does not mean it has to continue to do so.

              The **CORE** of that uncertainty is the number of BTC awarded per transaction mined.

              Not sure I follow that statement, in a transaction you get a specific amount of BitC from someone else. When mining you get a specific amount of BitC per block. Where is the uncertainty in ether aspect? The only uncertainty is how much other currency someone is willing to give you for BitC. But as more people want and use it, the more the value will rise.

              the number of BTC awarded to who finds the proper number/transaction is arbitrary.

              Again, how is this arbitrary? I do mine (slowly) and it seems no arbitrary at all.

              • I know because I don't know. What I mean is, the ammount of uncertainty in BTC is much, much higher than in dollars.

                Really? I actually don't know that at all. In fact the value of USD could go haywire in a lot of ways, in case you hadn't noticed the price of metals like gold and platinum has skyrocketed, meaning a lot of other people think so too.

                Actually, gold is way off its Sep 11 peak (down by about a third) and trading roughly where it was a little more than 3 years ago. Anybody who bought over the last few years and held it has pretty much taken a beating. I would not be surprised to see many of the "We buy gold" places close shop as they lose money on the price drop between purchase and sale or start offering way below spot for purchases. One jeweler I know has slow chis purchase simply because he didn't want the downside risk.

            • One of the least uncertain aspects of Bitcoin is the number of BTC awarded per block mined. That is dictated by the protocol. The code is open source so you can check if you're willing and able.

              Basically, though, the block reward gets halved every 210,000 blocks. That's happened once so far, and no-one pulled any switch to do it. Everyone running a Bitcoin node or miner simply runs code that has the same requirements to accept a block as valid. Some miner could have modified their software to produce 50-c
              • I know BTC per block mined is "dictated by protocol"

                what we don't know is how blocks are chosen

                with so many blocks mined, there are several acceptable solutions to start the next block, but they are not rewarded which was found first...they have to match each other another way...

                ex: my local fiber ring...from an IT networking perspective I could initiate BTC transactions with myself and get first in line b/c the transmission of the record of my transaction has to go out to the BTC 'core'...if I mine solutio

                • Some times miners do solve the next block more or less simultaneously. The block chain then splits for a moment, until one of the chains started is definitively longer than the other. The shorter chain then gets discarded, its blocks becoming 'orphaned'. This happens regularly and is expected. As for your example, per this behaviour your own blockchain would have to be longer than the one everyne else was on, or it would never be accpeted as valid. This would require some very serious computing power for y
                  • this is fun...I appreciate that you know how the system works, for real

                    As for the hidden ways Bitcoin can be influenced... can you name some examples?

                    I just said a bunch, plus other points (what happens after 21,000,000 BTC)...but you can always come up with an academic response that makes your argument at least seem plausible

                    like this:

                    Some times miners do solve the next block more or less simultaneously.....The shorter chain then gets discarded, its blocks becoming 'orphaned'. This happens regularly and is

          • ***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 hold onto a real currency because you are confident it will retain its value over time. As a result, there is no pressing need to get rid of it because what costs a dollar today will probably cost the same tomorrow. When the value of currency is uncertain, such as the hyper inflation some countries experienced or when governments limit liquidity, people generally dump the currency as fat as they can.

            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.

            What you are describing is not a currency but an investment. People buy it because they think it will

          • Re:The Real World (Score:5, Insightful)

            by DaveV1.0 (203135) on Sunday December 01, 2013 @09:04PM (#45571289) Journal

            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.

        • by dex22 (239643)

          This is exactly what BitPay does. They calculate the BTC price of your $ item, collect the BTC, convert that immediately at a known rate to $ and put it in your account.

    • Now since CNN and real Wall Street brokers are getting into the act I expect the value to go skyhigh! It went up 1000% in just 12 months.

      Even if you think that is non sense Tulip bubble mania all over again you can't ignore the fact that this got some Wall Street investors attention. With supercomputers and high trading algorithms you can bet they will automate the process and prevent it from crashing. Remember if you have a super computer you can make money too by shorting the bitcoin.

      You make free money t

      • who decides how many BTC you get for mining a transaction?

        remember how it halved not too long ago? who made that call? **kind of a big deal**

        • by Ambvai (1106941)
          "The reward for solving a block is automatically adjusted so that roughly every four years of operation of the Bitcoin network, half the amount of bitcoins created in the prior 4 years are created. 10,500,000 bitcoins were created in the first 4 (approx.) years from January 2009 to November 2012. Every four years thereafter this amount halves, so it will be 5,250,000 over years 4-8, 2,625,000 over years 8-12, and so on. Thus the total number of bitcoins in existence will never exceed 21,000,000. Blocks are
          • right...getting technical...but my core critcism still applies...thanks for getting that text btw...its the text from the BTC wiki if I'm not mistaken...something quasi-official.

            So, true, **according to this random block of text** with no source...the "reward for solving a block" is automatically adjusted.

            We can't verify that, but lets assume it's true.

            **how** is it automatically adjusted????

            this paragraph was written with assumptions that are no longer true, requiring more explanation.

            BTC mining has incre

        • by shentino (1139071)

          Supply and demand.

          You look for the cheapest miners, and they in turn give their priority to the transactions with the highest margins. If you're impatient or you are stingy, you'll get outbid by transactions with higher margins jumping ahead of you in line.

        • remember how it halved not too long ago? who made that call? **kind of a big deal**

          The rules for what can go into blocks (including mining rewards and many other things) were baked into the bitcoin software when it was written. If you want an authoritative source for what the rules are I would suggest you read the sourcecode.

          Any miner who modifies their software to generate blocks that don't follow the rules will find their blocks rejected by everyone else and therefore any coins created in those blocks will be worthless.

          To loosen the rules would require getting both the vast majority of

    • by istartedi (132515)

      People have to **USE** Bitcoin or Bitcoin dies..

      It "dies" in the sense that it fails as currency. That doesn't necessarily mean that it loses value. Many things have value but are not used as currency.

      For example, any given art collection at a major museum is a financial success in terms of wealth preservation; but a failure as currency. Nobody trades fractional Metropolitans. Any sales to or from the museum are converted into currency first. Auctions are conducted in currency, etc.

      You might say that

    • by Kiuas (1084567)

      People have to **USE** Bitcoin or Bitcoin dies...until you can directly exchange Bitcoin to currency this will just be an elaborate hoax.

      The ease of exchange is not nearly the only problem with BC. Let me list a few others:

      1. Deflation. Because there's a set cap on the total amount of Bitcoins that can ever exist (made worse by the fact that it is possible for coins to disappear permanently, limiting the supply even more), the currency is by nature deflationary (this does not however mean that it cannot go

    • by faedle (114018) on Monday December 02, 2013 @12:32AM (#45572151) Homepage Journal

      > Mt. Gox? Seriously? How do you even pronounce it?

      "Magic the Gathering Online Exchange."

      That should scare you.

  • by raftpeople (844215) on Sunday December 01, 2013 @06:17PM (#45570353)
    in the couch
  • Idiots (Score:4, Insightful)

    by wbr1 (2538558) on Sunday December 01, 2013 @06:19PM (#45570359)
    Keep...your...own...fucking...wallet...

    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?

    • by Billly Gates (198444) on Sunday December 01, 2013 @06:26PM (#45570407) Journal

      ... and use a VM just for that purpose. Since I do IT I have a copy of VMware workstation and will utilize this for just that purpose to play it safe.

      I have one for porn and one I am going to make for litecoin trading as bitcoin is too expensive already :-(

      Firefox and Chrome with flash can get you just as infected as IE under Windows in this day and age so any browser is bad. A VM is the only way to stay safe sadly.

      • by wbr1 (2538558) on Sunday December 01, 2013 @06:29PM (#45570419)
        If you are really paranoid, you can use whonix, which puts a vm in a vm, piping everything through tor and preventing just about any leak of IP information or exposure of OS exploits.
      • Properly setting up a VM, or in fact doing any proper security or even backups is beyond the abilities of most people. If those sorts of measures are required, bitcoins can't become a universal currency.

      • by rdnetto (955205)

        I have one for porn and one I am going to make for litecoin trading as bitcoin is too expensive already :-(

        Why is the high price an issue, given that it's divisible down to 8 decimal places?

    • Re:Idiots (Score:4, Informative)

      by timeOday (582209) on Sunday December 01, 2013 @06:50PM (#45570539)
      Actually it is idiots that keep all their savings in their own wallets, or in paper bag in the freezer, or buried in the yard. Whereas normal people do entrust their saving to complete strangers, all the time, in a thing called a "bank." This turns out to be much safer than holding it yourself, thanks to "regulations" enforced by "governments." Kind of impressive if you step back and think about it.
    • by EdZ (755139)

      Encrypt [...] your wallet.dat

      And for goodness sake write down your password somewhere. Or you end up with a wallet full of a handful of bitcoins you acquired ages ago but now can't do anything with.

  • by viperidaenz (2515578) on Sunday December 01, 2013 @06:41PM (#45570479)

    If someone hacks my bank and steals my money, the bank replaces it.
    If someone steals my wallet and takes off with my credit cards, I'm not liable for the transactions.

    • by Nyder (754090)

      If someone hacks my bank and steals my money, the bank replaces it.
      If someone steals my wallet and takes off with my credit cards, I'm not liable for the transactions.

      Cept bitcoins aren't credit card, they are money.

      So if you had any cash in your wallet, that would be gone and you could NOT replace it, much like bitcoins.

      • by tftp (111690)

        So if you had any cash in your wallet, that would be gone and you could NOT replace it, much like bitcoins.

        This is one of many reasons why nearly everyone pays with plastic. Cash is used only if you have no bank account. I keep very little cash, never carry it, and only use it for transactions at a flea market, for example.

        Not only using plastic is free and safe; it is also profitable (to you) because the bank shares with you a small part of the 2% that the c/c networks charge for transactions. The ven

      • by DaveV1.0 (203135)
        So, bitcoins are money and not an investment. You should explain that to the people in the other threads who are talking like bitcoins are investments.
      • My debit card has the same guarantee. That's pretty much like cash.

        Bitcoins aren't money either. No more than gold bars or stock is money.

  • by Tom (822) on Sunday December 01, 2013 @07:38PM (#45570831) Homepage Journal

    'You don't have to keep your Bitcoins online with someone else.

    In fact, why in all hells would you even think of storing your wallet with someone else??? I'm fairly new to bitcoin, but the thought was so far from my mind that it took me a while to understand what the problem with these kinds of attacks was.

    Don't people get it that Bitcoin is money? Storing your wallet on someone elses server is like giving them your money. You do that with a bank, but not with some random Internet site.

    • by DaveV1.0 (203135)
      It is easier and faster to do transactions if one's wallet is stored with an exchange. That is why people do it. Also, they falsely conflate these exchanges with banks and assume they have the same level of security.
  • If I store my wallet offline and create an exact copy, how does someone know which is real? If someone stole one wallet what's to stop transactions from a backup?
    • Both are equally "real", a "wallet" file doesn't store bitcoins as such, it stores the keys which allow transfer of those bitcoins.

      If someone hacked into your system and made an unencrypted copy* of your "wallet" file then they could use the keys in that file to transfer the money to addresses they control. Once they do that you will no longer have access to the coins. On the other hand if they just made a copy and didn't do anything with it (unlikely) then you wouldn't notice anything at all.

      * Either becau

  • Surprised NO ONE is mentioning this....

    Sheep Marketplace went down yesterday after weeks of suspicious behavior such as disabling withdrawals of money, a countdown to when withdrawals would be available but running at a slower speed, still no withdrawal when it expired, minimum of 1BTC withdrawal so people would deposit money, and more.

    So far it appears some $47 million worth of bitcoins was stolen.

    http://www.forbes.com/sites/andygreenberg/2013/12/01/silk-road-competitor-shuts-down-and-another-plans-to-go-o [forbes.com]

  • I don't have a better word than "proxy", but here is how it works:
    You have two accounts registered in the software, your exchange account, and your wallet (the one that is all yours on your local machine).
    When you receive funds in your exchange account not from your wallet, it immediately shuffles it to your wallet.
    When you receive funds in your wallet account not from your exchange, it immediately shuffles it to your exchange.

    This way hacking the exchanges won't net anything, except accounts. Maybe integra

  • It seems to me that we could follow the trail from source to destination accounts in the block chain, so we can identify who has the stolen bitcoins.

    Even with a mixing service, it should still be traceable in the long run.

    • by mysidia (191772)

      It seems to me that we could follow the trail from source to destination accounts in the block chain, so we can identify who has the stolen bitcoins.

      That depends on what the person who got illicit control of the BTC does.

      What do you suppose occurs, if the "thief" doesn't spend their illicit booty? Perhaps they have their lawyer figure out the statute of limitations for any potential crime they might get charged with, and plan their BTC transactions to occur, after that all runs out.

      Perhaps they will p

  • How easy is it to exchange bitcoins for actual money? I bought 150 years ago, which is supposedly worth quite a bit at the moment, but the only options I've seen for unloading them seems a bit shady (create an online account somewhere and deposit them...)

    With the current exchange rate, they're basically too valuable for use in any kind of actual commodity since I can't pay for anything online with them.

    So my question is, what's the real value, and why are the prices going so high? They must be selling som

    • I have a hard time believing that you refuse to do a few minutes worth of research to claim over $150,000. If you did, you'd know that there are places that will make deposits into your bank account fairly easily. There may be delays involved, but it can be done. You should be doing your own homework when it comes to this stuff, asking strangers will result in your wallet becoming one of these statistics.

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