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Bitcoin Crime The Almighty Buck

Bitcoin Exchange Flexcoin Wiped Out By Theft 704

Posted by timothy
from the in-the-movie-version-it'll-be-the-feds dept.
mrspoonsi writes "Joining MtGox, Flexcoin today announced they have had their vault wiped out, to the tune of some 896 BTC (about $615,000) by hackers. 'On March 2nd 2014 Flexcoin was attacked and robbed of all coins in the hot wallet. The attacker made off with 896 BTC, dividing them into these two addresses: 1NDkevapt4SWYFEmquCDBSf7DLMTNVggdu [and] 1QFcC5JitGwpFKqRDd9QNH3eGN56dCNgy6. As Flexcoin does not have the resources, assets, or otherwise to come back from this loss, we are closing our doors immediately.'"
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Bitcoin Exchange Flexcoin Wiped Out By Theft

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  • surprised!!!! (Score:5, Interesting)

    by banbeans (122547) on Tuesday March 04, 2014 @11:50AM (#46396747)

    Not!
    Which one is next?

    • surprised!!!! (Score:5, Insightful)

      by globaljustin (574257) <justinglobal@gmB ... minus physicist> on Tuesday March 04, 2014 @12:38PM (#46397293) Homepage Journal

      Not!
      Which one is next?

      right. fine. I'll give you the benefit of the doubt...but hilariously, all the rabid Bitcoin defenders have all gone away here on /. only to be replaced by its critics.

      i can't help but think that some of the posters who are saying "I told you so" were also big time Bitcoin fanbois a few months ago

      look at this discussion, from early December, when I **dared** to ask if Bitcoin had peaked: http://yro.slashdot.org/commen... [slashdot.org]

      look at the mods...

      I want /. to do better on this...MtGox and Bitcoin were hype, and sockpuppets on /. helped build that hype & it pisses me off

      real techies should have seen this a mile away! now everyone thinks we're idiots

  • by Anonymous Coward on Tuesday March 04, 2014 @11:52AM (#46396775)

    "Wow, we just got 896 bitcoins"
    "yup but because we did the value is now $2"

  • by BitZtream (692029) on Tuesday March 04, 2014 @11:54AM (#46396791)

    rocks ... doesn't it.

    This is what you wanted right?

    Seriously, if you come here to talk about how this isn't a fundamental bitcoin problem, you deserve to have your noise smacked with newspaper like a dog.

    The only 'benefit' bitcoin has is that its unregulated and not as well watched by the government ... which means its easy for people to just steal your money and lie about it ... I'm sorry, its easy for someone to setup an exchange and let someone else steal the coins from the 'hot wallet', whatever the fuck that is.

    Before you open your mouth to defend bitcoin ....

    THIS WHAT WE'VE BEEN TELLING YOUR STUPID DUMB ASSES ABOUT, NOW SHUT THE FUCK UP, ITS A SHITTY IDEA.

    • by X0563511 (793323) on Tuesday March 04, 2014 @11:56AM (#46396813) Homepage Journal

      It's funny how they want it both ways, eh? No regulation, but then they want dependable banks.

      Choose one or the other. You do not need to use an exchange, just like you don't need to use a bank.

      • by jythie (914043) on Tuesday March 04, 2014 @12:01PM (#46396885)
        but.... but... the market fixes everything! If consumers just vote with their wallets we do not need regulation in order to have dependable banks, right?
        • by silas_moeckel (234313) <silas&dsminc-corp,com> on Tuesday March 04, 2014 @12:06PM (#46396939) Homepage

          Dependable banks pretty much require somebody large enough backing them. That is generally governments who can print money.

          • by Archangel Michael (180766) on Tuesday March 04, 2014 @12:53PM (#46397485) Journal

            Dependable banks require that those running them, and those depositing money into them are not GREEDY BASTARDS, who do stupid things to make a bigger profit. Having a government behind them doesn't fix the problem. Take for example the latest Mortgage Backed Securities, that ended up being nothing but phoney scam to leverage profits, and hence the housing bubble that resulted. Government bailed out the immediate problem, but the real problem was that the fake securities were valued at more than the whole world's GDP, and that has not yet cleared the books. And it will take quite a bit of time to do so.

            AND the people who perpetrated this scam are not going to be prosecuted for any crimes.

            The point is, even GOVERNMENT isn't big enough to back banks that are greedy. And don't even get me started on the FED. This is why we need to have the corporate death penalty and revoke the corporate charters, rather than bail out the criminals^H^H^H^H^H^H Banks

            • Re: (Score:3, Insightful)

              by Rob Riggs (6418)

              Dependable banks require that those running them, and those depositing money into them are not GREEDY BASTARDS

              Let me re-write that for you in a simplified form:

              Dependable banks require that those running them, and those depositing money into them are not Human.

              • Dependable banks require that those running them, and those depositing money into them are not GREEDY BASTARDS

                Let me re-write that for you in a simplified form:

                Dependable banks require that those running them, and those depositing money into them are not Human.

                +1. The only reason there aren't more greedy bastards is due to the limited opportunities to act as one. Ask any communist how that worked out for them.

          • by jamstar7 (694492) on Tuesday March 04, 2014 @01:08PM (#46397653)

            Dependable banks pretty much require somebody large enough backing them. That is generally governments who can print money.

            That seems to be the problem all around. Read a Federal Reserve note sometime. There is nothing backing it but the government's promises. There isn't a hard currency on the entire planet at the moment. The difference between Bitcoin and a government currency is, Bitcoin didn't have a government 'guaranteeing' the cash.

            Fiat money works only as long as there remains confidence in the issuing agency. If you don't trust the government to back up its currency, its currency is so much paper, and it doesn't even make good asswipe. Want to get rid of a competing currency? Undermine confidence in it, it'll go away. We're seeing that with Bitcoin. Whether it's by 'criminal activity' or government design is immaterial; confidence in Bitcoin is gone.

            • by Shakrai (717556) * on Tuesday March 04, 2014 @01:44PM (#46398123) Journal

              That seems to be the problem all around. Read a Federal Reserve note sometime. There is nothing backing it but the government's promises. There isn't a hard currency on the entire planet at the moment. The difference between Bitcoin and a government currency is, Bitcoin didn't have a government 'guaranteeing' the cash.

              The United States of America has 314 million people with a near 100% literacy rate, a highly educated workforce, diversified economy, and 5,000 nuclear weapons. What does bitcoin have?

            • by ddt (14627)

              confidence in Bitcoin is gone.

              My confidence is bitcoin seems fairly grounded and rational to me.

              Despite the failure of both Mt Gox and Flexcoin, the bitcoin exchange rate right now is still $670 according to coinbase, which is what it was yesterday. It's as if the currency is more resilient than the sometimes flawed implementation of a few exchanges, and it doesn't seem as if slashdot skepticism is moving the exchange rate either.

              The Flexcoin issue doesn't seem hard to fix on other exchanges. How hard would it be for another exchange

        • by JaredOfEuropa (526365) on Tuesday March 04, 2014 @12:36PM (#46397279) Journal
          Few free market proponents claim that the free market fixes everything. They do claim that in many cases, running certain risks is preferable (cheaper, more effective, or less oppressive) to having regulation that would (attempt to) mitigate those risks.

          In this case, they could claim that the risk of having your BTC stolen can be mitigated sufficiently by individuals, by not having too many BTC in any exchange, and by looking into an exchange's reputation. Whether or not that's a reasonable risk to run instead of BTC and exchanges being subject to regulation is another matter... in the end, even free market proponents might come to the conclusion that some regulation is needed.
        • by PvtVoid (1252388)

          but.... but... the market fixes everything! If consumers just vote with their wallets we do not need regulation in order to have dependable banks, right?

          Whoops. Wallet is now empty. No vote for you.

    • by Mr2cents (323101) on Tuesday March 04, 2014 @12:08PM (#46396971)
    • by hodet (620484) on Tuesday March 04, 2014 @12:12PM (#46397025)

      Ok, well I know you are a bit emotional about this but I will chime in anyway. All the problems we have seen with thefts have had nothing to do with the Bitcoin protocol. The problems have been in trusting your stash with companies that have no business being trusted. It's the equivalent of leaving your bag full of cash with Lenny down at the bowling alley because he has a safe in the basement. Flexcoin, Gox et al., -- Why would anyone trust their funds to these people? These fly by nights are either a bunch of incompetents or just plain old crooks.

      Bitcoin itself is not a shitty idea. The problem right now is that bitcoin is very young and there is a 'wild west" aspect to it. The infrastructure will mature.

      If you feel so strongly about it then just don't use it. What's the problem? But to say a system that offers frictionless payments is a shitty idea and should not even be attempted is stupid. There is a huge need in the world for this right now. The ride will be bumpy so buckle up.

      One last thing and more of an open comment to people who have bitcoin. "Don't be a dumbass and let Lenny hold your bag of cash for you!" Geez does it even need saying?

      • by Anonymous Coward on Tuesday March 04, 2014 @12:43PM (#46397361)

        The problems have been in trusting your stash with companies that have no business being trusted.

        Bitcoin may not have any problems with the protocol - which is debatable - but the problem lies in the requirement for exchanges.

        In order to be able to change Bitcoin into dollars and back to Bitcoins, the exchanges must, out of necessity, maintain a stock of Bitcoins that is server-accessible.

        If it's server-accessible, it's hackable and subject to theft. If you think you can make something hack-proof purely out of software, let me introduce you to Kurl Godel.

        Also, from what I've read it appears that Bitcoin thefts are not reversible. This is especially problematic given that there is a finite supply of Bitcoins; no central authority can come in and save your Bitcoin "bank" if it is robbed, whereas if my local Wells Fargo down the street is robbed, the FDIC insures my deposits to the tune of $250,000 (which also comes in handy in case the bank fails entirely, which is an extremely rare occurrence.) Even if there was the equivalent of an FDIC for Bitcoin "banks", eventually they run out of Bitcoins they can pay back on insurance.

        This, and myriad other problems with Bitcoint that have been enumerated on Slashdot ad nauseum, should really convince any rational-minded person that Bitcoin is entirely worthless.

        • by Raenex (947668) on Tuesday March 04, 2014 @02:16PM (#46398629)

          If it's server-accessible, it's hackable and subject to theft. If you think you can make something hack-proof purely out of software, let me introduce you to Kurl Godel.

          You don't know what you are talking about. Godel's theorems were specifically about mathematical axiom systems, consistency, and completeness. It does not say it is impossible to write hack-proof software.

      • by DeathMagnetic (1365763) on Tuesday March 04, 2014 @12:53PM (#46397491)
        What you're saying may all be true, but the value of any currency is based on people's faith in it. It doesn't matter if it's just corrupt or incompetent companies failing and not the "Bitcoin protocol" itself. When the average person turns on CNN and sees story after story about Bitcoins disappearing, falling in value, or just general chaos in the Bitcoin market, they're going to avoid it like the plague. Fewer reputable businesses will devote the effort and take the risk of accepting Bitcoins as payment. Any chance of it ever becoming a ubiquitous global currency, not just a plaything for computer geeks, is quickly dying and no reasoned defense of the concept is going to change that. Hand waving away the problems by blaming individuals just misses the point that this system will not ever work on a wide scale until it is regulated, likely to the point where any value it has over other real currencies is lost.
        • by hodet (620484)

          I think people just misunderstand what the real problem is that bitcoin resolves. It should not be a replacement for dollars. I hold dollars, I love dollars, I hold quite a few actually and hope I always will. I'm not a libertarian. I see bitcoin being a real threat to payment processors like Visa, MC, PP and Western Union. It offers a seamless way to wire funds across borders without a money transmitter taking a big cut. If you live on the other side of the world I can pay you instantly and I don't n

          • by Pope (17780)

            It offers a seamless way to wire funds across borders without a money transmitter taking a big cut.

            You have to pay a transaction fee or it won't go through the blockchain. Plus multiple confirmations are needed to ensure that it did in fact go through. Your recipient will also have to pay a cut when they want to turn it back into real money.

            The Bitcoin protocol as it exists today is absolutely terrible.

      • by sjbe (173966) on Tuesday March 04, 2014 @01:24PM (#46397883)

        Why would anyone trust their funds to these people?

        Good question. The answer is that they have a poor appreciation of economics and a worse appreciation of risk.

        Bitcoin itself is not a shitty idea.

        We disagree on that point. I think bitcoin is an idiotic solution in search of a problem. The rather narrow problems it purports to solve (money transfer fees, etc) are done by externalizing a great deal of risk and cost. If you really account for all the costs and all the risks it isn't actually cheaper than currencies like the dollar. In reality it is used mostly by those who are either ideologically motivated or find the idea of it romantic or (unfortunately) by those who are engaging in illegal activities of one sort or another. A lot of people are involved too as a get rich quick scheme.

        But to say a system that offers frictionless payments is a shitty idea and should not even be attempted is stupid.

        Bitcoin is anything but "frictionless". It carries very real and significant costs including opportunity costs, exchange rate risk, security costs, liquidity problems, volatility costs, and more. It is not widely accepted, requires a computer, has essentially no physical payment infrastructure, etc. Any merchant that accepts bitcoin and doesn't charge some fairly hefty fees to use it is being incredibly irresponsible given the risks involved.

        One last thing and more of an open comment to people who have bitcoin. "Don't be a dumbass and let Lenny hold your bag of cash for you!" Geez does it even need saying?

        Yes it does unfortunately. Many of the people involved with bitcoin are smart but too many are not financially sophisticated and certainly don't seem to appreciate the risks involved.

      • by Tom (822)

        Flexcoin, Gox et al., -- Why would anyone trust their funds to these people? These fly by nights are either a bunch of incompetents or just plain old crooks.

        Here's why - and I speak as someone who apparently lost a small amount there - because Mt. Gox was the only place where I could turn BTC into EUR. So I sent them the amount I wanted to convert, but not my entire wallet.

        You are right that anyone who stores their wallet with someone else is crazy. But people actually used the exchanges as - surprise - exchanges. Which required at least temporarily transferring the coins.

    • by Stormy Dragon (800799) on Tuesday March 04, 2014 @12:31PM (#46397213) Homepage

      which means its easy for people to just steal your money and lie about it

      Yes, because never in history has anyone been "mugged" or "conned" or otherwise had their government regulated currency stolen by a third party.

      • by iroll (717924)

        The same said history lead our predecessors to make investments in security and regulation that make muggings and cons less likely and more risky today than they were historically.

      • by timeOday (582209)
        The difference is that there do exist reliable places to store US Dollars. You don't have to store your lifetime savings in your wallette or buried in the back yard. There are banks, where professionals adhere to standards in securing it. And there's a deterrence to robbing them, because taxes pay for police to arrest people who rob banks. And when all that fails, the bank has insurance against being robbed. And when that fails, there's the FDIC, which has never failed. (Is it possible? Only in the t
    • by JaredOfEuropa (526365) on Tuesday March 04, 2014 @12:45PM (#46397385) Journal
      Why do some people get so emotional over Bitcoin? Is it bitterness over the fact that they dismissed it as a "stupid idea" back when they could have mined 1600 BTC in a couple of weeks on their laptop?

      BTW I don't own and never owned more than a couple of them either.
    • Re: (Score:3, Insightful)

      by Hast (24833)

      When buying, selling and trading bitcoins there are two things which make it work.

      Exchanges, where you can buy or sell bitcoins to "normal" money.
      Wallets, where you store your bitcoins.

      Some sites are both (like mtgox) and others are only one (from what I can tell Flexcoin was a wallet, not an exchange).

      When you buy and sell bitcoins at an exchange you tend to need to transfer money to them and have it sit in an account until you want to exchange it to bitcoins. (This is similar to buying tokens at a casino

      • by anagama (611277) <obamaisaneocon@nothingchanged.org> on Tuesday March 04, 2014 @01:34PM (#46398021) Homepage

        Exactly how would a consumer figure out whether to trust a coin exchange? From their website? Do you look for a plain jane web 1.0 site under the notion that they are using solid technology without a bunch of zero day exploits -- or do you avoid it under the notion that they obviously aren't keeping up and are incompetent? Do you take the word of random forum posters? Call up customer service and expect them to say anything but your money is safe?

        It's very easy to say something like "use a trustworthy exchange" -- but I would think it quite hard to actually figure out if an exchange is trustworthy, even for geeks, and next to impossible for other users.

    • by pla (258480) on Tuesday March 04, 2014 @01:04PM (#46397601) Journal
      Seriously, if you come here to talk about how this isn't a fundamental bitcoin problem, you deserve to have your noise smacked with newspaper like a dog.
      [...] This what we've been telling your stupid dumb asses about, now shut the fuck up, its a shitty idea.
      [...]I'm sorry, its easy for someone to setup an exchange and let someone else steal the coins
      from the 'hot wallet', whatever the fuck that is.


      Assertion 1) You understand BitCoin enough to discuss its "fundamental" problems.
      Assertion 2) You've known that from the beginning and warned people about it.
      Assertion 3) You know the difficulty involved in setting up an exchange.

      And yet, you have no clue what "hot wallet" means?

      Wow. Sing it, brother! Tell me again how a sheep's bladder may be used in the prevention of earthquakes?
  • hmmm.... (Score:5, Funny)

    by Connie_Lingus (317691) on Tuesday March 04, 2014 @11:54AM (#46396799) Homepage

    im don't claim to be sherlock holmes, but im pretty sure im detecting a pattern here...

    • Ok, I don't understand how bitcoin works, but ultimately they're just encryped hash files on a disk, right? So unless the other person spends them before you do and you have a backup, how can they be stolen?

      Someone please explain...

      • by n7ytd (230708) on Tuesday March 04, 2014 @12:29PM (#46397191)

        Ok, I don't understand how bitcoin works, but ultimately they're just encryped hash files on a disk, right? So unless the other person spends them before you do and you have a backup, how can they be stolen?

        Someone please explain...

        Loosely speaking, a Bitcoin is a secret number. To spend a Bitcoin, you send that number to someone else and the transaction is recorded by the Bitcoin network. The network keeps track of who owns each coin, which means others can verify the ownership of a coin by consulting the network.

        The exchanges work by you "spending" your Bitcoin to them, so now in the network's eyes, the exchange is the owner of that coin. In return, the exchange keeps a record that you have a certain number of Bitcoins in your account. The idea being that in the future you can instruct the exchange to send coins back to you, to other people, or to deduct an amount of coin and send you the cash instead.

        It's just like a bank; you hand a teller $20, the bank adds $20 to your balance, and they keep the $20 bill.

        Where these exchanges differ from a bank is in their lack of accounting ability, apparently.

  • by gstoddart (321705) on Tuesday March 04, 2014 @11:56AM (#46396811) Homepage

    So what we have is a bunch of startups who think they know how to be like a bank, but are failing utterly.

    Is this is a systematic flaw in Bitcoin itself, or Schadenfreude by companies who have yet to learn they are nowhere near ready for holding onto something like this?

    It just seems like this is the kind of thing which sounds great on a whiteboard, but in reality is anything but.

    • by jythie (914043) on Tuesday March 04, 2014 @12:04PM (#46396917)
      BTC as a protocol no, but as an ecosystem it is still open to debate. With USD there are rules regarding who can act as a bank and what procedures they need to follow and, in exchange, if something goes wrong with said bank FDIC will help the people hurt by it. So the ecosystem around USD means greater stability and trust in financial institutions, even small ones.
    • by whoever57 (658626) on Tuesday March 04, 2014 @12:07PM (#46396947) Journal

      So what we have is a bunch of startups who think they know how to be like a bank, but are failing utterly.

      Is this is a systematic flaw in Bitcoin itself, or Schadenfreude by companies who have yet to learn they are nowhere near ready for holding onto something like this?

      There is another possiblity: that these exchanges are operating as designed.

      Who can most easily rob a bank? The people running it, of course.

      • So what we have is a bunch of startups who think they know how to be like a bank, but are failing utterly. Is this is a systematic flaw in Bitcoin itself, or Schadenfreude by companies who have yet to learn they are nowhere near ready for holding onto something like this?

        There is another possiblity: that these exchanges are operating as designed. Who can most easily rob a bank? The people running it, of course.

        Agreed, now someone tell the SEC...

    • by ericloewe (2129490) on Tuesday March 04, 2014 @12:11PM (#46397009)

      You seem to have no idea what Schadenfreude means. It's happiness derived from others' losses.

      You might want want a word like "overconfidence", or maybe recklessness.

  • From the FAQ (Score:5, Informative)

    by blueg3 (192743) on Tuesday March 04, 2014 @11:57AM (#46396829)

    Q: Where will my bitcoins go?

    A: Bitcoins deposited with flexcoin will be stored on our secure servers. They will remain in your account, and your account only, unless you authorize a transaction with them.

    Wishful thinking.

    From the Terms of Service:

    We have taken every precaution to defend your bitcoins from hackers and/or intruders. However, Flexcoin Inc is not responsible for insuring any bitcoins stored in the Flexcoin system. You are entering into this agreement with Flexcoin Inc. You agree to not hold Flexcoin Inc, or Flexcoin Inc's stakeholders, or Flexcoin Inc's shareholders liable for any lost bitcoins.

    We'll see.

    • by geekoid (135745)

      That's nice that they don't insure them, but that doesn't mean their sloppy security doesn't make the liable.

      • Re: (Score:3, Insightful)

        by gstoddart (321705)

        Ah, but it's in the terms of service. And those have been upheld by the courts.

        Which means people who lost money in this are out of luck, because all they really claim is they'll do their best effort but otherwise make no guarantees about their ability to do anything.

        In other words, there's zero basis on which to trust them, it's spelled out in the license, and if you trusted them and lost it's caveat emptor.

        You might as well ask the wino on the corner to hold onto your money, because he's about as account

    • Re:From the FAQ (Score:5, Informative)

      by gstoddart (321705) on Tuesday March 04, 2014 @12:05PM (#46396927) Homepage

      Translation: We'll try to be secure, and we'll call it secure, but we're really new at this and not entirely sure about this security thingy, but since we're not really a bank we'll tell you that if we prove to be incompetent we take no responsibility for that.

      Seriously, how many of us didn't see stuff like this happening?

      Hell, it sounds like the most lucrative way to make money of bitcoins is to set up your own exchange, and then have one of your people steal all the money, and then say "oops, teh hax0rs, not our fault, too bad for you".

      If you're not a bank, and not regulated like a bank, this is kinda like asking the kid with the lemonade stand to hold onto your life savings.

      It's frigging amateur hour. Entrusting someone with no track record with your money when that person has a clause which says "we take no responsibility for this" is just plain stupid in my mind.

      Then again, I don't own or care about bitcoins.

      • Actually, this is being perpetuated by the people in EVE Online, they had lots of practice setting up fake ISK banks in EVE and then robbing them, now they've graduated to bitcoins. LOL. And they're worth about the same at the end of the day, too.

  • by Catbeller (118204) on Tuesday March 04, 2014 @11:58AM (#46396843) Homepage

    So, it doesn't work - thousands of very bad men are trying and succeeding to break the ownership chain. No matter how hard you try to plan, you can't plan for malicious agents. And if you could, precise implementation is done by human beings, who forget where they last saw their toothbrush. . Voting machines? Trivial and done, hacked to hell and back and looks like elections were hacked ten years ago. Autonomous cars: oh, lordy lord lord, what a colossal fuck-up that will be; hubris on a scale undreamed of heretofore. Absolute perfection required of billions of kilos of metal racing around at high speed - and the designers assume bad people won't try to break it - will break it - for revenge or to make a point or just 'cause they are psychopaths.

    Keep systems as simple as possible to perform their function. Don't lard layers of clever on top of things that already work. Complexity insures failure. The Bitcoin protocol can't do what must do in the real world.

    • by compro01 (777531)

      Autonomous cars: oh, lordy lord lord, what a colossal fuck-up that will be; hubris on a scale undreamed of heretofore. Absolute perfection required of billions of kilos of metal racing around at high speed - and the designers assume bad people won't try to break it - will break it - for revenge or to make a point or just 'cause they are psychopaths.

      Malice schmalice. Fucking up driving even more than humans already do would be pretty difficult.

    • by jythie (914043)
      To be fair, with autonomous cars, they do not need to be perfect, just more reliable then human drivers. Given we have pretty good metrics on how often people mess up, there is a pretty clear bar afterwhich autonomous cars are 'good enough'.
  • Fuck (Score:5, Funny)

    by PvtVoid (1252388) on Tuesday March 04, 2014 @11:59AM (#46396859)
    Somebody stole a bunch of tulip bulbs!
  • by SpankiMonki (3493987) on Tuesday March 04, 2014 @12:02PM (#46396905)
    Although Flexcoin labelled themselves as a "bank" what they really were was an EWallet service. [bitcoin.it] Why people still use these web-based services to store their BTC balances is beyond comprehension.
  • Hmmmm (Score:5, Interesting)

    by jeff13 (255285) on Tuesday March 04, 2014 @12:04PM (#46396923) Homepage

    Ya know, I'm reminded of the words of one William K. Black (UMKC School of Law), economist and, and the only combination of the two to exist, a criminologist. He was once asked, what is the best way to rob a bank? His answer was; 'be a banker'.

    Really, the entire Bitcoin story has been one that was highly suspicious all along. Have you ever read a Bitcoin story that didn't make your left eyebrow raise like Mr. Spock in a room full of illogic? I watched 'The Wolf of Wall Street' recently and thought, *pffft*, soooo dated. I reckon in 20 years someone in Hollywoodland will catch up with reality enough to make a film in that vein about Bitcoin.

  • by suman28 (558822) <suman28NO@SPAMhotmail.com> on Tuesday March 04, 2014 @12:12PM (#46397023)
    GREETINGS, Permit me to inform you of my desire of going into business relationship with you. I got your contact from the International web site directory. I prayed over it and selected your name among other names due to it's esteeming nature and the recommendations given to me as a reputable and trust worthy person I can do business with and by the recommendations I must not hesitate to confide in you for this simple and sincere business. I am Wumi Abdul; the only Daughter of late Mr and Mrs George Abdul. My father was a very wealthy cocoa merchant in Abidjan,the economic capital of Ivory Coast before he was poisoned to death by his business associates on one of their outing to discus on a business deal. If you send us your bitcoins now to our highly encrypted, uncreacable account, we will 1) Keep it safe from hackers 2) Wire you the equivalent USD to a bank account of your choosing We are willing to offer you 15% of the sum as compensation for effort input after the successful transfer of this fund to your designate account overseas. please feel free to contact ,me via this email address wumi1000abdul@yahoo.com
  • by Wookie Monster (605020) on Tuesday March 04, 2014 @12:24PM (#46397127)
    What was the true intent of the exchange? Lure in suckers and then claim they were hacked? How can they prove that an outsider stole the coins?

    www.amazon.com/Best-Way-Rob-Bank-Own/dp/0292754183/

  • by LostOne (51301) on Tuesday March 04, 2014 @12:24PM (#46397133) Homepage

    This is not a failure of bitcoin. Suppose you had a stack of companies whose purpose is to store your physical gold and prevent it from being stolen and to serve as an exchange allowing customers to trade gold for currency. Then, it turns out that some of them had inadequate security or were outright crooked and the gold they were storing went missing. This would not be a failure of gold itself. Sure, if sufficient quantities of gold were affected, it would affect the price of gold, but it does not change gold itself. This is the same situation.

    The real problem here is the notion that bitcoin is a currency. It really isn't. It's a virtual commodity much like gold, with similar properties save for the fact that gold is physical and bitcoin is not. (Sure, the odds that everyone suddenly decides to pack up their toys and ignore bitcoin are much higher, mostly because there are no "real" uses to bitcoin, unlike gold which has actual uses other than being somewhat "rare" and looking pretty.) The same things that make gold less than idea as an actual currency (or a backer to a currency) apply to bitcoin. Sure, you can use either one as a place holder in a transaction if both parties agree, but you could just as easily use a common fiat currency, chickens, or grains of sand.

    • by unitron (5733)

      This is not a failure of bitcoin. Suppose you had a stack of companies whose purpose is to store your physical gold and prevent it from being stolen and to serve as an exchange allowing customers to trade gold for currency. Then, it turns out that some of them had inadequate security or were outright crooked and the gold they were storing went missing. This would not be a failure of gold itself. Sure, if sufficient quantities of gold were affected, it would affect the price of gold, but it does not change gold itself. This is the same situation.

      Even if you stole an amount of gold equal to all of the gold allegedly in Ft Knox, or that allegedly used to be in Ft.Knox, unless you put it on rockets and send it into the heart of the sun, the world wouldn't treat the situation as one in which the amount of gold in the world already removed from the ground had suddenly changed.

      The whole point of stealing it would be to exchange it for something else, either directly for goods or services, or for some country's currency to be spent for goods or services

  • by Agent0013 (828350) on Tuesday March 04, 2014 @12:26PM (#46397157) Journal
    I don't really understand why people are keeping their Bitcoins in these online "bank" accounts. The point of Bitcoin is that it is digital cash. It has the negatives of cash, easily stolen, along with the positives, hard to track. Being a form of cash rather than a credit account allows you to store it on your own hard drive or USB drive. Hell, put it in your Dropbox and it would be safer than having it in one of these online Bitcoin "banks". The money should only be in these online accounts for the time it takes to change it from US$ (or whatever currency you use) to Bitcoins or in reverse. It should be treated as an exchange not a bank account. I don't go to a currency exchange in another country, change my US$ to Pesos (for example) and then leave the money there in the exchange for months at a time.
  • Hell Of It Is (Score:5, Interesting)

    by Greyfox (87712) on Tuesday March 04, 2014 @12:35PM (#46397261) Homepage Journal
    It's all that Eve online ISK scam crap all over again. You can run a ponzi scheme in Eve, and the suckers will buy into it every time. At the end of the day you can walk away with enough isk that at the current exchange rate you could end up affording a pretty nice Honda. Or some so-so medical care. Really, Eve just needs a bitcoin interface and they'd be positioned to be the number one bitcoin investment firm in the world. At least until the whole thing collapses. I never cease to be amazed how often suckers fall for it, even when you mention the LAST scam in the channel they're advertising in.

    Of course, if bitcoin itself goes bust due to a reputation for this sort of thing, all that hacking and all that farming will be for naught.

    • Re:Hell Of It Is (Score:4, Insightful)

      by Registered Coward v2 (447531) on Tuesday March 04, 2014 @02:02PM (#46398429)

      I never cease to be amazed how often suckers fall for it, even when you mention the LAST scam in the channel they're advertising in.

      Having spoken to number of Bitcoin true believers; their argument basically was "Bitcoin is different. None of the real world rules apply to it. You don't understand." followed by an assertion that they were going to get rich.

      Which proves the old maxim that you can never go broke underestimating the stupidity of the public; or as a corollary the gullibility.

  • by Twinbee (767046) on Tuesday March 04, 2014 @12:43PM (#46397357) Homepage
    Is there an electronic currency like bitcoin, but which is much less private and traceable? This way we have the convenience of electronic transfer and the safety of normal cash.
  • by JDG1980 (2438906) on Tuesday March 04, 2014 @02:22PM (#46398749)

    One possibility is that the site was "hacked", as the operators claim.

    The other possibility is that the operators decided that walking off with ~$600,000 worth of Bitcoins was easier and more profitable than continuing to run the site.

    Since, apparently, no one knows who the operators are, and there has been no evidence of a hack released to the public, why should we believe that the first thing happened, and not the second?

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