Bitcoin Exchange Flexcoin Wiped Out By Theft 704
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.'"
surprised!!!! (Score:5, Interesting)
Not!
Which one is next?
surprised!!!! (Score:5, Insightful)
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
Re: When are the bank runs going to happen? (Score:4, Interesting)
Re: (Score:3)
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OK, so what is it about Bitcoin that makes it so hard to create a safe exchange?
This is not a trick question. If there's going to be a magical currency outside of government overview, we need to know.
Re: (Score:3)
Because Bitcoin only solves the transaction problem, it's a crypto-currency.
What is necessary is public & distributed account balances without any single point of failure. crypto-banking instead of crypto-currency.
But this is antithetical to the libertarian instincts of the ideological proponents, and the criminal instincts of the practical users who actually use the currency to transact instead of to speculate about itse
Re: When are the bank runs going to happen? (Score:5, Interesting)
But if crooks rob a physical bank, your money is insured to the legal limit.
BTW, I've been listening to the old Planet Money podcast episodes (I started at the beginning and am now in early 2009), and the FDIC insurance isn't provided by the government, it's provided by payments the banks make to be FDIC insured.
Re: (Score:3)
There's a flaw in your plan: it presumes you are worried about them being stolen. But if you were worried about them being stolen, then you would have already secured them (by holding them yourself instead of having some semi-anonymous unaccountable un-security-auditable party hold them for you).
Re:When are the bank runs going to happen? (Score:4, Insightful)
And that's the basic problem. Fools keep giving their bitcoins to anonymous internet people to hold then act all shocked when those anonymous people disappear.
It's like giving a bundle of bank notes to a random stranger to hold for you. Anyone can see that's not going to end well.
A serious question (Score:3)
So I have a reasonable question I'll post here. On the one hand it seems, at first glance, to be stupid to put your e-coins in a third party vault. Unlike gold, your home computer is theoretically as good as any third party as a vault/wallet for e-coins. So people who lost money at Mt Gox just seem like doofuses for using it as an online wallet. In the case of flex coin, the money lost is flex coins apparently, not their depositirs who were in off line storage.
But then rethinking that, maybe it is bett
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Security is simple, just never connect your wallet to the internet.
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Re:surprised!!!! (Score:5, Insightful)
Why are you assuming the ones who created Stuxnet *aren't* criminals. Government backing does not an honest man make.
Re:surprised!!!! (Score:4)
I have known a few good, honest cops who are in it because they honestly want to help make the world a safer place. I'm sure they at least looked the other way when their peers did something unethical, but it's a rare person that you can't level that accusation against.
Re: (Score:3, Insightful)
You think "governmental actors" care about $615,000? That's adorable.
Did those "governmental actors" prevent Mt. Gox from ever auditing their accounts? It's been obvious for a year that Gox was amateur hour. Or was that part of the elaborate conspiracy?
Re:surprised!!!! (Score:4, Insightful)
You think this could only be about money? That's adorable.
This could be about decentralized currencies & their ability to control our money. Considering how much involvement they've had in undermining almost all aspects of the internet recently, I'd bet it was them.
Besides, its very nice and easily to "plant" evidence to keep for a later date.
Or maybe the cypherphunks can't accept the idea that it's most likely they're being attacked by their own kind with the same lack of respect for regulation and disdain for law that they have?
No conspriacy theory needed (Score:5, Interesting)
Why is anyone assuming this is being done by 'criminals'?
Because that is by far the most likely answer. These are almost certainly the equivalent of digital bank robbers. Where there is poorly secured money to be stolen it will be stolen. Furthermore if you steal something you are by definition a criminal even if you are something else as well.
I know that folks involved in bitcoin like to invoke grand government conspiracies (they seem to be a bit paranoid) but the government doesn't have to steal bitcoins. If the government wants to squash bitcoin it will pass some laws and regulations and make it illegal to deal in bitcoins. Why go though the window when you can smash down the door?
Re: (Score:3)
While I agree that a government is almost certainly not behind this and thoughts that it is are people thinking a bit too much of BitCoin. That said, hypothetically I could see why a government would choose an underhanded way to bring down something like this compared to overt regulation.
Consider that bitcoin is in no small part driven by people fanatically thinking fiat currency is the devil (for some very literally calling the dollar the mark of the beast) and that gold standard or something like that is
Re:surprised!!!! (Score:5, Insightful)
As I said, small potatoes. The magnitude of bitcoin isn't enough to really concern most governments, and certainly not the ones with the resources to do what you suggest.
Sure. Could it be alien space monkeys trying to destabilize our currencies and use us for slaves to harvest tasty bananas? Sure, I guess
There's about as much evidence for either of those, which means there's zero evidence at all.
I generally tend to fall a little on the tinfoil-hat end of the spectrum -- but in the absence of evidence, I fall back to "Never attribute to malice that which is adequately explained by stupidity."
You're well into just claiming it could be a conspiracy, but I just don't see the need. It could be if you want to be paranoid enough. But there's nothing real to suggest it's true, which makes it just pure imagination for the moment.
Re:surprised!!!! (Score:4, Funny)
Could it be alien space monkeys trying to destabilize our currencies and use us for slaves to harvest tasty bananas?
I for one, welcome our new shit-flinging monkey overlords. At least if I can tell the difference between them and our current political overlords, that is.
How much can be stolen until it's all gone? (Score:5, Funny)
"Wow, we just got 896 bitcoins"
"yup but because we did the value is now $2"
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You give too much credit to thieves. This is the source of many a conspiracy theory, assuming all the other players are infinitely devious and plan every possible step of a giant conspiracy.
It could just be that the thieves don't think or realize that their actions will hurt the value. If they are aware of the consequences of their actions, ~900 bitcoins at half their price (or whatever they might drop to) is still a pretty good haul for not physically having to go anywhere to get it.
Re:How much can be stolen until it's all gone? (Score:5, Insightful)
That is really the point here - if you destroy a currency the currency is worthless, so why steal it unless you don't care about the value?
1. Steal currency
2. Convert into another currency
3. Time passes
4. People realise that a theft has occurred
5. Currency devalues
6. Theives don't care because they already cashed out in (2).
Unregulated currency (Score:5, Insightful)
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.
Re:Unregulated currency (Score:5, Insightful)
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.
Re:Unregulated currency (Score:5, Funny)
Re:Unregulated currency (Score:4, Informative)
Dependable banks pretty much require somebody large enough backing them. That is generally governments who can print money.
Re:Unregulated currency (Score:4, Insightful)
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
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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.
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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.
Re:Unregulated currency (Score:4)
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.
Re:Unregulated currency (Score:4, Insightful)
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?
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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
Re:Unregulated currency (Score:4, Informative)
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.
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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.
Comment removed (Score:4, Insightful)
Re: (Score:3)
Could Bitcoin exist without the Internet?
Would the Internet exist without the Government funding research projects?
Could the Government fund research projects without tax revenue?
Ergo, Bitcoin couldn't exist without taxation.
Re:Unregulated currency (Score:4, Funny)
Nobody knocks off Flexcoin [youtube.com]
good time to start a Flexcoin exchange (Score:5, Insightful)
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Years? It sounds like you'd only need a few months.
Are any of these exchanges 'years' old?
Re:Unregulated currency (Score:5, Insightful)
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?
Re:Unregulated currency (Score:5, Informative)
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.
Re:Unregulated currency (Score:4, Insightful)
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.
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The deposits insured by FDIC are backed by "full faith and credit of the US Treasury" like every Treasury-bond.
If the FDIC fund were depleted, the government would borrow/print money to pay off the insurance and then tax banks more to get it back.
Re:Unregulated currency (Score:4, Insightful)
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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
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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.
Anything but frictionless (Score:5, Insightful)
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.
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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.
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He wasn't talking about protocol, just the dumb libertarian ideas behind it.
The ideas behind the protocol are number theory. "dumb libertairianness" is just hype read into it by you and others.
Re:Unregulated currency (Score:5, Interesting)
No, it's what we get from the pro-bitcoin crowd. The people who think impossible-to-regulate transactions are a good idea happen to have a 100% overlap with the set of people who have a novice's understanding of economics, and apply that cudgel to all ideas.
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How did all the regulations help the Mortgage Backed Securities from begetting a housing bubble that eventually collapsed? And if you say it was de-regulation you're only partially right, the other side is DNC backed regulations requiring banks to make unsafe loans to people who couldn't afford to pay them back. Guess what happened, the perfect storm of RNC and DNC stupidity and an economy that is still suffering the consequences.
Sometimes, even the government isn't big enough to fix our problems.
Re:Unregulated currency (Score:5, Informative)
Yes, because never in history has anyone been "mugged" or "conned" or otherwise had their government regulated currency stolen by a third party.
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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.
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Re:Unregulated currency (Score:5, Insightful)
BTW I don't own and never owned more than a couple of them either.
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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
Re:Unregulated currency (Score:5, Insightful)
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.
Re:Unregulated currency (Score:4, Insightful)
[...] 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)
im don't claim to be sherlock holmes, but im pretty sure im detecting a pattern here...
Indeed. But how can they be "stolen"? (Score:3)
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...
Re:Indeed. But how can they be "stolen"? (Score:5, Informative)
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.
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Then you know who took it, right? Why don't you go get them back?
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Not exactly. The only thing you know is the addresses (wallets) where your BTC balances were transferred. Since there is no mechanism in the bitcoin protocol to reverse transactions, you would have to have access to the key(s) of the wallets controlled by the thieves in order to initiate a new transaction moving the BTC balances back to wallets you control.
IOW, the only way to recover stolen BTC is to identify the thieves and hack them back (or somehow coerce them to hand over the keys to their wallets).
So, doomed to fail? (Score:4, Insightful)
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.
Re:So, doomed to fail? (Score:4, Interesting)
Re:So, doomed to fail? (Score:5, Insightful)
There is another possiblity: that these exchanges are operating as designed.
Who can most easily rob a bank? The people running it, of course.
Re: (Score:3)
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...
Re:So, doomed to fail? (Score:4, Informative)
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.
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You can not hid secrets from the future with math.
I bought some Chinese food with BTC, and that message was in my fortune cookie. Coincidence? I think not.
From the FAQ (Score:5, Informative)
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.
Re: (Score:2)
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)
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
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All the TOS in the world won't prevent them from being sued. Similarly, Caveat Emptor doesn't protect them from gross negligence.
Re:From the FAQ (Score:5, Informative)
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.
Re: (Score:3)
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.
You can't make tech safe from malice (Score:4, Interesting)
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.
Re: (Score:3)
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.
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Fuck (Score:5, Funny)
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It is exceedingly rare for a post to be both funny and insightful at the same time.
Flexcoin was not an "Exchange" (Score:5, Informative)
Hmmmm (Score:5, Interesting)
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.
Dear Respected One (Score:5, Funny)
The Best Way to Rob a Bank is to Own One (Score:4, Interesting)
www.amazon.com/Best-Way-Rob-Bank-Own/dp/0292754183/
Bitcoin is a virtual commodity, not a currency (Score:5, Insightful)
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.
Re: (Score:3)
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
Why keep your Bitcoins in an E-Wallet? (Score:5, Insightful)
Hell Of It Is (Score:5, Interesting)
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)
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.
Bitcoin alternative? (Score:3)
Hackers? Prove it. (Score:4, Funny)
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?
Re:Government sponsored (Score:5, Insightful)
Control over currency is important, it allows governments to make adjustments based off the needs of the economy, which increases stability. BTC would need to get much, much larger to even make a dent in the overall stability of the economy and THEN states might actually worry, but we are about as close to that as interstellar travel.
Re: (Score:3)
Re: (Score:3)
For example, place an order in bitcoins amount of "product" equal to $X. Sell on streets in cash for $X + markup. Watch bitcoin value "conveniently" fall and pay back promised amount bitcoins, now valued much below $X. IRL cases would probably be much more complex, but bitcoins still suffer from an issue where there's large financial gains for some folks if the prices were to fall - and th
Re: (Score:3)
I don't think it's possible to make something "illegal tender", at least in the US. If I want to trade you one thing for another thing, it's hard to see the government saying we can't do that. "legal tender" is something that must be accepted for all debts, public and private. Trying to say that something cannot be used even in barter, is pretty tricky.
Re: (Score:3)
There's easy ways to avoid that. Document all of your transactions and for any large transactions, follow the applicable laws that require a good-faith effort to determine the other party's identity.
Oh, your chosen form of exchange doesn't make that easy? Well too bad - you'll have to do it anyway, face the consequences for breaking the law, or change your chosen method. This is why we usually don't make large financial transactions via carrier pigeon.
Re: (Score:3)
Who is to say they haven't already?
Either they're complicit and these exchanges are a scam, or they're not really qualified to be doing this, and just ripe to be picked off.
Well, we're not trusting laws, regulations, legal accountability, or liability (since the TOS say those things don't apply).
So, really, what's left besides blind trust in their intentions and integrity?
Re: (Score:3)
I don't understand... If they know the address where the bit coins went, why don't they just get them back? If someone took my iphone but I know where it went I would go get it.
Re: (Score:3)
a) Bitcoins don't work that way.
b) The internet doesn't work that way.