Chaos and Hackers Stalk Investors on Cryptocurrency Exchanges (reuters.com) 64
From a report: Dan Wasyluk discovered the hard way that trading cryptocurrencies such as bitcoin happens in an online Wild West where sheriffs are largely absent. Wasyluk and his colleagues raised bitcoins for a new tech venture and lodged them in escrow at a company running a cryptocurrency exchange called Moolah. Just months later the exchange collapsed; the man behind it is now awaiting trial in Britain on fraud and money-laundering charges. He has pleaded not guilty. Wasyluk's project lost 750 bitcoins, currently worth about $3 million, and he believes he stands little chance of recovering any money. [...] Cryptocurrencies were supposed to offer a secure, digital way to conduct financial transactions, but they have been dogged by doubts. Concerns have largely focused on their astronomical gains in value and the likelihood of painful price crashes. Equally perilous, though, are the exchanges where virtual currencies are bought, sold and stored. These exchanges, which match buyers and sellers and sometimes hold traders' funds, have become magnets for fraud and mires of technological dysfunction, a Reuters examination shows, posing an underappreciated risk to anyone who trades digital coins. Huge sums are at stake.
this is why I've called it the BiteCon (Score:2)
there is no accounting for... accounting.
Re: this is why I've called it the BiteCon (Score:2)
With BTC, it's completely accounted for. It's all there on the public ledger for the whole world to see. Even theft and fraud is accounted for.
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The aren't really crazy; they're just willfully ignorant.
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The article didn't mention librarians.
Re: If you believe a blockchain can stop thieves.. (Score:2)
Well that's completely non sequiter.
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So, TFA is fake news, when the guy says, "I'll probably never see my money?"
Well, shit.
rule #1 of bitcoin (Score:2)
dont keep money you arent trading on an exchange.
i thought everyone knew that, obviously not. Those who do not learn history are doomed to repeat it. MtGox says hello.
Not about bitcoin but exchanges... (Score:5, Insightful)
So they stuck them in a unregulated bank from some guy no one has heard of and the bank was robbed. Blame the currency! If they would have kept them in their own wallet, not some guys basement, they would have been fine.
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They aren't blaming it on the currency; they're blaming it on the complete lack of any kind of regulation surrounding the currency. The people who advocate Bitcoin (and similar cryptocurrency) wanted to create a whole new economy without all that pesky government regulation. Now they're learning the hard way how important all that regulation is to having a functioning economy.
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Mandate all households to obtain adequate insurance
Having a PEC has, and should have, no bearing on allowing a person to obtain medical insurance. We know a certain portion of the population is born with such afflictions. Unless gene therapy kicks into high gear, we are going to have these type of people for a very long time. Denying them coverage simply because of how
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Now they're learning the hard way how important all that regulation is to having a functioning economy.
It functions quite well for a lot of people. Not so much for the "investors" trusting random con artists. And this is how the world has been for a long time...
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He put them in an unregulated bank because making bitcoin transactions is a laughable shit-show. The blame falls squarely on the currency.
You aren't going to run a business out of a wallet any more than you're going to run one with a pile of money under the mattress in the back room
This type of incident is the rule, not the exception. The number of hacked, scammed, or collapsed exchanges exceeds the working ones by several orders of magnitude and the ones that aren't failed just haven't failed yet.
Btc is a
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You aren't going to run a business out of a wallet any more than you're going to run one with a pile of money under the mattress in the back room
Why? Especially since exchanges are really just a bunch of wallets? The original value of a bank was that money was safer there then at home. (Yes there was lending as well, but it was mainly safety.) With bitcoin, it is the opposite.
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If they would have kept them in their own wallet, not some guys basement, they would have been fine.
Are you sure about that [cointelegraph.com]?
Despite the swift action by Trezor on the attack, the incident still created some doubt among users on the security of hardware wallets.
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If they would have kept them in their own wallet, not some guys basement, they would have been fine.
Are you sure about that [cointelegraph.com]?
Despite the swift action by Trezor on the attack, the incident still created some doubt among users on the security of hardware wallets.
Yep. I am. Compare that ONE article with the many on exchanges. Also, there are other wallets. A paper wallet in a safe deposit box is possible too.
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Paypal is possible, too.
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This entire article sounds like about half the comments on the one from July 2010 on Slashdot discussing bitcoin 0.3. And the one from Feb 2011 discussing "dollar parity".
"what sort of guarantees are in place for virtual currency"?
"It is a ponzi"
"Stupid idea"
"Bitcoin is worthless."
" because anyone can print money (even small amounts) I'm not going to be giving up any of my items today."
etc
If anyone had mined or purchased during any of the early Slashdot articles, they'd have millions of USD. Yet, the goal
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Why won't you trust me???
Because you have a 7 digit ID. If you had a 6 digit ID, I probably would. ;)
Why do you have to use an exchange ? (Score:2)
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Bitcoin on a secondary dedicated computer (Score:3)
Can't you do everything from your digital wallet on your computer, except convert to real cash ?
Pretty much, if you run a full node on your own system the only way to lose your money would be if your system got compromised.
Which is why you don't run the bitcoin wallet software on your regular computer. You take an old obsolete computer, install Linux on it, install the wallet software on it, and use that machine only for:
(1) Linux software updates.
(2) Bitcoin software updates.
(3) Running the bitcoin software.
(4) Bitcoin transfers.
(5) Copying the bitcoin wallet to USB sticks for backups.
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And put the goddam computer under your mattress.
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So almost negligible risk ...
Re:Why do you have to use an exchange ? (Score:4, Interesting)
>Can't you do everything from your digital wallet on your computer, except convert to real cash ?
In theory. However, any anonymous trading between the crypto and something else (even another crypto) will require a trusted middleman. Of course, the middlemen in the crypto space are pretty much never trustworthy.
> Sorry, I never got on the cryptocurrency bandwagon.
Buy scratch-and-win tickets at your corner store or gas bar. On average, you'll do better and still get the same rush from gambling in hopes of getting filthy rich for little effort. All the rest is overly complicated window dressing.
well... (Score:1)
The first mistake was putting the BTC in escrow on a cryptocurrency exchange. The second mistake was leaving it there. Did no one teach these people about digital wallets?
Do your research on cryptocurrency before getting involved in it, people!
Why do people store money on exchanges? (Score:1)
Seriously, part of the point of bitcoin is that you can do transactions from your own bitcoin wallet. Why do we still have otherwise-intelligent people handing bitcoins worth millions of dollars to a random dude who set up a website on the internet?
If you had three million dollars in cash and a random guy you met on a street corner promised that if you gave it to him, he'd give it back to you in a few months when you need it... would you really hand it over and then be shocked when you couldn't find that
Why are you injecting middlemen where none belong? (Score:4, Insightful)
I've never heard of Moolah, which is the first red flag in entrusting a $3million pile of digital cash to them.
The whole point of BTC is to cut out middlemen. Like cash, you hand a wad over to someone and they can do whatever they want with it. Why would you give your wad of cash to someone? What the fuck do you think is going to happen if that guy runs off with your cash?
If you want to hand over a wad of digital cash to someone, use a bank like a normal person. Put your BTC in cold storage in a safety deposit box. This is asset security 101. The fact that these people managing millions of $ in assets don't know the first thing about securing cash is both laughable and sad.
Re: Why are you injecting middlemen where none bel (Score:2)
My point is they obviously did near-zero research. There are plenty of well-known reasonably trusted BTC exchanges. This is what happens when incompetent people come into money through luck rather than hard work or intelligent action.
FUD (Score:4, Insightful)
I hate all this constant stream of FUD in regard to crypto currencies. Fiat money can be stolen as well and it happens all the time, yet /. rarely if ever features such articles.
Every passing week brings at least five news pieces featuring five new prominent economists/advisors/CFO/etc. who all declare that Bitcoin is either a bubble or a Ponzi scheme.
We've all heard that Bitcoin is a fraud at least a thousand times already. Now leave it alone please. People who trade bitcoins or invest in bitcoins perfectly understand their risks. It's true that bitcoin's worth is basically zero unless the market agrees that it has a different price. The market has decided that it costs ~$4200 at the moment. It's true that Bitcoin might become worthless tomorrow. If you think otherwise you need to get a shot of common sense.
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Normal Fiat money, as you call it, is usually insured by the bank you store it in. Even if they get robbed or go under, the insurance will cover your funds. In the US this is done by the FDIC. AFAICS there is no insurance for bitcoin exchanges, wallets, or anything. Except for the ridiculous ponzi-stock-like value increases, it is much safer to keep cash under your pillow or under a rock on the sidewalk.
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The point is that the banks are only save so long as everyone doesn't try to remove their money simultaneously due to the fact that they don't actually have enough liquidity to cover those orders due to fractional reserve lending.
But yeah, the banks are honest and trustworthy and totally not lending the same dollar bill to five people here in the USA, no reason to fear.
Please, presume. (Score:2)
Secure? (Score:2)
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BTC as such is secure against tampering. If you keep them in your own digital or hardware wallet, they are totally secure. If you leave them on an exchange, they're only as secure as the exchange.
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Generally speaking, the Exchange is probably more secure than your computer. I don't think I would be confident nor comfortable having $3 million dollar's worth of coins sitting in my laptop or USB drive at home. The problem here isn't so much about the security/reliability of the exchanges. I think they are fairly OK considering Bitcoin isn't collapsing. The problem is that the overall system has far less safety checks and nets than normal government backed currencies. Thou Bitcoin is better off than
Huge sums? (Score:2)
Like the huge sums of money that come in my Monopoly board game?
Complete misinformation (Score:2)
Uh, dadoy? (Score:2)