
Compromised Linode, thousands of BitCoins stolen - tillda
http://bitcoinmedia.com/compromised-linode-coins-stolen-from-slush-faucet-and-others/
======
larrys
" _As a respected hosting provider, I hope they do the correct thing and
refund me for this liability due to their error. Many people trust Linode, and
they have proven themselves as a serious contender for hosting critical
sensitive operations on the internet. I would hate to not see them live up to
that reputation._ "

"hosting critical sensitive operations" in particular. If you are doing
"critical sensitive operations" you need a more secure solution and process
which will cost you more money.

Under no circumstances can a hosting provider assume the liability for
something like this.

The tradeoff you make for the low cost you pay is that you might have an issue
like this because someone screws up.

You pay more for a safe to store your money (and for a safe deposit box to
store your valuables) because it's important and you understand the risk
involved in not doing that. If you have valuable jewelry many times the
insurance company will only insure if you keep it in the safe when you are not
wearing it and even the amount of days is specified when it can be out of the
safe.

It's unreasonable to expect (and linode's contract clearly states as other's
have mentioned) a hosting provider to have a liability over what you are
paying them. Edit Add: Unless you specifically have an agreement in advance or
that is what they promised or charged you for.

Before anyone reacts to this with any harsh criticism please think for a
second what liability you would want for any mistakes that you make with your
web startup or idea. You could either be charging zero or charging a small $5
to $20 per month charge. You might make a mistake. Are you willing to accept
and even be able to insure for thousands or even millions in liability for
those mistakes?

~~~
bigiain
"please think for a second what liability you would want for any mistakes that
you make with your web startup or idea"

It seems to me that bitcoin wallets are a relatively new and not well enough
understood risk. There are very few other "files" like them, in that an
attacker copying them can deprive you of their value in a way that you cant
protect with backups. I feel a big part of current "internet security best
practices" are about minimising the risk of getting exploited - but with a
pragmatic limit to how much effort you invest mediated by the excuse of "if we
_do_ get rooted, we can always reinstall and recover from backups". It'll only
cost you time, and perhaps some reputation, and may put assumed-private-to-you
information in someone else's hands, but it hasn't deprived you of access to
any of your data. That doesn't apply to bitcoin wallets, and example like this
are pointing out flaws in assumptions people are making about appropriate ways
to manage them.

It'd suck to be "that guy" who provides the object lesson in why we need to
think differently about bitcoin wallets to just about any other file type we
might put on an internet accessible machine, but we _do_, and I don't know
whether we have an answer to the question "Is there a way to secure a bitcoin
wallet on a machine someone else has root access to (either your datacenter's
staff with physical access, or the people with hypervisor access to the
hardware your vm is running on)?"

I _think_ the answer is "if you can't trust those people, you can't risk
storing your bitcoins there". There's a reason people keep their money in
banks, and not in train station luggage lockers. I'm guessing inexpensive
commodity VPS's should be considered closer to storage lockers than bank
vaults. I suspect the finance sector and/or fortune500 companies have hosting
arrangements with companies offering bank-vault grade protection and reserve
bank style insurance - but sure as hell not at $24.95/month.

~~~
baddox
I don't see what's so conceptually new about bitcoin wallets. They're just
plain text that you don't want people getting access to. It's no different
than storing passwords in plain text: if someone copies them, they're
completely compromised (until the user changes them). The solution is pretty
simple: encrypt your own bitcoins with your own password (or more ideally,
your private key). Then, if someone hacks your server, they don't get
anything.

~~~
kamaal
Sorry for asking a noob question.

But what really is a bit coin? I mean in physical existence. Is it just a
file(plain text) with some data/metadata?

And stealing it means copying those files, and then deleting the source?

Which in case how is this any different than traditional bank account. My
money in the bank is basically DB record. And that can be stolen.

The bank can then just say to every one 'look this transaction from db such
and such is no longer valid'.

Can't bit coin do the same? I guess I'm missing something fundamental.

Can somebody explain this?

~~~
coopdog
A 'bit coin' is a space on a block chain that everyone has a copy of. You lock
the coin with a cryptographpic key, which you need to store. Whoever has a
copy of the key can unlock the bitcoin and re lock it with a different key,
such that now only the new owner has a copy of the key. Everyone can still see
the entire block chain, but only one account (that no one knows the owner of)
has the ability to move that coin.

So they got access to these peoples keys and transferred ownership of the
coins.

Most money supplies are regulated, but bitcoin isn't regulated. No one has the
ability to say 'reverse that transaction', but it also makes the currency safe
from inflation and interference by money printing governments and privacy
snoops.

~~~
chalst
_makes the currency safe from inflation_

There's an economic myth that inflexible supply of a commodity gives that
commodity when treated as money, stability. It does not, as looking at this
graph of US inflation/deflation time shows (1944 is when the dollar stopped
being gold convertible):

[http://en.wikipedia.org/wiki/File:US_Historical_Inflation_An...](http://en.wikipedia.org/wiki/File:US_Historical_Inflation_Ancient.svg)

A few points:

1\. The money supply around a currency not only contains the mined/minted
instances of that currency, but also liquid currency-denominated assets, like
customer bank balances. So money supply is not necessarily bounded.

2\. Inflation/deflation can be considered measures of the change in demand for
the currency. In times of deflation, holding money is valuable because it
becomes more valuable.

3\. From the above graph, you see that during the gold standard, inflation
tended to be mostly balanced out by deflation in the long-term, so long-term
inflation was low. But in the short term, prices were very unstable as
inflation jumped all over the place, and far more unstable even than fiat
money in the past three turbulent years that we've seen.

4\. From the point of view of an economy, inflation and deflation are not
symmetric; because of the value of sitting on money during periods of
deflation, savers do not tend to invest their money but move money from
investments to cash savings. This undermines economic activity. But in an
economy with a rich range of investment opportunities, moderate inflation does
not penalise acquisition of money and does encourage investment.

If you want a non-performing store of value and don't mind big fluctuations in
value, gold is there and we know how to secure gold rather well. Bitcoins are
another non-performing store of value with far more drastic fluctuations in
value, and securing it involves the double vulnerability: physical security of
storage media, information security of computations involving bitcoins. And it
is much easier to accidentally lose bitcoins than gold, pirate tales
notwithstanding.

~~~
stuhood
> physical security of storage media, information security of computations
> involving bitcoins

Only funds that you have daily access to need be vulnerable to the latter
point, as physical security (air-gapping) is sufficient when you do not need
to -send- funds.

> And it is much easier to accidentally lose bitcoins than gold, pirate tales
> notwithstanding.

Strongly disagree. Can you keep N redundant copies of your gold? Combined with
secret splitting, you could require that at least K of N secure locations be
accessed.

~~~
chalst
> Only funds that you have daily access to need be vulnerable to the latter
> point

I'm talking about protocol risk: e.g., the software that implements the
protocol on some machine is flawed, so the cryptography can be effectively
breached. Or there is some issue with the protocol, like but worse than the
issue Kaminsky found with anonymity.

>Can you keep N redundant copies of your gold?

Have you ever found that your backups didn't contain what they were supposed
to contain?

Gold gets stolen, but besides such things as costume jewellery, I think it
doesn't often get lost.

------
nbpoole
So, a customer service interface was compromised via stolen credentials and
used to access various Linode instances. A couple questions that immediately
come to mind:

1\. Can this interface be accessed from anywhere on the Internet? If so, why?
If not, does that mean other systems owned by Linode were compromised as well?

2\. Why can customer service representatives access and update servers without
the client being notified and with minimal logging?

~~~
stevenbrianhall
Regarding #1, an update from Linode was just posted:

"Our investigation has revealed a customer support interface was used to
access your account. The compromised credentials have been restricted and we
are discussing policy changes to prevent this from recurring."

~~~
mmaunder
I'm a Linode fanboy, but we need maximum transparency on what occurred and
what's being done. What support interface? How compromised? Who's credentials,
etc.

~~~
redthrowaway
Hopefully they're working on it, and will give a post mortem once they get it
sorted out. I'm inclined to show patience and not demand they do anything
other than ascertain the scale of the breach, alert those affected, and secure
their systems at this point. Later, they can get into what happened and how
they will avoid it in the future.

~~~
marshray
We can't wait for a full postmortem before Linode says anything.

Linode can't just leave us all wondering about our own security while pouring
over over someone else's Pastebins.

------
liquidsnake
The OP's tone clearly indicates that he expects some compensation, Linode's
TOS are pretty clear: _Therefore, subscriber agrees that Linode.com shall not
be liable for any damages arising from such causes beyond the direct and
exclusive control of Linode.com. Subscriber further acknowledges that
Linode.com's liability for its own negligence may not in any event exceed an
amount equivalent to charges payable by subscriber for services during the
period damages occurred. In no event shall Linode.com be liable for any
special or consequential damages, loss or injury._

This also provides an interesting dilemma when it comes to such events. In
this case the damage is relatively easily quantifiable, he got X bitcoins
stolen so the damage is X times the bitcoin value at that time. Still, it
could have easily been user personal data or credit card information, which
would have made an evaluation harder to make.

One of the risks of using such a platform I guess and something that anyone
who does it should consider.

~~~
polemic
This is why insurance exists.

I wonder if there are any insurance providers who'd be willing to provider
coverage for this sort of event.

~~~
larrys
Insurance won't insure for what they don't understand and build a risk model
for. I can assure they won't understand something like this for a very long
time.

~~~
SkyMarshal
I'm not sure they need to understand bitcoin specifically to build a risk
model, wouldn't they just need general data on losses suffered by various
internet hosts due to hacking attacks? Doesn't really matter exactly what is
stolen as long as they have a corpus of data on the value of everything that
is stolen in this manner. Bitcoin wallets probably fit somewhere in the payoff
curve for that.

------
RLG_RLG
Please people (not corporations w/ staffs), _do not_ run critical systems in
the cloud.

Get a dedicated server (not cheapest you can find) and secure it with:

(install in this order)

APF - <http://www.rfxn.com/projects/advanced-policy-firewall/>

BFD - <http://www.rfxn.com/projects/brute-force-detection/>

rkhunter

Ideally, install rkhunter on fresh system, right after updates, APF, & BFD.
Then update the binary check-sums with this command, _if you know server is
secure_ :

Update file properties: # rkhunter --propupd --sk

Run a system check to make sure it is known clean: # rkhunter --check --sk

Lastly, sign up for the security alert mailing list for your version of linux
on your server.

If you want maximum security, be sure to password protect your boot loader and
use an encrypted file system. _This will make it very difficult for ISP to
work on your server however!_

~~~
bigiain
And, I'd add "if any of this is news to you, you should _seriously_ question
whether you're skilled/competent enough to be admin-ing publicly accessable
servers with files (like bitcoin wallets) that can be valued in the thousands
(or tens or hundreds of thousands or more)".

------
luser001
Hmm, for a customer of a cloud provider, this sort of thing will be _very_
hard to defend against.

Maybe if the customer service system had had two-factor security, this might
have been avoided (i.e., customer service can access your account only if you
read them your hardware token's code).

Requiring SSL/SSH client certificates even for intranet accesses might have
deterred this attack.

I hope other cloud providers take note of this incident. This is a very
interesting incident.

~~~
wheels
Actually not. Just use a loopback cypto FS to store the sensitive stuff. The
reason they had to reboot the machine is that they just had access to the HDD
where they could change the password, as opposed to having live root access.

~~~
lsc
where do you keep the key to the crypto fs?

~~~
RLG_RLG
Written on a scrap of paper in your wallet. _only_ the password and no other
info should be on the scrap.

If you can memorize it, it is a bad password.

~~~
bronson
That's not strictly true. If you're careful and imaginative, with moderate
effort you can commit a fair amount of highly random data to memory. You just
can't expect to change it every month.

This may be oversimplified, but it's the correct horse battery staple.

------
cookiecaper
How many times does something like this have to happen before people learn to
encrypt? Any serious business or financial data should be encrypted, period.
Almost all of the major hacks we read about could have been minimized if not
entirely avoided if the data was encrypted.

I just read the release from Bitcoinica where they explained that the server
accessed contained _only_ Bitcoinica's "hot wallet", and that no code,
services, customer data, or other wallets were stored on the server.

If this was the case, why couldn't every access to that wallet, which,
assuming the above is true, necessarily occurs on other servers, run a
decryption on the file first? Even if you keep the passphrase and/or secret
key in plaintext on the machines that run the code, the separation should
prevent this kind of rogue access as long as the intrusion is isolated as
these people claim.

There is really no excuse just to have a plaintext wallet sitting around
anywhere anymore (the official bitcoin client now supports symmetrical
encryption). Like credit card numbers, when a wallet is accessed it should be
decrypted in ethereal storage like RAM and promptly discarded; it should never
hit disk as plaintext. At least the same practices used for PCI compliance and
credit card data should be used for btc wallets; preferably better since there
is no recourse if your btc wallet is compromised.

~~~
cbs
>If this was the case, why couldn't every access to that wallet, which,
assuming the above is true, necessarily occurs on other servers

From the sounds of it, this was that other server. All it did was operate on
the wallet. And if they used other servers, then those would have been the
target of the attack.

And, no matter how much damn encryption they have, they rooted the box that
operates on the decrypted data, thats game over. The only attacker you would
be able to thwart with more encryption would be the one who is able to root a
linnode VPS, but unable to extract the key or decrypted wallet from from
software _running on that box_. Sure, there is probably some number of
attackers in that space, but security is a game of diminishing returns, and
there are different security measures to take that are a much better
investment of time than stopping that small slice of people.

~~~
cookiecaper
My reading was that the Linode with the hot wallet did not contain the
software that operated on it. Perhaps it did, in which case you are right.

------
klodolph
I'm not really sure why people are trying to store bitcoins on a VPS in the
first place. You can't process credit cards on a VPS and be PCI compliant
(it's against the rules), but any moron can do what they want with bitcoins.

~~~
gravitronic
But all that regulation is evil and it's the freedom of bitcoin that gives it
the power*

*for hackers to get away with the entertaining virtual train robberies we've seen in the last year

~~~
darklajid
Show me your wallet with a good amount of cash and leave the room for a while.

Afterwards, let's talk about your comparison. Is 'can be stolen' really
something that the state can protect you against? Let's discuss it over
dinner. Depending on the contents of the wallet I'd pay.

On a more serious note: Your mockery, while amusing, is unrelated to the
problem at hand. 'Stealing amounts of $currency from private persons' is not a
new idea or something that bitcoin is supposed to change?

~~~
icebraining
What state? PCI DSS is _private_ regulation.

~~~
darklajid
Two problems.

1) I don't think PCI is relevant here. If you store bitcoins somewhere and
they get stolen then this is, in my world, cash. It's your very own digital
cash. Not a credit card. That's why I constructed a (probably poorly
implemented) example of someone leaving a wallet full of shiny $currency notes
out there.

2) 'What state?' WTH? Can I reply with 'What kind of question is that?' The
state I'm coming from is called 'Northrhine-Westfalia' [1]. Now I'm living
elsewhere and there are no 'states' here. I can offer the district 'Tel-Aviv'?
The point is, 'what state' is invoking aggressive feelings towards your US-
centered mindset.

1: <https://en.wikipedia.org/wiki/Northrhine-Westfalia>

~~~
icebraining
Oh, FFS. I meant "what state?" as in, "why are you talking about the state?",
since _you_ said:

    
    
        (...) something that the state can protect (...)
    

and since the PCI (which was what we were talking about) is _private_ , it
doesn't make sense to talk about the State.

 _US-centered mindset_

The fuck? Firstly, I'm European. Secondly, I assumed you were talking about
the State[1], not a particular state.

[1]: <https://en.wikipedia.org/wiki/State_(polity)>

~~~
darklajid
First and foremost: I'm sorry. We clearly didn't talk about the same thing and
I misunderstood what you wrote.

My take: Someone was mocking Bitcoins with "But all that regulation is evil
and it's the freedom of bitcoin that gives it the power" and I tried to make a
point saying that _no regulation is involved here_ (laws? certainly). This is
a wallet, it got stolen. Your credit cards are protected, your cash is gone
for good.

You invoked PCI and I was (and am) unable to make the connection, maybe again
because of a misunderstanding? I'm talking cash. Bitcoins are cash in my world
(or - at least their value is equivalent to cash, if you choose to sell them).

From there we went downhill and I overreacted. Yes, for me 'state' is exactly
what you posted. Again, sorry for the lapse.

~~~
icebraining
Well, I'm sorry for the confrontational reaction.

I invoked PCI because of the thread: the original post was from klodolph, who
said:

 _(...) You can't process credit cards on a VPS and be PCI compliant (it's
against the rules), but any moron can do what they want with bitcoins._

And to that gravitronic replied:

 _But all that regulation is evil and it's the freedom of bitcoin that gives
it the power(...)_

"All that regulation" only makes sense if gravitronic is talking about PCI,
which was the only regulation cited by klodolph.

------
kylebrown
Update: the Linode compromise first reported was that of the "slush" mining
pool (mining.bitcoin.cz), reporting a loss of 3094 BTC. Second report was the
donation-funded bitcoin faucet, reporting a loss of all of its 5 BTC.

Third report is the biggest, Bitcoinica.com which is arguably the second-
largest exchange. Their main site is hosted at rackspace, but their 'hot
wallet' was hosted at Linode, and contained 10,000 BTC which were stolen.[1]

1: [https://www.bitcoinica.com/posts/warning-please-do-not-re-
us...](https://www.bitcoinica.com/posts/warning-please-do-not-re-use-and-old-
bitcoin-deposit-addresses)

EDIT: Those not following this incident on the bitcoin forums might be amused
that the attacker used the stolen bitcoins to form a transaction with a size
of 1337 bytes. That's probably not a coincidence, since the size of bitcoin
transactions are usually under 1kb.

[http://blockchain.info/tx-
index/2893660/d9804de366aa4c2a0156...](http://blockchain.info/tx-
index/2893660/d9804de366aa4c2a01565c3a3c8aa2ea20baafc276dc875f80b9044841205333)

------
ben0x539
> Although passwords are stored using SHA1 with a salt,

Where's the bcrypt/scrypt/whatever police in this comments thread?

~~~
aidenn0
I already asked in the comments of the original article how many rounds of
sha1 are used. SHA-1 still isn't the best, since it yields to FPGA attacks,
but a single round can brute-force all 8 character passwords in less than 2
days on a GPU. My guess is that 10k rounds of sha-1 would probably not be
feasible for non-dictionary attacks without specialized hardware.

~~~
clarkmoody
The article mentions salted SHA-1, which is much more resistant to attack.

Obviously, more rounds and unique salts per user would yield better results,
regardless of the hashing scheme employed.

~~~
pork
You can salt all you want, but an 8 character password with a single round is
going to fall very, very fast. Salt, being public, has nothing to do with it.

~~~
mappu
It does however mean you have to spend two days per password, rather than two
days for the entire user base, or ten minutes with a pre-existing lookup
table.

~~~
getsat
No, consumer GPUs can do almost a billion SHA1 hashes per second now. We're
talking seconds to minutes for "complex" passwords, not days.

<http://codahale.com/how-to-safely-store-a-password/>

------
mindstab
How did the attackers know what they were looking for. I'm going to assume
that it's a small minority of linode users who have bitcoins on their
machines. How were just these users targeted so accurately? What tied together
knowledge they used bitcoins to those VMs and their linode accounts?

Also, was the nature of the attack just that the were able to login to your
linode admin panel and from their root the machines and then loot your
wallets?

~~~
darklajid
>Also, was the nature of the attack just that the were able to login to your
linode admin panel and from their root the machines and then loot your
wallets?

The way I understand it the attackers were able to get access to the admin
panel and invoked some kind of 'change root password' emergency stuff. The
machines were rebooted it seems, which makes sense: The interface of Linode
has probably/hopefully no access to the root password. Maybe this 'Reset my
root' feature (now I'm guessing) reboots the machine in single user mode or
passes init=/bin/sh to the kernel to reset the password once and reboots again
afterwards.

Only THEN the attacker had access. But yes, he had root. The good (if you want
to call it that) part of it is that this procedure rings every alarm possible.
The real owner doesn't have the password anymore, as he'll soon figure out.
It's everything but sneaky.

I DO wonder why root is allowed to log in at all, though..

~~~
slig
I disabled root login when I was setting up the server. Could my server be
affected too?

Also admins that only log with ssh keys and don't use root won't be able to
notice that, will they?

~~~
devicenull
Probably. You disabled root login how, via the sshd_config file? If so, you're
still screwed.

Even if you fully disable root, that's not going to stop the init=/bin/sh
script.

Even if you fix that (securing grub?) you're still screwed because it's a
virtual machine, and they can just mount the partition to another VM, and pull
all your data/reset root that way.

So, maybe if you have an encrypted partition, no root access, secure grub, and
real hardware (it's probably possible to dump the VMs memory by snapshotting
it, then pulling the key out that way), you would be secure against attacks
like this.

With a VM? No, it's not nearly secure enough for very important things.

~~~
darklajid
Well, having the whole disk dm-crypted is kind of secure I guess. At least I
still have no idea how I get at my ssl certification keys from startssl,
although I have a dd of that drive in question from the vps provider. I was
just too clever thinking of a long passphrase and too stupid to keep at least
a hint around somewhere..

Total dataloss for me. But i fyou _do_ remember your dm_crypt password, I
think you're safe against these kind of attacks

------
brandoncordell
It sucks that money was lost but I can't help but to shake my head at someone
keeping something like that on a cheap VPS. It's just stupid to think that was
at all safe. That's something you should do on your personal computer where
you can assure your security.

I'm not really sure if the author of the article expects to be compensated but
if so, he's dreaming. Just read through their terms.

Next time he won't be so ignorant as to put something so sensitive on a server
like this.

------
sgornick
Bitcoinica just reported losing 10K BTC (worth $50K USD) in this same
incident. \-
[http://bitcointalk.org/index.php?topic=66961.msg778254#msg77...](http://bitcointalk.org/index.php?topic=66961.msg778254#msg778254)

~~~
SkyMarshal
Saw that too. In past discussions on HN, Zhoutong said he hosted it at Heroku,
but apparently they keep the 'hot wallet' alone on Linode instead for some
reason, and use that to enable instant withdrawals.

At least Bitcoinica is eating the loss, it's not client money that was
directly stolen.

------
plasma
It's quite possible that the attacker has been using the support admin login
details for much longer against Linode, without being noticed, until now.

What sort of defenses can developers put in place to protect against admin
panels?

I've used these sorts of techniques in the past:

1) Separate username/password system compared to the regular website 2) IP
whitelist of who may even access the admin panel 3) Failed login attempts send
an e-mail alert with a log entry

Any other recommendations or suggestions?

------
dale-ssc
We install a little script that runs at boot up to page us if /.expected-
reboot isn't present (or removes it if it is). Then, to reboot systems, we run
expected-reboot, which is a tiny script that touches /.expected-reboot before
calling shutdown.

Wouldn't have prevented this but would likely have paged this unfortunate soul
when his machine rebooted unexpectedly.

------
sdrinf
As a Linode customer, I'm really looking forward to hearing out their side on
this issue

------
sgornick
Forum thread regarding this:
<https://bitcointalk.org/index.php?topic=66916.40;all>

~~~
mindslight
The comments calling for 'tainting' of stolen bitcoins and blocking their
exchange will be the end of bitcoin. The anonymity of bitcoin is only due to
general laziness. What happens when the market figures that out? Bitcoin's
byzantine agreement is novel, but its crypto is crap.

------
mootothemax
This is obviously an unacceptable incident. I don't understand how the author
can write:

 _Especially upsetting is that I went to great pains to keep everything as
secure as possible._

When that's plainly not true. Surely having a wallet stored on a VPS is a
_really bad idea_ , what with admins potentially having full access to hard
drive contents? Wouldn't a PGP'd local copy be a better solution, or am I
missing a trick?

------
Pent
This reminds me of a situation when I first signed up for linode... my
password on my account inexplicably changed one day(I use lastpass so no I did
not type the randomly generated password wrong). I contacted support and they
fixed it, but I still remember questioning why or how...

------
shirro
I am off to store some cash in my car and put all my important docs in a bus
locker. BRB.

------
dedward
Without passing too much judgement........ it's common sense that as your
revenue goes up, the time and effort put into ensuring you are on an
appropriate platform should go up as well.

Because sh*t happens...... whether we like it or not. Even if the technical
requirements are light and it runs fine on a tiny linode, that might not be
the right place from a security or integrity point of view, depending on the
value of the app.

(for me, a digital wallet worth that much, I'd want at my home..... where I
can control it)

------
thisduck
The title reads like a title one would expect from the future.

------
jaredstenquist
Since my $1,000 worth of bitcoins dropped in value to $150 over a period of
weeks, I've become significantly less interested in using it as a currency.

~~~
sgornick
You mean less interested in using it as a way to profit from speculation. As a
currency it is not as critical that the value only goes up.

A person or merchant receiving bitcoins can easily convert them out to USDs
and still lose less in fees than the same transaction would cost compared to
accepting a credit card or debit card payment. For example, BTC -> USD at most
exchanges is around half a percent.

~~~
Symmetry
It sounds like Bitcoin is doing much better in the "Medium of Exchange" side
of the money coin than the "Store of Value" side.

~~~
wmf
Which is not saying much, because if you try to avoid volatility by doing a
USD->BTC->USD transaction you get hit with fees that are almost as much as
credit cards, not to mention the complexity.

------
rubypay
Could this have been a vulnerability in Lish, which can be run from a browser
using Linode's AJAX console?

[http://library.linode.com/troubleshooting/using-lish-the-
lin...](http://library.linode.com/troubleshooting/using-lish-the-linode-shell)

I've completely ruined networking and disabled root logins on a Linode VPS,
but could still access that same VPS as root using Lish.

------
shirro
Linode compromised! That is important news that concerns me. If the headline
didn't mention the BitCoin scam that HN is always pumping would it have made
it to the front page? Certainly haven't heard anything from Linode :-(

~~~
icebraining
Sigh. Please give me a definition of 'scam' that fits with bitcoin and not
e.g. Apple or Google shares.

Hint: In a scam, there's deceit. The bitcoin devs never deceived anyone. The
whole system is transparent, so if there's anyone who bought without
understanding the risks, they have no one to blame but themselves.

(Note: No, I don't own any bitcoins).

~~~
shirro
Perhaps I am just cynical. I did not mean to suggest the devs were scammers.
But I still believe the ecosystem as a whole reeks of pyramids and other scams
and I am sick of reading about it. I also think Scientology and MLM are scams
but there are people who think they are not and we can't all agree. But then I
also think casinos and lotteries are scams so I am kind of outside mainstream
opinion on a few things I guess.

~~~
icebraining
I was probably too harsh, but frankly, just as you're sick of reading about
it, I'm sick of every single thread on bitcoin having that inaccuracy. What
can I say, I'm literal minded - the misuse of words annoys me.

 _But I still believe the ecosystem as a whole reeks of pyramids and other
scams_

Oh, sure, that's kind of inevitable, it's a result of the lack of constraints
and oversight. But personally, it's a part of why I like reading about it - it
still has that feeling of a "wild west", populated by pioneers and thieves.
Kinda like the Internet as a whole a few decades ago. Of course, it also means
I wouldn't trust it with my money.

 _I am sick of reading about it._

Sorry, but then... why not just skip the link? There are a few topics I'm
kinda sick of too, but I just ignore them.

 _But then I also think casinos and lotteries are scams so I am kind of
outside mainstream opinion on a few things I guess._

Again, my literal mind jumps when I read that ; ) I can completely understand
that you consider them _immoral_ and/or predatory, but there's no need to call
them a scam particularly - FSM knows there are plenty of other immoral acts.

------
nazgulnarsil
not having your wallet separately encrypted means you're asking to be robbed.

------
motters
The lesson repeatedly not being learned seems to be that it's not a good idea
to keep wallet files on other people's servers, where you have no control over
their security process.

------
ropable
For those of us late to the Bitcoin idea, how does one "steal" Bitcoins? Is it
the equivalent of copying someones private key and then deleting all their
copies of the key?

~~~
mckoss
No, you use a stolen private key to transfer the Bitcoins to a new public key
whose private key is only known to the thief.

------
opendomain
I know that bit pin is supposed to be annonomous but is there any way to get
these back? I mean is there some logs or if they were signed by his account or
anything?

~~~
wmf
All Bitcoin transactions are publicly logged, but they aren't reversible. So
you can see who stole your money but you can't do anything about it.

~~~
jQueryIsAwesome
There is a bunch of violent people who would disagree.

~~~
kijin
Only if those violent people can locate the thief's physical location, which
they can't.

------
ianloic
Why the fuck are people putting their bitcoins on servers that they don't
control? That's just stupid.

------
cpt1138
Update from linode: <http://status.linode.com/>

------
jaequery
i think bitcoin could use another layer of authentication to verify the person
is indeed the owner of bitcoins.

~~~
kirian
One of the features of the next release of the bitcoin protocol is to allow
things like multi-factor authentication (e.g. require a signature from the
private key on your computer and your mobile phone before the bitcoins can be
spent)

------
javascriptlol
The attitude that Linode should refund the loss is a fragilising attitude. The
more trust you keep pushing onto the provider the bigger everything is going
to blow up when something goes wrong.

------
beedogs
LOL, bitcoin.

------
tantalor
If this was sensitive data why was it not encrypted?

Replace "bitcoin wallet" with "medical history" or "credit card numbers".

~~~
regularfry
It had to be decrypted to be used. It was in use. Ergo...

~~~
singlow
It had to be rebooted to reset the root password. I see no good reason not to
have a decryption key held in memory and require you to log in and enter the
key upon reboot for something this important.

------
DiabloD3
The writeup of this is rather suspect. What happened is someone guessed
slush's Linode account password, and used the root password reset feature from
there.

What I don't understand is why does such a feature exist, why doesn't Linode
require >16 character length passwords that are sufficiently random (or eschew
password auth altogether), and why does slush (apparently from what I can
tell) allow password auth for ssh AND allow root to login on ssh.

~~~
darklajid
Yes, the writing is a little incoherent. Maybe that's the reason that caused
you to miss that, in fact, someone used Linode's 'Customer Service
Representative' interface to get access to his account.

Don't stop reading and comment with 'I call bullshit'.

