
Bitcoin Payment Processor BIPS Attacked, Over $1M Stolen - qwertzlcoatl
http://www.coindesk.com/bitcoin-payment-processor-bips-attacked-1m-stolen/
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ori_b
I'm not a bitcoin expert, so I may end up off base, but...

The US government seemed surprisingly warm to bitcoin in the senate hearing. I
suspect that if governments end up getting involved in bitcoin, each merchant
will require some form of ID for each wallet that they interact with. This
will mean that tracking down crimes like this will be fairly easy, since
there's a record of each transaction. Trace down the chain, find the people
involved, and if an anonymous wallet shows up, you investigate the people that
it transferred to or from.

Sure, it erodes privacy, but bitcoin has the potential to make things _much_
easier for law enforcement (and anyone else interested in money transfers) by
causing registration of endpoints, giving very strong leads to investigators.

~~~
GigabyteCoin
If the US government decides to take this approach, I am sure that a few of
these guys will do the exact opposite:
[http://en.wikipedia.org/wiki/Tax_haven#Examples](http://en.wikipedia.org/wiki/Tax_haven#Examples)

~~~
dublinben
Jurisdictions like that have been increasingly disappearing. If regulators in
major countries make it illegal to exchange BTC anonymously, it will
significantly hamper its adoption.

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M4v3R
Ugh. There are much better solutions than keeping user funds in the hot wallet
(fully cold storage with manual withdrawals, multi-signature wallets), but
many "reputable" businesses STILL uses them. I don't understand why. If you
want to store your customers funds online, do it the right way, or don't do it
at all.

~~~
dragontamer
You cannot automate a cold-wallet scheme.

Any automated website or tool will require a "hot wallet" of some kind. The
more funds in the hot wallet, the longer the website / BTC Bank can go
automatically.

Customers like having funds available to them immediately... among other
things.

~~~
michaelt
Given the choice between being hacked, losing your reputation and millions of
dollars; or having someone on call 24/7 to move USB sticks across an air gap;
I'd choose the latter.

I've seen fast food joints and parking lots with 24/7 attendants, it can't
possibly cost more than $100,000 a year.

~~~
dragontamer
THIS IS THE FUTURE EVERYONE!!!!

The future of modern banking is to return to physical transfer of funds.
Instead of relying on modern networking, technology, automation, or
websites... we will _manually_ move money over a physical medium.

</sarcasm>

Without automation, how the hell is BTC supposed to be any better than cash?

~~~
apalmer
Uhhh let me get this right:

$10,000,000 spent to secure a bitcoin exchange to within 99.999% secure via
"automation"

$100,000 spent to secure a bitcoin exchange to within 99.999% secure via
physical air gap...

which makes more sense

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clarkmoody
I know it makes for a better headline to say $1M stolen, but unless actual USD
was taken in the theft, I wish these headlines would say "X BTC stolen, valued
at $Y."

But then again, the headline made it to the front page and got me to
comment...

~~~
peteretep
Why do you wish that? Every news source on the planet localizes currency
amounts to their audience. Are you actually making some weird political point
about BTC value, or are you surprised that a news source is localizing
currency values?

~~~
clarkmoody
1) When large amount of BTC are stolen or moved, the fiat value would be far
less if the coins were sold on the open exchange.

2) The article title becomes immediately obsolete due to exchange rate
fluctuations. On the day of the theft for instance, the BTC/USD rate was
hugely volatile, fluctuating between $522 and $788.

We could go dig up the old Bitcoin Forum posts about people losing 25k coins
and mark-to-market those losses for more sensational headlines. Or we could
simply post the BTC amount in the headline along with present fiat value.

~~~
veemjeem
Well, it's a news article. The goal of the journalist is to get people to read
it. It would be a less interesting headline if it forced people to do the
conversion since many people still do not yet understand BTC. Putting both
values (BTC & USD) into the headlines would make it redundant.

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cryptocoin
If you are new to bitcoin-related sites, you might find this story legitimate.
But anyone that reads the article will see there is a basic flaw: DDoS attacks
do not give access to the server, they just make the service inaccessible. If
you read past (paid) articles about this very same service, you will see
claims about how secure the system is, and how expert everyone that developed
it is. The same was claimed by inputs.io, I'm sure you have read about that
story earlier.

The thing is, if you want to use bitcoin, you cannot trust third parties to
hold your coins for you. If you want to support bitcoin in your business, you
cannot trust other sites to handle the payment for you. Yes, it is not
convenient. But you have everything available to handle this yourself and,
yes, you will need someone competent to do that for you if you are not into
it. Bitcoin is not meant for the average user or the unaware merchant and it
might never be, people need to start accepting this fact.

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aw3c2
Misleading. 1295 BTC were stolen, no USD.

~~~
jzwinck
Well thank goodness for that. At least this way there is no chance of
recovery.

I enjoyed the bit at the end about a potential lawsuit to get the BTC back.
Sounds awfully familiar to the legal posturing after some other BTC heists--
none of which got anywhere AFAIK.

Do people still think the irrevocability of BTC transactions is a good thing?

~~~
ogig
>Do people still think the irrevocability of BTC transactions is a good thing?

Yes. Third parties will provide escrow/insurance services if there is demand
for them. Transactions been irreversible "by default" is a core benefit of
bitcoin and merchants may preffer that over chargebacks at 18€.

~~~
fat0wl
I've heard that this type of insurance is expensive and a large part of banks'
transaction fees. I can only imagine how expensive an insurance service like
that for Bitcoin would be.

~~~
maaku
However unlike the existing system there will be a transparent, competitive
market for such insurance mechanisms, and they will be available to
consumers/businesses directly.

~~~
fat0wl
I think the banks are pretty focused on offering competitive products that are
packaged together neatly to avoid putting too much of burden on consumers
(what's the diff between choosing a bank or choosing a private transaction-
insurance service?).

I'm paranoid of investment banks but I think plain old banks are benign. You
put a certain amount of money in your account and they handle all this for
you. There is usually no charge for checking. Credit cards don't charge
interest unless you go into debt, etc.

I don't think lack of competition is so much an issue, it seems that the
Bitcoin movement just has a fundamental distrust of govt/corporations. I think
if Bitcoin money didn't magically appreciate in value so much it wouldn't be
much cheaper than banking except for big international money transfers.

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Vitaly
Whale Communications, before they were purchased by Microsoft, had a hardware
solution where a shared HDD disk was used to physically switch it between 2
different hosts to enable file sharing in a shared directory. would be almost
perfect to secure the hot wallet of a BT service. MS seem to discontinued the
product. I wander if something like this still exists from another vendor?

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stpddts
Can we get a break from all these Bitcoin posts please?

~~~
iamshs
I agree, there are six posts about Bitcoin right now on top. On one hand it is
community regulated matter, but on other hand 20% of top posts is too much.

~~~
bdcravens
When Steve Jobs passed, the entire home page was related articles.

