BITCOIN, Heists, Thefts, Hacks, Scams, and Losses

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In summary: I don't know if this actually happened, but...?In summary, the website of major bitcoin exchange MtGox was offline Tuesday amid reports it suffered a debilitating theft. Around midmorning in the U.S., the company released a statement saying it had closed off transactions "to protect the site and our users." It offered no further details.
  • #36
nsaspook said:
Inside job or total stupidity to keep refilling the 'cash' drawers from the safe while the 'bank' is being robbed.
I don't think you need to guess where my vote goes. It is less amazing than it should be that their software could not keep enough track of the transactions for them to know they were being robbed.
 
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  • #37
http://www.chicagotribune.com/news/...lothian-hacker-ransom-met-20150220-story.html
A south suburban police department paid a $500 ransom to an unidentified hacker to regain access to data from a police computer the hacker managed to disable, records show.
...
Village officials released a copy of the town's invoice in response to an open records request by the Tribune. The invoice, "for MPD virus," shows the village sent a $606 money order to a bitcoin cafe in New York to transmit the money to the hacker. The payment included bank fees and surcharges.
 
  • #38
http://www.wired.com/2015/03/evolution-disappeared-bitcoin-scam-dark-web/
Late Tuesday, a Reddit user named NSWGreat who had earlier self-described as an Evolution drug dealer and “public relations” staffer —he or she had even hosted an “ask me anything” session about the job days earlier—wrote a post to Reddit’s darknet markets forum that claimed to confirm Evolution’s administrators had in fact shut down the site’s back end too, and escaped with users’ money; NSWGreat described confronting Evolution’s two pseudonymous owners, Verto and Kimble, who he or she says then admitted they were closing the market and stealing its funds.

Who would think that 'bad' people would 'take the money and run'. :H

danny-trejo-snickers-hed-2015.png
 
  • #39
http://blog.cryptsy.com/post/137323646202/announcement
These are the approximate figures taken:
Bitcoin: 13,000 BTC
Litecoin: 300,000 LTC

This of course was a critical event for Cryptsy, however at the time the website was earning more than it was spending and we still have some reserves of those cryptocurrencies on hand. The decision was made to pull from our profits to fill these wallets back up over time, thus attempting to avert complete closure of the website at that time. This worked fine for awhile, as profits decreased due to low volume and low Bitcoin prices, we would adjust our spending accordingly. It wasn’t until an article from Coinfire came out that contained many false accusations that things began to crumble. The article basically caused a bank-run, and since we only had so much in reserves for those currencies problems began.

https://medium.com/@octskyward/the-resolution-of-the-bitcoin-experiment-dabb30201f7#.grssowbqj
Why has Bitcoin failed? It has failed because the community has failed. What was meant to be a new, decentralised form of money that lacked “systemically important institutions” and “too big to fail” has become something even worse: a system completely controlled by just a handful of people. Worse still, the network is on the brink of technical collapse. The mechanisms that should have prevented this outcome have broken down, and as a result there’s no longer much reason to think Bitcoin can actually be better than the existing financial system.

Think about it. If you had never heard about Bitcoin before, would you care about a payments network that:

  • Couldn’t move your existing money
  • Had wildly unpredictable fees that were high and rising fast
  • Allowed buyers to take back payments they’d made after walking out of shops, by simply pressing a button (if you aren’t aware of this “feature” that’s because Bitcoin was only just changed to allow it)
  • Is suffering large backlogs and flaky payments
  • … which is controlled by China
  • … and in which the companies and people building it were in open civil war?
I’m going to hazard a guess that the answer is no.

http://www.nytimes.com/2016/01/17/business/dealbook/the-bitcoin-believer-who-gave-up.html?_r=0
Mr. Hearn, until recently one of the most prominent leaders of the Bitcoin project, became so disillusioned that in December he sold the few hundred Bitcoins he had left and quietly took a job at a new start-up.
 
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  • #40
This reminds me of online poker. The sites rigged the poker games. I always wondered why anyone would trust those guys.

I got interested in an online bank, but passed. I'd be helpless if they closed up shop. That's why banks had those massive buildings. They couldn't afford to run and leave all that stone behind.

Were the bitcoin exchanges hacked or were they inside jobs? We may never know.

I'm amazed at how much trust people have in the current financial system. Credit cards in particular have no security at all. But it works.
 
  • #41
Bitcoin dying? Hardly, the number of transactions/day is rapidly increasing, and the market capitalization, excluding the major bubble, has been on an uptrend since the beginning. Not that I care because I never bought or used bitcoins myself, but it's ridiculous the amount of naysayers and futurologists I see predicting the end of bitcoin since the beginning. When the paper money was invented there were a lot of scams too, it didn't mean that paper money would not be something to stay.

2016-01-19 00_12_50-Bitcoin Number Of transactions Per Day.png
2016-01-19 00_13_03-Bitcoin Market Capitalization.png


https://blockchain.info/charts/n-tr...ageString=1&show_header=true&scale=0&address=
https://blockchain.info/charts/mark...ageString=1&show_header=true&scale=0&address=
 
  • #42
Tosh5457 said:
Bitcoin dying? Hardly, the number of transactions/day is rapidly increasing, and the market capitalization, excluding the major bubble, has been on an uptrend since the beginning.
I'm surprised by the fairly smooth increasing trend in transactions per day, though that may be an artefact of the mining and it hitting a wall was part of the reason for the doom prediction, but the value doesn't have any kind of trend that I can discern. Regardless, a currency doesn't need growth it needs stability.
...but it's ridiculous the amount of naysayers and futurologists I see predicting the end of bitcoin since the beginning. When the paper money was invented there were a lot of scams too, it didn't mean that paper money would not be something to stay.
The difference is that the scams are pretty much built-in to the design of Bitcoin. I'm not just predicting it will go away, I'm suggesting it should be banned.
 
  • #43
https://news.bitcoin.com/knc-miner-bankruptcy-shutting-down/
In July 2016, the four-yearly reconfiguration of bitcoin block rewards will see miners receive only 12.5 BTC for each new block mined, down from 25. For the first four years of Bitcoin’s existence, when the cryptocurrency was still obscure, that reward had been 50 BTC.

Unless there is a corresponding increase in bitcoin price after the halving occurs, many miners will see a big drop in income — which could make mining unprofitable in places with high overheads and without access to cheap electricity.
 
  • #45
http://www.coindesk.com/bitfinex-shuts-down-customer-bitcoin-stolen/
UPDATE (3rd August 2:40 UTC): Bitfinex representatives confirmed 119,756 BTC (more than $60m) has been lost or stolen from the exchange.

Hong Kong digital currency exchange Bitfinex has taken its trading platform offline following a reported hack that resulted in the theft of customer funds.

According to a statement posted on its website, Bitfinexhas suspended trading, deposits and withdrawals. Both the number of customers impacted and the exact amount lost in the breach are unclear at this time.
 
  • #46
https://www.washingtonpost.com/worl...29cbea-657e-11e6-b4d8-33e931b5a26d_story.html
“When bitcoin was invented, the people dedicated to it were mostly crypto-punks and libertarians,” said Eric Mu, the chief marketing officer with HaoBTC, which operates the bitcoin “mine” in this township in China’s western Sichuan province. “Now they are more like bankers and lawyers who see opportunities in the industry. And as they join, the industry is changing.”
...
But Sirer identifies one risk with the concentration of mining power here: If the Chinese government wanted, it could in theory crack down on miners and force them to block certain bitcoin accounts.

“They would not be able to usurp funds, but they could stop the motion of funds,” he said, describing exactly the sort of government control bitcoin was supposed to guard against.

These are concerns that have parallels with the way China is using its digital market power to reshape the Internet and influence the global debate about censorship and surveillance.
 
  • #48
A paper just came out discussing how the blockchain ledger can be used to store arbitrary data, including at least two instances of child pornography. Because it is append-only, anyone with a copy of that particular blockchain - miners and wallet-holders - is breaking the law in 112 countries.
 
  • #49
That is scary. While it would be clear which transaction inserted it into the ledger, a person would still be guilty of distributing it. I wouldn't want to explain that to the FBI. :olduhh:
 
  • #50
Interesting article discussing a scalability problem with Bitcoin:
https://hackernoon.com/if-we-lived-...-would-the-blockchain-have-to-be-bd07b282416f

Blocks and the blockchain are big, so using it for a lot of transactions is cumbersome and will just keep getting worse. As it does, people will stop supporting it due to the cost, leaving large organizations the only ones managing it...the very banks and credit card companies that bitcoin was invented to avoid!
 
  • #51
Scientific American devoted a large amount of the January issue to crypto-currencies. I remember reading about the blockchains growing to unmanageable sizes.
 
  • #52
There are a couple solutions, a off chain fee less transaction which is built on a different layer than the block chain. This would enable light transactions, leaving the large transaction to be on the chain for more security. There is also bitcoin cash that is betting technology will keep increasing because of moores law. Also u have nanocurrecy which creates a block chain per each person so we all record our own ledgers individually and we each verify or agree per transaction. No one knows it’s limits but seems to be way more scalable than btc. Although less secure.
 
  • #53
theb2 said:
There is also bitcoin cash that is betting technology will keep increasing because of moores law.
Considering that Moore's law for processing power*, memory and hard drive space all ended 10-15 years ago, that's not a very good bet.

*Note: Moore's law was originally about transistor count, and until about 2005 processing power followed, but after that it diverged. So processors are still getting more transistors almost at Moore's pace, but they aren't getting faster at anywhere near that pace.
Note2: I've seen articles saying that processor speed is still following Moore's law but it's memory speed that is causing the divergence. I'm not sure I totally buy this: clock speeds have stopped increasing altogether and most of the increase in processing power is from multi-core processing, which only works for some tasks and has a diminishing return because of it.
 
  • #54
russ_watters said:
Considering that Moore's law for processing power*, memory and hard drive space all ended 10-15 years ago, that's not a very good bet.

*Note: Moore's law was originally about transistor count, and until about 2005 processing power followed, but after that it diverged. So processors are still getting more transistors almost at Moore's pace, but they aren't getting faster at anywhere near that pace.
Note2: I've seen articles saying that processor speed is still following Moore's law but it's memory speed that is causing the divergence. I'm not sure I totally buy this: clock speeds have stopped increasing altogether and most of the increase in processing power is from multi-core processing, which only works for some tasks and has a diminishing return because of it.
Yeah some other crypto starts with a v addresses the Moore’s law problem by allowing mining through only commercial cpus which is a better bet. but you have to remember the scalability issue really is an argument in which is more appropriate amount of centralization. There is a fear that if we increase the block size then eventually you’ll need huge servers that just compute for the ledger and that would centralize the mining. Basically become new banks, to me this is irrelevant. What’s more relevant is the non inflationary world currency aspect.
If you look at the American dollar it’s only worth I think 2% of its initial worth. The ability to store your value into a currency that won’t depreciate is pretty revolutionary. Gold2.0
 
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  • #55
Also in the issue of scalability there is a project which is called mimblewimble its a way to increase privacy per transaction. But it’s based off different cryptography which actually eliminates the need to confirm all transactions to the start of the chain. Which would increase the speed essentially limitless besides the network problem.
 
  • #57
theb2 said:
The ability to store your value into a currency that won’t depreciate is pretty revolutionary.

1 BTC on 15-December = $17,900.
1 BTC today = $8,900.

I guess it would be.
 
  • #58
Vanadium 50 said:
1 BTC on 15-December = $17,900.
1 BTC today = $8,900.

I guess it would be.
It’s a new currency, volatility happens everywhere. If you are privileged to live in a first world you may not be familiar with currency crashes
Vanadium 50 said:
1 BTC on 15-December = $17,900.
1 BTC today = $8,900.

I guess it would be.
That’s actually a good thing lol, it’s a relatively new currency. If you want to see how bitcoin is performing you check its transaction usage and it’s security track record. At the end of the day money is only valueable from trust.
 
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  • #59
theb2 said:
It’s a new currency, volatility happens everywhere. If you aren’t privileged to live in a

That’s actually a good thing lol, it’s a relatively new currency. If you want to see how bitcoin is performing you check its transaction usage and it’s security track record. At the end of the day money is only valueable from trust.

Bitcoin has been a total failure as an actual currency. Today it's only a store of wealth or an investment vehicle to be gambled with on Wall Street.

How could you possibility run a standard business using bitcoin as a currency with these types of monthly price changes.
https://bitcointicker.co/stamp/btc/usd/3Mth/
 
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  • #61
nsaspook said:
Bitcoin has been a total failure as an actual currency. Today it's only a store of wealth or an investment vehicle to be gambled with on Wall Street.

How could you possibility run a standard business using bitcoin as a currency with these types of monthly price changes.
https://bitcointicker.co/stamp/btc/usd/3Mth/
I agree,
nsaspook said:
Bitcoin has been a total failure as an actual currency. Today it's only a store of wealth or an investment vehicle to be gambled with on Wall Street.

How could you possibility run a standard business using bitcoin as a currency with these types of monthly price changes.
https://bitcointicker.co/stamp/btc/usd/3Mth/
I agree, although you have to remember it’s still a work in progress. And even though it’s pretty crappy in my opinion there are a bunch of international business that run using bitcoin. A lot of it is from transferring money overseas as it’s cheaper and quicker.
 
  • #63
theb2 said:
Basically become new banks, to me this is irrelevant. What’s more relevant is the non inflationary world currency aspect.
If you look at the American dollar it’s only worth I think 2% of its initial worth. The ability to store your value into a currency that won’t depreciate is pretty revolutionary. Gold2.0
I'm not sure I want to go down this road, but I've never heard anyone suggest before that Bitcoin could be non-inflationary. Do you have a basis for believing that it could be? And why that matters/would be a positive thing?
 
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  • #64
russ_watters said:
I'm not sure I want to go down this road, but I've never heard anyone suggest before that Bitcoin could be non-inflationary. Do you have a basis for believing that it could be? And why that matters/would be a positive thing?
In the white paper of bitcoin it says the currency has a set number of coins. It’s a cap, it’s going to take about another ten years to mine the rest of them. But it’s a fixed set of coins. No more will be printed and in that since it’s like gold. Although unlike gold we won’t be finding anymore bitcoin.
 
  • #65
Only 20 percent of total bitcoins remain to be mined so the number current in existence today should give us a good idea of how the system will work 10 years from now. People invest in Bitcoin because they think it will greatly increase in value over a regular currency. It wouldn't be wise to buy one pizza with Bitcoins today, when you can buy 10 pizzas next month. Who will make/pay a house loan using bitcoin today if you expect the value of one bitcoin to be $1,000,000 in 2028 instead of $9,000 today because of speculation.
 
  • #66
nsaspook said:
Only 20 percent of total bitcoins remain to be mined so the number current in existence today should give us a good idea of how the system will work 10 years from now. People invest in Bitcoin because they think it will greatly increase in value over a regular currency. It wouldn't be wise to buy one pizza with Bitcoins today, when you can buy 10 pizzas next month. Who will make/pay a house loan using bitcoin today if you expect the value of one bitcoin to be $1,000,000 in 2028 instead of $9,000 today because of speculation.
The number of bitcoins that are rewarded every mine is halved every 200000 blocks. Today days you only get about 12 btc when you are successfully at mining.

I mean you could buy pizza with bitcoin if your short bitcoin, as in you think bitcoin is overvalued.
 
  • #67
The need to even think about shorting bitcoin for a possible purchase is exactly what's wrong with it.
 
  • #68
nsaspook said:
The need to even think about shorting bitcoin for a possible purchase is exactly what's wrong with it.
Lol you must not like any form of currency
 
  • #69
theb2 said:
Lol you must not like any form of currency

I have plenty of investments but I don't keep money stuffed in a mattress hoping it will increase in value when I retire.
 
  • #70
nsaspook said:
I have plenty of investments but I don't keep money stuffed in a mattress hoping it will increase in value when I retire.
My point was you can short any currency
 

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