1. Post #1
    HUGE NERD
    Dacheet's Avatar
    November 2007
    6,304 Posts
    More than $87,000 worth of the virtual currency known as Bitcoin was stolen after online bandits penetrated servers belonging to Bitcoinica, prompting its operators to temporarily shutter the trading platform to contain the damage.

    Friday's theft came after hackers accessed Bitcoinica's production servers and depleted its online wallet of 18,547 BTC, as individual Bitcoin units are called, company officials said in a blog post published on Friday. It said the heist affected only a small fraction of Bitcoinica's overall bitcoin deposits and that all withdrawal requests will be honored once the platform reopens.

    It was at least the second time in 10 weeks Bitcoinica has been stung by a computer intrusion that has cost it dearly. In early March, a security lapse at cloud services provider Linode allowed hackers to make off with about $210,000 worth of bitcoin after they gained unauthorized access to bitcoin wallets stored by Bitcoinica and seven other customers. Last June, an anonymous person claimed to have lost $500,000 worth of bitcoin to online thieves, but the claims were never independently verified.

    "It is with much regret that we write to inform our users of a recent security breach at Bitcoinica," Friday's blog post stated. "The overwhelming majority of our bitcoin deposits were not stolen. The thief stole from us not you. All withdrawal requests will be honored."

    The post went on to warn that a database storing user names, e-mail addresses, and account histories was also accessed, and it also suggested cryptographically hashed passwords may also have been compromised. It advised customers who reused their Bitcoinica passwords on other sites to change them. Documents used to legally verify users' identities are stored on separate servers at a separate data center with a different encryption regimen.

    "Even full access to website database would not give the attacker access to this data," the post stated. "We will have more to say soon about the circumstances surrounding this attack and what we will do to handle it."

    Ars has sent e-mails sent to Bitcoinica CEO and lead developer Zhou Tong and other officials seeking comment for this article, but hadn't received a response by time of writing.

    According to comments Tong left in an online forum, hackers penetrated a webserver hosted by Rackspace after they managed to reset a password, most likely through an automated e-mail. Other participants in the discussion castigated Tong for not relying on two-factor authentication to manage the account. They also criticized Bitcoinica for storing such large amounts of liquid currency online, rather than keeping it offline and in an encrypted format. Tong didn't address the authentication issue, but he defended the decision to store such a large amount of currency online.

    "The sum of margin balance is the absolute minimum of funds we have to keep (so that we can honor every withdrawal request)," Tong explained. "Since the system is down at the moment, we don't have the knowledge of open positions. We're pretty sure that margin balance can be covered with our off-site reserves, but we are unable to determine value of unpaid unrealized profits and the unpaid swaps."

    Other participants complained that the theft of such a large amount of bitcoin threatened to devalue the currency. At time of writing, those fears appeared to be unfounded, with the value of a BTC remaining largely unchanged at about $4.94, according to current exchange rates.

    Bitcoin is a digital currency that's transferred through a peer-to-peer network, making it virtually impossible to trace those who use it. Strong cryptographic controls ensure that once bitcoins are spent they can't be taken back, although a recently published research paper reports limitations that allow the same bitcoins can be double spent.

    The March heist that hit Bitcoinica also affected several other trading platforms that have also lamented the necessity of storing large amounts of the currency in liquid form in "hot wallets" to automatically cover payout requests made by customers. Also hit in the earlier Linode breach was Gavin Andreson, the lead Bitcoin programmer, who lost about $25 worth of the currency.

    He told Ars at the time that he's working on an update to the Bitcoin framework that would largely prevent such thefts by requiring "multisignature transactions." Under such a system, wallets would contain only one of two private encryption keys needed to spend coins, with the other residing on a separate machine at a different location.

    Andreson didn't immediately respond to a request for comment on late Friday.
    Source
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  2. Post #2
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  3. Post #3
    Gold Member
    Sector 7's Avatar
    May 2005
    3,136 Posts
    Whenever I think too hard about crypto currency I get a little bit dizzy.

    this is why virtual money is kinda silly as an idea.
    guess what:

    almost every dollar on earth is 'virtual'

    if you use a credit card, well, that's silly too I guess
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  4. Post #4
    Gold Member
    JustExtreme's Avatar
    April 2007
    6,967 Posts
    Yeah, google fractional reserve banking J!NX :P
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  5. Post #5
    GOLF WANG
    Alec W's Avatar
    August 2006
    7,586 Posts
    J!NX, oh J!NX
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  6. Post #6
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  7. Post #7
    Whenever I think too hard about crypto currency I get a little bit dizzy.



    guess what:

    almost every dollar on earth is 'virtual'

    if you use a credit card, well, that's silly too I guess
    "Kinda" a silly idea

    and a CC is also kind of a more universally useful type of virtual money.
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  8. Post #8
    Gold Member
    W00tbeer1's Avatar
    July 2008
    3,129 Posts
    Too early to start a digital currency service like this IMO. We need to wait for better security technology.
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  9. Post #9
    Gold Member
    demoguy08's Avatar
    February 2005
    3,990 Posts
    Since bitcoins are anonymous, does it mean they're never getting them back?
    Unless Bitcoinica has some sort of insurance policy then yes, it's permanently gone.

  10. Post #10
    Gold Member
    Cushie's Avatar
    February 2005
    2,249 Posts
    Since bitcoins are anonymous, does it mean they're never getting them back?
    Yes. Bitcoins are anonymous and they cant be traced. As soon as the money left their account it was gone for good.

  11. Post #11
    Dennab
    October 2009
    2,552 Posts
    thats actually worth a shitload
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  12. Post #12
    fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart fart
    Kinglah Crab's Avatar
    November 2007
    7,670 Posts
    thats actually worth a shitload
    yeah like $87000 or something

    yeah
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  13. Post #13
    Hello, my name is Penis. Please refer to me as such. I'm totally cool with it.
    SPESSMEHREN's Avatar
    November 2009
    4,603 Posts
    I thought that bitcoin fad died out when people who bought dedicated "mining rigs" pushed the mining difficulty up too high?

    Well, I'm sure it'd be easy to trace the money. Not much you can buy with $87,000 in bitcoins except drugs and more bitcoins.
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  14. Post #14
    Gold Member
    Beafman's Avatar
    May 2006
    1,327 Posts
    Too early to start a digital currency service like this IMO. We need to wait for better security technology.
    Considering that quantum computers are only some decades away, security problems will be a thing of the past, because it will break every single code faster than the speed of light...
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  15. Post #15
    2014 SH Pun Award Nominee
    Awesomecaek's Avatar
    January 2009
    20,585 Posts
    Too early to start a digital currency service like this IMO. We need to wait for better security technology.
    Hackers will always be step ahead of security, because you can only defend against something you already know. Being a real hacker isn't about using something people already know about, but finding new paths and new routes, and that will always happen.

    There is nothing like absolutely secure system.
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  16. Post #16
    I thought that bitcoin fad died out when people who bought dedicated "mining rigs" pushed the mining difficulty up too high?

    Well, I'm sure it'd be easy to trace the money. Not much you can buy with $87,000 in bitcoins except drugs and more bitcoins.
    It's not like you need to spend it all in one go. And there are quite a few services that sell stuff other than drugs.

  17. Post #17
    Hello, my name is Penis. Please refer to me as such. I'm totally cool with it.
    SPESSMEHREN's Avatar
    November 2009
    4,603 Posts
    It's not like you need to spend it all in one go. And there are quite a few services that sell stuff other than drugs.
    like what?

  18. Post #18
    Considering that quantum computers are only some decades away, security problems will be a thing of the past, because it will break every single code faster than the speed of light...
    Yeah well, I expect they'll find a way, even still.

  19. Post #19
    Jacinth's Avatar
    January 2010
    1,126 Posts
    I thought that bitcoin fad died out when people who bought dedicated "mining rigs" pushed the mining difficulty up too high?

    Well, I'm sure it'd be easy to trace the money. Not much you can buy with $87,000 in bitcoins except drugs and more bitcoins.
    I'm sure they could trade for USD over a years time quite easily.
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  20. Post #20
    like what?
    I know there is or at least was a service that sold steam games. Another one that sold hardware and some server hosting services. Probably there are more but I don't use bitcoins so I don't look for them.

  21. Post #21
    Gold Member
    Greenen72's Avatar
    September 2009
    8,610 Posts
    Woah, bitcoins are actually still a thing?
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  22. Post #22
    .PSID's Avatar
    May 2011
    128 Posts
    I know there is or at least was a service that sold steam games. Another one that sold hardware and some server hosting services. Probably there are more but I don't use bitcoins so I don't look for them.
    You could easily get the first thing and probably the second and third with hats, which seem to be more effective than bitcoins.
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  23. Post #23
    Jacinth's Avatar
    January 2010
    1,126 Posts
    I know there is or at least was a service that sold steam games. Another one that sold hardware and some server hosting services. Probably there are more but I don't use bitcoins so I don't look for them.
    There's also a firearms dealer that accepted bitcoin in the US.

  24. Post #24

    September 2011
    5,173 Posts
    All these breaches involving BitCoins really says something.
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  25. Post #25
    Gold Member
    Xenocidebot's Avatar
    April 2006
    4,999 Posts
    Bitcoins worth $87,000
    This is incorrect. The worth of a bitcoin on the free market is null.
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  26. Post #26
    Gold Member
    Van-man's Avatar
    August 2009
    15,159 Posts
    This is incorrect. The worth of a bitcoin on the free market is null.
    So is most other currencies.
    Since they only exist in digital form on a bunch of computers.

    The money on your credit card? Well it's only worth something as long as other places accepts it.
    If they don't, well sucks to be you.
    Same with bitcoins, a group of people and companies accepts it as a currency, and therefor it's worth something.
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  27. Post #27
    Dennab
    July 2009
    2,787 Posts
    Think of all the drugs you can buy with that.
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  28. Post #28
    Gold Member
    sami-pso's Avatar
    June 2006
    4,759 Posts
    Any huge pile of money is at risk of getting stolen.

  29. Post #29
    stupid10er's Avatar
    January 2010
    3,532 Posts
    what i could do with 87k in bitcoins

  30. Post #30
    what i could do with 87k in bitcoins
    87k worth of bithookers

    87k worth of bitcoke
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  31. Post #31
    Gold Member
    Hattiwatti's Avatar
    October 2007
    2,273 Posts
    Would've been around 500k if this happened last summer when 1 bitcoin was worth $30 at its best.

  32. Post #32
    Gold Member
    Van-man's Avatar
    August 2009
    15,159 Posts
    Would've been around 500k if this happened last summer when 1 bitcoin was worth $30 at its best.
    And if all those bitcoins were cashed in at once, the market would almost crash.
    That's happened before.

  33. Post #33
    Gold Member
    SigmaLambda's Avatar
    March 2006
    6,424 Posts
    like what?
    child slaves, black market arms, the services of perfect, supple kathoey. bitcoins, what you need, when you need it

    Edited:

    So is most other currencies.
    Since they only exist in digital form on a bunch of computers.

    The money on your credit card? Well it's only worth something as long as other places accepts it.
    If they don't, well sucks to be you.
    Same with bitcoins, a group of people and companies accepts it as a currency, and therefor it's worth something.
    but again the only companies that accept it as trade are shitty little online coffee vendors and .tor websites

    And if all those bitcoins were cashed in at once, the market would almost crash.
    That's happened before.
    HMMMMMMM its almost as if bitcoins are a less valid form of currency because of the fact that their value is unregulated and supported only by internet randroid speculator wannabe neckbeards
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  34. Post #34
    Dennab
    August 2011
    3,194 Posts
    So is most other currencies.
    Since they only exist in digital form on a bunch of computers.

    The money on your credit card? Well it's only worth something as long as other places accepts it.
    If they don't, well sucks to be you.
    Same with bitcoins, a group of people and companies accepts it as a currency, and therefor it's worth something.
    Except, you know, nearly no actual free market business actually accepts a bogus currency like bitcoins, one not accepted as a national currency by ANY nation, therefore has little baring on the actual world's economy. Yes money is virtual due to credit cards and all that, but at least that virtual money is recognized as having worth.
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  35. Post #35
    The Union Jack would look a shit ton better with a Hammer and Sickle in the middle of it
    Bobie's Avatar
    November 2007
    7,153 Posts
    even though the concept of this happening is kinda cool, the stuff thats going to be purchased with these bitcoins is probably fucking horrible
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  36. Post #36
    Desuh's Avatar
    November 2011
    10,659 Posts
    Remember when 1BTC was at like $30? It crashed hard and is more stable now but still not stable enough to be used as currency imo.

    I really regret not having a good pc when bitcoins were created. Back then you could have made thousands of dollars just by having your pc on overnight.

  37. Post #37
    Except, you know, nearly no actual free market business actually accepts a bogus currency like bitcoins, one not accepted as a national currency by ANY nation, therefore has little baring on the actual world's economy. Yes money is virtual due to credit cards and all that, but at least that virtual money is recognized as having worth.
    Bitcoins are recognized by some sellers and service providers. They're a valid for of exchanging one item(bitcoins) for another. Just like real money.
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  38. Post #38
    Bitcoins are recognized by some sellers and service providers. They're a valid for of exchanging one item(bitcoins) for another. Just like real money.
    Except it's not real money and can't touch real money, so all in all it's a bullshit concept.

    it's the same as trading hats, basically. It just seems stupid and needed. Yes, it can have benefits, but why go through all that extra trouble for some pixel money?
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  39. Post #39
    Dennab
    August 2011
    3,194 Posts
    Bitcoins are recognized by some sellers and service providers. They're a valid for of exchanging one item(bitcoins) for another. Just like real money.
    Some is the key word here
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  40. Post #40
    Gold Member
    Van-man's Avatar
    August 2009
    15,159 Posts
    Except it's not real money and can't touch real money, so all in all it's a bullshit concept.

    it's the same as trading hats, basically. It just seems stupid and needed. Yes, it can have benefits, but why go through all that extra trouble for some pixel money?
    you DO realize a alarmingly high amount of money is currently digital?
    You can't touch that, unless you go down to your bank and make a withdrawal.
    And if said banks IT system breaks down completely, well you're fucked.
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