The 150 000 000 crypto currency heist

[mrcharly-YHT]

https://medium.freecodecamp.org/a-hacker-stole-31m-of-ether-how-it-happened-and-what-it-means-for-ethereum-9e5dc29e33ce

The initial theft was 31m; it was stopped by 'white hat hackers' using the thieves technique to empty the wallets so that the theft couldn't proceed. So a total of 150m was removed from wallets (then vast bulk returned).

Apart from considering most crypto-currencies values being inflated as a vast ponzi scheme, this just highlights their vulnerability. They are not backed by the sorts of guarantees that come with a bank.

[Morat]

They are definitely a minefield, but the best of them are immune to other risks like runs on banks or devaluation.

[mrcharly-YHT]

I don't see how they are immune to devaluation. Their 'value' is still dependent on a 'perceived' value.

There is no security in these systems, no insurance. If the system is hacked or broken, you are stuffed.

They are no more secure than cash or gold kept in a safe.

[Kim]

They are no more secure than cash or gold kept in a safe.

...but somewhat more convenient to use.

Good analogy.

[Afasoas]

We aren't far away from another 2008 style banking crisis due to the overvalued derivatives on banks assets.
And because our successive government's haven't implemented full Glass-Steagall separation of consumer and investment banking we are all at risk.
Which either means another government bailout or people losing their savings, pensions etc.

As of 2016 HSBC has 20.77 $US trillion of derivatives secured against 2.37 $US trillion of assets and 1.27 $US trillion of customer deposits.
For other banks it's worse.

[mrcharly-YHT]

Ugh.

I think I'd rather keep gold (or platinum etc) in a safe. Most currencies are not secure.

Can anyone suggest anything else of enduring value?

[Kim]

Can anyone suggest anything else of enduring value?

Bromptons.

[mrcharly-YHT]

Can anyone suggest anything else of enduring value?

Bromptons.

lol and probably appreciate in value after TEOTWAWKI

[Biggsy]

Discontinued Campag components.


There are cryptocurrencies pegged to gold.

[ian]

Most of the economy is based on belief but at least with banks and national currency there's a theoretical asset base even if it's leveraged and derivativised to hell and beyond. Even the value of precious metals is perception outside of industrial uses. There's no fallback for most cryptocurrencies, no underlying assets other than machine grunt. I know we're always told the rules are 'different' in the digital realm, but every time they're tested it turns out they're not.

[mrcharly-YHT]

Most of the economy is based on belief but at least with banks and national currency there's a theoretical asset base even if it's leveraged and derivativised to hell and beyond. Even the value of precious metals is perception outside of industrial uses. There's no fallback for most cryptocurrencies, no underlying assets other than machine grunt. I know we're always told the rules are 'different' in the digital realm, but every time they're tested it turns out they're not.

Exactly.

This, in spades.

This most recent theft has proven that the 'security' of cryptocurrencies is also a myth.

[woollypigs]

Bother I can't find it now but I heard on the  brilliant Note To Self podcast - https://www.wnyc.org/shows/notetoself/

That hackers have found a way to find out who you are when using bitcoin. So you can't hide who you are behind a bitcoin id or want ever the are called. While searching for this I found many stories where people have nicked bitcoins and lost access to their bitcoin.

[Pickled Onion]

Bother I can't find it now but I heard on the  brilliant Note To Self podcast - https://www.wnyc.org/shows/notetoself/

That hackers have found a way to find out who you are when using bitcoin. So you can't hide who you are behind a bitcoin id or want ever the are called. While searching for this I found many stories where people have nicked bitcoins and lost access to their bitcoin.

Not just hackers - tracking blockchain transactions was instrumental in bringing down alphabay and hanza. You can Tor connection traffic as much as you like, but if you actually want your bitcoin/ephereum/etc it has to join up somewhere.

[mrcharly-YHT]

What is really incredible about this is the silence.

A conventional bank heist stealing 10million would be in the papers and news for weeks.

This is a heist stealing 31million.

Hear that?













That's the major news coverage

[Morat]

I think it's far too complex a subject for the mainstream hacks.

[Morat]

I don't see how they are immune to devaluation. Their 'value' is still dependent on a 'perceived' value.

There is no security in these systems, no insurance. If the system is hacked or broken, you are stuffed.

They are no more secure than cash or gold kept in a safe.

I was perhaps lazy in saying "immune to devaluation". They are immune to central banks devaluing them through Quantative Easing because there is known number of $coins which means they cannot simply be printed at will by the Bank of England. The value at which they trade is of course variable (and volatile!).

There is certainly no insurance against theft of crypto currency and as the security is being tested it's pretty clear that these are very early days for crypto currencies and I wouldn't be putting my pension into them. However, if you need to be pretty anonymous for online purchases of pornography, narcotics or you're financing an international terrorist ring - I would imagine they have their uses.

I'd just like to point out that my use of crypto currencies is limited to mining one Litecoin and then losing the password to my wallet - I've never bought anything with bitcoin

[ian]

I think it's far too complex a subject for the mainstream hacks.

You're probably right, I was going to say something similar, though the annoying thing is that it's not really that complicated, but most journalism seems to the grind to a halt or gets it titanically wrong when it comes to science and technology.

[mrcharly-YHT]

I don't see how they are immune to devaluation. Their 'value' is still dependent on a 'perceived' value.

There is no security in these systems, no insurance. If the system is hacked or broken, you are stuffed.

They are no more secure than cash or gold kept in a safe.

I was perhaps lazy in saying "immune to devaluation". They are immune to central banks devaluing them through Quantative Easing because there is known number of $coins which means they cannot simply be printed at will by the Bank of England. The value at which they trade is of course variable (and volatile!).

There is certainly no insurance against theft of crypto currency and as the security is being tested it's pretty clear that these are very early days for crypto currencies and I wouldn't be putting my pension into them. However, if you need to be pretty anonymous for online purchases of pornography, narcotics or you're financing an international terrorist ring - I would imagine they have their uses.

I'd just like to point out that my use of crypto currencies is limited to mining one Litecoin and then losing the password to my wallet - I've never bought anything with bitcoin

See

Bother I can't find it now but I heard on the  brilliant Note To Self podcast - https://www.wnyc.org/shows/notetoself/

That hackers have found a way to find out who you are when using bitcoin. So you can't hide who you are behind a bitcoin id or want ever the are called. While searching for this I found many stories where people have nicked bitcoins and lost access to their bitcoin.

Not just hackers - tracking blockchain transactions was instrumental in bringing down alphabay and hanza. You can Tor connection traffic as much as you like, but if you actually want your bitcoin/ephereum/etc it has to join up somewhere.

The main advantage to cryptocurrencies is convenience of payment. Closely matched by how easy it can be to lose the key to your wallet, as you've found.

[Morat]

Err yes. All good points, already conceded. I don't think any of them mean that crypto currencies are going to go away, just that they're not the universal panacea that early proponents believed them to be.

[mrcharly-YHT]

The idea that they tracked the blockchain transactions disturbs me greatly. I thought those were very hard to track.

You can prise cash out of my cold dead hands. And if I visit the usa I'm wearing kevlar body armour.

[Pickled Onion]

What is really incredible about this is the silence.

A conventional bank heist stealing 10million would be in the papers and news for weeks.

This is a heist stealing 31million.

Hear that?













That's the major news coverage

A Billion USD was nicked from three Moldovan banks in 2014. How much coverage did that get? The ethereum heist is theft of what most people see as a tool of drug and arms dealers, or at best a ponzi scheme. There's no political angle either.

[Pickled Onion]

The idea that they tracked the blockchain transactions disturbs me greatly. I thought those were very hard to track.

I was being deliberately simplistic - transactions can't be tracked in the way you might track a credit card transaction which has the parties to the transaction clearly attached to it for ever. But unlike a CC transaction all the data for all transactions is available. It's not trivial to piece it all together, but not impossible, and software to do it is commercially available.

[Morat]

I found this to be a useful explanation. http://bitcoinsimplified.org/learn-more/anonymity/

[Afasoas]

Bother I can't find it now but I heard on the  brilliant Note To Self podcast - https://www.wnyc.org/shows/notetoself/

That hackers have found a way to find out who you are when using bitcoin. So you can't hide who you are behind a bitcoin id or want ever the are called. While searching for this I found many stories where people have nicked bitcoins and lost access to their bitcoin.

Not just hackers - tracking blockchain transactions was instrumental in bringing down alphabay and hanza. You can Tor connection traffic as much as you like, but if you actually want your bitcoin/ephereum/etc it has to join up somewhere.

You know, that's just not the case.
Alphabay, for instance: http://www.theregister.co.uk/2017/07/20/alphabay_hotmail_fbi/

It's possible to track bitcoin transactions to a wallet, but not necessarily easy to determine who the wallet belongs to. And from there it can be laundered in much the same way a conventional currency can be. Always possible to trace it but there's always a point where that tracing becomes too exhaustive an effort.

[Pickled Onion]

You know, that's just not the case.

Actually, I do know that's the case.

I know the hotmail account was also instrumental, and it's clear that's the part of the story the FBI are keen for everyone to hear about.