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Bitcoin Exchange Flexcoin Wiped Out By Theft

timothy posted about 10 months ago | from the in-the-movie-version-it'll-be-the-feds dept.

Bitcoin 704

mrspoonsi writes "Joining MtGox, Flexcoin today announced they have had their vault wiped out, to the tune of some 896 BTC (about $615,000) by hackers. 'On March 2nd 2014 Flexcoin was attacked and robbed of all coins in the hot wallet. The attacker made off with 896 BTC, dividing them into these two addresses: 1NDkevapt4SWYFEmquCDBSf7DLMTNVggdu [and] 1QFcC5JitGwpFKqRDd9QNH3eGN56dCNgy6. As Flexcoin does not have the resources, assets, or otherwise to come back from this loss, we are closing our doors immediately.'"

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surprised!!!! (5, Interesting)

banbeans (122547) | about 10 months ago | (#46396747)

Not!
Which one is next?

When are the bank runs going to happen? (1)

Anonymous Coward | about 10 months ago | (#46396857)

I am surprised that the value of BitCoins hasn't crashed from folks selling them for their currency of choice.

That's what I'd do if had these things: withdraw from the "bank" and sell for $US before mine get stolen.

Re: When are the bank runs going to happen? (3, Interesting)

AudioEfex (637163) | about 10 months ago | (#46397105)

It hasn't crashed yet because the current BitBelievers are buying up the stock folks are selling off, thinking they are getting "fire sale" prices. So it's the same people who are already in that are presumably spending all the legal tender they can muster to buy more to hoard away. One of them described it to me on this board as him "putting my money where my mouth is". I think he may have been almost right, he just didn't follow through the entire statement where he then places the money in his mouth, chews on it, swallows it, digests it, and then deposits it in a toilet somewhere before flushing it away.

Re:surprised!!!! (1, Interesting)

Spamalope (91802) | about 10 months ago | (#46397245)

Which one is next?

The one the governmental actors target? We know they want to discredit bitcoin. Why not make the effort profitable too? Stealing bitcoin discredits bitcoin while providing 'clean' funds for covert operations. Win-Win!

The folks who created Stuxnet could do this without a doubt. Why is anyone assuming this is being done by 'criminals'?

Bitcoin: currency of choice for criminals (0)

Anonymous Coward | about 10 months ago | (#46396767)

I came here to laugh at you.

Idiots! (0)

Anonymous Coward | about 10 months ago | (#46396771)

Inside job...

How much can be stolen until it's all gone? (5, Funny)

Anonymous Coward | about 10 months ago | (#46396775)

"Wow, we just got 896 bitcoins"
"yup but because we did the value is now $2"

Take the Bitcoins and run! (0)

Anonymous Coward | about 10 months ago | (#46396787)

Take the Bitcoins and run!

Unregulated currency (5, Insightful)

BitZtream (692029) | about 10 months ago | (#46396791)

rocks ... doesn't it.

This is what you wanted right?

Seriously, if you come here to talk about how this isn't a fundamental bitcoin problem, you deserve to have your noise smacked with newspaper like a dog.

The only 'benefit' bitcoin has is that its unregulated and not as well watched by the government ... which means its easy for people to just steal your money and lie about it ... I'm sorry, its easy for someone to setup an exchange and let someone else steal the coins from the 'hot wallet', whatever the fuck that is.

Before you open your mouth to defend bitcoin ....

THIS WHAT WE'VE BEEN TELLING YOUR STUPID DUMB ASSES ABOUT, NOW SHUT THE FUCK UP, ITS A SHITTY IDEA.

Re:Unregulated currency (4, Insightful)

X0563511 (793323) | about 10 months ago | (#46396813)

It's funny how they want it both ways, eh? No regulation, but then they want dependable banks.

Choose one or the other. You do not need to use an exchange, just like you don't need to use a bank.

Re:Unregulated currency (4, Funny)

jythie (914043) | about 10 months ago | (#46396885)

but.... but... the market fixes everything! If consumers just vote with their wallets we do not need regulation in order to have dependable banks, right?

Re:Unregulated currency (3, Informative)

silas_moeckel (234313) | about 10 months ago | (#46396939)

Dependable banks pretty much require somebody large enough backing them. That is generally governments who can print money.

Re:Unregulated currency (0)

Anonymous Coward | about 10 months ago | (#46396957)

At least in Bitcoin's case, we can use the end of the old adage

- only outlaws will have wallets.

Re:Unregulated currency (1)

Impy the Impiuos Imp (442658) | about 10 months ago | (#46397243)

It's not so much regulation and police protection they are worried about as it is all the extra BS yokels like you seem to think necessarily and properly come along with it like outrageous taxes for bloated, bloviated pop politics (basically a power-hungry politician taking heir money to hand to people who vote for him AKA help him seize power through the abstraction of might makes right called The Vote), overly intrusive monitoring, and outlawing of legitimate business (see bloviating preening power seekers above.)

No, all that extra stuff does not follow, or DNF in scientific terms. A secure and safe business environment includes disallowing rent-seeking and confiscatory tax rates which make the economic impact little different from corrupt places like Russia, Mexico, and a hundred other countries where kickbacks are required to get anything done.

Re:Unregulated currency (0)

Anonymous Coward | about 10 months ago | (#46396897)

I thought the whole point was to pump up a ponzi scheme without the burden of any sort of legal oversight. Once those things (crypto-currencies) start to get hard to find/generate then there is nothing left to do but bring the pyramid down.

Re:Unregulated currency (3, Funny)

Mr2cents (323101) | about 10 months ago | (#46396971)

good time to start a Flexcoin exchange (4, Insightful)

DocSavage64109 (799754) | about 10 months ago | (#46397207)

Yet... Now is probably a good time to start a Flexcoin exchange which you can then "rob" and shut down in a years time for some easy $500,000.

Re:Unregulated currency (5, Insightful)

hodet (620484) | about 10 months ago | (#46397025)

Ok, well I know you are a bit emotional about this but I will chime in anyway. All the problems we have seen with thefts have had nothing to do with the Bitcoin protocol. The problems have been in trusting your stash with companies that have no business being trusted. It's the equivalent of leaving your bag full of cash with Lenny down at the bowling alley because he has a safe in the basement. Flexcoin, Gox et al., -- Why would anyone trust their funds to these people? These fly by nights are either a bunch of incompetents or just plain old crooks.

Bitcoin itself is not a shitty idea. The problem right now is that bitcoin is very young and there is a 'wild west" aspect to it. The infrastructure will mature.

If you feel so strongly about it then just don't use it. What's the problem? But to say a system that offers frictionless payments is a shitty idea and should not even be attempted is stupid. There is a huge need in the world for this right now. The ride will be bumpy so buckle up.

One last thing and more of an open comment to people who have bitcoin. "Don't be a dumbass and let Lenny hold your bag of cash for you!" Geez does it even need saying?

Re:Unregulated currency (2, Interesting)

Captain Splendid (673276) | about 10 months ago | (#46397189)

Bitcoin protocol

He wasn't talking about protocol, just the dumb libertarian ideas behind it.

Re:Unregulated currency (2, Insightful)

serviscope_minor (664417) | about 10 months ago | (#46397231)

He wasn't talking about protocol, just the dumb libertarian ideas behind it.

The ideas behind the protocol are number theory. "dumb libertairianness" is just hype read into it by you and others.

Re:Unregulated currency (1)

retchdog (1319261) | about 10 months ago | (#46397211)

Well, if he's anything like me, the 'emotion' is amusement and schadenfreude.

Re:Unregulated currency (1, Insightful)

snsh (968808) | about 10 months ago | (#46397187)

"Unregulated and not watched by the government"

You mean like silver and gold?

Re:Unregulated currency (5, Informative)

Stormy Dragon (800799) | about 10 months ago | (#46397213)

which means its easy for people to just steal your money and lie about it

Yes, because never in history has anyone been "mugged" or "conned" or otherwise had their government regulated currency stolen by a third party.

hmmm.... (4, Funny)

Connie_Lingus (317691) | about 10 months ago | (#46396799)

im don't claim to be sherlock holmes, but im pretty sure im detecting a pattern here...

Indeed. But how can they be "stolen"? (2)

Viol8 (599362) | about 10 months ago | (#46396993)

Ok, I don't understand how bitcoin works, but ultimately they're just encryped hash files on a disk, right? So unless the other person spends them before you do and you have a backup, how can they be stolen?

Someone please explain...

Re:Indeed. But how can they be "stolen"? (1)

SpankiMonki (3493987) | about 10 months ago | (#46397091)

The attackers moved the BTC balances from the Flexcoin "hot wallet" [bitcoin.it] to their own wallets (accounts). As soon as the bitcoin network validated the transaction, the coins were effectively "spent" - i.e., successfully stolen.

Re:Indeed. But how can they be "stolen"? (4, Informative)

n7ytd (230708) | about 10 months ago | (#46397191)

Ok, I don't understand how bitcoin works, but ultimately they're just encryped hash files on a disk, right? So unless the other person spends them before you do and you have a backup, how can they be stolen?

Someone please explain...

Loosely speaking, a Bitcoin is a secret number. To spend a Bitcoin, you send that number to someone else and the transaction is recorded by the Bitcoin network. The network keeps track of who owns each coin, which means others can verify the ownership of a coin by consulting the network.

The exchanges work by you "spending" your Bitcoin to them, so now in the network's eyes, the exchange is the owner of that coin. In return, the exchange keeps a record that you have a certain number of Bitcoins in your account. The idea being that in the future you can instruct the exchange to send coins back to you, to other people, or to deduct an amount of coin and send you the cash instead.

It's just like a bank; you hand a teller $20, the bank adds $20 to your balance, and they keep the $20 bill.

Where these exchanges differ from a bank is in their lack of accounting ability, apparently.

Re:Indeed. But how can they be "stolen"? (0)

Anonymous Coward | about 10 months ago | (#46397199)

They steal them not by just making a copy, but by transferring them into their own accounts. That means the coins you have backed up are already spent.

Re:Indeed. But how can they be "stolen"? (1)

tlhIngan (30335) | about 10 months ago | (#46397205)

Ok, I don't understand how bitcoin works, but ultimately they're just encryped hash files on a disk, right? So unless the other person spends them before you do and you have a backup, how can they be stolen?

Thing is, "spending" in bitcoin basically equates to "transfer X BTC from wallet Y to wallet Z". Which can be done by anyone at any time as long as they have access to the key to the wallet.

So all the crooks do is transfer the balance from the wallet to their own and wait for it to appear on the blockchain to confirm it. Most likely, you won't notice in time and it's locked in. Once it's in the blockchain, it's too late.

Re:hmmm.... (1)

Connie_Lingus (317691) | about 10 months ago | (#46396997)

im don't claim to be the best grammatist, either...

Re:hmmm.... (0)

Anonymous Coward | about 10 months ago | (#46397035)

It's pretty much the same patterns as EVE Online in-game banks and investment cooperatives have had for years, except for the fact that eve scammers are more likely to gloat on the forums.

So, doomed to fail? (3, Insightful)

gstoddart (321705) | about 10 months ago | (#46396811)

So what we have is a bunch of startups who think they know how to be like a bank, but are failing utterly.

Is this is a systematic flaw in Bitcoin itself, or Schadenfreude by companies who have yet to learn they are nowhere near ready for holding onto something like this?

It just seems like this is the kind of thing which sounds great on a whiteboard, but in reality is anything but.

Re:So, doomed to fail? (0, Troll)

geekoid (135745) | about 10 months ago | (#46396863)

It's a systematic flaw in electronic currency.
You can not hid secrets from the future with math. ANd presumable you want a currency that will last decades.

Re:So, doomed to fail? (2)

SpankiMonki (3493987) | about 10 months ago | (#46397249)

You can not hid secrets from the future with math.

I bought some Chinese food with BTC, and that message was in my fortune cookie. Coincidence? I think not.

Re:So, doomed to fail? (3, Interesting)

jythie (914043) | about 10 months ago | (#46396917)

BTC as a protocol no, but as an ecosystem it is still open to debate. With USD there are rules regarding who can act as a bank and what procedures they need to follow and, in exchange, if something goes wrong with said bank FDIC will help the people hurt by it. So the ecosystem around USD means greater stability and trust in financial institutions, even small ones.

Re:So, doomed to fail? (4, Insightful)

whoever57 (658626) | about 10 months ago | (#46396947)

So what we have is a bunch of startups who think they know how to be like a bank, but are failing utterly.

Is this is a systematic flaw in Bitcoin itself, or Schadenfreude by companies who have yet to learn they are nowhere near ready for holding onto something like this?

There is another possiblity: that these exchanges are operating as designed.

Who can most easily rob a bank? The people running it, of course.

Re:So, doomed to fail? (0)

Anonymous Coward | about 10 months ago | (#46396961)

Or they could be startups who realized that they are in a position with no government oversight (which is indeed hindered greatly by Bitcoin's technical structure) who realize they can make more money by walking away with other people's deposits than continuing as a legitimate enterprise.

It doesn't have to be gross incompetence - it could also be malice masquerading as incompetence.

Re:So, doomed to fail? (1)

Anonymous Coward | about 10 months ago | (#46396977)

Is this is a systematic flaw in Bitcoin itself, or Schadenfreude by companies who have yet to learn they are nowhere near ready for holding onto something like this?

Schadenfreude ? I don't think that word means what you think it means ...

Re:So, doomed to fail? (3, Informative)

ericloewe (2129490) | about 10 months ago | (#46397009)

You seem to have no idea what Schadenfreude means. It's happiness derived from others' losses.

You might want want a word like "overconfidence", or maybe recklessness.

Re:So, doomed to fail? (1)

gstoddart (321705) | about 10 months ago | (#46397153)

You seem to have no idea what Schadenfreude means. It's happiness derived from others' losses.

Perhaps I should have said "over" instead of "by" -- but I'm certainly getting some entertainment out of these predictable losses.

For these companies, I'll stick with incompetence, and for the users who entrusted them I'll stick with suckers.

Re:So, doomed to fail? (1)

Anonymous Coward | about 10 months ago | (#46397129)

So what we have is a bunch of startups who think they know how to be like a bank, but are failing utterly.

Is this is a systematic flaw in Bitcoin itself, or Schadenfreude by companies who have yet to learn they are nowhere near ready for holding onto something like this?

It just seems like this is the kind of thing which sounds great on a whiteboard, but in reality is anything but.

Speaking of systemic flaw, as the world lost $15 trillion in value in 2008, $80 trillion sits in offshore holding accounts, neatly tucked away in all those "legal" tax havens. Gee, smells a lot like deregulation to me...hell of a loophole that just never seems to close.

I also wonder what the daily losses due to credit card theft amount to? The entirety of bitcoin loss could probably be summarized in an hour of credit card losses.

It's fucking hilarious to me that people actually think the current system is stable. We print billions of dollars every month to try and prove how stable it is.

From the FAQ (5, Informative)

blueg3 (192743) | about 10 months ago | (#46396829)

Q: Where will my bitcoins go?

A: Bitcoins deposited with flexcoin will be stored on our secure servers. They will remain in your account, and your account only, unless you authorize a transaction with them.

Wishful thinking.

From the Terms of Service:

We have taken every precaution to defend your bitcoins from hackers and/or intruders. However, Flexcoin Inc is not responsible for insuring any bitcoins stored in the Flexcoin system. You are entering into this agreement with Flexcoin Inc. You agree to not hold Flexcoin Inc, or Flexcoin Inc's stakeholders, or Flexcoin Inc's shareholders liable for any lost bitcoins.

We'll see.

Re:From the FAQ (1)

geekoid (135745) | about 10 months ago | (#46396873)

That's nice that they don't insure them, but that doesn't mean their sloppy security doesn't make the liable.

Re:From the FAQ (1, Insightful)

Anonymous Coward | about 10 months ago | (#46396925)

Liable for what?

If you breeak into an imaginary bank and steal imaginary currency who do you imagine will care?

Re:From the FAQ (2, Funny)

Anonymous Coward | about 10 months ago | (#46397001)

an imaginary friend ?

Re:From the FAQ (2, Insightful)

gstoddart (321705) | about 10 months ago | (#46397033)

Ah, but it's in the terms of service. And those have been upheld by the courts.

Which means people who lost money in this are out of luck, because all they really claim is they'll do their best effort but otherwise make no guarantees about their ability to do anything.

In other words, there's zero basis on which to trust them, it's spelled out in the license, and if you trusted them and lost it's caveat emptor.

You might as well ask the wino on the corner to hold onto your money, because he's about as accountable if your money goes missing.

Re:From the FAQ (0)

Anonymous Coward | about 10 months ago | (#46397239)

Actually, they aren't liable. Their TOS can be summed up in two words: Caveat Emptor.

Re:From the FAQ (4, Informative)

gstoddart (321705) | about 10 months ago | (#46396927)

Translation: We'll try to be secure, and we'll call it secure, but we're really new at this and not entirely sure about this security thingy, but since we're not really a bank we'll tell you that if we prove to be incompetent we take no responsibility for that.

Seriously, how many of us didn't see stuff like this happening?

Hell, it sounds like the most lucrative way to make money of bitcoins is to set up your own exchange, and then have one of your people steal all the money, and then say "oops, teh hax0rs, not our fault, too bad for you".

If you're not a bank, and not regulated like a bank, this is kinda like asking the kid with the lemonade stand to hold onto your life savings.

It's frigging amateur hour. Entrusting someone with no track record with your money when that person has a clause which says "we take no responsibility for this" is just plain stupid in my mind.

Then again, I don't own or care about bitcoins.

Sinking ship (1)

Yim (268074) | about 10 months ago | (#46396833)

How long till bitcoins become illegal tender? I wonder if these coins are being moved around to another exchange, liquidated, and move on to the next one to rob. This is happening way too frequently, and since there isn't any enforcement tied to it, there will be no recourse for these exchanges. Sitting ducks, anyone?

Re:Sinking ship (2)

RKThoadan (89437) | about 10 months ago | (#46397081)

I don't think it's possible to make something "illegal tender", at least in the US. If I want to trade you one thing for another thing, it's hard to see the government saying we can't do that. "legal tender" is something that must be accepted for all debts, public and private. Trying to say that something cannot be used even in barter, is pretty tricky.

Re:Sinking ship (1)

ppanon (16583) | about 10 months ago | (#46397219)

Apparently you can get charged with money laundering [theglobeandmail.com] though.

Re:Sinking ship (1)

egranlund (1827406) | about 10 months ago | (#46397251)

I don't think it's possible to make something "illegal tender", at least in the US.

They could always make it illegal to posses it, like illegal drugs. Though, I doubt it would go that far.

Hacked!! (-1)

Anonymous Coward | about 10 months ago | (#46396835)

flexcoin was using RHEL and mysql/php for the backend!.. so much for 'open source" security :)

Why? (1, Insightful)

Anonymous Coward | about 10 months ago | (#46396841)

By stealing so much from these exchanges that they end up closing... they are just destabilizing the currency and cause the price of bitcoins to plummet. Any hacker doing this for profit is likely quite retarded. I can see why a government who does not like the idea of a cryptocurrency would perform such a theft, however.

Re:Why? (1)

bobbied (2522392) | about 10 months ago | (#46397015)

Yea, criminals are killing the goose that lays the golden eggs. But criminals are not the sharpest knives in the drawer to start with.

Re:Why? (1)

gstoddart (321705) | about 10 months ago | (#46397101)

They're apparently a lot smarter than the people doing security for these exchanges.

And possibly smarter than the people who chose to put their bitcoins there.

So who's the dummy in this equation? The guys who walked off with the money would appear to be coming out the winners here.

Re:Why? (2)

Mitchell314 (1576581) | about 10 months ago | (#46397027)

There are ways to profit from falling currencies. Particularly with strategically placed liabilities and investments.

For example, place an order in bitcoins amount of "product" equal to $X. Sell on streets in cash for $X + markup. Watch bitcoin value "conveniently" fall and pay back promised amount bitcoins, now valued much below $X. IRL cases would probably be much more complex, but bitcoins still suffer from an issue where there's large financial gains for some folks if the prices were to fall - and the means of significantly achieving such are plausible.

Re:Why? (0)

Anonymous Coward | about 10 months ago | (#46397041)

Uh presumably the thieves got the bitcoins for near nothing.

So they're not as retarded as you think if:
a) they succeed in converting the bitcoins to something else
or
b) bitcoins retain significant value.

Re:Why? (0)

Anonymous Coward | about 10 months ago | (#46397145)

Uh presumably the thieves got the bitcoins for near nothing.

Yea! but their value dropped in half!

You can't make tech safe from malice (3, Interesting)

Catbeller (118204) | about 10 months ago | (#46396843)

So, it doesn't work - thousands of very bad men are trying and succeeding to break the ownership chain. No matter how hard you try to plan, you can't plan for malicious agents. And if you could, precise implementation is done by human beings, who forget where they last saw their toothbrush. . Voting machines? Trivial and done, hacked to hell and back and looks like elections were hacked ten years ago. Autonomous cars: oh, lordy lord lord, what a colossal fuck-up that will be; hubris on a scale undreamed of heretofore. Absolute perfection required of billions of kilos of metal racing around at high speed - and the designers assume bad people won't try to break it - will break it - for revenge or to make a point or just 'cause they are psychopaths.

Keep systems as simple as possible to perform their function. Don't lard layers of clever on top of things that already work. Complexity insures failure. The Bitcoin protocol can't do what must do in the real world.

Re:You can't make tech safe from malice (2)

compro01 (777531) | about 10 months ago | (#46396919)

Autonomous cars: oh, lordy lord lord, what a colossal fuck-up that will be; hubris on a scale undreamed of heretofore. Absolute perfection required of billions of kilos of metal racing around at high speed - and the designers assume bad people won't try to break it - will break it - for revenge or to make a point or just 'cause they are psychopaths.

Malice schmalice. Fucking up driving even more than humans already do would be pretty difficult.

Re:You can't make tech safe from malice (2)

jythie (914043) | about 10 months ago | (#46396935)

To be fair, with autonomous cars, they do not need to be perfect, just more reliable then human drivers. Given we have pretty good metrics on how often people mess up, there is a pretty clear bar afterwhich autonomous cars are 'good enough'.

Re:You can't make tech safe from malice (1)

Attila Dimedici (1036002) | about 10 months ago | (#46397019)

Except that you miss the point. Currently, if you are involved in a mishap involving an automobile, there is a chance that you could have avoided it if your skill was sufficient to the task and if that is not the case it is unlikely that you were specifically targeted. In addition, if by some chance you WERE targeted, the person targeting you is putting themselves at risk. In an autonomous car, your skill will be irrelevant AND those targeting you will be able to target just the vehicle you are in.

Re:You can't make tech safe from malice (1)

Anonymous Coward | about 10 months ago | (#46397141)

Or they could sabotage your brakes, or put a bomb on the underside of your car, or any number of other things. Basically, if someone wants you dead by sabotaging your car, the autonomous driving system doesn't seem like a hugely amazing avenue of attack - it will almost certainly require technical skill beyond 90%+ of the population, free access to the interior of the vehicle, and a lot of technical skill and paraphernalia. The idea that we should resist a change that could cut the 10.84 deaths from car accidents drastically because it might provide a new way for the 4.7 murders per 100,000 people to occur seems really bizzare to me - especially when most of the murders are heat-of-the-moment deals rather than cold-blooded planned out affairs.

Re:You can't make tech safe from malice (0)

Anonymous Coward | about 10 months ago | (#46397053)

I disagree. A fleet of malicously hacked/infected cars has more damage potential than any given human driver has ever had.

Re:You can't make tech safe from malice (1)

Idarubicin (579475) | about 10 months ago | (#46397143)

Autonomous cars: oh, lordy lord lord, what a colossal fuck-up that will be; hubris on a scale undreamed of heretofore. Absolute perfection required of billions of kilos of metal racing around at high speed...

You seem to have entirely accidentally illustrated why it's very difficult to improve things with technology. In the United States, there are something like six million automobile accidents per year. Motor vehicle accidents kill about thirty-five thousand people each year, and maim many times that number. Yet for some reason, the expected standard for autonomous vehicles is no deaths, and no accidents.

It's a weird quirk of human psychology that we're predisposed to tolerate and accept - essentially without thought - any risk that we've faced for most of our lives, but primed to respond with terror to any 'new' threat, even if it replaces an older, more dangerous threat. The old, dangerous ways are always better than the newfangled ones. Heck, we build that prejudice into our regulatory frameworks. Compare the level of regulation - and level of passenger safety - associated with, for example, aircraft versus automobiles. If Aspirin (acetylsalicylic acid) or Tylenol (paracetamol/acetaminophen) had been brought to market in 1990, they'd be behind the pharmacist's counter, not sold on open shelves in 200-tablet extra-strength bottles. Our brains 'grandfather in' old risks, and react disproportionately to new ones.

Fuck (5, Funny)

PvtVoid (1252388) | about 10 months ago | (#46396859)

Somebody stole a bunch of tulip bulbs!

Re:Fuck (0)

Anonymous Coward | about 10 months ago | (#46397259)

At least tulips are pretty. BTC doesn't even have that going for it.

What's that in your pockets (-1)

Anonymous Coward | about 10 months ago | (#46396861)

Or are you REALLY REALLY glad to see me? Hey, where you going? WHy you running? You dropped something. A buttcoin.

Government sponsored (2, Interesting)

arbiterxero (952505) | about 10 months ago | (#46396877)

So..... here's the thing.... .... while I'm no user nor defender of bitcoin, the idea seems fun...

except you're pissing off the biggest governments in the world (US, Russia, China) by creating a currency they can't control........ currency is used as a method of control ...now if I have an army of digital terrorists (APT's) and a digital currency that may undermine my rule........

well I know exactly what I'm going to do. I'm going to steal and terrorize anyone who accepts it.

Flame was ridiculously amazing, and those same programmers are still at work doing SOMEthing..... I'd bet they had a hand in some of these.... they seem too well co-ordinated, first one, then as the media coverage starts to die, another....and wait a week, we'll hear of a third.

Re:Government sponsored (4, Insightful)

jythie (914043) | about 10 months ago | (#46397003)

Well, one issue is how much to the governments actually care? BTC adherents believe they are a huge futuristic threat to the world order and have states quaking in their boots, but as far as I can see, outside worries about money laundering and tax evasion, the various states do not really care all that much.

Control over currency is important, it allows governments to make adjustments based off the needs of the economy, which increases stability. BTC would need to get much, much larger to even make a dent in the overall stability of the economy and THEN states might actually worry, but we are about as close to that as interstellar travel.

Who is doing this? (1)

wjcofkc (964165) | about 10 months ago | (#46396881)

Is it one person or hacking group behind this? In the United States government, there are some who have expressed indifference to bitcoin, and some who see it as illegal and a threat. I suspect the indifference crowd is lying would also like to see it gone. If it is the United States government robbing all these exchanges blind, it would be too new a program to be in the Snowden files. Seriously, at this point is there a single one among us who not put these actions past the American government?

Re:Who is doing this? (1)

stinerman (812158) | about 10 months ago | (#46396981)

I would put it past them. This is incredibly small potatoes for them. I know a lot of the bitcoin apologists think they're doing something incredibly revolutionary. They aren't. Basic economics says this is bound to failure because there is a fixed amount of coins to be mined. That's a very bad feature of a currency (works great for an investment, though one will always need to find the next fool)

Maybe organized crime is involved or maybe a couple of 8th graders. I really don't know, nor do I care. I'm just basking in the shadenfreude at this point.

Re:Who is doing this? (1)

JustNiz (692889) | about 10 months ago | (#46397181)

>> This is incredibly small potatoes for them.

Not at all.
Digital currencies do have the potential to completely undermine the dollar (and any other fiat currency). Its exactly why China has already made trading currency for Bitcoin illegal, and Russia has made trading Bitcoin at all illegal.

The root of literally all the power governments have comes from their control of a currency and that only they can make as much as they want out of thin air while everyone else have to trade something for it. Take away a government's power/control of their countries money/economy (i.e. everyone just starts using digital currency instead) and the government becomes immediately and completely powerless and redundant.

Security is Job #1 (1)

RichMan (8097) | about 10 months ago | (#46396899)

The data penetration market is currently very involved and you need very good security, on all three levels, electronic, physical and personnel to keep data secure. I think the lure of the bitcoin profit was too easy for new people to enter.

So people set up these multi-million dollar value exchange/vaults without security as thought ONE. I think this is more a testament to the cowboy free range nature of the bit coin market when faced with organized criminal hacker cultures.

Flexcoin was not an "Exchange" (5, Informative)

SpankiMonki (3493987) | about 10 months ago | (#46396905)

Although Flexcoin labelled themselves as a "bank" what they really were was an EWallet service. [bitcoin.it] Why people still use these web-based services to store their BTC balances is beyond comprehension.

Hahahahahaha (0)

Anonymous Coward | about 10 months ago | (#46396915)

So just how much evidence is required that putting money into a completely anonymous system that operates outside of the purview of government regulation is no different than flushing it down the toilet?

Let the bitcoin advocates come and say "it isn't so! The government is EVIL!". I will continue to laugh as people fail to realize that anonymity with no recourse is *more* evil...

Hmmmm (4, Interesting)

jeff13 (255285) | about 10 months ago | (#46396923)

Ya know, I'm reminded of the words of one William K. Black (UMKC School of Law), economist and, and the only combination of the two to exist, a criminologist. He was once asked, what is the best way to rob a bank? His answer was; 'be a banker'.

Really, the entire Bitcoin story has been one that was highly suspicious all along. Have you ever read a Bitcoin story that didn't make your left eyebrow raise like Mr. Spock in a room full of illogic? I watched 'The Wolf of Wall Street' recently and thought, *pffft*, soooo dated. I reckon in 20 years someone in Hollywoodland will catch up with reality enough to make a film in that vein about Bitcoin.

Re: Hmmmm (1)

VTBlue (600055) | about 10 months ago | (#46397117)

Finally a fellow MMTer! *i presume*

Black makes things so crystal clear!

for the love of god stop using wallets. (1)

nimbius (983462) | about 10 months ago | (#46396967)

or at least temper the amount youre willing to commit to them.

Yea, but HOW (1)

Danathar (267989) | about 10 months ago | (#46397007)

What I want to know is HOW are the coins being stolen? Is it standard hacker stuff with viruses, malware, etc?

Re:Yea, but HOW (1)

ThomasBHardy (827616) | about 10 months ago | (#46397109)

I don't know much about bitcoin, I've been laughing to myself about the concept since I first heard of it years ago and so never looked into it.

But what I'm curious about, and maybe some of the others here with more in-depth knowledge can illuminate, is "What stops a guy, say a CEO of an exchange, and his trusty head programmer who helped build it(who would know exploits better?), from emptying all of the wallets in the exchange and laundering it through a couple of anonymous trades and then walking away with all of the money before bitcoin further devalues due to recent events?" Surely we're not just trusting in their morals from preventing this.

Re:Yea, but HOW (1)

Dagger2 (1177377) | about 10 months ago | (#46397235)

What stops any company from doing this?

Re:Yea, but HOW (2)

gstoddart (321705) | about 10 months ago | (#46397271)

What stops a guy ... snip ... , from emptying all of the wallets

Who is to say they haven't already?

Either they're complicit and these exchanges are a scam, or they're not really qualified to be doing this, and just ripe to be picked off.

Surely we're not just trusting in their morals from preventing this.

Well, we're not trusting laws, regulations, legal accountability, or liability (since the TOS say those things don't apply).

So, really, what's left besides blind trust in their intentions and integrity?

Dear Respected One (4, Funny)

suman28 (558822) | about 10 months ago | (#46397023)

GREETINGS, Permit me to inform you of my desire of going into business relationship with you. I got your contact from the International web site directory. I prayed over it and selected your name among other names due to it's esteeming nature and the recommendations given to me as a reputable and trust worthy person I can do business with and by the recommendations I must not hesitate to confide in you for this simple and sincere business. I am Wumi Abdul; the only Daughter of late Mr and Mrs George Abdul. My father was a very wealthy cocoa merchant in Abidjan,the economic capital of Ivory Coast before he was poisoned to death by his business associates on one of their outing to discus on a business deal. If you send us your bitcoins now to our highly encrypted, uncreacable account, we will 1) Keep it safe from hackers 2) Wire you the equivalent USD to a bank account of your choosing We are willing to offer you 15% of the sum as compensation for effort input after the successful transfer of this fund to your designate account overseas. please feel free to contact ,me via this email address wumi1000abdul@yahoo.com

Re:Dear Respected One (1)

3.5 stripes (578410) | about 10 months ago | (#46397121)

What is uncreacable.. and more pointedly, what is creacable?

Insurance (0)

Anonymous Coward | about 10 months ago | (#46397057)

Sounds to me like there is a golden opportunity for someone to insure bitcoin deposits. Sadly, the world is full of criminals so that thefts from both external and internal sources will be with us forever.

Please help (0)

Anonymous Coward | about 10 months ago | (#46397061)

I need money for a life-threatening operation.

I take BTC donations at 1JJh21VdTWG9LmsV9zAJ1WAfvcGZ7HMKjJ, Doge donations at DAa6Q7fZpk4Mp1DVZFKUyeXR8AhxQhzAiQ, FTC donations at 71R7GmWPd3rmScxDZuN54AZWR9hVE9bPMy and LTC donations at LWuos79ohFZWd2yskCNnMnDpff8NtQsux8.

Re:Please help (1)

ArcadeMan (2766669) | about 10 months ago | (#46397073)

Please keep this troll on life support, he really needs the coins to pay for his Internet connection!

Re:Please help (1)

pushing-robot (1037830) | about 10 months ago | (#46397209)

So you plan to threaten someone's life, and you're still at the funding stage?

Who the hell is Flexcoin??? (0)

TomGreenhaw (929233) | about 10 months ago | (#46397069)

So every time somebody with a crypto-currency wallet and insufficient security measures loses their currency its news?

Should we abolish cash because robbers can steal it?

blah blah bleh (1)

fisted (2295862) | about 10 months ago | (#46397071)

e-wallet users are retarded and deserve just that shit.
This isn't an inherent weakness in bitcoin, it's the result of people Doing It Wrong(tm). As usual, kind of.

Re:blah blah bleh (1)

fisted (2295862) | about 10 months ago | (#46397119)

eh by e-wallet i mean web-wallet, of course

Interesting how the libertarians don't believe in (-1)

Anonymous Coward | about 10 months ago | (#46397083)

What an excellent society in which libertarians don't feel the need to be responsible for their customer's property and don't even bother to insure their own contents.

Go libertarians! Don't think ahead!

The Best Way to Rob a Bank is to Own One (3, Interesting)

Wookie Monster (605020) | about 10 months ago | (#46397127)

What was the true intent of the exchange? Lure in suckers and then claim they were hacked? How can they prove that an outsider stole the coins?

www.amazon.com/Best-Way-Rob-Bank-Own/dp/0292754183/

Bitcoin is a virtual commodity, not a currency (4, Insightful)

LostOne (51301) | about 10 months ago | (#46397133)

This is not a failure of bitcoin. Suppose you had a stack of companies whose purpose is to store your physical gold and prevent it from being stolen and to serve as an exchange allowing customers to trade gold for currency. Then, it turns out that some of them had inadequate security or were outright crooked and the gold they were storing went missing. This would not be a failure of gold itself. Sure, if sufficient quantities of gold were affected, it would affect the price of gold, but it does not change gold itself. This is the same situation.

The real problem here is the notion that bitcoin is a currency. It really isn't. It's a virtual commodity much like gold, with similar properties save for the fact that gold is physical and bitcoin is not. (Sure, the odds that everyone suddenly decides to pack up their toys and ignore bitcoin are much higher, mostly because there are no "real" uses to bitcoin, unlike gold which has actual uses other than being somewhat "rare" and looking pretty.) The same things that make gold less than idea as an actual currency (or a backer to a currency) apply to bitcoin. Sure, you can use either one as a place holder in a transaction if both parties agree, but you could just as easily use a common fiat currency, chickens, or grains of sand.

Replace "GOLD" with diamonds, or say, smoke (0)

Anonymous Coward | about 10 months ago | (#46397267)

and there you have it. Gold really is a limited resource. Diamonds are not. Bitcoins are not even tangible.

Why keep your Bitcoins in an E-Wallet? (4, Insightful)

Agent0013 (828350) | about 10 months ago | (#46397157)

I don't really understand why people are keeping their Bitcoins in these online "bank" accounts. The point of Bitcoin is that it is digital cash. It has the negatives of cash, easily stolen, along with the positives, hard to track. Being a form of cash rather than a credit account allows you to store it on your own hard drive or USB drive. Hell, put it in your Dropbox and it would be safer than having it in one of these online Bitcoin "banks". The money should only be in these online accounts for the time it takes to change it from US$ (or whatever currency you use) to Bitcoins or in reverse. It should be treated as an exchange not a bank account. I don't go to a currency exchange in another country, change my US$ to Pesos (for example) and then leave the money there in the exchange for months at a time.

Hell Of It Is (4, Interesting)

Greyfox (87712) | about 10 months ago | (#46397261)

It's all that Eve online ISK scam crap all over again. You can run a ponzi scheme in Eve, and the suckers will buy into it every time. At the end of the day you can walk away with enough isk that at the current exchange rate you could end up affording a pretty nice Honda. Or some so-so medical care. Really, Eve just needs a bitcoin interface and they'd be positioned to be the number one bitcoin investment firm in the world. At least until the whole thing collapses. I never cease to be amazed how often suckers fall for it, even when you mention the LAST scam in the channel they're advertising in.

Of course, if bitcoin itself goes bust due to a reputation for this sort of thing, all that hacking and all that farming will be for naught.

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