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Bitcoin Exchange Hacked - Cyber Attacks Show Increasing Technology and Finance Risk
Bitcoin Down 12 Percent this Year - Cyber Attack Shows Technology Risk
2015 has not started well for bitcoin with prices having fallen 12%, from $320 to $288. The cyber attack on a leading bitcoin exchange is the latest challenge for the fledgling digital currency.
Bitstamp, Europe's leading bitcoin exchange - and third largest globally - has been off-line following a breach in their system by hackers on Sunday night. The UK based company has suspended lodgements and withdrawals and reported that roughly $5.1 million, around 19,000 BTC, had been ‘lost.’ The revelation follows the disclosure that Bitstamp's wallet system has been compromised, prompting it to halt deposits and later shut down its platform entirely according to Coin Desk.
Today, Bitstamp said it expected to resume trading within 24 hours after suspending operations because of the ‘security breach.’
The bulk of the digital currency units are in cold storage - on computers not connected to the internet - and are therefore safe from further predations, the company has said. “Bitcoin customers can rest assured that their bitcoins held with us before temporary suspension of services . . . are completely safe and will be honoured in full,” Bitstamp said.
2014 was a tough year for bitcoin with prices falling from over $800 to just over $300. At its height, Bitcoin was trading at $1240. But in the run-up to and following the bankruptcy of the leading Mt Gox exchange, it has declined in value to around $285.
Bitcoin or BTC in U.S. Dollars - 5 Years (Thomson Reuters)
Some say this reflects a steady loss of faith of it's users in their ability to trade the currency safely due to exchange and technology risk. Others say it was a speculative bubble and was destined to burst and it is healthy it did.
We see the value in owning bitcoins as a form of cash diversification and see merits in owning and having a very small allocation to bitcoin. It is slowly proving itself as a means of exchange. However, whether it will become a store of value is another matter.
Given the fact that we live in an era of currency wars and bail-ins - having a small allocation to such a liquid and fairly easily traded currency that is independent of debasing fiat currencies is not a bad idea.
When the chickens of government and central bank profligacy finally come home to roost, as they always do, alternative digital currencies may serve as an accepted medium of exchange.
But today's news highlights the vulnerability of any form of "virtual wealth.”
By virtual wealth, we mean many of our investments and savings today which are either in digital form - deposits - or intermediated by digital platforms - most investments including gold ETFs and digital gold trading platforms.
It is imprudent to rely on any asset which derives its value from or can only be accessed through the internet and certain online platforms and websites.
http://www.goldcore.com/us/gold-blog/bitcoin-12-percent-year-hackers-sho...
As tensions mount geopolitically - thankfully the consequences of military confrontation between nuclear-armed superpowers makes war a last resort - the Western bloc, Russia and China have all been experimenting with non-conventional warfare which include disabling the internet in target countries to collapse the economy.
If the internet and the financial system was brought down through unconventional warfare, criminal cyber attacks or simply a major glitch in the system - which has grown so complex that it is incomprehensible even to specialists - the assets of many people would be ‘erased’ and inaccessible.
Technology is a great enabler. But it can also be a great disabler. It is important to be aware of this.
Cyber and technology risk in the modern era is another reason to own physical coins and bars in an allocated and segregated manner, in the safest vaults, in the safest jurisdictions in the world.
Review of 2014 – Gold Second Best Currency, +13% in EUR, +6% GBP
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Tell that to AIG
#41
06 JANUARY 2015
What 2000, 2008 and 2015 May Have In Common
'As a dog returns to its vomit, so the fool repeats their folly.'
Proverbs 26:11
And they do it about every seven or eight years, it seems, in the modern economic discipline of bubblenometry.
What hath the Fed wrought, and the crony accomplices to Wall Street in the Administration and Congress?
Back to the brink, again. Crouching dangers, hidden risks.
Margin Debt as a percent of GDP is flashing a warning sign as shown in the first chart from Cross-Currents.net.
" jca
http://jessescrossroadscafe.blogspot.com/2015/01/what-2000-2008-and-2015...
I stacked me some more bitcoin this week. I thought it was just a post Christmas sale.
I stacked some too which really just involved me moving my hand and using my imagination. Wait....wait, that might have been something different.
You guys should examine the GAWMiners Paycoin (XPY) debacle unfolding in the cryptocurrency space---
I thought this was supposed to be impossible to hack because of the block chain and the encryption and the guy with the thing and the stuff.
The problem was the guy behind the guy.
Nothing is impossible to hack, nothing.
Absolutely , bitcoin IS hackable.
It would only take around 5 Trillion years , using every computer on the planet wired together.
Absolutely , bitcoin IS hackable.
It would only take around 5 Trillion years , using every computer on the planet wired together.
http://hackaday.com/2013/12/20/ambient-computer-noise-leaks-your-encryption-keys/
Or a good set of ears. Of course, I'd be completely safe offering to suck your dick betting that you'll completely ignore or completely rationalize that fact.
Yawn , is that really the best you can come up with ?
LMFAO!
I hear that if you cover your eyes, the bad guys cant see you. IOW, What you just claimed is absolutely wishful thinking but if you deny it hard enough, it will be so. Good luck with that.
Oh, send your wife in your stead, I'd rather you not touch my dick.
The government has already seized bitcoins.
Game over.
Seized them because of weak security.
If you left your wallet full of gold coins on a train that would be taken as well. Does not mean the contents of the wallet are weak does it.
Game On.
Well...how do you communicate with your "block chain"?
This is the value of cash on hand (or in the wall or in the freezer.)
Is McDonalds gonna raise the price of their Big Mac to 25 dollars tomorrow? I don't think so...
Software is used to communicate with the block chain. In fact you can even write your own software that can communicate with the block chain because it is 100% open source. However in your case I doubt that would ever be possible.
Bitcoin (the network) was NOT hacked and its block chain continues to operate just fine. Bitstamp (the company) was hacked because of keys mismanagement.
My prediction: 2015 - the year this very distinction becomes clear to ZH-ers.
Don't bother these morons with facts. It's wasted time. Let them stack their yellow metal until it gets collected by the government.
Bitcoin (the network) was NOT hacked and its block chain continues to operate just fine.
Of course, but they don't want to know the truth. They hate BTC with a religious devotion and are merely praising their anti-God.
There is more involved with bitcoin besides the block chain, blockhead.
The bitcoin 'system' has been hacked repeatedly. The government has seized bitcoins They have shut down and seized 'silk road'.
They know exactly what is happening on the net.
There is nothing religious about these facts. This is not a matter of faith.
Blockhead.
That is incorrect.
Wallets have been hacked , due to weak passwords.
Exchanges have been hacked , due to bad security.
Governments have confiscated bitcoins through legal channels (court-ordered hacking of illegal servers) and by forcing private keys from people thus allowing them to confiscate bitcoin.
But the bitcoin system itself HAS NEVER been hacked. It is technically IMPOSSIBLE.
So, in your head, how do you separate "the bitcoin system" from the exchanges and wallets?
This is going to be great. Give me a minute to pop some popcorn. The gymnastics are going to be spectacular. You're an imbecile that went 'nu uhhhhh' and went on to parrot exactly what he said.
Think about it like this:
Bitcoin is the foundation network protocol.
Wallets and Exchanges are software applications (app's) which run over the top of the protocol. These can be hacked into if they have weak security.
In simple language you may understand (metaphorically speaking):
Bitcoin would be the equivalent of physical gold bullion
Exhanges and Wallets would be the equivalent of banks and clearing houses. These can be broken into if they have weak security.
Oh ok, In other words it's entirely part of the system and you're in extreme denial. Or you're idiotically delusional.
The bitcoin 'system' includes wallets, passwords and exchanges.
Bitcoin exists in a world where it is traded in markets and has to contend with a government with first rate hacking and waterboarding abilities.
Is any of that in the 'white paper'?
Of course not.
Fuck you.
Wallets and exchanges are software layers that operate on top of the bitcoin protocol. They are NOT bitcoin.
What you are saying is as dumb as saying an email message is the Internet.
You can't do anything with bitcoin without the things that connect it to the real world.
Otherwise it's just a bunch of numbers on a memory stick in your pocket.
LOL. Bitcoin is a lie, a fraud, and a ponzi in every way imaginable.
In short it is not the "anonymous rebellion against the system" it claims to be. It is the "electronic money corral" that the banks want to herd the sheep into.
Baa, baa, stupid bitcoin sheep. Don't forget to pay with your self phone!!
Yawn , that is so 2011.... Don't you have anything new to come out with ?
This story came out today.
Need a calendar, pinhead?
Story came out day before yesterday actually. Tell me Oh Wise One , If a bullion vault gets robbed does that mean the bullion then has no value ? Banks get robbed all the time. Does not mean that what got stolen has failed and has no value , it means they had bad security , the fact that somebody tried to steal it prooves it has value otherwise they would not be stealing it would they ...
Need a brain ? Butt Brain ?
Nobody, but nobody, made the kind of outlandish, completely false claims for gold that have been made for bitcoin.
You guys are just completely full of shit.
What , you mean like the armies of idiots that keep telling us silver will be 1000 dollars and gold will go to 50k ?
You guys are just completely full of shit.
The situation with gold and silver isn't relevant here.
Bitcoin is a fairy tale pure and simple whether gold is $10,000 or $50.
bitcoin was the first so it was innocent, it's all the copy-s that are a fraud:
Premined coins, IPO coins, malware coins, even botnet-mining friendly coins, be-aware. There are thousands, and only btc is worth your investment, and maybe namecoin. To give you an example bunnycoin is worth so little that cannot trade against bitcoin and trade against dogecoin, with in itself is trading at 0.0000005 bitcoins per dogecoin. Pump and dump! penny stocks without any utility! and yet everything has a value.
This story is about bitcoin, pinhead.
Fonestar, is that you?
Excuse me?!!!
Pinhead!!
Yeah, I sell telecommunications systems and services, and my customers don't care why the phone doesn't ring or why they can't download their butt pics of Kim Kardashian. All they know is that their shit don't work. At the end of the day, this is what Bitcoin will have to address.
All they know is that their shit don't work. At the end of the day, this is what Bitcoin will have to address.
Everyone's BTC shit is working just fine this morning.
Buy a clue.
"Buy a clue."
LOL.
Not with a bitcoin, pinhead.
Just because their BTC is working "just fine" doesn't mean that BTC is suddenly going to be adopted by the mainstream. This is what my comment was discussing, not whether or not BTC "works."
I see you bought your clue with your BTC.
It's so annoying when idiots try to defy logic with inane arguments.
Mainstream does not know what TPC/IP is either.
But everybody is using it.
When BTC goes mainstream most people won't know they are using it because it will be invisibly underpinning the entire global financial system just as TCP/IP underpins the entire global Internet.
You missed my point, obviously.
To paraphrase what you just said: Internet in order to become successful has to figure out how to make web site unhackable.
Clearly it doesn't.
Nope.
I'll re-phrase with more detail: If you're going to sell a complicated technology product/service to a customer without educating them on exactly how it works, then they don't care why it doesn't work. They just care that it doesn't. This is even more true when the complicated technology product/service is their savings or something they depend upon to survive.
As the public is educated more and more on crypto-currencies and glean a better understanding of it, they will gain traction and further acceptance. But, not in an environment of of hyped-up cyber-terror propaganda.
Cryptos may have their day in the future as a widely accepted means of conducting trade, but it isn't right now. Not when there are alternatives that are easier for everyday people to understand (and trust).
Besides, "successful" is subjective. The Internet, or some version of it, was around for over 30 years before it morphed into a viable economic platform.
"I'll re-phrase with more detail: If you're going to sell a complicated technology product/service to a customer without educating them on exactly how it works, then they don't care why it doesn't work. They just care that it doesn't. "
'commander gruze?' will give you an education worth about 1,000 bitcoins which is to say worth $0. Poor old anonymous and indestructible bitcoin has fallen prey to all kinds of calamities unforeseen by pinheads like the commander. And now that they have been, pinheads like the commander simply deny their existence.
Even more interesting is the incredible chart of price movement. Every single thing associated with it drives the price way up or way down. It's all over the map. Oops.. wait a minute... they haven't rigged bitcoin price points yet. Never mind.
Here's what some just can't understand. Whether bitcoin trades at $1 or $1000, its functional characteristics remain unchanged. To drive some closed-minded folks mad, I will add that from this viewpoint it exhibits the same resilience to price swings as gold and silver.