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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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Bitcoin got "bubbled" just like gold, silver and oil did.
NOTHING is immune to bubbling.
The good news is gold, silver and oil have a real value of some kind.
Bitcoin is vapor-ware. Not even the value of a piece of paper.
"Bitcoin (the network) was NOT hacked".....NOT YET.
Only a matter of time. My prediction is, it's a short time.
Banks stuff cash and gold into vaults, and museums surround art with the most sophisticated security systems available. That stuff gets broken into and robbed anyway. Robbery on the internet carries way less risk. Take your time, take days or weeks or more if you need. Stay focused and keep working. No worries about making it through the vault wall before the guard changes or an alarm or camera goes off in your face. Stealing something physical carries more risk than stealing something digital that's physically intangible from someplace near or far. So I agree with therover here. With the risk so low, the hackers will never stop trying.
"With the risk so low, the hackers will never stop trying."
And the flip side to that is: with high concentration of potential reward - be it custodial bitcoin accounts (which is a dumb idea anyway), or database full of credit card numbers - the hackers will never stop trying. Hence the solution bitcoin brings - decentralize everything, put control and oversignt over users' accounts back into their hands so that there is no single point of failure (such as bank or payment processor or big merchant). The fact that some exchange got hacked precisely because of using old centralized security model (custodial accounts) should surprise no one.
I am a bitcoiner and have been for five years. The major potential threat is new computer technology such as Quantum computers. With enormous computational power of quantum computing the mathamatical puzzles will be solved in microseconds and that will put control of the network into a centralized source which will defeat the purpose.
But cheer up... we are still seven - ten years away from non government applications of that technologfy....just sayin' right now it's safe to trust the network because the government does not see bitcoin as a threat -- yet.
There are algo's which are resistant to quantum computer cracking. If such a quantum device is ever built that can crack SHA_256 then the entire global financial system will be compromised. Also such a device would be able to create equations and recipies for the mass production of gold in a lab. Bitcoin can freeze , and hard-fork into a new algo which is resistant to quantum computational systems. Try making that switch with the current dinosaur incumbent financial systems we have today , some of which are still running FORTRAN 77 code. Quantum computing and bitcoin cracking , another red herring.
There are algo's which are resistant to quantum computer cracking. If such a quantum device is ever built that can crack SHA_256 then the entire global financial system will be compromised
wait a second. You're under the impression that the NSA, a US spy agency, the ones that built SHA 256, somehow wanted to build something uncrackable? Umm, I don't care if you don't believe in God, saying that makes you a religious zealot.
Oh, and the entire financial system is always compromiseable in one way or another. Again with the religious zealotry.
SHA_256 is hackable , however it would take every single computer on the planet wired together in parallel around 5 Trillion years to do it.
I hear that the NSA uses off the shelf DELLs for that kind of work too. Shhhhh, don't tell anyone. You're as dumb and deluded as an Obama voter.
Or you just need to know how to use the back door that's built into it, like all the other algos had.
SHA_256 is Open Source. How can there be 'secret doors' in Open soure code ?
Because the math and code is so complex, few people understand it.
No need to guess. It's clearly stated in bitcoin whitepaper what conditions and measures are required to hack the blockchain. Go figure, chapter 11.
Oh that's right, the fucking bitcoin white paper. The constitution and the Magna Carta have been trashed, but the bitcoin white paper -- that will stand the test of time.
Bitcoin white paper since 2013.
Constipation and M/C were trashed because they were written by and for government (oligarchs) and "The Peep-Hole".
> Bitcoin white paper since 2013
Actually it was published in November of 2008.
But if you think you've found a problem with any of the math expressed in this paper, do tell.
The 'math' didn't include the part exchanges being scams or hackable. The 'math' didn't cover the entire 'concept'.
Get it, pinhead?
Any currency can be stolen.
If it was worth nothing why would so many hackers be dedicating so much time , resources and effort trying to steal it ?
BTW the bitcoin protocol itself is NOT hackable , but fraudulent or weak exchanges or weak software or running over the bitcoin protocol is hackable.
Oh yes. Bitcoin is first and foremost an invention in the field of mathematics (cryptography, to be precise). It is a maths based system for acheiving consensus over decentralized network without central clearing house. Yes, it will stand the test of time as long as maths stands. Do you really want to bet against the laws of maths?
The code was written by a mystery man that won't admit he wrote it, and it's on such a hi level that very few actually understand it. It could have a back door, just like every RSA encryption code ever, and nobody would know until it's too late.
The difference this time is that it is Open Source. That means all of the code can be reviewed by anobody. It would be impossible to insert a back door into Open Source Code.
When everyone is responsible, no one is responsible. How many programmers do you think actually understand the level of math and programming that was used to put back doors in the encryption algorithms? Most wouldn't understand if you pointed to it, and most assume that since it's open source, that someone else has gone through every line of code to make sure everything is okay.
FUD FUD FUD
Bitcoin was not hacked, a 3rd party service was broken into.
With Bitcoin there is the concept of physical possession, and physical possession reoresents 100% of ownership. Physical possession of bitcoin is done through physical possession of a bitcoin's private key. (which you can memorize and carry in your head btw).
Saying bitcoin was hacked is the same as saying the concept of physical gold is broken because a bank was robbed. In that case you'd say a bank was robbed of it's gold, well the same is true here.
What your are saying is way above their understanding.
Just let them think it's broken , don't want any of these idiots getting involved with bitcoin.
This is not above their understanding. The author sells gold for a living, more and more gold bugs and seeing value to bitcoin and taking steps into it, this is scaring the crap out of the gold industry which couldn't care less about the principles of sound money that they sell to their customers.
Bitcoins can be hacked, tracked and ripped off.
The price of bitcoin is headed to it's logical endpoint = 0.
Only the irrational beliefs of dead enders stuck with an ivestment in the bankrupt concept keep the price above $0.
Go peddle your kool-aid somewhere else.
Bitcoins can be hacked, tracked and ripped off.
The price of bitcoin is headed to it's logical endpoint = 0.
Only the irrational beliefs of dead enders stuck with an ivestment in the bankrupt concept keep the price above $0.
Go peddle your kool-aid somewhere else.
Bitcoins can be hacked, tracked and ripped off.
The price of bitcoin is headed to it's logical endpoint = 0.
Only the irrational beliefs of dead enders stuck with an ivestment in the bankrupt concept keep the price above $0.
Go peddle your kool-aid somewhere else.
Bitcoins can be hacked, tracked and ripped off.
The price of bitcoin is headed to it's logical endpoint = 0.
Only the irrational beliefs of dead enders stuck with an ivestment in the bankrupt concept keep the price above $0.
Go peddle your kool-aid somewhere else.