Bitcoin site is hacked, with $1million of the virtual currency stolen

reply to post by Eryiedes


So don't you use banks, standing orders, direct debits , cheques or credit cards?

Do you really think if you put money in a bank it sits in a vault?

PhoenixOD
reply to post by Eryiedes

 

So don't you use banks, standing orders, direct debits , cheques or credit cards?

Nope.
I don't have a bank account so obviously cheques are out of the question.
I don't use direct debit because this also uses a bank account which I don't have.
I don't have a credit card.
I have no idea what a "standing order" is so I'm gonna assume I don't use those either.
I mostly work for cash and on the few occasions someone writes me a cheque (which is as frequent as Haley's Comet) I get a friend to cash them for me.
I despise digital transactions.
It's just me and my abacus.

-Amitabha-

reply to post by Eryiedes


I hear that. I do have a stupid BMO account, I only have it in case I need to cash a check though. A few more months of this crap I am just gonna close it altogether. Paying them 8 bucks a month for nothing is getting to be a royal pain in my ass.

this is why you dont trust your bitcoins to some dodgy online site. i have NO DOUBT this guy stole them himself once bitcoin started to rise the past week, it hit a high of just over $400 AU yesterday.

very tempting for a BOY of just over 18 to pretend to get hacked to become a multi millionaire.

i've been in bitcoins for ages and made enough to pay off my house early and have 200 coins still sitting here as a long game scenario incase the world economy collapses in my lifetime and this takes off. i've kept my main source of bitcoins in a wallet on multiple media sources and only put a few into online trading services.

but that being said it is a really interesting phenomenon to watch, and be apart of.

have also made some old friends very happy that started mining with me back in the early days that had forgotten all about it, some had 5 or 6 coins, others hundreds still and had one bloke who had sold his PC with his bitcoin wallet on the HDD with over 500 coins sitting on it, wonder if the guy he sold it to even knows or more likely they got formatted into oblivion.

eManym

It seems there would be great difficulty selling the bitcoins for currency and then depositing the currency in a bank since bitcoins are hard to impossible to trace where they came from. Government intervention would ensue causing loss of the currency and possibly jail time for money laundering.

edit on 10-11-2013 by eManym because: (no reason given)

have you not bought and sold btc?

PLENTY of people are out there buying and/or selling btc 24/7

and as long as it's bought with a currency that came out of a system... the currency will be able to go right back into it.

And it's all child's play... simply set up a btc seller and get the banking info to deposit the cash... go to the nearest bank like Wells Fargo that allows transactions (to them it appears as you are simply paying a bill)

wham bam ty maam... btc shows up, put them through a couple washes to get rid of any trace and you're good to go shopping

any currency is essentially electronic and transferring from one bank to another... and that's it, no one sees the BTC except your BTC wallets and the sites you use to send'em

Don't see how this is stealing.

A virtual currency that really has no value, other than what people are willing to pay for it, still has zero real value.

Since it isn't legal tender...the guy should only be jailed for possible hacking and/or tax evasion.


Kinda like stealing 1Billion WoW gold... Police won't give a care...unless you hacked the account.

reply to post by ChuckNasty


Actually, the police are willing to investigate, according to Daily Mail.

Sure, it's not legal tender, but he would still be breaking an agreement between him and the people keeping their bitcoins on his server. The legislation for cybercrime like this is still in it's infancy, but it is considered crime.

reply to post by MikhailBakunin


Well as an example, lets say someone has a million dollars worth of bitcoins. They send them from their wallet to an exchange, such as CampBX. The exchange trades them for currency. Then they want to deposit the million to their bank account. When this is done, many red flags will pop up about the amount of the transfer. The government will suspect drug money and will be asking questions. Then the depositor will have to prove it is not drug money.

The depositor answers, the money came from bitcoin sales. Then the government will query about were the bitcoin came from. Since this is hard to impossible to prove through the anonymity of bitcoin transactions, I assume the government will suspect illegal activity. This is what I meant in my post.

Sort of a precedent: Dutch teenager arrested for allegedly stealing virtual furniture from "rooms" in Habbo Hotel, a 3D social networking website. (BBC NEWS)

In the case above members of the site accessed the furniture by scamming people to give them usernames and passwords. This is against the user agreement and i'm pretty sure it's a specific crime as well in most countries.

Now, let's assume that the Aussie guy in the OP lied about getting hacked and actually took those Bitcoins for his own personal use. This would be more like the owners of Habbo hotel defrauding their customers somehow. Like deleting virtual stuff the customers have bought with real money. This would certainly be illegal, it would be a breach of the user agreement.

There must have been some sort of contract between the owner of the Bitcoin site and it's users. If there was not, it might be harder to prosecute him (I don't really know, I'm no lawyer :up. But surely no one would give away their Bitcoins without some kind of legal agreement? You never know, I guess.

So, i'm thinking this could be fraud.

reply to post by PhoenixOD


You guys realize that the sites give disclaimers about using the wallets for temporary use due to this exact reason right?

There are a lot of ignorant post in this thread by people who dont really know or understand the potential for bitcoins and why its good.

If you dont believe in the IRS or the FED then you should be doing everything you can to make bitcoin successful.

reply to post by eManym


Good thing suspecting someone of a crime isnt the same as proving it beyond a resonable doubt in the court of law.

reply to post by Subnatural

Good to know. Hopefully the system will catch up to what people do now. (Example would be cyber bullies. Cyber bully laws are still many years behind)

If the site owner guy did lie about being hacked, hope people get their coins back & he serves jail time.

I am still not ready to jump into bitcoin. Spending the cash on a computer power enough to mine a serious about of bitcoins only to remain at high risk of theft is just too wild for my blood.

I am wondering, why has there not been more security behind bitcoin to limit thefts like this?

This is why currency will never progress to Beast chips, too easy to hack digitized and electronic currency. Everyone and their mother has a computer in the western hemisphere and no one actually trusts electronic currencies unless they are completely insane.

reply to post by lonewolf19792000


The dollar is like 90% digital currency these days lol.

TKDRL
reply to post by lonewolf19792000

 

The dollar is like 90% digital currency these days lol.

Most, if not all, modern currencies are 90% digital.

reply to post by lonewolf19792000


Ummm... im not sure you understand the article...

The site was a wallet. The hacker didnt hack the currency the hacker hacked the site and took the coins.

rayuki
this is why you dont trust your bitcoins to some dodgy online site. i have NO DOUBT this guy stole them himself once bitcoin started to rise the past week, it hit a high of just over $400 AU yesterday.

This is my take on it. He can do it legally. They are not considered a security while being stored. They are nothing. If you were investing them and getting something such as interest back then you would have some protection. In the case of bitcoin storage you have zero protection. If the website owner wants to take all of your coins he can and there is no precedent to charge him with anything.

I keep seeing it over and over. Website hacked. Coins stolen. Yeah right. Its the owners, wake up already people. It looks like a good scam to me. No penalty and all profit. Keep your coins to yourself. The only reason the owners aren't owning up to stealing these coins is because they want to keep the scam going and price high.

Some publicity has been given to a recent Texas judgment that held that Bitcoins were a form of money, and thus a scheme by which investors hoped to increase their holdings of bitcoins was subject to securities regulations.
Is there any doubt that a similar holding would be made in Canada?

It was not necessary to find that bitcoins were a form of money in order for the investment to be a security. I recall from law school days securities that promised gains from chinchillas, for example.

Yes even a chinchilla can be a security.

www.slaw.ca...

Some one is trying to discredit them! but who?
how do you know this is not a lye ?
who? the NSA CIA ? to drop the prices.
you will see a lot for like this.

with I can not tell the police!

could be china? and the million hackers.
but I bet its the american government.
they just have to stop Bitcoin.

reply to post by PhoenixOD


OK - let me clear up a bunch of misconceptions here.

Firstly there was a site 'hacked' which had Bitcoin (BTC) wallet on it or attached to it. It is almost certain that the wallet was not encrypted, plus it was not on a private computer, rather it was on a server.

The theft would have had zero impact on the price, or on the faith in BTC's security. The value was too small, and the inadequate security measures applied were the result of negligence on the part of the owner.

The movement in the price of BTC is a normal market function, BTC is new and expanding to new markets, the supply is fixed so moving into new markets creates an increase in demand - but the supply is static. This leads to surges in price, which then gain momentum due to speculation - then they run into a parabolic curve, this causes a short term top - then the price retraces until it hits solid support again.

Myself and others called this move almost exactly, when the move began I was thinking it would top out around $380 - but it over ran, so I knew that the downside correction would be fairly dramatic. The faster it runs up, the faster and deeper it will fall - this is just normal market action.

BTC is still a relatively low cap asset, so its prone to volatility - as the market depth increases, volatility will fade.

BTC is not fiat currency because it is not created by a central authority - neither can it be created at will in any quantity.

BTC is not a ponzi scheme, because nobody is getting paid by new entrants. It is fixed asset that is new, and is experiencing increasing market penetration and the volatility of a low market cap asset with broad instant market access.

BTC is real money because it satisfies the critical criteria of being a store of value; due to being relatively durable, limited supply and resistant to counterfeit.

It is real money and has value because money is like a piece of capital - it has characteristics that give it value regarding the job it has to do.

Consider the question - how much is a freight aircraft worth? To assess how much it is worth, we need to answer some questions, we need to determine its characteristics and see how well suited it is to do its task. We would need to know its cargo capacity, its fuel efficiency, its range, its annual maintenance costs and so on - and how much demand and supply there is for this kind of aircraft.

So when we ask - what is BTC worth? Then we need to know its monetary characteristics - how fungible, portable, acceptable (market depth - demand), divisible, limited in supply (supply) and is it a store of value (durable, resistant to monopoly or counterfeit) and if it has special properties outside of being money - in the case of BTC it is also a public ledger and means of electronic payment. Gold btw has a special function of being aesthetic, therefore in demand for jewelry - which adds something to its value.

Some people make the mistake of saying that BTC is 'backed by nothing', with the connotation that somehow that makes it worthless. Only money receipts or placeholders need to be backed by something to have retain their value - so fiat currency is always at risk of falling to zero value, if it is not redeemable into some kind of money. This is because receipts can be counterfeit at will.

Gold does not need to be 'backed by something' - because gold IS money. In the same fashion, BTC does not need to be backed by anything because it IS money - it is not a money receipt or placeholder.