Bitcoin: global peer-to-peer currency system

[sic]

If I had to guess, I'd say all the attention from the government is driving the value down. But I really have no idea.

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[Qcanfixit]

YouTube - ‪Bitcoin: Currency of Resistance‬‏

YouTube - ‪Bitcoin: Currency of Resistance‬‏

[Motley]

Cyber thief steals $450,000 worth of experimental virtual currency

An internet-goer who put his faith in a risky new currency recently saw over $450,000 worth of Bitcoins — a digital form of money supported solely by its own users — disappear from his computer. A Bitcoin devotee with the somewhat appropriate web handle "Allinvain" has become the poster child for why the new form of money may never catch on.

While the U.S. dollar struggles to keep its head above water, some intrepid web users are putting their faith in the experimental type of currency called Bitcoins. Bitcoins were created in 2009 as an alternative to modern currencies, and are completely decentralized and entirely digital. Users exchange cold hard cash for the cyber dollars which can then be exchanged with other users for goods and services.

Bitcoin users store their virtual cash in a "wallet file" that, while safe from viruses and other insidious internet threats, can still be outright stolen, either through hacking or physically removing the file from the computer with a portable flash drive, leaving the owner with an empty bank account. And since the currency is entirely user-driven, there is no official government entity keep an eye out for suspicious activity, and victims of skilled cyber thieves have no option but to accept their loss.

That's where user Allinvain landed on Monday when he booted up his computer to find that his wallet file had been lifted, along with over 25,000 Bitcoins. The exchange rate for Bitcoins fluctuates wildly, and while roughly $20 buys you a single Bitcoin today, the rate has spiked to nearly $30 per coin on a regular basis. At the time of the theft, Allinvain's wallet was worth about $467,500. It was cash he was saving to open, ironically, a Bitcoin business.

Justice-minded Bitcoin veterans are attempting to hunt down the virtual robber through the complex log files used to launder the digital dough, but their efforts might be in vain. The completely anonymous nature of the Bitcoin system means that users are protected from identity theft, but are also nearly untouchable when it comes to punishment for misdeeds.

[BGPunk2001]

[Star*Child]

<low whistle> whoah...it seems to be that if you had THAT much money in bit coins that you wouldn't leave them on your computer...I'd be keeping that crap on a USB key and sure as hell not connected to the network.

poor bastard was going to open a business. I guess he should have hired a security consultant instead.

-*

[Einzelherz]

That is DELICIOUS ironing.

[rogue]

Originally Posted by Star*Child

<low whistle> whoah...it seems to be that if you had THAT much money in bit coins that you wouldn't leave them on your computer...I'd be keeping that crap on a USB key and sure as hell not connected to the network.

poor bastard was going to open a business. I guess he should have hired a security consultant instead.

-*

A USB key would have certainly helped in this case.

Let's be clear: he didn't put that much IN to bitcoins. He bought them when they were cheap and just starting out, and the value grew.

[DeusExMachina]

Some one gets robbed: news at 11.

[Gilla-Machster]

Originally Posted by DeusExMachina

Some one gets robbed: news at 11.

I thought this **** was suppose to be hella-encrypted and anonymous? So like how did someone even know he had that much digital monies?

[sorbee711]

Originally Posted by Gilla-Machster

I thought this **** was suppose to be hella-encrypted and anonymous? So like how did someone even know he had that much digital monies?

That is the interesting part. Did someone hack in and stumble on the bitcoins or was he targeted. If he was targeted it would appear there is a way to circumvent the anonymity.

[rogue]

Originally Posted by sorbee711

That is the interesting part. Did someone hack in and stumble on the bitcoins or was he targeted. If he was targeted it would appear there is a way to circumvent the anonymity.

Appear there was a way to circumvent...

Anyone who reads a little bit about this sees that "anonymous" is a term used VERY loosely here.

It's anonymous in that you don't need to provide your real physical name or address to someone, but you DO need to conduct the transaction online. Email addresses, logins, usernames, IP addresses... a lot of pieces of information go back and forth against the P2P network to authenticate and conduct the transaction.

Giving you a $20 bill would be FAR harder to track and trace in a lot of ways, even though we'd see each other in person and thus it's "not anonymous!"

[sorbee711]

Originally Posted by rogue

Giving you a $20 bill would be FAR harder to track and trace in a lot of ways, even though we'd see each other in person and thus it's "not anonymous!"

I'd wear a fake mustache. Take that!

[TheMonkeyMafia]

http://forum.bitcoin.org/index.php?topic=16457.0

16 page thread all about it

[Jubert69]

http://cgi.ebay.com/Bitcoins-1-Bitco...#ht_500wt_1019

1 bitcoin wow


http://cgi.ebay.com/Bitcoin-lot-10-b...#ht_561wt_1002

$1,001.00

[DoctorNick]

free shipping!

[Harv]

Wow, so the exchange mechanism is all anonymous and encrypted, but a simple file on your hard drive can be stolen and you are out of all your BitCoins?

Yeah, that's going to work, considering how well protected the average person's PC is.

[raj100]

I still dont understand this. Why would I want a bitcoin? I've never seen anything for sale any where that would take this crap... What if I want to buy something at a real store, I have to keep a computer with me?

[dmross]

Don't be so quick to blame Bitcoin for a theft. That's like blaming cash for being easily stolen.

Bitcoin transactions are not truly anonymous and never have been. All transactions are tracked by the network and openly visible. Forensic methods can be used to build a trail. Now if you're a good hacker there are ways to ensure anonymity.

As for cryptography, it has nothing to do with the wallet file on your client, but rather to ensure that coins can't be duplicated and transactions cant be forged.. I'm sure later versions may include some wallet encryption options, but for now there are 3rd party tools and basic backup & encryption steps that any user can take.

People need to remember a few things -
1. This is EXPERIMENTAL software. It's free. It's open source. It's just recently gone from concept to true potential.
2. Users are responsible for securing their wallets, just as you are responsible for securing the cash in your physical wallet. OMG someone stole $500,000 I had sitting on my desk for the past 3 years. Duh. It's silly to blame the bitcoin client for theft.

The guy who got hacked made some stupid mistakes. If you have $500,000 in bitcoins, you don't upload your unencrypted wallet to various online backup sites. You don't keep it sitting there in a client that is on a box with known malware and viruses. Common sense.

[smithsmithy]

Originally Posted by Harv

Wow, so the exchange mechanism is all anonymous and encrypted, but a simple file on your hard drive can be stolen and you are out of all your BitCoins?

Yeah, that's going to work, considering how well protected the average person's PC is.

From what I'm reading it looks like they took over his computer and transferred the coins because he left his wallet open over night while he was doing a system scan...because he thought that he had downloaded something malicious.

Originally Posted by raj100

I still dont understand this. Why would I want a bitcoin? I've never seen anything for sale any where that would take this crap... What if I want to buy something at a real store, I have to keep a computer with me?

This isn't really for the "I need to get some bread and milk" crowd, it's more for the "I need to go get a glass dragon dildo and a vile of meth but I don't want anyone to KNOW that I'm buying a glass dragon dildo and vile of meth" crowd. The differences between the two are subtle, but they're there.

[masskillingspree]

http://i.imgur.com/vb7ni.png

Yeah, this is not a sustainable trend. Nor is this even remotely stable. Not exactly something desirable in a currency. >200% increase in less than 2 weeks? Get the **** outta here with that nonsense.

[bobturismo]

Originally Posted by masskillingspree

http://i.imgur.com/vb7ni.png

Yeah, this is not a sustainable trend. Nor is this even remotely stable. Not exactly something desirable in a currency. >200% increase in less than 2 weeks? Get the **** outta here with that nonsense.

I'm just guessing and not a financial person by any means, but from what I saw, a LOT of people found out about it around the beginning of June, (including myself) and it started to take off like wild fire.

I think the large dip was from two things, the news reporting that the gov't wants to shut it down and paypal backing out.

My guess is that it's gonna go back up again, transferring money for cheaper than paypal? It's worth it for the people that just do that regardless of price.

[masskillingspree]

Originally Posted by bobturismo

I'm just guessing and not a financial person by any means, but from what I saw, a LOT of people found out about it around the beginning of June, (including myself) and it started to take off like wild fire.

I think the large dip was from two things, the news reporting that the gov't wants to shut it down and paypal backing out.

My guess is that it's gonna go back up again, transferring money for cheaper than paypal? It's worth it for the people that just do that regardless of price.

I was aware of all of those things prior to making my post.

[bobturismo]

Originally Posted by masskillingspree

I was aware of all of those things prior to making my post.

Well, would you say this is just it's "big crash" and that it's gonna stable out from here for the most part having survived it, or do you think it's gonna be completely volatile for it's remainder?

[smithsmithy]

Originally Posted by bobturismo

Well, would you say this is just it's "big crash" and that it's gonna stable out from here for the most part having survived it, or do you think it's gonna be completely volatile for it's remainder?

I'm just as clueless as you but I'm going to go with volatility through and through. The prices really took off when people found out that you can buy narcotics anonymously with them, but once the feds shut that down by planting fake ads and make examples out of people I'm sure that people will back away from it. Honestly, this seems more like a stock than a currency, it's not like you're exchanging money at a bank, you can only sell your Coins if someone out there is willing to buy them.

I think it's going to go down like this, *something* is going to trigger all the biggest holders to sell off all their coins. Maybe it's the feds cracking down on the drug thing, maybe they just decided that it's time to cash out, whatever. Soon people will catch wind of this and everyone will start dumping all the coins at once, blah blah blah and history repeats itself in one way or another and people who stupidly bought coins @$25 start crying about how unfair it all was.

[Chewyguru]

Good freaking lord. What a ****ing ****storm. People either made or lost a boatload today. The last week has not been kind to Bitcoin.

First someone claims amid ridiculous speculation and tinfoilhat theories that 25,000 Bitcoins were stolen via a trojan, a trojan indeed is found in the wild that steals wallet.dat, other people claim to be hit as well. Then MtGox's (The main exchange) online session setup is supposedly hacked and peoples accounts compromised. Now the market has been crashed in one day due to what is either, a massive flood of 550,000 Bitcoins dumped on the market for nothing, or a hack of MtGox's market data. (Edit it appears someones wallet.dat was stolen and sold off, and its now being reversed by MtGox)

Fingers are being pointed, the tinfoil hats are out in force, some say it will stabilize some are saying it is dead.......

I think the market needs to be much bigger to stabilize myself, because too many people are messing with it BIG TIME. The weakness hasn't been the security of the system but the extreme volatility of the market/speculation and the nonexistence of any governing body. A few people bought thousands of Bitcoins today for a few dollars, it is madness. Anyway thats the state of Bitcoin right now from my perspective. What a mess.