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(Ars Technica)   "In Wake of Bitcoin Spike, Instawallet Halts Service and Mt. Gox 'Eats' DDOS." Move ZIG for great justice   (arstechnica.com ) divider line
    More: Interesting, Instawallet, Gox, BTC  
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1980 clicks; posted to Geek » on 05 Apr 2013 at 7:02 AM (3 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



35 Comments     (+0 »)
 
View Voting Results: Smartest and Funniest
 
2013-04-05 07:08:39 AM  
All your bit coins are belong to us!
 
2013-04-05 07:23:04 AM  
D.N.R.T.F.A. N.A.F.W.G.T.D.
 
2013-04-05 07:23:38 AM  
Old news is exciting!
 
2013-04-05 08:03:52 AM  
The value of Bitcoins has surged in recent weeks amid decreasing trust in traditional banking systems, particularly after Cyprus imposed a tax on top bank depositors and placed limits on withdrawals to help pay for a European bailout.


lul... everybody knows the value is spiking because more and more people are learning they can use bitcoins to purchase drugs relatively risk free off the internet.  Nobody is parking actual capital in bitcoins...
 
2013-04-05 08:45:52 AM  

Alonjar: because more and more people are learning they can use bitcoins to purchase drugs


tired propaganda is tired.
 
2013-04-05 09:13:59 AM  
Mt. Gox eats dildoes?

/dnrtfa
//nttawwt
 
2013-04-05 09:17:23 AM  
Greatest Ponzi scheme ever.
 
2013-04-05 09:31:18 AM  

Giltric: Greatest Ponzi scheme ever.


I'm not sure you understand what a Ponzi scheme is.
 
2013-04-05 10:53:16 AM  

Giltric: Greatest Ponzi scheme ever.


It's a take the money and run con.

Assuming of course, you can ever find someone to FENCE all those bitcoins back to dollars for you.

/what person with $100,000 laying around is going to be buying your bitcoins and giving you cash?
 
2013-04-05 11:17:14 AM  

Alonjar: The value of Bitcoins has surged in recent weeks amid decreasing trust in traditional banking systems, particularly after Cyprus imposed a tax on top bank depositors and placed limits on withdrawals to help pay for a European bailout.


lul... everybody knows the value is spiking because more and more people are learning they can use bitcoins to purchase drugs relatively risk free off the internet.  Nobody is parking actual capital in bitcoins...


Mount Gox says everyone is buying Bitcoins, no one is selling.
 
2013-04-05 11:17:52 AM  
jealous gov'ts trying to undo bit coins?
 
2013-04-05 11:22:41 AM  

mcreadyblue: Mount Gox says everyone is buying Bitcoins, no one is selling.


So they're getting ready to cash out then?
 
2013-04-05 11:33:59 AM  
mcreadyblue:
Mount Gox says everyone is buying Bitcoins, no one is selling.

Yet.

/Who is "everyone" buying from if no one is selling
 
2013-04-05 11:52:48 AM  
How to get rich through bitcoins.

1. Create a bitcoin wallet service, or bitcoin bank, or provide an investment opportunity where people can earn a high amount of interest.  Doesn't matter which really, as long as people are investing their bitcoins with you.
2. After receiving a number of bitcoins, announce, "oh dear, we have been hacked!  those dastardly criminals stole all our bitcoins!"
3. Keep all the bitcoins.
4. Create a new identity in the bitcoin world, easily done since everyone is anonymous.  Go back to step 1 and repeat.

For those who aren't aware, every place that you can invest or deposit bitcoins anywhere will be "hacked" before long.  Strangely, it turns out that "let's have a system of money where government is completely uninvolved!" turns out to be a bad idea.
 
2013-04-05 12:01:03 PM  

ubermensch: Old news is exciting!


I think the previous greened link went to a more mainstream sight that insisted that a DDOS attack was a hacking and all the bitcoins were stolen.  Ars may be now owned by Conde Nast, but they still have a few clued in editors/writers.
 
2013-04-05 12:14:57 PM  

2chris2: For those who aren't aware, every place that you can invest or deposit bitcoins anywhere will be "hacked" before long. Strangely, it turns out that "let's have a system of money where government is completely uninvolved!" turns out to be a bad idea.


There were 5,041 bank robberies in 2011 alone to the tune of $38mm in cash stolen.

Clearly having a system of money where government is completely involved is a bad idea.
 
2013-04-05 12:54:07 PM  

MugzyBrown: 2chris2: For those who aren't aware, every place that you can invest or deposit bitcoins anywhere will be "hacked" before long. Strangely, it turns out that "let's have a system of money where government is completely uninvolved!" turns out to be a bad idea.

There were 5,041 bank robberies in 2011 alone to the tune of $38mm in cash stolen.

Clearly having a system of money where government is completely involved is a bad idea.


I see you have never heard of the FDIC.
 
2013-04-05 01:01:58 PM  

2chris2: 2. After receiving a number of bitcoins, announce, "oh dear, we have been hacked!  those dastardly criminals stole all our bitcoins!"
3. Keep all the bitcoins.


I thought one of the major selling points of Bitcoins is that they can't be stolen. Because each "coin" is distinctive and each transaction is recorded, it shouldn't be possible for someone to hack a wallet service and spend Coin No. 045E231W3 if the recognized owner of that coin has credibly informed the community that future transactions involving Coin No. 045E231W3 are fraudulent. As I understand it, a transaction isn't validated until a number of non-parties to the transaction agree that Buyer is authorized to transfer Coin No. 045E231W3 to the seller, and that should stop high-profile hacking like this in its tracks. What am I missing here?
 
2013-04-05 01:06:51 PM  

fluffy2097: I see you have never heard of the FDIC.


1) Bank robbery is not protected by FDIC
2) I don't think the tax payers should be forced to pay you for failing to properly investigate where you keep your money.
 
2013-04-05 01:27:39 PM  

MugzyBrown: 2chris2: For those who aren't aware, every place that you can invest or deposit bitcoins anywhere will be "hacked" before long. Strangely, it turns out that "let's have a system of money where government is completely uninvolved!" turns out to be a bad idea.

There were 5,041 bank robberies in 2011 alone to the tune of $38mm in cash stolen.

Clearly having a system of money where government is completely involved is a bad idea.


In 2010 there were 82,445 bank branch locations in the US, servicing millions of people.  I don't know much about Bitcoin - first I heard of it was through a review of a graphics card on NewEgg, and use of the cards to generate coins.  How does Bitcon compare to real banks, in terms of customers, service, visibility?

MugzyBrown: fluffy2097: I see you have never heard of the FDIC.

1) Bank robbery is not protected by FDIC


The bank robber is not specifically stealing out of your account.  They're pulling from ATMs, or drawers.  They're not raiding MugzyBrown's Christmas Club, or Subby's savings account.  If there is a hack against your account, then is it covered by the FDIC.  IF it is, then it's safer than Bitcoin.  Unless Bitcon insures your deposits, your account won't be worth more than the paper it's printed on.
 
2013-04-05 01:53:16 PM  

Duck_of_Doom: The bank robber is not specifically stealing out of your account. They're pulling from ATMs, or drawers. They're not raiding MugzyBrown's Christmas Club, or Subby's savings account. If there is a hack against your account, then is it covered by the FDIC. IF it is, then it's safer than Bitcoin. Unless Bitcon insures your deposits, your account won't be worth more than the paper it's printed on.


From what I understand, the hacking of the 'wallet' company is pretty much akin to a bank robbery.  Also, according to them they will settle of up claims with their customers once they can authenticate owners.

It's a very young idea, and a couple hundred years ago if your bank got robbed, your money was gone.  If the idea continues to grow, there will be business opportunities for bonding companies to provide insurance to depositors and all sorts of things taken for granted with traditional banks.

I

Duck_of_Doom: How does Bitcon compare to real banks, in terms of customers, service, visibility?


Bitcoin is a virtually currency, so it does not compare to banks at all.  The current value of all bitcoins in existance is about $1.5 Billion and 1 bitcoin is currently trading for about $140.

I'm far from an expert, and I have not invested.. though I would consider it if the price comes back down to where it was a couple of months ago, or levels off.

I love the idea of a free market currency though.  One that cannot be dicked with by politicians.

People criticize bitcoin as a bubble, but if you traded an ounce of gold for Federal Reserve Bitcoins back in 1913, your investment has lost about 98%
 
2013-04-05 03:03:03 PM  
A quick educational post for those lacking a basic understanding of how Bitcoin works and what it means WRT Bitcoin-related services.

"Coins" don't actually exist - we talk about them like they do because it's easier on the brains of people who grew up in a world where there was paper money and bank account balances that theoretically represent paper money. In reality your bank account balance does not represent paper money as anyone with a functional understanding of fractional reserve banking knows. What your bank account balance actually represents is the result of math performed on a ledger. When you (or someone else) deposit to your account, a record of that transaction is made and it increases the balance in your account. When you (or someone else) withdraw funds from that account the same thing happens but with negative numbers instead of positive and your account balance is decreased. This is the way Bitcoin works - there are no discrete "coins" rather there is a distributed ledger with a series of balances.

Your "account" - or "address" in Bitcoin nomenclature - is actually a cryptographic key pair. Your address is sort of like an account number and is essentially just the public key and in order to prove you have the right to spend from that balance you sign messages with the private key. So long as the security of the private key is maintained, no one may impersonate you to spend your funds.

This is where the problem with a lot of Bitcoin services come in - they're storing private keys on your behalf and not doing a very good job of keeping them safe. The way the signing works is, by design, meant to allow more than one person to share a private key, like a joint bank account. Bitcoin doesn't care who you are, so long as you've got the right key. If a hacker breaks into a service that's doing a poor job of securing your keys they may be able to impersonate you and transfer your balance elsewhere. This is all very similar to the way actual cash works in the event of a bank robbery.

Many have commented that this is what FDIC is for and if Bitcoin had some equivalent it would be much safer. This is all quite true, as are the comments that FDIC doesn't cover everything and neither would private insurance. What the entire argument boils down to, however, is that there are ways to store your "coins" that do not require entrusting private keys to a third party. There are also Bitcoin businesses like blockchain.info that do essentially the same thing instawallet did but store your private keys encrypted with passphrases they don't store or have access to. It's a lot like the early days of banking where some banks had excellent vaults and some... well... not so much.

It's a young marketplace and there are definitely weak points in the infrastructure, but Bitcoin itself is quite strong. Maybe some day this will be different/better, but as of today, Bitcoin - like early banks - requires that investors do at least a little homework. Caveat investor.
 
2013-04-05 03:15:59 PM  
img199.imageshack.us
 
2013-04-05 03:31:19 PM  
MugzyBrown: I'm far from an expert, and I have not invested.. though I would consider it if the price comes back down to where it was a couple of months ago, or levels off.

So you think that it's a good idea to invest in a ponzi scheme after the ponzi scheme has already crashed?

I love the idea of a free market currency though.  One that cannot be dicked with by politicians.

And no one has been able to explain what this "currency" is actually useful for compared to regular money, given the inconvenience and the volatility.  I can use fiat dollars to pay off taxes and avoid going to jail.  What are bitcoins good for?

People criticize bitcoin as a bubble, but if you traded an ounce of gold for Federal Reserve Bitcoins back in 1913, your investment has lost about 98%

You really don't seem to understand what a bubble is.

No one has ever put there money in US Dollars in the hopes that US Dollars will gain value over time.  In fact, the very fact that inflation occurs makes such a bubble impossible.  People who have US Dollars tend to either spend it, invest it, or put it in an interest earning savings account.

The same cannot be said for bitcoins, where people are buying bitcoins for the specific purpose of getting rich by selling their bitcoins later on to other people who are hoping to get rich.  But where the bitcoins themselves serve no real utility unless you're looking to buy hard drugs or child pornography without getting caught.
 
2013-04-05 03:37:28 PM  

schrodinger: No one has ever put there money in US Dollars in the hopes that US Dollars will gain value over time.


Do people put their money in dollars hoping it will decrease in value over time?

schrodinger: But where the bitcoins themselves serve no real utility


Well you could exchange it for an increasing amount of goods or services, you could save it, or you could exchange it for other currencies, or hold onto and hope they go up in value.

A US dollar can only do 3 of those things.
 
2013-04-05 04:05:01 PM  

MugzyBrown: I love the idea of a free market currency though.  One that cannot be dicked with by politicians.


Not true.  Bitcoins can be dicked with by just about anyone with a mind to do so.

/If politicians aren't trying to regulate it, it must not matter very much
//or they don't know what bitcoins are
 
2013-04-05 04:05:36 PM  

MugzyBrown: schrodinger: No one has ever put there money in US Dollars in the hopes that US Dollars will gain value over time.

Do people put their money in dollars hoping it will decrease in value over time?
schrodinger: But where the bitcoins themselves serve no real utility

Well you could exchange it for an increasing amount of goods or services, you could save it, or you could exchange it for other currencies, or hold onto and hope they go up in value.

A US dollar can only do 3 of those things.


Umm... which one do you think a USD can't do?
 
2013-04-05 04:06:10 PM  

MugzyBrown: Do people put their money in dollars hoping it will decrease in value over time?


No, just like people don't put their money in pizza in the hopes of pizza will gain money over time.

Dollars are meant to be spent or invested elsewhere (A savings account is technically an investment, since the money is being lent out to others in the hope of a return).  They are not meant to be an investment where you can bury them in your backyard and do absolutely nothing with them and somehow gain.  The promise of "something for nothing" is a con.

Well you could exchange it for an increasing amount of goods or services, you could save it, or you could exchange it for other currencies, or hold onto and hope they go up in value.

A US dollar can only do 3 of those things.


That's a good thing.

If currency loses value over time, then people will have an incentive to use that money while they still can in the form of spending or investment, thus stimulating the economy.

The purpose of money is to serve as a medium of exchange.  Any currency that rewards hoarding is counter productive.
 
2013-04-05 04:07:40 PM  

schrodinger: MugzyBrown: Do people put their money in dollars hoping it will decrease in value over time?

No, just like people don't put their money in pizza in the hopes of pizza will gain money decrease in valueover time.


Fixed that for me.

The problem with bitcoin enthusiasts is that they think that money is supposed to be a get rich quick scheme.
 
2013-04-05 04:09:19 PM  

Telos: MugzyBrown: I love the idea of a free market currency though.  One that cannot be dicked with by politicians.

Not true.  Bitcoins can be dicked with by just about anyone with a mind to do so.

/If politicians aren't trying to regulate it, it must not matter very much
//or they don't know what bitcoins are


As frankmanhog posted in the last bitcoin thread:

i.imgur.com

Lots and lots of room for dicking around.
 
2013-04-05 04:42:01 PM  
Personally, I'm waiting for the day when bottlecaps come into fashion as the standard currency.
 
2013-04-05 05:47:06 PM  
You know who else took advantage of a wildly fluctuating currency?
 
2013-04-06 02:02:16 AM  

Telos: MugzyBrown: schrodinger: No one has ever put there money in US Dollars in the hopes that US Dollars will gain value over time.

Do people put their money in dollars hoping it will decrease in value over time?
schrodinger: But where the bitcoins themselves serve no real utility

Well you could exchange it for an increasing amount of goods or services, you could save it, or you could exchange it for other currencies, or hold onto and hope they go up in value.

A US dollar can only do 3 of those things.

Umm... which one do you think a USD can't do?


I was really hoping for an answer to this.

Maybe you can't trade it for an increasing amount of goods or services, because virtually all goods or services accept dollar bills already, so the amount cannot be increasing?
 
2013-04-06 01:13:33 PM  

Smackledorfer: Telos: MugzyBrown: schrodinger: No one has ever put there money in US Dollars in the hopes that US Dollars will gain value over time.

Do people put their money in dollars hoping it will decrease in value over time?
schrodinger: But where the bitcoins themselves serve no real utility

Well you could exchange it for an increasing amount of goods or services, you could save it, or you could exchange it for other currencies, or hold onto and hope they go up in value.

A US dollar can only do 3 of those things.

Umm... which one do you think a USD can't do?

I was really hoping for an answer to this.

Maybe you can't trade it for an increasing amount of goods or services, because virtually all goods or services accept dollar bills already, so the amount cannot be increasing?


Maybe, but there are new goods and services created all the time...
 
2013-04-06 05:59:36 PM  

MugzyBrown: Well you could exchange it for an increasing amount of goods or services, you could save it, or you could exchange it for other currencies, or hold onto and hope they go up in value.


Basically, it's the same pitch as any "make money from home" scheme.  Bitcoins are better because you can get rich simply by holding onto them!

Of course, those riches have to come from somewhere.  i.e., other speculators, who hope to sell it at an even higher cost down the road.

It's basically a ponzi scheme.
 
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