Looks like Mt. Gox is dead...

[Mark R]

How can you get behind something that can be so easily comprimised?

Bitcoin itself is actually very secure. The main problem with it is that most people protect their bitcoins with a single key that they hold themselves, while not recognising the sensitivity of the key. In the case of bitcoin, the key is the ONLY thing that prevents access to them, so ANYONE with the key has full control. This is a far more sensitive piece of information than your SSN, or bank details, or bank card PIN; most people, even technically minded people fail to appreciate the sensitivity of this. Bitcoin does have technical solutions to this problem, in the form of multi-key signatures, but uptake has been relatively poor.

The second problem has been that many of the businesses built up around bitcoin, exchanges, trading platforms, "banks", etc. have been built by people with no knowledge of finance, security, good business practice, etc. Take Mt Gox, for example, they had no financial audit in place, had no segregation of company funds and client funds, ran self-made buggy software which hadn't been validated or properly tested, had no reliable controls or audit on internal system access (the CEO would routinely make undocumented code changes on the live system whenever he felt like it), etc.

 

[artvscommerce]

How can you get behind something that can be so easily comprimised?

I don't have a problem with the idea. I mean in today's world, money in genereal is almost strictly digital anyway. My company direct deposits money directly to my bank, which I can reduce by transferring those funds to a store or restaurant in exchange for whatever I'm buying. Now while we all know banks and online exchange sites aren't invincible, they're a lot more secure than some of these bitcoin exchanges seem to be. If a reputable exchange like e-trade allowed you to buy and sell bitcoins, than I might actually get behind it because they've proven to be secure.

I have some other reservations, but the big one is simply security. Not sure why people on a tech forum have to automatically like anything that's on a computer... that's just a stupid ass mindset.

The innovation behind the protocol is what is so interesting to many people; this has nothing to do with the state of the exchanges that exist today. In the early days of the internet, people that weren't able to understand it had very similar critiques.


It's not that people on a tech forum automatically have to like something because it's on a computer; but this is a pretty ground breaking thing that has been created here. Of course it's going to seem a little peculiar when people make negative statements about bitcoin and then back it up with reasons that have nothing to do with the protocol itself.

Another distinction that should be made is that there are people who support it or like it because they believe in the concept or protocol, and then there are people who like it and support it because they look at it as an investment vehicle. You have every reason to be suspicious of bitcoin as an investment vehicle; there are far too many variables for anyone to claim this isn't an extremely high risk investment. But that doesn't detract from the brilliance of the concept.

 

[Ns1]

Bitcoin itself is actually very secure..... In the case of bitcoin, the key is the ONLY thing that prevents access to them, so ANYONE with the key has full control. This is a far more sensitive piece of information than your SSN, or bank details, or bank card PIN; most people, even technically minded people fail to appreciate the sensitivity of this...

I'm not finding this very secure.

 

[momeNt]

I'm not finding this very secure.

It's as secure as you want it.

Does it protect idiots who give it away or who allow MTGox to keep the coins in their wallets? No. That doesn't make it not secure. Secure and foolproof are two different things.

 

[Ns1]

It's as secure as you want it.

Does it protect idiots who give it away or who allow MTGox to keep the coins in their wallets? No. That doesn't make it not secure. Secure and foolproof are two different things.

Yeah I'm still not finding it very secure, thanks.

 

[momeNt]

Yeah I'm still not finding it very secure, thanks.

Is cash secure then?

 

[Mark R]

I'm not finding this very secure.

It is as secure as you keep the key(s). You choose.

If you want to keep the key off line as an encrypted series of numbers printed on a piece of paper locked in a safety deposit box in a bank vault, or as a memorised series of words/numbers, you can. You can keep the key in a hardware tamper-resistant crypto-processor.

You don't need to keep the key on a computer which is online; that's convenient, but less secure. You might use this for a "checking account". You just decrypt the key with a passphrase and/or biometrics when you are ready to spend.

However, for a "savings account", you might keep the key double-encrypted on an encrypted partition, on a laptop which boots off a live CD and has had it's wifi chip removed. To transfer from savings to checking, you generate the transaction off line on the secure computer, and then enter the code it generates into a networked computer in order to send the transaction.

You can also have more than 1 key. Say 3, of which any 2 are required. For example, a company might be holding client bitcoins in trust. If you wanted, you could set up the key so that you need 2 company managers + 1 director, or the CEO + 1 other director, to release the coins.

The problem is that people aren't used to this, they are used to having other people look after them and stop them doing things which might hurt them.

At the moment, bitcoin is young, so people are using it in its simplest mode, even though that might not be the best way.

Technically, it would be possible to have a service where a "2 of 3 keys" system is used. You hold 1 key, an online "bank" holds a 2nd, and an independent ID verification service holds the 3rd. If you want to spend, you go to your "bank" site , and present your key, checks your payment request, checks your ID, and then countersigns the transaction.

If you leak your key, a thief will still have to convince the ID verification service or your bank of your identity.

If you lose your key, you will still be able to use the ID service and bank to generate a new one.

If the bank is compromised, then the attacker can't move the bitcoins without your key as well.

 

[gorcorps]

The bitcoins themselves are not easily compromised, but the exchanges are, because you are not relying on the security of the bitcoin protocol, but of the exchange itself.

Nobody can steal your bitcoins, you can either lose them or give them away. In the case of mtgox, they were given away because the original bitcoin holders entrusted them to mtgox and ceased to have control of the coins.

Middle men and exchanges like mtgox are probably not the best way to use bitcoins. It's like giving some random person on the street money and telling him to buy you something while you wait. You have no recourse if he just leaves with the money.

Well here's the thing. There are features of the Bitcoin protocol(m-of-n transactions specifically) that fix many of the problems you are seeing with the current exchanges. Nobody uses those though, because it has other effects that reduce the appeal of trading with Bitcoins and that goes against the interest of an exchange.

Current Bitcoin exchanges operate off the blockchain, as in, they don't use a Bitcoin transaction to record their customers trades, instead they operate internal ledgers. They only use the blockchain when its time to move customer Bitcoins off the exchange into the customer's personal account. This allows them to move Bitcoins between internal customer accounts at a much faster rate than the blockchain would, thus giving them more profits(commissions from the trades).

Bitcoin itself is actually very secure. The main problem with it is that most people protect their bitcoins with a single key that they hold themselves, while not recognising the sensitivity of the key. In the case of bitcoin, the key is the ONLY thing that prevents access to them, so ANYONE with the key has full control. This is a far more sensitive piece of information than your SSN, or bank details, or bank card PIN; most people, even technically minded people fail to appreciate the sensitivity of this. Bitcoin does have technical solutions to this problem, in the form of multi-key signatures, but uptake has been relatively poor.

The second problem has been that many of the businesses built up around bitcoin, exchanges, trading platforms, "banks", etc. have been built by people with no knowledge of finance, security, good business practice, etc. Take Mt Gox, for example, they had no financial audit in place, had no segregation of company funds and client funds, ran self-made buggy software which hadn't been validated or properly tested, had no reliable controls or audit on internal system access (the CEO would routinely make undocumented code changes on the live system whenever he felt like it), etc.

That's fine if the currency is secure, but until I can be comfortable trading it then it doesn't really matter. I haven't kept up on it entirely, but I believe that bitcoin mining is nearing it's end... right? I remember hearing that the rate of finding coins now is so low that it's not worth the energy it requires (talking ONLY bitcoin here). So that means people now have to rely on the exchanges to get bitcoins, which I'm not willing to do until somebody with the proper expertise and software is running it.

Yes, things can improve. Until they do though, I don't think a significant amount of people are going to trust it.

 

[waggy]

yeah bitcoin seems extreamly secure. just have ignore the hacks, the "lost" coins and the BS with Mtgox .

lol.

 

[norseamd]

there is stuff to be worked out with digital currencies but there looks to be some sort of use for them. hard to know what exactly can work and not work

 

[artvscommerce]

yeah bitcoin seems extreamly secure. just have ignore the hacks, the "lost" coins and the BS with Mtgox .

lol.

In other news, E-mail is not secure and totally useless because some email accounts have been hacked and credentials have been lost.

 

[waggy]

In other news, E-mail is not secure and totally useless because some email accounts have been hacked and credentials have been lost.

let me know when people lose hundreds and thousand from lost Email. Even in business something important is at least touched in by person.

 

[surfsatwerk]

In other news, E-mail is not secure and totally useless because some email accounts have been hacked and credentials have been lost.

You're reaching.

 

[artvscommerce]

let me know when people lose hundreds and thousand from lost Email. Even in business something important is at least touched in by person.

You are really missing the point. The point is anyone can write shitty code to handle email. That doesn't mean email itself is not secure.

Just because some people wrote some shitty code that worked with bitcoins we should just write the protocol off?

 

[Ns1]

Is cash secure then?

I can safely flash my cash on TV without fear of someone hijacking it, for instance

http://nymag.com/daily/intelligencer/2013/12/bloomberg-anchors-christmas-bitcoin-gets-stolen.html

or, i can deposit my cash in a bank and when my bank gets robbed still have cash in the bank.

 

[IAteYourMother]

yeah bitcoin seems extreamly secure. just have ignore the hacks, the "lost" coins and the BS with Mtgox .

lol.

No one is suggesting that you invest in bitcoin, it doesn't seem like you would know what to do with it anyways. The beauty here is that it is a wild west of sorts with high voltality, but in exchange you have greater freedom with bitcoins.

If you're a risk averse person, as it seems you are, then stay far away.

 

[artvscommerce]

I can safely flash my cash on TV without fear of someone hijacking it, for instance

http://nymag.com/daily/intelligencer/2013/12/bloomberg-anchors-christmas-bitcoin-gets-stolen.html

or, i can deposit my cash in a bank and when my bank gets robbed still have cash in the bank.

I think your point works against you. I think it's revolutionary that money was able to exchanged so easily. Yes, in this case it wasn't intentional but that is just because this is something new that not everyone fully understands yet. A responsible individual would have never put that $20 at risk by exposing the private key.

 

[Ns1]

I think your point works against you. I think it's revolutionary that money was able to exchanged so easily. Yes, in this case it wasn't intentional but that is just because this is something new that not everyone fully understands yet. A responsible individual would have never put that $20 at risk by exposing the private key.

So how is that secure?

My response was to:

Is cash secure then?

 

[waggy]

No one is suggesting that you invest in bitcoin, it doesn't seem like you would know what to do with it anyways. The beauty here is that it is a wild west of sorts with high voltality, but in exchange you have greater freedom with bitcoins.

If you're a risk averse person, as it seems you are, then stay far away.

risk averse? lol. sure sure that's why i started a business. i was afraid of risk.

but saying that I'm also not stupid (spelling and grammar aside lol). IF this was the only thing that happened with bitcoin i would say meh.

but this is NOT the firs time. it has happened often enough the risk far far outweighs the risk of putting tons of money into it. Seems a smart hacker or unethical business man can wipe out the money from many many people.

UNTIL bitcoin can get some real protection and real exchanges its never going to be mainstream. all its going to get now is those looking for a fast buck and others looking to pay for illegal things.

 

[momeNt]

I can safely flash my cash on TV without fear of someone hijacking it, for instance

http://nymag.com/daily/intelligencer/2013/12/bloomberg-anchors-christmas-bitcoin-gets-stolen.html

or, i can deposit my cash in a bank and when my bank gets robbed still have cash in the bank.

Banks are not an attribute of cash.

Flashing your bitcoin wallets and keys on TV isn't the same as counting cash on TV either. It's more like flashing your cash on the street. I agree that a physical robbery is a lot more personal than stealing a QR code over the television, there are still a lot of cash robberies. So that argument also fails.

 

[Ns1]

Flashing your bitcoin wallets and keys on TV isn't the same as counting cash on TV either

Exactly, cash is way safer.

 

[momeNt]

Exactly, cash is way safer.

Just google person robbed of cash. Probably happens at least 1,000 times a day in the USA.

 

[IAteYourMother]

risk averse? lol. sure sure that's why i started a business. i was afraid of risk.

but saying that I'm also not stupid (spelling and grammar aside lol). IF this was the only thing that happened with bitcoin i would say meh.

but this is NOT the firs time. it has happened often enough the risk far far outweighs the risk of putting tons of money into it. Seems a smart hacker or unethical business man can wipe out the money from many many people.

UNTIL bitcoin can get some real protection and real exchanges its never going to be mainstream. all its going to get now is those looking for a fast buck and others looking to pay for illegal things.

Who's arguing that bitcoin is mainstream right now? It's simply going through the growing pains that past currencies have gone through, including the US dollar. There's no reason to think that private enterprises can't continue to improve security for individual persons.

Of course, the value of a bitcoin still seems sketchy to me, because I don't know where the confidence in a bitcoin is coming from. There's no government in place that can levy taxes on its constituents, backed by an army/police force. I don't personally plan on investing anything in bitcoins myself, but to try to directly compare a USD to a bitcoin seems a little silly at this point because they're at different levels of maturity.

 

[waggy]

Who's arguing that bitcoin is mainstream right now? It's simply going through the growing pains that past currencies have gone through, including the US dollar. There's no reason to think that private enterprises can't continue to improve security for individual persons.

Of course, the value of a bitcoin still seems sketchy to me, because I don't know where the confidence in a bitcoin is coming from. There's no government in place that can levy taxes on its constituents, backed by an army/police force. I don't personally plan on investing anything in bitcoins myself, but to try to directly compare a USD to a bitcoin seems a little silly at this point because they're at different levels of maturity.

I never said it was mainstream. i said it's not going to be mainstream until they get the shit secure.

All i said in the thread is laughing at people saying its secure. lol sure it is. all the news stories about hackers, lost coins and the bs that happend with the exchange. lol

 

[IAteYourMother]

I never said it was mainstream. i said it's not going to be mainstream until they get the shit secure.

All i said in the thread is laughing at people saying its secure. lol sure it is. all the news stories about hackers, lost coins and the bs that happend with the exchange. lol

THe security lies mostly with the exchanges and middlemen, not with the actual bitcoin itself, which is an important distinction that wasn't initially being made clear in criticisms