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Topic: BTC-E.COM NICE RECOVERY FROM THE HACK! =) - page 4. (Read 51047 times)

legendary
Activity: 1106
Merit: 1004
There is no such infrastructure in place for bitcoin, and there likely will never be.

Why do you say so?
I see a demand for deposit insurance in bitcoin world. If nobody has offered that yet is probably because nobody has the skills and money to start one, or those who eventually have the skills (and money) are not aware, or do not believe in, such demand. In any case, this may change.
legendary
Activity: 1246
Merit: 1077
They are still your bitcoins, because they can be used as them on demand.
Tell that to ThiagoCMC.

Really, all money is just an obligation of someone to pay me back for something.
No. Money is not necessarily an obligation. Money is the most fungible commodity in an economy. And just like with every other commodity, no one is obligated to give you anything for the money commodity.

Now, currencies - or money substitutes - are obligations. Traditionally, the dollar was an obligation (of the Federal Reserve) to pay someone back in gold, on demand. The British Pound was an obligation of the Bank of England to pay back the holder of said currency in sterling silver. Neither of these currencies are obligations any longer.
Money is an obligation in the sense that it only has value if people pay you back for it.

I don't like how people tell others that the deposits aren't money, because for practical purposes they are. They aren't risk-free though, but nothing is.
legendary
Activity: 980
Merit: 1008
They are still your bitcoins, because they can be used as them on demand.
Tell that to ThiagoCMC.

Really, all money is just an obligation of someone to pay me back for something.
No. Money is not necessarily an obligation. Money is the most fungible commodity in an economy. And just like with every other commodity, no one is obligated to give you anything for the money commodity.

Now, currencies - or money substitutes - are obligations. Traditionally, the dollar was an obligation (of the Federal Reserve) to pay someone back in gold, on demand. The British Pound was an obligation of the Bank of England to pay back the holder of said currency in sterling silver. Neither of these currencies are obligations any longer.
legendary
Activity: 2198
Merit: 1311
Everybody, please, repeat after me:

"The bitcoins I have on an exchange are not my bitcoins. They are an obligation of the exchange to pay me back said number of bitcoins."

If the exchange gets hacked and loses its bitcoins, it cannot meet that obligation, and you will have no bitcoins to withdraw. Hence, they were not and are not your bitcoins, they belonged to the exchange.

It's like having money in a bank without deposit insurance. It's not actually your money, it's a bank's obligation to pay you back the money on demand. Will they be able to meet that obligation? Who knows.
They are still your bitcoins, because they can be used as them on demand. That's like saying the money I have at the bank is not my money. Really, all money is just an obligation of someone to pay me back for something.

I don't think you read what he wrote very carefully.  In a simple practical sense, a bitcoin is yours if you control its disbursement.  If an exchange gets hacked and all its bitcoins stolen, and you had bitcoins on the exchange, you no longer have the ability to disburse those bitcoins.  In other words, they're not yours anymore.

And, as runeks pointed out, there's a big difference between money in a BTC exchange and money in a bank.  Typically you have some state backed deposit insurance with the later.  There is no such infrastructure in place for bitcoin, and there likely will never be.
legendary
Activity: 1246
Merit: 1077
Everybody, please, repeat after me:

"The bitcoins I have on an exchange are not my bitcoins. They are an obligation of the exchange to pay me back said number of bitcoins."

If the exchange gets hacked and loses its bitcoins, it cannot meet that obligation, and you will have no bitcoins to withdraw. Hence, they were not and are not your bitcoins, they belonged to the exchange.

It's like having money in a bank without deposit insurance. It's not actually your money, it's a bank's obligation to pay you back the money on demand. Will they be able to meet that obligation? Who knows.
They are still your bitcoins, because they can be used as them on demand. That's like saying the money I have at the bank is not my money. Really, all money is just an obligation of someone to pay me back for something.
legendary
Activity: 2198
Merit: 1311
Everybody, please, repeat after me:

"The bitcoins I have on an exchange are not my bitcoins. They are an obligation of the exchange to pay me back said number of bitcoins."

If the exchange gets hacked and loses its bitcoins, it cannot meet that obligation, and you will have no bitcoins to withdraw. Hence, they were not and are not your bitcoins, they belonged to the exchange.

It's like having money in a bank without deposit insurance. It's not actually your money, it's a bank's obligation to pay you back the money on demand. Will they be able to meet that obligation? Who knows.

+1
legendary
Activity: 980
Merit: 1008
Everybody, please, repeat after me:

"The bitcoins I have on an exchange are not my bitcoins. They are an obligation of the exchange to pay me back said number of bitcoins."

If the exchange gets hacked and loses its bitcoins, it cannot meet that obligation, and you will have no bitcoins to withdraw. Hence, they were not and are not your bitcoins, they belonged to the exchange and now, possibly, to the hacker.

It's like having money in a bank without deposit insurance. It's not actually your money, it's a bank's obligation to pay you back the money on demand. Will they be able to meet that obligation? Who knows.
legendary
Activity: 2198
Merit: 1311
It looks like some hacker/scammer injected a huge amount of FAKE capital and bought the ACTUAL coins on the market.

I don't think a hack like this means they have access to the wallet, it just looks like they pumped a bunch of funny money USD into the market to make the transactions legit. I suspect the coins are giggity-gone at this point.

I love being right  Tongue

Yeah, basically this is the opposite of the MtGox hack where lots of fake BTC were sold (price goes down).  This time lots of fake USD were sold (price goes up).
vip
Activity: 756
Merit: 503
This event should remind everyone to change their password on BTC-E as a precaution. Or anywhere else the same password is used.
hero member
Activity: 914
Merit: 500
It looks like some hacker/scammer injected a huge amount of FAKE capital and bought the ACTUAL coins on the market.

I don't think a hack like this means they have access to the wallet, it just looks like they pumped a bunch of funny money USD into the market to make the transactions legit. I suspect the coins are giggity-gone at this point.

I love being right  Tongue
legendary
Activity: 1106
Merit: 1004
Brute Force a 16 character password? I don't think so. Somehow the hacker found it.

Yep. Unless it was not random enough, like the full name of someone in charge or something - but then I wouldn't call it "brute force" any more either.

The password probably leaked somehow. If I were behind BTC-e, I'm not sure I'd put the service back up before figuring out what happened. If somebody had access to the password once and you don't know how he did it, then what's to stop this person from have access to it again?
hero member
Activity: 1078
Merit: 502
Yeah, I am probably thinking more on the terms of fraudulant...



legendary
Activity: 1120
Merit: 1003

How do you figure it has nothing to do with being greedy? The second people saw a problem, they ran and tried to sell coins.. How is that not greedy?


I disagreed with the statement that people deserved to have their trades rolled back because they should have known the price is wrong - they got rolled back because they weren't real trades.

I didn't say it wasn't "greedy". We all operate in our own self interest (greed). There's nothing wrong with wanting to make more money.

Now if by "greed" you mean being fraudulent, that's a different story.
legendary
Activity: 2198
Merit: 1311
My account there has been completely restored.  I guess that site isn't as crappy as everyone makes it out to be.  This is basically the opposite of the MtGox hack crash - i.e. a hack rally.  From what I understand the thief only got away with ~4k BTCs.  That's still a good chunk of change, but it sounds like the exchange is covering it from reserves.
legendary
Activity: 1120
Merit: 1003
Don't forget the worlds most powerful brute force cracking machine is being built, it's hard to know what is safe from some of the mining rigs out there now and there is custom hardware on the way...

Brute Force a 16 character password? I don't think so. Somehow the hacker found it.
hero member
Activity: 1078
Merit: 502
That's why you make backup, so in case of problems you do a rollback and problem solved. Not like the scammers of bitcoinica that "we have no backups lol"
Unfortunately, it's not problem solved for at least two reasons. First, you can't rollback coin withdrawals. (They may have a similar problem with LR withdrawals, but I doubt it.) Second, you will have customers who will, in many cases justifiably, feel that rolling back legitimate trades rips them off. (You'll also have a bunch of jerks demanding to keep their ill-gotten gains, such as people who deposited BTC, sold them for $50 each, and then tried to withdraw USD. But screw them.)

For example, consider someone who saw the price rise at BTC-e and then bought a Mt. Gox code and then bought bitcoins at Mt. Gox, withdrew them from Gox and deposited them at BTC-e. A rollback would give them their bitcoins back. That still leaves them out the commission they paid for the Gox code plus  two Mt. Gox commissions (buying the bitcoins and then having to sell them). They also may take exchange losses depending on the timing and are left having to withdraw USD from Mt. Gox.
After the price rose above $12, it was extremely obvious that this was a hack. Anyone who traded elsewhere with the assumption that the btc-e trade was legit deserves to have the trade rolled-back.


I agree..... Some people are just greedy...

Oh please, it has nothing to do with being greedy (we all are). The trades got rolled back because they weren't real trades. If you sold for $50 of fake LR, you can't expect the exchange to pay you out in real LR.

How do you figure it has nothing to do with being greedy? The second people saw a problem, they ran and tried to sell coins.. How is that not greedy?

full member
Activity: 210
Merit: 100
Hmm... I'm still a bit confused.
All that noise and only 4500 BTC were stolen?!  Cheesy
I'm guessing LTC and NMC withdrawals were capped as well?

http://blockchain.info/block-index/256991/000000000000076b892483f7c33fe7e44b577ec2f2a5f1bf9df71952a1184578
legendary
Activity: 1120
Merit: 1003
That's why you make backup, so in case of problems you do a rollback and problem solved. Not like the scammers of bitcoinica that "we have no backups lol"
Unfortunately, it's not problem solved for at least two reasons. First, you can't rollback coin withdrawals. (They may have a similar problem with LR withdrawals, but I doubt it.) Second, you will have customers who will, in many cases justifiably, feel that rolling back legitimate trades rips them off. (You'll also have a bunch of jerks demanding to keep their ill-gotten gains, such as people who deposited BTC, sold them for $50 each, and then tried to withdraw USD. But screw them.)

For example, consider someone who saw the price rise at BTC-e and then bought a Mt. Gox code and then bought bitcoins at Mt. Gox, withdrew them from Gox and deposited them at BTC-e. A rollback would give them their bitcoins back. That still leaves them out the commission they paid for the Gox code plus  two Mt. Gox commissions (buying the bitcoins and then having to sell them). They also may take exchange losses depending on the timing and are left having to withdraw USD from Mt. Gox.
After the price rose above $12, it was extremely obvious that this was a hack. Anyone who traded elsewhere with the assumption that the btc-e trade was legit deserves to have the trade rolled-back.


I agree..... Some people are just greedy...

Oh please, it has nothing to do with being greedy (we all are). The trades got rolled back because they weren't real trades. If you sold for $50 of fake LR, you can't expect the exchange to pay you out in real LR.

Btw, they had backups, they reverted the trades and they will pay everything, to me it seems BTC-E is facing the problem in the best way. Not like the idiots/scammers of bitcoinica


BTCe has handled this the best that can be expected. They didn't make the amateur mistakes that Bicoinica SUPPOSEDLY made (inside job).

The eventual outcome of this will be heightened security for LR deposits - that's a good thing.

legendary
Activity: 1148
Merit: 1008
If you want to walk on water, get out of the boat
I agree too.

Btw, they had backups, they reverted the trades and they will pay everything, to me it seems BTC-E is facing the problem in the best way. Not like the idiots/scammers of bitcoinica
hero member
Activity: 1078
Merit: 502
That's why you make backup, so in case of problems you do a rollback and problem solved. Not like the scammers of bitcoinica that "we have no backups lol"
Unfortunately, it's not problem solved for at least two reasons. First, you can't rollback coin withdrawals. (They may have a similar problem with LR withdrawals, but I doubt it.) Second, you will have customers who will, in many cases justifiably, feel that rolling back legitimate trades rips them off. (You'll also have a bunch of jerks demanding to keep their ill-gotten gains, such as people who deposited BTC, sold them for $50 each, and then tried to withdraw USD. But screw them.)

For example, consider someone who saw the price rise at BTC-e and then bought a Mt. Gox code and then bought bitcoins at Mt. Gox, withdrew them from Gox and deposited them at BTC-e. A rollback would give them their bitcoins back. That still leaves them out the commission they paid for the Gox code plus  two Mt. Gox commissions (buying the bitcoins and then having to sell them). They also may take exchange losses depending on the timing and are left having to withdraw USD from Mt. Gox.
After the price rose above $12, it was extremely obvious that this was a hack. Anyone who traded elsewhere with the assumption that the btc-e trade was legit deserves to have the trade rolled-back.


I agree..... Some people are just greedy...
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