Topic: [UNO] Unobtanium Info & Discussion - Hardfork block 1042000 - Merge Mine w/BTC! - page 126. (Read 1047017 times)

Big Vern is a liar and a thief, there are many reasons to doubt the "hack" story of Cryptsy (much more likely an inside job). And Gox was an unmitigated disaster, a platform that was run in an amateurish and fraudulent way and bleeded money for a long time, until it was too much to keep up the facade. In both cases the core was rotten before the outside. In this case it appears to be a straight theft, a clearly identifyable singular event, that caused the problem. Big difference. That's why I also mentioned a similar case where it did work out okay for all users (Poloniex).

Would I personally trust BFX with my money now? No, but others might. Ultimately it is up to the trading community to decide BFX fate now. Option 1 would be the certain death of a major platform and massive losses for many of its users. Scenario 2 has a chance of working out good or also ending up failing, but in a less catastrophic way.

Either way, the hacker must be laughing right now. He steals 120k BTC and instead of the whole community focusing their anger and chasing after him, people start hating on BFX "because socialism is bad duh".

Big Vern Cryptsy tried that, but never succeeded  , but even he understood that if he announced the losses everyone would start to withdraw funds instead of trading.
If Mt.Gox came back to the business, would anybody return to it  Don't think so.

 

Yeah all stolen coins are linked to user accounts, but the theft was entirely on BFX's end. So the analogy is a bit flawed. The problem is - as always - not bitcoin but cerntalized exchanges. When the Bitcoin community will finally learn and *gasp* find a solution is the real question.

Its an ugly situation with no easy solutions. Them also tapping ETH, LTC and USD balances definitely is controversial, I see that and would probably also be angry if I was affected. Yet I'm trying to look at it from a pragmatic perspective. There are 2 basic options:
1. Close BFX, let remaining customers get their assets out and say screw everyone else.
2. Keep BFX running with the goal of eventually earning enough in fees and other profits to recover the losses.

Bitfinex has suffered a loss, but is (maybe, hopefully?) not beyond repair. If they can keep/regain the trust of enough of their customers, they could eventually earn enough to pay everyone back. There are precendents for this, see Poloniex hack (much smaller scale but also a much smaller exchange back then). BFX does trade alts, sure. But the bulk of their income is made from BTC trading. If they want to have a shot at option 2 they HAVE to keep their BTC markets running, else they'd destroy their business. The only way to do that is the messy situation we're in now. Without "shared losses" they'd loose their main market and main source of income.

So yeah - there are plenty of "reasons", some even good, to explain and justify what they're doing. It still sucks, I won't contest that.

This article sums it up well.

http://zerohedge.com/news/2016-08-07/first-bitcoin-bail-all-bitfinex-users-lose-36-shared-loss-after-historic-hack

It is really a bail-in, just like the Cypriots experienced.

Coming soon to a bank near you in the EU and United States...

I don't disagree, if they aren't in your wallet, consider them as good as gone. It makes digesting things like this that much easier.

They were in your apartment in the complex owned by bifx.

Which is why ETH (forked) is no longer a cryptocurrency (if it ever was one). If history can be altered because some or most people aren't happy, you don't need a blockchain. A database will do.


The point was, if the coins are not in your wallet and you trusted a 3rd party and they're all the sudden not living up to their 3rd party promises... Well, you can't say that hasn't happened before and sorry for your loss. The coins weren't in your house if they were at BFX.

Meanwhile, the blockchain continues and is unaffected.

I didn't know the word immutability, i googled it. "In object-oriented and functional programming, an immutable object (unchangeable object) is an object whose state cannot be modified after it is created."  Based on the definition it seems like the object wouldn't be immutable if it could be altered.

Was the exchange paying out portions of the fees they collected to all their users? I highly doubt it. So if they weren't willing to share in the gains, why should all users be responsible in sharing for the losses?!

I feel it is worse because being hacked is an assumed risk when using an exchange. I doubt anyone goes into an exchange thinking that if the exchange is hacked that their funds could be used to pay others who lost something. That is what makes it worse to me.

If it leads to insolvency, those who didn't have the opportunity to removes fund before the whole thing burned down, would be in the same boat anyway. Although i suppose if they got out, they got out, so they won't be affected. If they didn't make it out and their funds are frozen there and they are accepting it as total loss then 60% of what they had prior isn't so bad. Which sucks because if you lost nothing, why should you still take a 30% hit?

I thought that was half the allure of the chain. That if something like this happened thanks to the chain you could prove ownership no problem. Really funds shouldn't be frozen from anyone, they should all be allowed to withdraw. That is what i take issue with.

The people running the exchange should be held liable. NOT the users of the exchange.

Someone breaks into my neighbors house and robs them. Now someone is taking half my shit to help my neighbor out? Like not even shit they lost, just shit that might be somewhat equivalent in value. That is no different than what is happening and it still rubs me wrong.

There is no solution. Prevention is the only solution.

localbitcoins has been fine for most use cases in my experience, and you are correct. Things like bitsquare need to be examined more closely. otc trading is still a very thriving market.

Re. Bitfinex response, I don't think there is a "right" answer for them - pretty well every option seems as bad as any other.

The individuals who lost BTC don't seem to have done anything more or less than those who didn't lose coins - everyone relied on Bitfinex, and everyone left value on the exchange, given that it is a platform for trading between coins, it seems basically chance that they were holding the coin which was stolen at that moment. I expect their view would be "why should I be singled out?"

To expand a little, a person whose trade to buy, e.g. ETC for BTC, completed before the hack would be better off than the person on the sell side of the same trade.

The fault lies clearly with Bitfinex as a whole (whether it was a hack or an inside job) and if it leads to insolvency then everyone will be in the same boat anyway.

I haven't seen if they are proposing to make people whole in some way - e.g. as Poloniex did when they were hacked, anyone know?

What would be interesting to know is if their terms and conditions mention how they will deal with this sort of situation.  I can't imagine that they do, but perhaps exchanges will need to think about this going forward?

I had to smile
120,000 BTC stolen and is out there waiting to be dumped.  
via central exchanges plox

15,000 UNO is out there in a known custodial hand.
via strong and wise community action

AND justice?

Mintpal fraudster gets 11 years ... Karma they say is a lady dog and her sons built Rome (but not in a day) ... remember how Fallin'Knife was able to recover all the Mintpal UNO?  That was magic, and now seeing Moolah.io CEO served is delight.  And Vern, if you're out there, the blockchain circle does not forget.    

Unobtanium - The crypto commodity here is a magnificent community!


---
bumps

"perhaps bitsquare or localbitcoins should be examined a little more if you're wanting to play the market"
on the money.  but in terms of goals 1. make UNO a reliable crypto2crypto base  2. thus then push utilizing it as a p2p fiat2crypto instrument

"After such much thought, analysis, consultation and the conclusion there must be the liquidation the main capital of any financial institute, the trust, has gone"  brief and to the point.  there is no financial institute worthy of trust.  "control the private keys" ... "be your own bank" ... that is the NEW financial institute inc ... shares on sale this week ... about $1

it's always an inside job ...
Bitfinex security policy: Multi-sig Hot wallet only holds minimal amounts (~0.5% of customer funds) (cached 28.7.2016)
http://webcache.googleusercontent.com/search?q=cache:QodhXDQDsW0J:https://www.bitfinex.com/security_policy&num=1&hl=en&gl=us&strip=0&vwsrc=0

 

I just think it's extremely unfair on the users who had balances in Alt-coins, BTC or in Fiat that weren't affected should have to take some of the hardship when they know exactly which users lost coins and could think of a way to deal with them only instead of getting absouloutely everyone's balance involved.

Again I have no idea how the legality of this situation works that is just my opinion. Maybe i overstretched a bit when i said worse then the eth hardfork. haha

Huh? How is response to theft worse than altering immutability?

Not to be overly pedantic, but what was stolen from users was BFX tokens that anyone assumes are worth more than the risk. Anyone who signed their outputs to an address they don't control the private keys to should know the risks by now.

On another note, perhaps bitsquare or localbitcoins should be examined a little more if you're wanting to play the market.

Sounds like an inside job...

But I believe that this sums up the security over there:

https://www.youtube.com/watch?v=l0WG0B2JYLQ

Sounds good to me. Give me your money.

Sorry For Your 36.067% loss - http://qntra.net/2016/08/sorry-for-your-36-067/

moar central exchanges plox. 

Wait a hot second, they know who lost what exactly, but have no problem making all responsible?

" i am sorry, your neighbor was robbed, you must give half of what you have to them" How is this any different from what is taking place?

My interpretation of the situation was that if you have ANY funds on the exchange they will be cut by 30%. Is it limited to bitcoin? If it were, in the sense, i can see what you are saying.

Um the other option is tough shit. If you lost your money you lost your money. If not, get out while the going is good. Instead we have this. Bullshit.

The only reason we see this socialism complaints is because of Bitfinex unique multisig wallet implementation (which is a significant part of this problem to begin with) which means the lost BTC are consistently linked to each user on the blockchain, instead of written down in the exchange SQL database and then thrown in a pool. But BFX is an exchange, not an online wallet. The reality is that its the company that got hacked, not their individual users. So they have to take responsibility for the theft entirely upon themselves, which they are doing, and treat all customers equally.

Had Bitfinex worked like most other exchanges and use a combined cold-/hotwallet system that had gotten hacked, nobody would complain about "socialising losses", because it was the company that suffered losses in the first place and not individual customers. The loss would automatically be shared between all users. This is the same situation, just the method of theft was different.

It sucks, but is still the only option they really have IMO. And yeah, that decentralized exchange idea we keep coming back to - its really about time someone REALLY did something about that...

Exactly! Because of the ineptitude of those running the exchange, EVERYONE who used it now suffers? What the fucking fuck. Obviously it wasn't secure enough.

Look at how in depth people have taken their security here, why can't an exchange function at half that level of paranoia, considering they are handling millions in funds? It always seems too convenient. Someone at finex was in on it.

Fuckers should be hunted down like the pigs they are.

"Yeah only btc got jacked, but if you used our exchange you now have 30% less than you did. "

Why do exchanges need centralized wallets? If everything is on the chain shouldn't you be able to use your own private wallet to trade? Why is there no exchange where you input your address and use that instead of having to deposit to the exchange? The exchange could pull the data on how many coins are in the address. You aren't supposed to be able to double spend thanks to the infallible block chain so it shouldn't be an issue of "what if the funds aren't actually in the wallet" Seems not so difficult imo. Yet we all take part in this bullshit of giving out money to some anonymous assholes in hopes that it will be safe. Is cryptsy even around any more? That was THE exchange for how long. The system is flawed. By continuing to use it it just gives free license for this shit to take place time and time again. All for what? trading coins like they are stocks. People realize how fucking idiotic this is, no? It is almost, almost, as stupid as the good faith of the us of a backing the value of the dollar. ALMOST.

What do i know. Random douche bag behind a screen all the same. I know none of this feels right though.

Indeed if they follow through with this, it is more absurd then the eth hardfork. HOW in any way are people unaffected responsible for the funds of those who are???

That is the most fucking RETARDED thing i have yet to see in the cryptoworld. This offends me more than rolling back block chains. This is horrible. Although evolution often needs a catalyst. Seeing how they soften the blow on the bigger cry babies by making those who lost little lose more should make us all take pause and question what the fuck is going on. This is worse than the banks now. What bittfinex did now is steal EVERYONES money and redistribute it. It is sounding more and more like an inside job as this goes on.

Why didn't the exchange have an insurance policy to protect deposits? Oh you mean for as real as crypto is, it is still a fucking toy that no one backs like that? What is the marketcap of btc, is it really 9 fucking billion dollars, hard to believe someone isn't willing to insure that. Or, that insurance like that exists but they opted not to use it? I dunno. All they did was turn the assets of all who used the site into an insurance policy.

The hack was bad, their reaction is 100 times worse.