What is the greatest lesson of MtGox?

Armis

hero member

Activity: 588

Merit: 501

Quote from: taylormcm on February 28, 2014, 05:00:26 PM

If you plan on holding any coins for the long-term it is best to store them in a paper wallet.

Developers are currently working on an offline paper wallet generator and we need testers! It's built in HTML and JavaScript and is very similar to other paper wallet generators like bitaddress.org and bitcoinpaperwallets.com

There will be many advanced features included in this paper wallet generator, for starters:

- ZIP download for offline generation
- Multiple coin support (BTC, LTC, NMC, PPC, NXT, etc.)
- Security dashboard: Gauge your setup's security level in the hopes of achieving Zero Trust
- Import Keys or Generate your own
- RNG Generation: Entropy collection based on mouse movement
- Batch generation and printing of multiple wallets

Full feature list will be announced, all features may not make it into the initial Beta but they'll all get added before release.

Please sign up at http://www.cryptopapers.com so you can be notified upon BETA release.

Cheers!

if you like we could partner on a more appropriate address for your site -- cryptocurrencykeys.com, let me know if you have an interest

nitehawk

hero member

Activity: 532

Merit: 500

Worldcore - Banking for the Future

Be Fearful When Others Are Greedy and Greedy When Others Are Fearful

or

Admit nothing, deny everything, demand proof, and make outrageous counter accusations. And if all else fails, discredit all opposition.

taylormcm

newbie

Activity: 10

Merit: 0

If you plan on holding any coins for the long-term it is best to store them in a paper wallet.

Developers are currently working on an offline paper wallet generator and we need testers! It's built in HTML and JavaScript and is very similar to other paper wallet generators like bitaddress.org and bitcoinpaperwallets.com

There will be many advanced features included in this paper wallet generator, for starters:

- ZIP download for offline generation
- Multiple coin support (BTC, LTC, NMC, PPC, NXT, etc.)
- Security dashboard: Gauge your setup's security level in the hopes of achieving Zero Trust
- Import Keys or Generate your own
- RNG Generation: Entropy collection based on mouse movement
- Batch generation and printing of multiple wallets

Full feature list will be announced, all features may not make it into the initial Beta but they'll all get added before release.

Please sign up at http://www.cryptopapers.com so you can be notified upon BETA release.

Cheers!

Merchant

newbie

Activity: 36

Merit: 0

Quote from: proton on February 25, 2014, 10:16:31 AM

Do not trust any company with a funny name, especially one that is called Magic: The Gathering Online

Unless they actually exchange Magic cards for bitcoin (and vice versa), of course Wink

DannyHamilton

legendary

Activity: 3472

Merit: 4801

Quote from: Armis on February 26, 2014, 08:51:32 AM

Quote from: spooderman on February 26, 2014, 05:02:12 AM

If you aren't the sole controller of your private keys, you don't have any bitcoins.

Possession isn't necessary for ownership.

Just because you transfer custody of your coins to someone doesn't make the new holders of the coin the new owners, just like when you take your kids to school it doesn't make the teacher the parent.

You entrust your fiat / cryptocurrency to exchanges for the specific purpose they set forth in their agreement -- essentially to safeguard until you have removed it from their system.

Bitcoins aren't children.

Bitcoins are a cryptocurrency. This means that they rely on cryptographic proof of ownership. That cryptographic proof is provided with a digital signature from a private key that is cryptographically linked to the bitcoin address. When you "send" bitcoins, what you literally do is digitally sign an agreement that transfers ownership of the value to the controllers of a specific set of private keys.

Quote from: DannyHamilton on February 25, 2014, 10:57:03 AM

If you don't have exclusive control of the private keys, then you don't have the bitcoins.

Any time you send your bitcoins to an address where you don't have exclusive control of the private keys (such as MtGox, CoinBase, BitStamp, BTC-E, localbitcoins, etc), you are making a donation to whoever has control of those private keys.

The bitcoins immediately belong to them and not to you. They are no longer "your" bitcoins. In return, most of the people who run these websites will offer you a promise that they will send an equal amount of their bitcoins wherever you ask them to whenever you ask them to. You need to decide if you trust them to deliver on such a promise, keeping in mind the possibilities that they could have security flaws, could find their assets seized by government agencies, could be tempted to keep the bitcoins for themselves, and a variety of other situations that could cause them to fail to live up to the promise provided.

You are not "entrusting your fiat / cryptocurrency to exchanges", you are purchasing a promise. You are trusting the exchange to deliver on that promise. There are many untrustworthy individuals and many untrustworthy organizations in the world. Be careful about purchasing promises from untrustworthy entities. The promises are often not worth what you pay for them.

TrailingComet

sr. member

Activity: 462

Merit: 250

Don't store coin in 3 rd party wallets outside your control
Take responsibility for your coins
Spread yr risk by using multiple exchanges and service providers

Armis

hero member

Activity: 588

Merit: 501

Quote from: spooderman on February 26, 2014, 05:02:12 AM

If you aren't the sole controller of your private keys, you don't have any bitcoins.

Possession isn't necessary for ownership.

Just because you transfer custody of your coins to someone doesn't make the new holders of the coin the new owners, just like when you take your kids to school it doesn't make the teacher the parent.

You entrust your fiat / cryptocurrency to exchanges for the specific purpose they set forth in their agreement -- essentially to safeguard until you have removed it from their system.

DannyHamilton

legendary

Activity: 3472

Merit: 4801

Quote from: BlockChainLottery on February 26, 2014, 04:41:47 AM

Quote from: DannyHamilton on February 25, 2014, 05:34:16 PM

...
The bitcoins belong to them and not to you. They are no longer "your" bitcoins. In return, they offer you a promise that they will send an equal amount of their bitcoins wherever you ask them to whenever you ask them to. You've chosen to trust them to deliver on that a promise.
...

It's striking sometimes how much similarities it has compared with a bank.

An unregulated, uninsured, unaudited bank, but yes a bank.

T.Stuart

hero member

Activity: 644

Merit: 500

One Token to Move Anything Anywhere

In my case, don't get blinded by greed.

Cluster2k

legendary

Activity: 1692

Merit: 1018

The first and only lesson: never keep bitcoins or money at a place you don't control. The wallet and bankroll of any exchange is a massive honeypot for all the worst the Internet has to offer. It could all be gone tomorrow without any warning. Unfortunately that also severely limits the opportunity to trade money for bitcoins and back again. This is the greatest weakness bitcoin has today.

btcxyzzz

legendary

Activity: 888

Merit: 1000

Monero - secure, private and untraceable currency.

if you wanna trade, trade on as many exchanges as possible. it's safer, and it's more effective because of volumes.
if you wanna store, store it on linux, encrypt wallets and do daily automatic backup on some remote machine.

still wonder why so many people left their money at mt gox, i fleed away the moment the problems began...

anu

legendary

Activity: 1218

Merit: 1001

RepuX - Enterprise Blockchain Protocol

Quote from: edok on February 25, 2014, 04:05:48 PM

I actually trust Coinbase to secure my BTC more than I trust myself to not lose it. Sue me.

Its easy enough:
http://brainwallet.org/
With a brain wallet, you don't need any backup.

To be extra safe, disconnect your computer from the network (pull the plug) while entering your passphrase. When done, close the browser, delete cookies and then reconnect.

Use your social security number to salt your passphrase.

thats it.

When you have done that, you are in the position that wherever you are, you have access to funds. Even if the govt steals all your assets, throws you in jail a few years and chucks you out on the street naked and bleeding, you can walk into a tailor shop and leave with a $5000 suit.

spooderman

legendary

Activity: 1652

Merit: 1029

If you aren't the sole controller of your private keys, you don't have any bitcoins.

BlockChainLottery

sr. member

Activity: 332

Merit: 250

AwesomeDice.net

Quote from: DannyHamilton on February 25, 2014, 05:34:16 PM

...
The bitcoins belong to them and not to you. They are no longer "your" bitcoins. In return, they offer you a promise that they will send an equal amount of their bitcoins wherever you ask them to whenever you ask them to. You've chosen to trust them to deliver on that a promise.
...

It's striking sometimes how much similarities it has compared with a bank.

Unacceptable

legendary

Activity: 2212

Merit: 1001

Quote from: ginbank on February 25, 2014, 07:03:29 AM

LMAO!!!!!!!!! Cheesy

Jeezy911

sr. member

Activity: 294

Merit: 250

Im still mad karpooples bought a frappacino with my BTCs

DannyHamilton

legendary

Activity: 3472

Merit: 4801

Quote from: edok on February 25, 2014, 04:05:48 PM

I actually trust Coinbase to secure my BTC more than I trust myself to not lose it. Sue me.

No need to sue you.

Just be aware of the risks you are taking. There won't be a lot of sympathy if Coinbase suddenly is unable to deliver on their promises.

The bitcoins belong to them and not to you. They are no longer "your" bitcoins. In return, they offer you a promise that they will send an equal amount of their bitcoins wherever you ask them to whenever you ask them to. You've chosen to trust them to deliver on that a promise.

Keep in mind the possibilities that they could have security flaws, could find their assets seized by government agencies, could be tempted to keep the bitcoins for themselves, along with a variety of other situations that could cause them to fail to live up to the promise provided.

You are placing blind faith in an entity with no evidence that they are deserving of that faith. They are not audited, your "deposits" are not insured, and there is little (if any) regulation forcing them to follow any particular "best practices" or "security protocols".

edok

full member

Activity: 167

Merit: 100

I actually trust Coinbase to secure my BTC more than I trust myself to not lose it. Sue me.

melvster

sr. member

Activity: 350

Merit: 250

Quote from: rramires on February 25, 2014, 06:29:28 AM

Exchange is not a bank!
Never sleep with BTC on an exchange.
Send -> Negotiate -> Move your wallet.
Give preference to trade with more coins types, it becomes easier to exchange and have to where run.

Commerce on the Internet has come to rely almost exclusively on financial institutions serving as
trusted third parties to process electronic payments. While the system works well enough for
most transactions, it still suffers from the inherent weaknesses of the trust based model.
Completely non-reversible transactions are not really possible, since financial institutions cannot
avoid mediating disputes. The cost of mediation increases transaction costs, limiting the
minimum practical transaction size and cutting off the possibility for small casual transactions,
and there is a broader cost in the loss of ability to make non-reversible payments for non-
reversible services. With the possibility of reversal, the need for trust spreads. Merchants must
be wary of their customers, hassling them for more information than they would otherwise need.
A certain percentage of fraud is accepted as unavoidable. These costs and payment uncertainties
can be avoided in person by using physical currency, but no mechanism exists to make payments
over a communications channel without a trusted party.

-- Satoshi Nakamoto

bitcoinminer

sr. member

Activity: 322

Merit: 252

I would say the greatest lesson has to be the proper way to set up a Ponzi scheme.

Con Man = Confidence Man. There are still morons on here whom still have confidence in MagicalGoXXX.

Topic: What is the greatest lesson of MtGox? (Read 4977 times)