Storing bitcoins - Bitcoin Wiki

On Moderation, Bitcoin, and Creating Content

Ok, I don't care that much about moderation. To begin with, the moderators get to have the kind of community they want. That's how that works. If they don't want your content, you should take it elsewhere. That said, this community should probably start having a discussion about what they want, and how they want it to look. So, I thought I would give a little bit of advice to the mods, should they choose to accept it, and all of you out in Bitcoinlandia can take it for what it's worth because... well... this is a community of whiney little babies, and I can't imagine how hard it must be to not listen to the constant complaining. I, myself, am regularly moderated, which I usually face by sending a quick message off to a mod or two. Frankly, I don't care that much if I'm moderated, but I do find moderation ironic in a world filled with anarchists.
Now, I'm often called a bully and a troll. They are distinctions I'm fine with. The only thing I really care about is truth, and I hate when people show up here and try to convince the community of things that are untrue.
When I started in Bitcoin I was much younger and much more naive. I remember negotiating to purchase bitcoins with Paypal with people forever ago, or free Bitcoins that were given out of faucets. I remember Bitcoinica and the weird failure. I remember the first edition of Bitcoin Magazine. I remember when [email protected] was asking for money, and I watched as people gave it to him. The forums were abuzz with rumors that he was investing in dark markets, and that's how his returns were so incredible. I didn't know enough then. I remember sitting there watching it and thinking, "how can you know that it's a ponzi" as others accused him loudly of running an obvious scheme. I remember when Matthew N. Wright made a bet with the community of (I believe) 10,000 Bitcoins that it Pirate would pay, and when that time passed, Matthew withdrew his bet, and told everyone he was teaching them a lesson. He was drummed out of the community, gave up his equity in Bitcoin magazine and the other dozen projects he was a part of. I remember when bitinstant came about and saved us all so much time, as we had to go to our local drug store and pick up the weird blue phone. An Indian would pick up and you would feed him a random set of numbers. Then suddenly, a few hours/days/indeterminate amount of time later, money would show up at Mt. Gox. I remember TradeFortress, and the Bruce Wagner ordeal, and dozens and dozens and dozens of other weird scams or things that looked like scams. I remember when mining started and people began bilking investors out of mining contract profits. And I remember getting scammed myself numerous times. And always, scammers feed on one thing: your personal greed. I was taken for many many Bitcoin by TradeFortress when he offered a Bitcoin index fund. I thought I was being reasonable when I put my money into the slow-growth fund. The returns that were promised were far less than all the other scams, what could go wrong? In a world where people were promising to double your money every month, TF promised only that he would double it every year or so. Reasonable, right? When I went to withdraw my funds... they weren't there. I didn't know then what I know now.
I remember sitting in the audience at the first North American Bitcoin conference put on by Pumper Moe Levin. By that time, I'd become fairly sensitive to scammers in the space, though I'm still surprised by their brazenness. I even tweeted about one scam that was pitching shares in an oil drilling company https://twitter.com/junseth/status/427102576824582144. It was there that I saw Neo&Bee stand in front of a packed room and explain their plan to bring freedom and wonder to the people of Greece. I remember feeling uneasy about the polish of the pitch. It looked great, but I didn't understand a goddamn thing they said. I didn't trust my gut. Months later, millions had been stolen, and the CEO was flaunting his newfound wealth on Facebook as he took pictures of himself in nice cars. All of us sat there and watched that happen. And since then, I have heard dozens of others who were in the audience tell me that they also were as uneasy as I was about the Neo&Bee presentation. None of us said anything because we are blinded by our desire for this to work.
After Neo&Bee, I promised myself I would never let something that sat uneasy rest without asking probative questions. I was called a troll for attacking bitcoin-trader.biz when bitcoin moderator u/SeansOutpost took their money as the main sponsor of Coins in the Kingdom. They were an obvious ponzi, and he let them show up to try to bilk the community. That's fine. I'm happy to let Sean profit, in spite of himself. It speaks poorly of his character and makes me know that he will put his own desire for popularity or success or whatever the fuck it is ahead of the wellbeing of those he is hosting. But in lieu of my promise, I camped myself at the Bitcoin-trader.biz table for the remainder of the weekend, and explained to everyone who spoke with the man and woman behind the table (themselves investors in the ponzi) why it was an obvious scam.
"We do arbitrage to make 1% per day," the man behind the table would say. They had a live feed of all the arbitrage that they said they were doing.
There is a simple investment mindtrick called the rule of 72. Basically, if someone is giving you a percentage return, you can figure out how long it will take to double your money. You divide 72 by the percentage, but make sure to keep the units the same. So at 1% per day, they are promising a doubling of your money every 72 days, or 5x per year. So a quick extrapolation would mean that if you put $10 in on day one, 365 days later, you would be able to pull out $320 and 730 days later (2 years) you'd have earned a cool $10k. Three years in, if you invested $10, you'd have earned over $300k. Does that sound reasonable to you? "So what you're telling me is that if I give you $10 today, in 3 years, you'll give me over $300,000?"
"No, that's not what I said," the guy manning the booth told me. "I told you 1% per day."
So I did the math for him, which he scoffed at, but which seemed convincing enough to the people thinking of investing. Those two threatened to sue me and they went back to Canada, where they emailed the head of the Bitcoin-trader.biz group. They pressed him for an audit after my so-called trolling, and then a week and a half later, he disappeared with their money and a few million dollars more. In the aftermath, I had a call with the man behind the booth. He said something like, "I thought that the guy who was standing at our booth all weekend was trolling us, but when the fund closed, I realized he knew something we didn't."
Here's the thing, probative questions are uncomfortable. I have been around these parts pretty long, and I'm incredibly familiar with the technology for a guy who doesn't know a lick about comp-sci. You have seen my memes batted about, and you may have even used them yourself in spite of hating me. You may listen to Bitcoin Uncensored even though you hate the Bitcoin gossip. You might have even accidentally been subject to my ire in a debate you accidentally got into with me. The reality is, I create a huge amount of the content that Bitcoiners consume. Others like u/eragmus, u/btcdrak, and even u/americanpegasus are doing content and curation as well. You can hate our content, you can like our content, but the reality is that these communities are built by maybe 1% of us content creators. I enjoy the childish requests for no moderation, because behind the curtain, most of you will run like a child to any of the many moderators here and tell on people. The Open Bazaar team just did it to me, and I got warning from moderator u/Aussiehash whom I told to fuck off. What everyone really means when they say they don't like censorship, is that they don't like censorship of the content they want to consume. The instant they are offended, they want that content censored. Words like troll are used against people whose content you don't like, hijacking posts is the word used for the person creating the most content in a post. Recently, Andreas Antonopoulos (despite being on the front page lamenting the censorship) blocked me on Twitter because Tatianna Moroz told him I'm a sexist. Again, fine, but ironic considering the claim that one is against censorship carte blanche. Adam Levine censored me while trying to prove that he's completely against censorship.
Me, I don't care about censorship. Community's are built through some kind of pruning. The kind of community I like is one that self-polices and makes prunes itself much like Wikipedia. Those that don't want to be a part of it, don't have to be, and those that want to be a part of it choose themselves to participate. Censorers are always vilified. So I don't do it. I don't do it at all. So the great question is not whether you should censor, but who gets to decide who gets to censor. So here's my proposal. Everyone, stick around bitcoin. It's a great place, and u/theymos has done a pretty darn good job of not fucking shit up. Do I agree with his current moderation decisions? I wouldn't have done what he did. But I don't think this is a moral question. On the other end, I have bitcoinarchy. I have set it up, me and u/brighton36 will be the only moderators. And our only promise is that we won't moderate anything. And we have a history of being completely unrelenting in our unwillingness to censor. So now you can't say dick. You can hate me, you can love me, but if what you are ACTUALLY looking for is a uncensored forum, then join my subreddit. Somehow, I'm willing to bet that most of you are looking for a place that does the kind of censorship you like, and not no censorship.
Does that solve everybody's problem?
u/ThePiachu, u/rbitcoin-bot, u/colsatre, u/StarMaged, u/DotGaming, u/BashCo, u/frankenmint, u/gruez, u/arthurbouquet, u/DigitalGoose, u/MineForeman, u/Camdien
submitted by junseth to Bitcoin [link] [comments]

So you think you know about BTC? Everyone who is interested in BTC should read this...

fyi - the use of the word "scheme" is not used negatively!
BASIC FEATURES
Bitcoin is probably the most successful — and probably most controversial — virtual currency scheme to date. Designed and implemented by the Japanese programmer Satoshi Nakamoto in 2009, the scheme is based on a peer-to-peer network similar to BitTorrent, operating at a global level and used as a currency for all kinds of transactions (for both virtual and real goods and services). It thereby competes with official currencies like the euro or US dollar. The scheme maintains a database that lists product and service providers which currently accept Bitcoins. These products and services range from intemet services and online products to material goods and professional or travel/tourism services. Bitcoins are divisible to eight decimal places enabling their use in any kind of transaction, regardless of the value. Although Bitcoin is a virtual currency scheme, it has certain innovations that make its use more similar to conventional money.
Bitcoins are not pegged to any real-world currency. The exchange rate is determined by supply and demand in the market. There are several exchange platforms for buying Bitcoins that operate in real time. Mt.Gox is the most widely used currency exchange platform and allows users to trade US dollars for Bitcoins and vice versa. As previously stated, Bitcoin is based on a decentralised, peer- to-peer (P2P) network, i.e. it does not have a central clearing house, nor are there any financial or other institutions involved in the transactions. Bitcoin users perform these tasks themselves. In the same vein, there is no central authority in charge of the money supply.
In order to start using Bitcoins, users need to download the free and open-source software. Purchased Bitcoins are thereafter stored in a digital wallet on the user’s computer. Users have several incentives to use Bitcoins. Firstly, transactions are anonymous, as accounts are not registered and Bitcoins are sent directly from one computer to another. Also, users have the possibility of generating multiple Bitcoin addresses to differentiate or isolate transactions. Secondly, transactions are carried out faster and more cheaply than with traditional means of payment. Transactions fees, if any, are very low and no bank account fee is charged.
ECONOMIC FOUNDATIONS OF BITCOIN
The theoretical roots of Bitcoin can be found in the Austrian school of economics and its criticism of the current fiat money system and interventions undertaken by governments and other agencies, which, in their view, result in exacerbated business cycles and massive inflation.
The following ideas are generally shared by Bitcoin and its supporters:
— They see Bitcoin as a good starting point to end the monopoly central banks have in the issuance of money.
— They strongly criticise the current fractional-reserve banking system whereby banks can extend their credit supply above their actual reserves and, simultaneously, depositors can withdraw their funds in their current accounts at any time.
— The scheme is inspired by the former gold standard.
TECHNICAL DESCRIPTION OF BITCOIN
The technical aspects of this system are complex and not easy to understand without a sound technical background. Therefore, a comprehensive explanation of the underlying technical mechanism of Bitcoin lies outside the scope of this report. This section aims simply to provide a basic description of the functioning of this virtual currency scheme. According to the founder, Nakamoto (2009), an electronic coin can be defined as a chain of digital signatures. Each owner of the currency (P') has a pair of keys, one public and one private. These keys are saved locally in a file and, consequently, a loss or deletion of the file would mean that all Bitcoins associated with it are lost as well.
A simplified illustration of a chain of transactions from one node to another can be found here. The virtual coin shown in the picture is the same one, but at different points in time. To initiate the transaction, the future owner P‘ has to first send his public key to the original owner P0. This owner transfers the Bitcoins by digitally signing a hash6 of the previous transaction and the public key of the future owner. Every single Bitcoin carries the entire history of the transactions it has undergone, and any transfer from one owner to another becomes part of the code. The Bitcoin is stored in such a way that the new owner is the only person allowed to spend it.
All signed transactions are then sent to the network, which means that all transactions are public transactions, although no information is given regarding the involved parties. The key issue to be addressed by the system is the avoidance of double spending, i.e. how to prevent a coin being copied or forged, especially considering there is no intermediary validating the transactions. The solution implemented is based on the concept of a “time stamp”, which is an online mechanism used to ensure that a series of data have existed and have not been altered since a specific point in time, in order to get into the hash. Each time stamp includes the previous time stamp in its hash, forming a chain of ownership. By broadcasting the new transactions, the network can verify them. The systems that validate the transactions are called “miners” — essentially these are extremely fast computers in the Bitcoin network which are able to perform complex mathematical calculations that aim to verify the validity of transactions. The people who use their systems to undertake this mining activity do so on a voluntary basis, but they are rewarded with 50 newly created Bitcoins every time their system finds a solution.
“Mining” is therefore the process of validating transactions by using computing power to find valid blocks (i.e. to solve complicated mathematical problems) and is the only way to create new money in the Bitcoin scheme.
According to Nakamoto (2009): “if a greedy attacker is able to assemble more CPU power than all the honest nodes, he would have to choose between using it to defraud people by stealing back his payments, or by using it to generate new coins. He ought to find it more profitable to play by the rules, such rules that favour him with more new coins than everyone else combined, than to undermine the system and the validity of his own wealth”.
MONETARY ASPECTS OF BITCOIN
The Bitcoin scheme is designed as a decentralised system where no central monetary authority is involved. Bitcoins can be bought on different platforms. However, new money is created and introduced into the system only via the above-mentioned mining activity, i.e. by rewarding the “miners” who perform the crucial role of validating all transactions made, with new Bitcoins. Therefore, the supply of money does not depend on the monetary policy of any virtual central bank, but rather evolves based on interested users performing a specific activity. According to Bitcoin, the scheme has been technically designed in such a way that the money supply will develop at a predictable pace The algorithms to be solved (i.e. the new blocks to be discovered) in order to receive newly created Bitcoins become more and more complex (more computing resources are needed). As explained on its website} the rate of block creation is approximately constant over time: six per hour, one every ten minutes. However, the number of Bitcoins generated per block is set to decrease geometrically, with a 50% reduction every four years. The result is that the number of Bitcoins in existence will reach 21 million in around 2040. From this point onwards, miners are expected to finance themselves via transaction fees. In fact, this kind of fee can already be charged by a miner when creating a block.
The fact that the supply of money is clearly determined implies that, in theory, the issuance of money cannot be altered by any central authority or participant wanting to “print” extra money. According to Bitcoin supporters, the system is supposed to avoid inflation, as well as the business cycles originating from extensive money creation. However, the system has been accused of leading to a deflationary spiral. The total supply of Bitcoins is expected to grow geometrically until it reaches a finite limit of 21 million. If, however, the number of Bitcoin users starts growing exponentially for any reason, and assuming that the velocity of money does not increase proportionally, a long-term appreciation of the currency can be expected or, in other words, a depreciation of the prices of the goods and services quoted in Bitcoins. People would have a great incentive to hold Bitcoins and delay their consumption, thereby exacerbating the deflationary spiral. The extent to which this could be a problem in reality is not clear. Two remarks should be made. Firstly, the deflation hypothesis entails an assumption which is not realistic at this stage, i.e. that many more people will want to receive Bitcoins in return for goods or in exchange for paper money. However, Bitcoin is still quite immature and illiquid which is a clear disincentive for its use. Secondly, Bitcoinis not the currency of a country or currency area and is therefore not directly linked to the goods and services produced in a specific economy, but linked to the goods and services provided by merchants who accept Bitcoins. These merchants may also accept another currency (e. g. US dollars) and therefore, the fact that deflation is anticipated could give rise to a situation where merchants adapt the prices of their goods and services in Bitcoins.
SECURITY INCIDENTS AND NEGATIVE PRESS
From time to time, Bitcoin is surrounded by controversy. Sometimes it is linked to its potential for becoming a suitable monetary alternative for drug dealing and money laundering, as a result of the high degree of anonymity.“ On other occasions, users have claimed to have suffered a substantial theft of Bitcoins through a Trojan that gained access to their computer.” The Electronic Frontier Foundation, which is an organisation that seeks to defend freedom in the digital world, decided not to accept donations in Bitcoins anymore.
However, practically identical problems can also occur when using cash, thus Bitcoin can be considered to be another variety of cash, i.e. digital cash. Cash can be used for drug dealing and money laundering too; cash can also be stolen, not from a digital wallet, but from a physical one; and cash can also be used for tax evasion purposes. The question is not so much related to the format of money as such (physical or digital), but rather to the use people make of it. Nevertheless, if the use of digital money in itself complicates investigations and law enforcement, special requirements may be needed. Therefore, the real dimension of all these controversies still needs to be further analysed.
Bitcoin has also featured in the news, in particular following a cyberattack perpetrated on 20 June 2011, which managed to knock the value of the currency down from USD 17.50 to USD 0.01 within minutes. Apparently, around 400,000 Bitcoins (worth almost USD 9 million) were involved. According to currency exchange Mt.Gox, one account with a lot of Bitcoins was compromised and whoever stole it (using a Hong Kong based IP to login) first sold all the Bitcoins in there, only to buy them back again immediately afterwards, with the intention of withdrawing the coins. The USD 1,000/ day withdrawal limit was active for this account and the hacker was only able to exchange USD 1,000 worth of Bitcoins. Apart from this, no other accounts were compromised, and nothing was lost.
This chart shows the evolution of Bitcoin’s exchange rate on the Mt.Gox exchange platform during the hours of the incident, and is also the expression of how an immature and illiquid currency can almost completely disappear within minutes, causing panic to thousands of users. The problem was related to a particular trading platform — Mt.Gox — which did not have strong enough security measures.
In a more recent case (May 2012), the exchange platform Bitcoinica lost 18,547 Bitcoins from its deposits following a cyberattack, in which sensitive customer data might also have been obtained.”
A PONZI SCHEME?
Another recurrent issue is whether Bitcoin works like a Ponzi scheme or not. The US Securities and Exchange Commission defines a Ponzi scheme in the following terms:
"A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity.“
On the one hand, the Bitcoin scheme is a decentralised system where — at least in theory — there is no central organiser that can undermine the system and disappear with its funds. Bitcoin users buy and sell the currency among themselves without any kind of intermediation and therefore, it seems that nobody benefits from the system, apart from those who benefit from the exchange rate evolution (just as in any other currency trade) or those who are hard-working “miners” and are therefore rewarded for their contribution to the security and confidence in the system as a whole. Moreover, the scheme does not promise high returns to anybody. Although some Bitcoin users may try to profit from exchange rate fluctuations, Bitcoins are not intended to be an investment vehicle, just a medium of exchange.
“Bitcoin is an experiment. Treat it like you would treat a promising internet start-up company: maybe it will change the world, but realise that investing your money or time in new ideas is always risky."
However, it is also true that the system demonstrates a clear case of information asymmetry. It is complex and therefore not easy for all potential users to understand. At the same time, however, users can easily download the application and start using it even if they do not actually know how the system works and which risks they are actually taking. Therefore, although the current knowledge base does not make it easy to assess whether or not the Bitcoin system actually works like a pyramid or Ponzi scheme, it can justifiably be stated that Bitcoin is a high-risk system for its users from a financial perspective, and that it could collapse if people try to get out of the system and are not able to do so because of its illiquidity.
WOOOHOOO KNOWLEDGE=POWER
Thanks to...
Source: ECB Europa - Virtual Currency Schemes 2012
submitted by audibleadderall to Bitcoin [link] [comments]

BTC-E.com safety checklist for noobs

DISABLE JAVA There's java zero day exploits being discovered all the time. One exploit still hasn't been fixed. You should do this permanently with your browser java is an exploit factory. IE you can't completely disable java so don't use it.
INSTALL NOSCRIPT ADDON https://addons.mozilla.org/en-US/firefox/addon/noscript/ or whatever shit script blockers Chrome/Safari use because Chrome is still lacking the required infrastructure for selective script disablement and object blocking so noscript isn't available, but inferior clones are. Whitelist only sites you need, like btc-e.com so it doesn't automatically load harmful scripts on untrusted sites.
GET AN ENCRYPTED PASSWORD SAFE http://www.schneier.com/passsafe.html Don't use any solution that 'encrypts in your browser' because it will need java and we disabled java remember?
MAKE NEW GMAIL ACCOUNT JUST FOR TRADING Make a random account name + password that can't be guessed. http://www.passwordgenerator.eu/
Store them in your password safe so you don't forget them. Never reuse that password on any site. ENABLE TWO FACTOR AUTHENTICATION.
Note that 2factor ID sometimes doesn't work if your phone time is off. You get 30 seconds to type in the code, if off by 10 seconds derp run out of time. Set your time manually if the shitty telco time server is off www.timeanddate.com
MAKE BTC-E ACCOUNT Use impossible to guess passwords from password generator + throw in your own random letters. Save in password safe. Do not pick a name anywhere close to being your email username.
ENABLE 2FACTOR ID Click Profile, then click 'Edit'
https://btc-e.com/profile#edit/home - confirm your email.
https://btc-e.com/profile#edit/security - enable "Withdraw only with request on E-Mail"
DO NOT CLICK ANY LINKS IN THE TROLLBOX!!!! No matter how innocent the link looks don't click anything in the chatbox. Hackers are dropping links full of java zeroday, redirectors that look just like btc-e login page and phish for passwords, all sorts of bad. Trollbox is also prone to misinformation being that it is a trollbox. Avoid.
If you chat on there, expect every PM sent to you will be from a hacker trying to mine information or get you to click a link. Assume every link is an exploit attempt. Notice how it displays your name, if you picked same name as your email, they can go to work on both by trying to break into your gmail account. This is another way how people get their coins stolen. Hacker takes chat name and tries it on gmail/hotmail/yahoo. If they get in because you didn't set up 2 factor expect to be robbed of coins.
DO NOT ENABLE API Unless you know what you're doing, do not enable this. Liberty Reserve disabled their API by default because of so many drained accounts.
DISCLAIMER Of course, be aware the exchange is in Russia or possibly Bulgaria and if anything happens the owner could just disappear, but this is highly unlikely. Why would you walk away from a money machine. Remember bitfloor (US) lost all it's customers bitcoins once, CryptoXchange (Australia) stole from users and disappeared, Bitcoinica (China?) stole or lost all the coins, and bitcoin-24 (German) has just lost their bank account and owner MIA. All exchanges carry risk no matter what country they are in.
You can fund btc-e through cash deposit in India, Singapore, Malaysia, Bangladesh, Nepal, Australia with http://www.ecurrencyzone.net/ which are authorized exchange listed on the Okpay.com site. They sell btc-e vouchers and Okpay. So does http://liliontransfer.org/ for wires and other methods.
If you want a really secure platform (you fear your comp is probably already infected with hidden java zeroday botnet) then download any linux live distro and make bootable USB or burn to CD. I recommend Liberty Linux http://dee.su and just use the non private browser (disable java and javascript!), NOT the Tor browser you don't want to trust SSL over Tor and risk a malicious exit node capturing traffic and running sslstrip on it or feeding you a MITM attack with spoofed certs.
If you want to know why watch this, nothing has changed since this talk was given: https://www.youtube.com/watch?v=Z7Wl2FW2TcA
submitted by Derpcoin to Bitcoin [link] [comments]

How to prevent anyone from hacking into your server for about $40 a month

I'm deeply sorry for slush and Bitcoinica losing a lot of Bitcoins due to someone breaking into their Linode server and stealing their BTC. Still, it was/is preventable, without a huge investment of money:
  1. Rent an Amazon instance (Micro is free for a year, then for a reserved instance it costs less than $10 a month. A reserved Small instance costs about $40 a month, and should be more than enough for a small business).
  2. Install a clean ubuntu image, encrypt the hard-drive.
  3. Generate a private/public SSH key pair, store the private key in a safe place on your trojan-free machine. Encrypt it with a strong password and back it up on Dropbox / your favorite backup provider.
  4. Upload the public key to Amazon, and connect only via SSH. Disable any other means of connecting to the machine except via this private/public key pair.
That's it. Nobody, not Amazon, Bill Gates, or even Satoshi himself can hack into your server now.
So ... while it sucks ... I wouldn't blame Linode for the hacking. Slush and Bitcoinica gave up on their responsibility for securing their own servers, and relied on a 3rd party. Linode, I am sure, had TOS that limit their responsibility in this case ... and rightfully so.
P.S.
Make sure to update to the latest security patches of any software you use, use Apache's mod_security, and any other security best practices. The above is how to prevent physical access to your terminal, not how to prevent buffer overflows or SQL injections.
UPDATE - Sorry, I guess haven't really thought this through - even on Amazon, if someone gained ROOT ACCESS to the machine hosting your VM, he could read your RAM even if you're using an encrypted hard drive. Still, it's a lot harder than what the attack on Linode's customer had to do ... but for true security you really should own a physical box.
Still, I think EC2 offers pretty much the best security besides owning a physical machine of your own.
submitted by ripper2345 to Bitcoin [link] [comments]

Bitcoinica & how I lost $20k

I bought the coins for $5 a piece and thought it would be a good idea to put those bitcoins in a wide range of investments. Later I heard about bitcoinica , I hesitated using it until i read that It was a registered business. This made me feel like it was safe, WRONG... I also considered storing bitcoins on bitcoinica as an investment because it would pay me interest just to park my money there. I signed up 2 weeks before the hack and was one of the many users who was affected by the hacker deleting user files. Bitcoinica had no way to prove how much i stored on the site or even if my email was real. Long story short I have accepted that my 40 btc are lost forever and learned a valuable lesson in who i should trust. I wrote this post in the hopes that someone reading this takes extra steps in being safe before making even a small investment.
TL;DR: Got burned by bitconica, finally accepting loss and encouraging others to play it safe and do the extra research before investing.
submitted by Willipa_Prime to Bitcoin [link] [comments]

12-21 18:57 - 'Don't forget the counterparty risk! Don't keep your coins in exchanges and e-wallets! Store your bitcoins somewhere safe!!!' (self.Bitcoin) by /u/shadowboyah removed from /r/Bitcoin within 0-5min

'''
Now that the price is going to the moon, I'd like to bring back the topic of counterparty risk. Because I see new people coming in, I'd like to inform them that leaving your money to someone else, be it a bank, an exchange, a darknet market, a borrower etc etc, you face the risk of never getting your money back!
In Bitcoin there have been many hacks, ponzis, scams which have affected it price very negatively. Some of the most famous ones where : Bitcoinica, Mt. Gox, BTCe, Poloniex, BitStamp, Cryptsy, Shapeshift, Gatecoin, Bitfinex, BTER, Vircurex, Mintpal, Bitpay, Cavirtex, Bitquick, the DAO, Bittrex, cloud mining scams, p2p lending, Darknet markets exit scamming/getting bust etc. The way they were hacked varied, some didn't lose customer funds, others refunded them, others lost altcoins etc, but the danger of losing everything is still there.
Coinbase has had problems with the IRS demanding customer info, Cryptsy lawsuit because they helped Cryptsy's CEO steal and cash out customer funds, freezing accounts for gambling etc, not giving customer's Ethereum Classic after the Fork and so on.
Some of the 'old guys' know about all that and prefer to stay safe. Others keep risking it. Just be the smart guy! Very few people profit from trading or arbitrage! Do you think you are in the 10-20% of people that constantly make money trading? Chances are you aren't... In a year you could have made more than 2-3x just by holding your coins in a private wallet!
Some people were lending money at Bitfinex to earn interest (more than 10% per year). Guess what happened to them... They initially lost 36% and then it went down to 18% due to BFX's clever trick. And some people just kept USD in that exchange thinking nobody could take it from them.
Don't get distracted by high yields by any altcoin like Dash, Nubits, Lending Club or Cloud mining scheme. 90-100% of all those are scams or just unable to keep their promises. Some people might have profited, but on the expense of others, and in total, more people lost than gained.
And you are going to ask me: What if I want to sell or buy some coins? How do I do it? Well, nowadays there are many ways where you can do that safely. Might not very cheap, but these are probably some of the best ways to do it:
Localbitcoin, Bitcoin.de, Paxful, Wallofcoins, BitBargain, Bitsquare, Tether (Omni Dex), Mycelium local trader, Purse.io, itBit, Gemini or Glidera, are some ways where you can buy coins with very little counterparty risk and OTC. If you still insisted in trading, BTCC and Kraken are currently the best exchanges in my opinion!
The best way to buy coins would be to buy them with your debit/credit card and get them sent to your private wallet instantly! Some exchanges/services that I know are Glidera, Bitstamp, Coinbase, Bitx, Coinsbank and CEX.io. There might be others, but I don't know how good they are (I never buy with credit cards btw). I mainly use Kraken. I once deposited coins and sold them on Kraken and within 1 day I had my Euros in my SEPA account. Selling coins is riskier and the only 100% safe way, is to exchange BTC with cash with someone that you trust. I used to sell coins via Localbitcoin a few years ago. I would buy from an exchange and sell it for more there. After some time, I stopped using Localbitcoins. I had a small customer base, which I trusted and they trusted me. I'd work simply with bank deposits. At some point I trusted them and they trusted me so much, that I would send them the coins even the day before they'd make the deposit. I never had a single problem.
But, I had problems when I started... On my first trade someone tricked me on my first trade and I released the coins without ever getting the payment. I also had a problem when I sold coins with Paypal as he did a chargeback. I was young and naive, but luckily I didn't lose more than 200£ in total. Do some KYC to make sure they aren’t sending money from a hacked account or use services like Moneypolo, OkPay and Perfect money. These services are great for sellers, but as a buyer you might lose your money if you get hacked. Avoid services where someone can reverse a transaction like PayPal and Skrill. It isn't just about the exchanges getting hacked. What if you get hacked? Someone could easily steal all your details and even if you had 2FA on, they could steal your funds (something extremely hard to do, maybe impossible, if you had a hardware wallet. Finally, arbitrage isn't that profitable. The probability of one exchange getting hacked is lower than the probability of one out of five exchange being hacked. So you have to expect losses from at least one exchange... Bitstamp, BTCe and Poloniex made their customers whole again and that's very honorable, but how many more blows can they take? What if they lose altcoins and they take the route of socialised losses?
'''
Don't forget the counterparty risk! Don't keep your coins in exchanges and e-wallets! Store your bitcoins somewhere safe!!!
Go1dfish undelete link
unreddit undelete link
Author: shadowboyah
submitted by removalbot to removalbot [link] [comments]

Why don't cryptocurrency service operators encrypt private keys?

I just read this article: Ottawa bitcoin exchange defrauded. I am amazed why the operators of Bitcoin services do not encrypt private keys? I used to work in credit card payments security, and encrypting credit card data when stored on a disk was a necessity (not doing so fails the PCI-DSS compliance audit). Since then (about 7 years ago), doing this has become increasingly easier. There are open source encryption tools available on linux distributions (gpg, openssl), and bitcoin wallets have their own encryption routines. Furthermore, you can more easily do full disk encryption.
This attack vector (hijacking server access control and rebooting it in rescue mode) has been publicly known ever since the linode attacks (bitcoin faucet, slush's pool and bitcoinica were affected if I remember right) 2 years ago. But we see it repeated over and over again. James Grant in the referenced article might be rightfully outraged that the hosting provider let itself being susceptible to social engineering attack, but having a one-layer security model is not suitable for handling valuable data.
TLDR have proper security policy and if you're lazy at least encrypt stored data.
submitted by Petersurda to Bitcoin [link] [comments]

/r/bitcoinsec - Wiki: Timeline of Heists

Hey all!
This stickied thread is temporary: Data will be moved to wiki so users can update.
therealbobsaget proposed the idea of keeping a relatively accurate record of Bitcoin heists. I believe the idea is great, and we can utilize the Wiki to store this information down for historical reasons.
From History_of_Bitcoin#Theft_and_exchange_shutdowns:

Mt. Gox:

On 19 June 2011, a security breach of the Mt. Gox Bitcoin exchange caused the nominal price of a bitcoin to fraudulently drop to one cent on the Mt. Gox exchange, after a hacker allegedly used credentials from a Mt. Gox auditor's compromised computer illegally to transfer a large number of bitcoins to himself. They used the exchange's software to sell them all nominally, creating a massive "ask" order at any price. Within minutes the price reverted to its correct user-traded value. Accounts with the equivalent of more than US$8,750,000 were affected. Source Source Source Source

Bitomat:

On July 2011, the operator of Bitomat, the third largest Bitcoin exchange, announced that he lost access to his wallet.dat file with about 17,000 bitcoins (roughly equivalent to US$220,000 at that time). He announced that he would sell the service for the missing amount, aiming to use funds from the sale to refund his customers. Source

MyBitcoin:

In August 2011, MyBitcoin, a now defunct Bitcoin transaction processor, declared that it was hacked, which caused it to be shut down, paying 49% on customer deposits, leaving more than 78,000 bitcoins (equivalent to roughly US$800,000 at that time) unaccounted for. Source Source

Bitcoinica:

In early August 2012, a lawsuit was filed in San Francisco court against Bitcoinica — a Bitcoin trading venue — claiming about US$460,000 from the company. Bitcoinica was hacked twice in 2012, which led to allegations that the venue neglected the safety of customers' money and cheated them out of withdrawal requests. Source Source

Bitcoin Savings and Trust:

In late August 2012, an operation titled Bitcoin Savings and Trust was shut down by the owner, allegedly leaving around US$5.6 million in Bitcoin-based debts; this led to allegations that the operation was a Ponzi scheme. Source Source Source Source. In September 2012, the U.S. Securities and Exchange Commission had reportedly started an investigation on the case. Source

Bitfloor:

In September 2012, Bitfloor, a Bitcoin exchange, also reported being hacked, with 24,000 bitcoins (worth about US$250,000) stolen. As a result, Bitfloor suspended operations.[116][117] The same month, Bitfloor resumed operations; its founder said that he reported the theft to FBI, and that he plans to repay the victims, though the time frame for repayment is unclear. Source

Instawallet:

On 3 April 2013, Instawallet, a web-based wallet provider, was hacked,[119] resulting in the theft of over 35,000 bitcoins[120] which were valued at US$129.90 per bitcoin at the time, or nearly $4.6 million in total. As a result Instawallet suspended operations. Source

Bitcoin+Android PRNG:

On 11 August 2013, the Bitcoin Foundation announced that a bug in a pseudorandom number generator within the Android operating system had been exploited to steal from wallets generated by Android apps; fixes were provided 13 August 2013. Source

Inputs.io:

A Bitcoin bank, operated from Australia but stored on servers in the USA, was hacked on 23 and 26 October 2013, causing a loss of 4100 bitcoins, worth over A$1 million. Source

Global Bond Limited (GBL):

In Hong Kong a Bitcoin trading platform owned by Global Bond Limited (GBL) vanished with 30 million yuan (US$5 million) from 500 investors on 26 October 2013. Source

SilkRoad:

After the arrest of SilkRoad's owner, the FBI claims it has confiscated over 144,000BTC. Source

Sheep Market (post-silkroad):

The debate concerning the Sheep Market heist of 96,000+ BTC is still ongoing, there has been talks of the owners simply taking the money and running, while the owners claim that their operations were "hacked". Source

Users:

301BTC were taken from SatoshiChrist's blockchain.info wallet. Attack method unknown, what is known is lack of 2FA may have lead to attacks capturing his wallet information from either phone or system.
Found a great thread over at Bitcointalk.org containing even more heists:

Linode hacks:

Besides the aforementioned Bitoinica, Bitcoin.cx and Bitcoin faucet among others were affected by this attack. Response by Linode

Allinvain Theft:

In 2011 a miner and Bitcointalk.org user "Allinvain" awoke to find 25,000BTC were transferred out of his wallet. He believes his system may have been infected by the attackers. Source
Will be updating periodically. Leave heist information and sources in comments, thanks!
submitted by bitcomsec to bitcoinsec [link] [comments]

Tales From the Crypto @axlcrypto

I wanted to start a topic about history of bitcoin and tales from the crypto! Most bizarre unusual things happen in Bitcoins Magic World! Please post your story, a link, a photo, something happened to you or someone else in this bizarre new world! From bitcoin creation by http://en.wikipedia.org/wiki/Satoshi_Nakamoto till now!
Some classics :
7,500 Bitcoins are Thrown Out with a Hard Drive! http://www.theguardian.com/technology/2013/nov/27/hard-drive-bitcoin-landfill-site
The pizza cost 750.000$! http://motherboard.vice.com/blog/this-pizza-is-worth-750000
1000btc stolen 500 btc bounty http://nxter.org/500-btc-bounty-for-lost-nxt-btc/
Silk Road http://en.wikipedia.org/wiki/Silk_Road_(marketplace)
Silk Road hitman http://www.washingtonpost.com/blogs/the-switch/wp/2013/10/02/silk-roads-mastermind-allegedly-paid-80000-for-a-hitman-the-hitman-was-a-cop/
The man who bought 5.000btc for 27$ http://www.theguardian.com/technology/2013/oct/29/bitcoin-forgotten-currency-norway-oslo-home
This guy says he is giving 100 btc tell him why !?! https://bitcointalk.org/index.php?topic=723463.0
Provo couple to document 'Life on Bitcoin' ! http://www.deseretnews.com/article/765631895/Provo-couple-to-document-Life-on-Bitcoin.html
80btc around the world! https://bitcoinstarter.com/projects/947
First Bitcoin Baby! https://bitcoinstarter.com/projects/946
Bitcoins in space ! http://www.virgin.com/richard-branson/bitcoins-in-space
First cop accepting bitcoins ! http://www.hazard-herald.com/news/home_top-news/2822997/Vicco-approves-measure-to-pay-police-chief-in-Bitcoin
First University accepting Bitcoins , Bitcoin Master added http://www.unic.ac.cy/digitalcurrency
Guns for bitcoins! http://news.yahoo.com/u-arrests-man-selling-guns-online-bitcoins-214929763.html
Bitcoin Assasination Market http://www.forbes.com/sites/andygreenberg/2013/11/18/meet-the-assassination-market-creator-whos-crowdfunding-murder-with-bitcoins/
Homeless surviving on Bitcoins! http://www.wired.com/2013/09/bitcoin-homeless/all/
15 year old kid make 100.000$ from bitcoins http://www.businessinsider.com/15-year-old-kid-launches-education-startup-with-bitcoin-fortune-2014-6
Wikileaks bitcoin http://www.forbes.com/sites/jonmatonis/2012/08/20/wikileaks-bypasses-financial-blockade-with-bitcoin/
Bitcoin Hacks! http://www.theguardian.com/technology/2014/ma18/history-of-bitcoin-hacks-alternative-currency
Bitcoin MMA! http://www.kitco.com/news/2014-07-18/Bitcoin-Brands-Inc-to-Sponsor-MMA-Legend-Phil-Baroni.html
Bitcoin ransomware malware! http://en.wikipedia.org/wiki/CryptoLocker
Bitcoinica thief! http://bitcoinmagazine.com/1330/the-strange-antics-of-the-bitcoinica-thief/
Bitcoin for homeless! http://www.wired.com/2014/06/bitcoin-run-jason-king/
Heart beat unlocks bitcoin wallet! http://www.wired.com/2014/02/nymi/
Bitcoin game show! http://finance.yahoo.com/news/streamin-garage-launches-first-bitcoin-123000238.html?soc_src=mediacontentstory
Mining Harvard! http://www.wired.com/2014/02/harvard-dogecoin/
Bitcoin for Cannabis! http://www.coindesk.com/washington-dispensary-now-takes-bitcoin-cannabis/
Bitcoin 3d printed gun! http://www.forbes.com/sites/andygreenberg/2013/05/05/meet-the-liberator-test-firing-the-worlds-first-fully-3d-printed-gun/
Bitcoin Laundry http://www.wired.com/2013/08/bitocoin_anonymity/
Bitcoin thefts scams hacks! https://bitcointalk.org/index.php?topic=576337.0
Bitcoin road trip! https://bitcointalk.org/index.php?topic=556038.0 - https://en.bitcoin.it/wiki/Bitcoin_Road_Trip
Bitcoin House auction! https://bitcointalk.org/index.php?topic=199199.60
Bitcoin 8000 convenience in Argentina! http://www.coindesk.com/bitpagos-brings-bitcoin-8000-convenience-stores-ripio/
Bitcoin Canadian hacker! https://bitcointalk.org/index.php?topic=736857
Hackers Steal $1.65 Million in NXT from BTER Exchange! http://www.coindesk.com/bter-nxt-bitcoin-exchange-hack/
Bitcoin in space! https://bitcointalk.org/index.php?topic=496829.20
Bitcoin family road trip https://www.yahoo.com/tech/this-family-is-road-tripping-using-only-bitcoin-89813939049.html
Share your story!
submitted by axlcrypto to Bitcoin [link] [comments]

BITCOIN STORE Esslingen  Roomtour  Wir zeigen euch ... What is Bitcoin? DON'T GET ZHOUTONGED! Zhou Tonged Bit Coin Boom Buy Bitcoins Gold Silver @TheEndOfMoney interview: Ryan Zhou about Bitcoinica, CoinJar, Ethereum Bitcoin Tools! Trade Smarter Remembering Bitcoinica

Bitcoinica has fallen far in these past four months. The margin trading service that was once hailed as a revolutionary margin trading service and a shining beacon of success in the Bitcoin economy has become a locus of scandals and thefts, as skilled online intruders continue to peck at the now defunct service’s diminishing million-dollar supply of customers’ funds and its operators ... Wer im Internet mit der virtuellen Währung Bitcoins bezahlt, sollte jetzt aufmerksam weiter lesen. Denn der Bitcoin-Börse Bitcoinica wurden 18.547 Bitcoins gestohlen. https: r Bitcoin comments 4lbvm7 bitcoinica_claim_of_64532_btc_and_135k_accepted . Logout; Register; bitcoin.com links. www.bitcoin.com; Bitcoin News; Bitcoin Casino ; Bitcoin Store ; Mining Bitcoin; Bitcoin.com podcast; Bitcoin Tools; Bitcoin Wiki; Reddit; Live Chat; The Bitcoin Forum Index In the news; Bitcoinica in the news again . Forum rules If you are posting news, press or any other ... As bitcoin is a digital asset, it can be very un-intuitive to store safely. Historically many people have lost their coins but with proper understanding the risks can be eliminated. If your bitcoins do end up lost or stolen then there's almost certainly nothing that can be done to get them back. tl;dr The best way to store bitcoin is to either use a hardware wallet, a multisignature wallet or ... Bitcoin history for 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019. Bitcoin price chart since 2009 to 2019. The historical data and rates of BTC ...

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BITCOIN STORE Esslingen Roomtour Wir zeigen euch ...

#bitcoin #crypto #cryptocurrencies This video will Enlighten you to see what other exchanges price ranges usually run at. when making your trading decisions it's always a good decision to check ... 40,000 bitcoins was stolen from Bitcoinica. This video shows an unusual transaction of 80 bitcoins to Theymos linked closely to the 15,000 bitcoins that were supposedly recovered by Zhou Tong from ... http://ZhouTonged.com/ Bitcoin Slang, Your positions are automatically liquidated due to insufficient trading balance after a margin call. This occurs when t... I talk about Bitcoinica being sold by the 17 year old creator. Give a coin-tip on how to transfer bitcoin without going through Mt. Gox. I also give my opinion on Bitcoin ads and the futuristic ... Sign Up For A Free Webinar And Free Weekly Email Updates Here: https://www.bitcoinbeats.net/ https://teespring.com/stores/bitcoin-beats-merch Spread the word...

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