Bitcoin heist: $500k stolen from some guy

[silverpig]

Bitcoin heist

Bitcoin, the decentralized virtual currency whose value has skyrocketed in recent weeks, faced a key test Monday as a veteran user reported that Bitcoins worth hundreds of thousands of dollars had been stolen from his computer.

Ars Technica was unable to independently verify the user's story, and he did not respond to our request for an interview. But whether the story is true or not, it highlights a major disadvantage of the currency's much-touted lack of intermediaries. Bypassing middlemen frees users from government meddling and bank fees. But it also deprives them of the benefits those intermediaries provide, including protection against theft and fraud.

Okay, so it *might* have happened. I don't agree with the article saying that the intermediares necessarily protect you from theft and fraud. Sure, it's true to some extent, but not at all true with cash.

Besides, can't you just put your bitcoins on a truecrypt drive and a backup offsite truecrypt drive and have them be (almost) perfectly safe?

 

[YoungGun21]

Yes, his computer was hacked and somebody remotely stole his BTC. They could have just as easily emptied his real bank accounts.

 

[Genx87]

An intermediary like a bank will usually protect you against fraud and at the very least provide a trail to allow law enforcement to find the thief. And there is a court system that also allows one to regain financial loss.

If I lose my bitcoins who do I turn to in order to recieve compensation if somebody steals or defrauds me?

 

[silverpig]

An intermediary like a bank will usually protect you against fraud and at the very least provide a trail to allow law enforcement to find the thief. And there is a court system that also allows one to regain financial loss.

If I lose my bitcoins who do I turn to in order to recieve compensation if somebody steals or defrauds me?

The same people who you turn to if they steal your cash.

 

[silverpig]

Yes, his computer was hacked and somebody remotely stole his BTC. They could have just as easily emptied his real bank accounts.

Ah true. If you have full access to someone's computer, it doesn't really matter... they're screwed.

 

[Thump553]

Yes, his computer was hacked and somebody remotely stole his BTC. They could have just as easily emptied his real bank accounts.

Not true. That would have involved breaking into the bank's computers which have far more advanced security procedures. In addition, generally speaking, if the hackers did succeed in breaking into the bank's computer, the bank is liable to the account owner for the unauthorized withdrawal (ie, the bank eats the loss).

 

[IceBergSLiM]

his fault. he should be responsible to secure his assets. His bit coins on a flash drive locked in a desk would not have been stolen by the hacker.

 

[Genx87]

The same people who you turn to if they steal your cash.

I walk into a police station and report my bitcoins were stolen? That is like saying my sister defrauded me in monopoly. bitcoins is a made up currency that exists in a true free market. Outside the scope of any regulation and the protections it offers.

 

[yllus]

There is, of course, no reason that banks cannot still exist and serve the purpose of keeping this new currency safe in exchange for a user fee. (And if it fails to keep it safe, it can offer insurance against theft - just like it does today.)

It's an interesting story in that it highlights that as much as things change, they stay the same - or remind us why things are they way they are.

 

[Broheim]

Yes, his computer was hacked and somebody remotely stole his BTC. They could have just as easily emptied his real bank accounts.

not really, but for the sake of argument let's assume you're right...

I've never come across a bank that didn't protect their customers against theft and fraud, so you would simply get your money back (minus the fee that I can't remember what's called in english).

 

[IceBergSLiM]

He's lucky someone didn't track him to house and take his whole computer by gun point. Less learned don't brag anywhere that you are holding half a million in assets on your computer.

 

[manimal]

oceans 14?

 

[Nebor]

I walk into a police station and report my bitcoins were stolen? That is like saying my sister defrauded me in monopoly. bitcoins is a made up currency that exists in a true free market. Outside the scope of any regulation and the protections it offers.

I would email the police department. Or more accurately the FBI. It's a cyber-crime, theft and damages of hundreds of thousands of dollars worth of digital property. There are laws to cover this.

 

[Genx87]

I would email the police department. Or more accurately the FBI. It's a cyber-crime, theft and damages of hundreds of thousands of dollars worth of digital property. There are laws to cover this.

On a currency no govt recognizes as legitimate? The crime is breaking into his computer. Good luck getting the FBI to do anything about the theft of a made up currency. Much less assign it a value. Like I said earlier. No different than telling the FBI somebody stole monopoly money.

 

[JockoJohnson]

I would email the police department. Or more accurately the FBI. It's a cyber-crime, theft and damages of hundreds of thousands of dollars worth of digital property. There are laws to cover this.

Is BitCoin a recognized currency by the police and the FBI? Or is it like monopoly to them? Otherwise, it would be treated as a hack which is still a crime but theft of nothing solid is a bit extreme.

Edit: GenX beat me to it.

 

[Acanthus]

It would be impossible to find someones IP for a heist without sending them coins. You will still never know the balance of bitcoins at that address. This story has some holes.

 

[Nebor]

On a currency no govt recognizes as legitimate? The crime is breaking into his computer. Good luck getting the FBI to do anything about the theft of a made up currency. Much less assign it a value. Like I said earlier. No different than telling the FBI somebody stole monopoly money.

No different than someone hacking into Microsoft and stealing the source code for Office 2012. A digital product of SOME (disputed) value has been stolen, and a computer system was hacked. Thus a crime was committed.

 

[silverpig]

Not true. That would have involved breaking into the bank's computers which have far more advanced security procedures. In addition, generally speaking, if the hackers did succeed in breaking into the bank's computer, the bank is liable to the account owner for the unauthorized withdrawal (ie, the bank eats the loss).

No it wouldn't. A simple keylogger would give the hacker the user's bank login information. The login request could even be made through the target's computer. It'd all look legit to the bank.

 

[Genx87]

No different than someone hacking into Microsoft and stealing the source code for Office 2012. A digital product of SOME (disputed) value has been stolen, and a computer system was hacked. Thus a crime was committed.

Actually it is quite different. Source code is an asset that is owned by a corporation that is under the regulation of the United States govt. Bitcoins are a digital currency made out of thin air given in exchange for running a computer program.

The crime is breaking into his computer. That we can agree on. Stealing a currency that is created out of thin air for running an application on your computer? Good luck.

 

[silverpig]

I walk into a police station and report my bitcoins were stolen? That is like saying my sister defrauded me in monopoly. bitcoins is a made up currency that exists in a true free market. Outside the scope of any regulation and the protections it offers.

There is an agreed upon price for them and a value.

If your sister did defraud you in monopoly, I don't see why you couldn't technically bring it to the cops (not practically, but technically). They could technically investigate, arrest her, put her on trial, and force her to give you the value of the monopoly money back.

The only difference is monopoly money isn't worth anything, and this guy has $500k worth of bitcoins gone.

 

[Fern]

There is, of course, no reason that banks cannot still exist and serve the purpose of keeping this new currency safe in exchange for a user fee. (And if it fails to keep it safe, it can offer insurance against theft - just like it does today.)
-snip-

Interesting idea.

If this story is true, look for someone to launch a bitcoin bank or something that provides such services.

Fern

 

[Fern]

Actually it is quite different. Source code is an asset that is owned by a corporation that is under the regulation of the United States govt. Bitcoins are a digital currency made out of thin air given in exchange for running a computer program.

The crime is breaking into his computer. That we can agree on. Stealing a currency that is created out of thin air for running an application on your computer? Good luck.

Look to me that bitcoins unarguably have value. The fact that it is intangible seems irrelevent to me. A cyber theft of property, whether tangible or not, strikes me as something the FBI should investigate.

Fern

 

[YoungGun21]

Not true. That would have involved breaking into the bank's computers which have far more advanced security procedures. In addition, generally speaking, if the hackers did succeed in breaking into the bank's computer, the bank is liable to the account owner for the unauthorized withdrawal (ie, the bank eats the loss).

Silverpig beat me to it, but I'll say it again. All they need are his login credentials to his bank account and then it is easy to take. The problem with that is that you could most likely easily trace where the money went. With BTC, you can't. The guy even knows exactly which address the BTC went to, but does that help at all? No.

 

[Genx87]

There is an agreed upon price for them and a value.

If your sister did defraud you in monopoly, I don't see why you couldn't technically bring it to the cops (not practically, but technically). They could technically investigate, arrest her, put her on trial, and force her to give you the value of the monopoly money back.

The only difference is monopoly money isn't worth anything, and this guy has $500k worth of bitcoins gone.

What is a bitcoin worth in the real world? Can I buy gasoline with a bitcoin? How about a house? Anything tangible? There is nothing there. Just fools willing to part with real world cash for a made up currency. Why not start your own currency called Silverpig and sell it on an exchange to people stupid enough to give you a backed currency?

And no police dept is going to invesitgage and toss my sister in jail for defrauding me with fake money in monopoly. What world do you live within? The bitcoin world?

 

[silverpig]

Interesting idea.

If this story is true, look for someone to launch a bitcoin bank or something that provides such services.

Fern

There already are AFAIK. Being so new they have no reputation, so you don't really know if they are secure or not.