5 ms·

This analogy falls completely flat. It is more like you live in the most secure fortress but set your door code to 1234.

arcticbull 8y ago
But also because crypto is totally unregulated -- and by the rules of the game, if you have the keys, you have the coins -- you have zero recourse. Not that it could be reversed anyways. In both these real-world cases, you've got the police.
- SquareWheel 8y ago
  In the context of the US, crypto is regulated. https://en.wikipedia.org/wiki/Export_of_cryptography_from_the_United_States https://en.wikipedia.org/wiki/Export_of_cryptography_from_th...
  - 6nf 8y ago
    Yes technically that's true but it doesn't really matter, those laws won't have any effect on activities like this. There's always some other hacker in some other country ready to take your unsecured coins.
    - luckylion 8y ago
      That applies to regular theft as well, it's illegal and still it happens. I'm not a lawyer, but I'm pretty sure that using a guessed key to transfer funds is as illegal as using a guessed password would be to transfer funds from one bank account to another or using a "guessed" house key to enter a house and walk away with the TV. That's not to say that you have a lot of options to get your ether back, but that's not fundamentally different from regular theft either.
      - lb1lf 8y ago
        Regular theft has the added benefit (for the victim) of the thief having to show up on-site in order to steal anything. That puts him squarely in the jurisdiction of whatever country the victim lives in, with all the complications that entails (for the thief, that is.) This is basically theft where there is no risk for the thief.
        luckylion 8y ago
        > This is basically theft where there is no risk for the thief. Sure, my point is just that the difference isn't in legality or possibility for recourse, but in the probability of successful enforcement of the law. The problem isn't so much that the thief is in another country, even if he lives next door to you, it's impractically hard to track him down unless he makes a mistake.
        anyzen 8y ago
        He does still need to withdraw funds though, which might be a problem nowadays (with KYC). Or are there still anonymous ways to withdraw funds?
        luckylion 8y ago
        You can exchange for Monero to gain anonymity, and there will always be a way if you're willing to pay for it. 80% of a few millions is still a good sum.
      - adventured 8y ago
        > but that's not fundamentally different from regular theft either. Regular theft certainly occurs and is illegal, however this scenario is entirely different from the most common types of regular theft. A criminal operating in a foreign nation is going to steal: physical items from my house, my wallet, my car, items in my car, my bike, the watch on my arm, the tv in my living room, valuables in my home safe, valuables in my safety deposit box (that one is very difficult in general)? Nope. The most common types of regular theft involve physical items that are physically lifted. Even most bank account scams are performed domestically, not internationally. There is an extraordinarily tiny set of potential criminals likely to, or capable of targeting me when it comes to the most common forms of regular theft. It is not open to a global-scale competition as in this 'blockchain bandit' case. A friend recently had their vehicle broken into. A thousand dollars worth of physical items were stolen. Half of it was recovered quickly by checking local pawn shops. Good luck doing anything like that with Ethereum and a foreign bandit.
        luckylion 8y ago
        > A friend recently had their vehicle broken into. A thousand dollars worth of physical items were stolen. Half of it was recovered quickly by checking local pawn shops. Good luck doing anything like that with Ethereum and a foreign bandit. That's true, at least for recognizable things. If the thief steals currency, e.g. a stack of dollar bills, you'll have about the same potential to get those bills (or others) back unless you locate the thief. The jurisdiction adds a layer of confusion, but that's not the relevant part imho. If I break into your mail account and illegally transfer your domains to my hoster, you'll have high chances to get them back, even if I'm in another country or continent, because there's a central authority that has the power to make it happen if you can provide sufficient proof. There's no such authority for ether (well ... they could fork, but realistically, they won't) or cash, and that's what makes it hard.
- patrickaljord 8y ago
  > But also because crypto is totally unregulated -- and by the rules of the game, if you have the keys, you have the coins Nothing could stop you from opening a business that would offer insurance in case of key theft. Most banks offer around $100k (depends on the country) in case they go bankrupt or robbed which is very little if you have life time savings in them that are way more than $100k. Big banks have an advantage though in that if they ever go bankrupt they tend to be bailed out by the government which is hard to replicate as a business (you still end up paying for it through inflation so you don't technically get your money back when your bank goes bankrupt as the total value of your money goes down).
  - gota 8y ago
    > Nothing could stop you from opening a business that would offer insurance in case of key theft. I don't think insurance models work for this. How can the insurance company verify that the key wasn't stupid simple? It seems very hard to determine prices and premiums if can't assess the 'risk' - knowing that all 'risk' comes from the potential of user-error and nothing else Also, there's the issue that in our financial system its very difficult for the common person to transfer all of their money to another account they own and call it theft. If I'm not mistaken that is a possibility with every single cryptocurrency, right?
    - couchand 8y ago
      I would expect that to get a reasonable premium, you would have to agree to follow certain best practices that would reduce the risk profile. Implementation would of course be hard.
      - patrickaljord 8y ago
        You could be forced to use something like coinbase where they store your private keys. Actually coinbase already provides some kind of insurance in case they get hacked.
  - Ensorceled 8y ago
    > Nothing could stop you from opening a business that would offer insurance in case of key theft. There is no way to prove a key was stolen and no way to prove the theft was not a fraud. Insurance is backed up with jail time for insurance fraud and is STILL rife with fraud (especially automotive insurance). Blockchain theft insurance is not a business that would survive long.
- natmaka 8y ago
  > But also because crypto is totally unregulated -- and by the rules of the game, if you have the keys, you have the coins -- you have zero recourse. Just like cash.
  - arcticbull 8y ago
    The difference is most of us have moved on from cash and don’t want to move back; this is a regression.
    - natmaka 8y ago
      I don't propose to move back to cash. From a privacy standpoint classic dematerialized money (credit cards and such) are a major regression. A good cryptomoney offers all dematerialization benefits, and enforces privacy even better than cash.
      - arcticbull 8y ago
        It doesn't. With credit cards we get (included at no additional cost) 30-day loans, chargebacks, various forms of insurance and rewards for spending. None of those exist with any kinds of cryptomoney. Privacy isn't really improved with most forms of cryptomoney as you have not anonymity but pseudonymity of fully public information. Once you identify anyone (as any merchant or transaction recipient can) you can immediately access their entire transaction history all the way back to day 1. Any reasonably advanced government agency can build tools to crawl and deanonymize network participants too.
- Macross8299 8y ago
  >But also because crypto is totally unregulated -- and by the rules of the game, if you have the keys, you have the coins -- you have zero recourse. I don't think that's true. If you could go to the cops with dead-to-rights evidence that someone stole your coins, pretty sure the cops could still charge them with larceny because the law still views cryptocurrency as a form of property. Plenty of people have been charged with crimes for stealing cryptocurrency -- the ex-secret service agent who stole from the custody of the Silk Road investigation comes to mind. It's just that catching and prosecuting cybercriminals across jurisdictions is a _very_ hard problem that it might as well be that you have "no recourse" in 99.99% of cases.

arcticbull 8y ago

But also because crypto is totally unregulated -- and by the rules of the game, if you have the keys, you have the coins -- you have zero recourse. Not that it could be reversed anyways. In both these real-world cases, you've got the police.

SquareWheel 8y ago
In the context of the US, crypto is regulated. https://en.wikipedia.org/wiki/Export_of_cryptography_from_the_United_States https://en.wikipedia.org/wiki/Export_of_cryptography_from_th...
- 6nf 8y ago
  Yes technically that's true but it doesn't really matter, those laws won't have any effect on activities like this. There's always some other hacker in some other country ready to take your unsecured coins.
  - luckylion 8y ago
    That applies to regular theft as well, it's illegal and still it happens. I'm not a lawyer, but I'm pretty sure that using a guessed key to transfer funds is as illegal as using a guessed password would be to transfer funds from one bank account to another or using a "guessed" house key to enter a house and walk away with the TV. That's not to say that you have a lot of options to get your ether back, but that's not fundamentally different from regular theft either.
    - lb1lf 8y ago
      Regular theft has the added benefit (for the victim) of the thief having to show up on-site in order to steal anything. That puts him squarely in the jurisdiction of whatever country the victim lives in, with all the complications that entails (for the thief, that is.) This is basically theft where there is no risk for the thief.
      - luckylion 8y ago
        > This is basically theft where there is no risk for the thief. Sure, my point is just that the difference isn't in legality or possibility for recourse, but in the probability of successful enforcement of the law. The problem isn't so much that the thief is in another country, even if he lives next door to you, it's impractically hard to track him down unless he makes a mistake.
        anyzen 8y ago
        He does still need to withdraw funds though, which might be a problem nowadays (with KYC). Or are there still anonymous ways to withdraw funds?
        luckylion 8y ago
        You can exchange for Monero to gain anonymity, and there will always be a way if you're willing to pay for it. 80% of a few millions is still a good sum.
    - adventured 8y ago
      > but that's not fundamentally different from regular theft either. Regular theft certainly occurs and is illegal, however this scenario is entirely different from the most common types of regular theft. A criminal operating in a foreign nation is going to steal: physical items from my house, my wallet, my car, items in my car, my bike, the watch on my arm, the tv in my living room, valuables in my home safe, valuables in my safety deposit box (that one is very difficult in general)? Nope. The most common types of regular theft involve physical items that are physically lifted. Even most bank account scams are performed domestically, not internationally. There is an extraordinarily tiny set of potential criminals likely to, or capable of targeting me when it comes to the most common forms of regular theft. It is not open to a global-scale competition as in this 'blockchain bandit' case. A friend recently had their vehicle broken into. A thousand dollars worth of physical items were stolen. Half of it was recovered quickly by checking local pawn shops. Good luck doing anything like that with Ethereum and a foreign bandit.
      - luckylion 8y ago
        > A friend recently had their vehicle broken into. A thousand dollars worth of physical items were stolen. Half of it was recovered quickly by checking local pawn shops. Good luck doing anything like that with Ethereum and a foreign bandit. That's true, at least for recognizable things. If the thief steals currency, e.g. a stack of dollar bills, you'll have about the same potential to get those bills (or others) back unless you locate the thief. The jurisdiction adds a layer of confusion, but that's not the relevant part imho. If I break into your mail account and illegally transfer your domains to my hoster, you'll have high chances to get them back, even if I'm in another country or continent, because there's a central authority that has the power to make it happen if you can provide sufficient proof. There's no such authority for ether (well ... they could fork, but realistically, they won't) or cash, and that's what makes it hard.
patrickaljord 8y ago
> But also because crypto is totally unregulated -- and by the rules of the game, if you have the keys, you have the coins Nothing could stop you from opening a business that would offer insurance in case of key theft. Most banks offer around $100k (depends on the country) in case they go bankrupt or robbed which is very little if you have life time savings in them that are way more than $100k. Big banks have an advantage though in that if they ever go bankrupt they tend to be bailed out by the government which is hard to replicate as a business (you still end up paying for it through inflation so you don't technically get your money back when your bank goes bankrupt as the total value of your money goes down).
- gota 8y ago
  > Nothing could stop you from opening a business that would offer insurance in case of key theft. I don't think insurance models work for this. How can the insurance company verify that the key wasn't stupid simple? It seems very hard to determine prices and premiums if can't assess the 'risk' - knowing that all 'risk' comes from the potential of user-error and nothing else Also, there's the issue that in our financial system its very difficult for the common person to transfer all of their money to another account they own and call it theft. If I'm not mistaken that is a possibility with every single cryptocurrency, right?
  - couchand 8y ago
    I would expect that to get a reasonable premium, you would have to agree to follow certain best practices that would reduce the risk profile. Implementation would of course be hard.
    - patrickaljord 8y ago
      You could be forced to use something like coinbase where they store your private keys. Actually coinbase already provides some kind of insurance in case they get hacked.
- Ensorceled 8y ago
  > Nothing could stop you from opening a business that would offer insurance in case of key theft. There is no way to prove a key was stolen and no way to prove the theft was not a fraud. Insurance is backed up with jail time for insurance fraud and is STILL rife with fraud (especially automotive insurance). Blockchain theft insurance is not a business that would survive long.
natmaka 8y ago
> But also because crypto is totally unregulated -- and by the rules of the game, if you have the keys, you have the coins -- you have zero recourse. Just like cash.
- arcticbull 8y ago
  The difference is most of us have moved on from cash and don’t want to move back; this is a regression.
  - natmaka 8y ago
    I don't propose to move back to cash. From a privacy standpoint classic dematerialized money (credit cards and such) are a major regression. A good cryptomoney offers all dematerialization benefits, and enforces privacy even better than cash.
    - arcticbull 8y ago
      It doesn't. With credit cards we get (included at no additional cost) 30-day loans, chargebacks, various forms of insurance and rewards for spending. None of those exist with any kinds of cryptomoney. Privacy isn't really improved with most forms of cryptomoney as you have not anonymity but pseudonymity of fully public information. Once you identify anyone (as any merchant or transaction recipient can) you can immediately access their entire transaction history all the way back to day 1. Any reasonably advanced government agency can build tools to crawl and deanonymize network participants too.
Macross8299 8y ago
>But also because crypto is totally unregulated -- and by the rules of the game, if you have the keys, you have the coins -- you have zero recourse. I don't think that's true. If you could go to the cops with dead-to-rights evidence that someone stole your coins, pretty sure the cops could still charge them with larceny because the law still views cryptocurrency as a form of property. Plenty of people have been charged with crimes for stealing cryptocurrency -- the ex-secret service agent who stole from the custody of the Silk Road investigation comes to mind. It's just that catching and prosecuting cybercriminals across jurisdictions is a _very_ hard problem that it might as well be that you have "no recourse" in 99.99% of cases.