7 ms·

The Big Bitcoin Heist

68 points by yarapavan 7y ago

brenden2 7y ago
Here's an AP version of the same story (works in private mode): https://apnews.com/55117fb55a714e909fb9aaf08841a5d6/Bitcoin-heist:-600-powerful-computers-stolen-in-Iceland https://apnews.com/55117fb55a714e909fb9aaf08841a5d6/Bitcoin-...
- brenden2 7y ago
  And also about the escape: https://apnews.com/db543dc5d2774098acf398984ac7324a/Suspect-in-Iceland's-'Big-Bitcoin-Heist'-escapes-prison https://apnews.com/db543dc5d2774098acf398984ac7324a/Suspect-...
sschueller 7y ago
March 2018
ajross 7y ago
All I could think when reading that headline was "Which one?". Frankly this incident (a physical theft of mining hardware) isn't even that interesting in a "bitcoin" sense. Presumably the hardware was attractive because it's easily liquidatable (being used by inherently gray market folks already) and not because of any value from their bitcoin role per se.
zepearl 7y ago
> In Iceland, it is not a crime to stage a prison break: The law recognizes that inmates, like all human beings, are naturally entitled to freedom, and thus cannot be punished for seeking it. Funny :)
- code-is-code 7y ago
  Same in germany
  - OnlineGladiator 7y ago
    And Mexico
- danielbln 7y ago
  The same is true in Germany. You'll probably break a few laws while breaking out of a prison, but the act itself is not punishable and will not yield you more time.
  - beerandt 7y ago
    What's the economic result? Any relative increase in attempts since there's no incentive not to?
    - WJW 7y ago
      The sample size is so low you can't get any meaningful results. And use of violence against a guard or breaking prison materials is still illegal (since it's illegal to use violence against anyone and/or to destroy property). But if the door is left open and you walk out without harming anyone, that in itself is not illegal.
      - beerandt 7y ago
        So how does this work in the case of initial arrest? Or a fugitive thats not necessarily am escapee? There's no incentive to surrender?
        zepearl 7y ago
        > Or a fugitive thats not necessarily am escapee? I'd guess that that person, not being at that point of time a "detainee", would get the outcome of the other laws related to "resisting arrest" or something similar (like when police wants to do a check on you and/or your vehicle, etc... and you run off).
    - hesk 7y ago
      This has been legal doctrine in Germany for over a century.
  - nloladze 7y ago
    I read it's three to ten in the US but I saw a show where it's up to fifteen. As for the machines, I know someone who mines on a much smaller scale but still has a lot of security precautions, it's a tough business.
- mandelbrotwurst 7y ago
  This seems strangely worded even if true. If they are entitled to said freedom, does that not preclude even building the prison?
  - ramphastidae 7y ago
    Entitled but not guaranteed. You can be punished with jail time for breaking the law, but can’t be further punished for trying to escape.
GuiA 7y ago
I thought bitcoin mining hardware was only useful for a few months at best due to rising complexity built in the protocol? If so the computers hidden by the criminals won’t be very useful when they get out of prison a few years from now.
- Nextgrid 7y ago
  That is true when buying the hardware - it needs to be fast & efficient to recoup its initial investment and still make extra money down the line before becoming obsolete (due to using more energy than the money it makes). When you don’t buy the machines to begin with, you get a head start which allows you to profit immediately up to the point when the electricity costs outweigh the benefits without having to sacrifice part of the profits to pay for the machine itself.
- Filligree 7y ago
  That's correct. Of course there's a chance Bitcoin will collapse in the interval, in which case it might still work.
- seibelj 7y ago
  There is also a premium on fresh block rewards that have not been spent yet. These are called “coinbase transactions” which is why the company is called Coinbase. The reason these fresh coins are valuable is that they are untainted by prior transactions and have various uses because of that. So mining BTC has an additional premium above the spot price of BTC.
  - bdcravens 7y ago
    Where are these "fresh block rewards" sold? Not on any exchange. These transactions would have to take place via a backchannel, which very very few miners do. Coinbase's name has nothing to do with those transactions. It's just a name, taken from the technology.
    - seibelj 7y ago
      Miners can pick any address when they assemble a new block to have the new coins mined to. They make deals ahead of time for where to send these. This is definitely a thing in China and if you look at my profile you can see I know what I’m talking about. I wasn’t saying Coinbase was named for the premium, I was saying they were named for that piece of blockchain trivia as an interesting aside.
mr_woozy 7y ago
I'm in Iceland reading this now and almost every sentence of this article is filled with embellishments and half truths
- confiscate 7y ago
  care to give some examples? Because I am a curious reader who does not live in Iceland and don't have the context to be able to identify the embellishments
  - mr_woozy 7y ago
    sure it's always frustrating because it does nothing to change the narrative of what's repeated outside of Iceland regardless of the truth. >"At 32, Stefansson is the most famous thief ever to emerge from this polite and friendly island, ranked by the Global Peace Index as the world’s most peaceful nation." Patently false. So far our most famous criminal would be (Tomas)[https://www.nytimes.com/2017/02/07/world/europe/iceland-murder-victim-birna-brjansdottir-autopsy.html https://www.nytimes.com/2017/02/07/world/europe/iceland-murd...] or runner up for any of the various banking / cartel that siphoned money out of the country during the crash. Sindri doesn't even register with most people here except as a petty thug. Bjarni Ben the old prime minister or Sigmundur David both appeared in the Panama Papers here as well. >It was cryptocurrency, ironically, that helped save Iceland after the bankers bankrupted it. I have no idea where the author got this but Cryptocurrency has provided any material benefit to Iceland in any form or shape, I say this even though I'm a BTC advocate. First it was our fishing industry which was able to sell high abroad and return with Euros to exchange for ISK and then it was the tourism boom (as much as we all hate it here) from 2014-onwards. Crypto currency mining here doesn't employ anyone, doesn't get aggressively taxed (it should) and often gets industrial market rates on large enough consumption (just like the aluminum smelters). Oh and to correct another misunderstood thing about Iceland we get around 70% of our power generation from HYDROpower not Geothermal like everyone things (that goes towards home heating mostly). Which means .......Dams, lots and lots of dams flooding areas of Iceland and destroying the nature the tourists come to see. > Today, Bitcoin mines consume more energy than all of Iceland’s homes combined. This is just repeated ad-nauseam abroad now more than any other statement and its entirely attributed to a single electrical engineer for the electric producer company who was commenting on if the building trend kept at the same rate back in 2018. It didn't obviously but any idiot journalist now stumbles across some _other_ article saying it so they just repeat now too. Smelting consumes FAR more electricity here than any other industry. These are just a handful, nobody likes these guys here, no one is cheering for them we're mostly embarrassed that they're gleefully unaware of badly they make Iceland look international as the posterboys for big, dumb, meat-head rubes, that were used by a foriegn criminal who never got caught. Classic Icelandic hnakkar.
ur-whale 7y ago
http://archive.is/np6rz http://archive.is/np6rz
unnouinceput 7y ago
550 Bitcoin computers? I assume are the dedicated type, not general ones like the one I use to type my comment. If so, those go obsolete in like half a year. The heist, with its mined bitcoins, its maximum of several millions (USD) at best, even at 20k USD/bitcoin. Become a politician, you'll get these money and much more in those 4 years of a single mandate, all legal because they are called donations.
- kortilla 7y ago
  No: https://www.fec.gov/help-candidates-and-committees/making-disbursements/personal-use/ https://www.fec.gov/help-candidates-and-committees/making-di...
paulpauper 7y ago
yeah he stole a bunch of stuff that is probably already obsolete as of publication of this article. huge cost too in transporting and setting it up. there are and still are guys who made as much as that or even more just quietly running crypto giveaway scams on YouTube and twitter without all the fanfare of an actual heist. of all the thefts and heists involving bitcoin, this one is downright unimpressive in terms of dollar amount. >Mr. X told Stefansson that he would give him 15 percent of the profits from as many Bitcoin computers as he could steal from data centers across Iceland. The total take, Stefansson calculated, could be as much as $1.2 million a year—“forever.” Because, with the stolen computers, Stefansson and Mr. X would establish their own Bitcoin mine. yes because mining computers never become obsolete
- mr_woozy 7y ago
  >yes because mining computers never become obsolete exactly!
paulpauper 7y ago
>In his teens, Stefansson graduated to drugs: pot, speed, cocaine, ecstasy, LSD. By the time he turned 20, he was growing cannabis. His rap sheet soon included 200 cases of petty crime. He broke into people’s homes to steal TVs and stereos, and somehow managed to extract $10,000 from some slot machines in a Reykjavík bar. yikes. I'm sure he's hardly the only one. It makes you wonder if Iceland's purported low crime and peacefulness is due to under-reporting of crime and crime being ignored and excessively lenient sentencing guidelines, than because of the absence of actual crime. If all the criminals keep being released over and over, then the prison population will be very low yet there will be crime everywhere anyway. lenient sentences heavily tips the moral calculus in favor of criminals, both petty and major.Time is money. time behind bars means less time for stealing.
- mr_woozy 7y ago
  It is a large reason actually, we don't have enough well funded programs for mental help or drug addiction and roughly 70% of prison inmates are there for drugs and just cycle in and out running up huge fines which they'll never actually be able to pay. Also please keep in mind because of our sovereignity but low population we win a lot of categories for "most this of any nation" due to sheer per-capita mathematics. We're basically the most-per-capita country out there in many ways.

68 points by yarapavan 7y ago

Here's an AP version of the same story (works in private mode): https://apnews.com/55117fb55a714e909fb9aaf08841a5d6/Bitcoin-heist:-600-powerful-computers-stolen-in-Iceland https://apnews.com/55117fb55a714e909fb9aaf08841a5d6/Bitcoin-...

brenden2 7y ago
And also about the escape: https://apnews.com/db543dc5d2774098acf398984ac7324a/Suspect-in-Iceland's-'Big-Bitcoin-Heist'-escapes-prison https://apnews.com/db543dc5d2774098acf398984ac7324a/Suspect-...

sschueller 7y ago

March 2018

ajross 7y ago

All I could think when reading that headline was "Which one?". Frankly this incident (a physical theft of mining hardware) isn't even that interesting in a "bitcoin" sense. Presumably the hardware was attractive because it's easily liquidatable (being used by inherently gray market folks already) and not because of any value from their bitcoin role per se.

zepearl 7y ago

> In Iceland, it is not a crime to stage a prison break: The law recognizes that inmates, like all human beings, are naturally entitled to freedom, and thus cannot be punished for seeking it. Funny :)

code-is-code 7y ago
Same in germany
- OnlineGladiator 7y ago
  And Mexico
danielbln 7y ago
The same is true in Germany. You'll probably break a few laws while breaking out of a prison, but the act itself is not punishable and will not yield you more time.
- beerandt 7y ago
  What's the economic result? Any relative increase in attempts since there's no incentive not to?
  - WJW 7y ago
    The sample size is so low you can't get any meaningful results. And use of violence against a guard or breaking prison materials is still illegal (since it's illegal to use violence against anyone and/or to destroy property). But if the door is left open and you walk out without harming anyone, that in itself is not illegal.
    - beerandt 7y ago
      So how does this work in the case of initial arrest? Or a fugitive thats not necessarily am escapee? There's no incentive to surrender?
      - zepearl 7y ago
        > Or a fugitive thats not necessarily am escapee? I'd guess that that person, not being at that point of time a "detainee", would get the outcome of the other laws related to "resisting arrest" or something similar (like when police wants to do a check on you and/or your vehicle, etc... and you run off).
  - hesk 7y ago
    This has been legal doctrine in Germany for over a century.
- nloladze 7y ago
  I read it's three to ten in the US but I saw a show where it's up to fifteen. As for the machines, I know someone who mines on a much smaller scale but still has a lot of security precautions, it's a tough business.
mandelbrotwurst 7y ago
This seems strangely worded even if true. If they are entitled to said freedom, does that not preclude even building the prison?
- ramphastidae 7y ago
  Entitled but not guaranteed. You can be punished with jail time for breaking the law, but can’t be further punished for trying to escape.

GuiA 7y ago

I thought bitcoin mining hardware was only useful for a few months at best due to rising complexity built in the protocol? If so the computers hidden by the criminals won’t be very useful when they get out of prison a few years from now.

Nextgrid 7y ago
That is true when buying the hardware - it needs to be fast & efficient to recoup its initial investment and still make extra money down the line before becoming obsolete (due to using more energy than the money it makes). When you don’t buy the machines to begin with, you get a head start which allows you to profit immediately up to the point when the electricity costs outweigh the benefits without having to sacrifice part of the profits to pay for the machine itself.
Filligree 7y ago
That's correct. Of course there's a chance Bitcoin will collapse in the interval, in which case it might still work.
seibelj 7y ago
There is also a premium on fresh block rewards that have not been spent yet. These are called “coinbase transactions” which is why the company is called Coinbase. The reason these fresh coins are valuable is that they are untainted by prior transactions and have various uses because of that. So mining BTC has an additional premium above the spot price of BTC.
- bdcravens 7y ago
  Where are these "fresh block rewards" sold? Not on any exchange. These transactions would have to take place via a backchannel, which very very few miners do. Coinbase's name has nothing to do with those transactions. It's just a name, taken from the technology.
  - seibelj 7y ago
    Miners can pick any address when they assemble a new block to have the new coins mined to. They make deals ahead of time for where to send these. This is definitely a thing in China and if you look at my profile you can see I know what I’m talking about. I wasn’t saying Coinbase was named for the premium, I was saying they were named for that piece of blockchain trivia as an interesting aside.

mr_woozy 7y ago

I'm in Iceland reading this now and almost every sentence of this article is filled with embellishments and half truths

confiscate 7y ago
care to give some examples? Because I am a curious reader who does not live in Iceland and don't have the context to be able to identify the embellishments
- mr_woozy 7y ago
  sure it's always frustrating because it does nothing to change the narrative of what's repeated outside of Iceland regardless of the truth. >"At 32, Stefansson is the most famous thief ever to emerge from this polite and friendly island, ranked by the Global Peace Index as the world’s most peaceful nation." Patently false. So far our most famous criminal would be (Tomas)[https://www.nytimes.com/2017/02/07/world/europe/iceland-murder-victim-birna-brjansdottir-autopsy.html https://www.nytimes.com/2017/02/07/world/europe/iceland-murd...] or runner up for any of the various banking / cartel that siphoned money out of the country during the crash. Sindri doesn't even register with most people here except as a petty thug. Bjarni Ben the old prime minister or Sigmundur David both appeared in the Panama Papers here as well. >It was cryptocurrency, ironically, that helped save Iceland after the bankers bankrupted it. I have no idea where the author got this but Cryptocurrency has provided any material benefit to Iceland in any form or shape, I say this even though I'm a BTC advocate. First it was our fishing industry which was able to sell high abroad and return with Euros to exchange for ISK and then it was the tourism boom (as much as we all hate it here) from 2014-onwards. Crypto currency mining here doesn't employ anyone, doesn't get aggressively taxed (it should) and often gets industrial market rates on large enough consumption (just like the aluminum smelters). Oh and to correct another misunderstood thing about Iceland we get around 70% of our power generation from HYDROpower not Geothermal like everyone things (that goes towards home heating mostly). Which means .......Dams, lots and lots of dams flooding areas of Iceland and destroying the nature the tourists come to see. > Today, Bitcoin mines consume more energy than all of Iceland’s homes combined. This is just repeated ad-nauseam abroad now more than any other statement and its entirely attributed to a single electrical engineer for the electric producer company who was commenting on if the building trend kept at the same rate back in 2018. It didn't obviously but any idiot journalist now stumbles across some _other_ article saying it so they just repeat now too. Smelting consumes FAR more electricity here than any other industry. These are just a handful, nobody likes these guys here, no one is cheering for them we're mostly embarrassed that they're gleefully unaware of badly they make Iceland look international as the posterboys for big, dumb, meat-head rubes, that were used by a foriegn criminal who never got caught. Classic Icelandic hnakkar.

ur-whale 7y ago

http://archive.is/np6rz http://archive.is/np6rz

unnouinceput 7y ago

550 Bitcoin computers? I assume are the dedicated type, not general ones like the one I use to type my comment. If so, those go obsolete in like half a year. The heist, with its mined bitcoins, its maximum of several millions (USD) at best, even at 20k USD/bitcoin. Become a politician, you'll get these money and much more in those 4 years of a single mandate, all legal because they are called donations.

kortilla 7y ago
No: https://www.fec.gov/help-candidates-and-committees/making-disbursements/personal-use/ https://www.fec.gov/help-candidates-and-committees/making-di...

paulpauper 7y ago

yeah he stole a bunch of stuff that is probably already obsolete as of publication of this article. huge cost too in transporting and setting it up. there are and still are guys who made as much as that or even more just quietly running crypto giveaway scams on YouTube and twitter without all the fanfare of an actual heist. of all the thefts and heists involving bitcoin, this one is downright unimpressive in terms of dollar amount. >Mr. X told Stefansson that he would give him 15 percent of the profits from as many Bitcoin computers as he could steal from data centers across Iceland. The total take, Stefansson calculated, could be as much as $1.2 million a year—“forever.” Because, with the stolen computers, Stefansson and Mr. X would establish their own Bitcoin mine. yes because mining computers never become obsolete

mr_woozy 7y ago
>yes because mining computers never become obsolete exactly!

paulpauper 7y ago

>In his teens, Stefansson graduated to drugs: pot, speed, cocaine, ecstasy, LSD. By the time he turned 20, he was growing cannabis. His rap sheet soon included 200 cases of petty crime. He broke into people’s homes to steal TVs and stereos, and somehow managed to extract $10,000 from some slot machines in a Reykjavík bar. yikes. I'm sure he's hardly the only one. It makes you wonder if Iceland's purported low crime and peacefulness is due to under-reporting of crime and crime being ignored and excessively lenient sentencing guidelines, than because of the absence of actual crime. If all the criminals keep being released over and over, then the prison population will be very low yet there will be crime everywhere anyway. lenient sentences heavily tips the moral calculus in favor of criminals, both petty and major.Time is money. time behind bars means less time for stealing.

mr_woozy 7y ago
It is a large reason actually, we don't have enough well funded programs for mental help or drug addiction and roughly 70% of prison inmates are there for drugs and just cycle in and out running up huge fines which they'll never actually be able to pay. Also please keep in mind because of our sovereignity but low population we win a lot of categories for "most this of any nation" due to sheer per-capita mathematics. We're basically the most-per-capita country out there in many ways.