8 ms·

3rd largest Bitcoin exchange lost its wallet.dat

117 points by mef 15y ago

mef 15y ago
Looks like the admin stored the wallet.dat and backups on an ec2 instance, and then shut it down while doing a RAM upgrade without realizing he would lose everything on the disk. Translation of post: DECLARATION I hereby inform all users of the service www.bitomat.pl of system failure that occurred on 26 July 2011 and its consequences. At the outset I would like to apologize for such a long delay in publication of this statement. I explained that it was dictated only by the good service investigation conducted to determine the causes of failure and the people responsible for it. Unfortunately, to date, despite intensive efforts, could not determine these issues. However, I believe that the longer pause to disclose this communication at this stage would be unreasonable. I am also aware that service users are the appropriate explanation. On 26 July 2011 at about 23:00, I noticed that absorbs all Bitcoin server machine resources, and probably not used for making. So there was need to increase the amount of RAM in the server. As a result of that procedure - suddenly the whole virtual machine has been erased, all data stored on the server has been lost!, Including records concerning bitcoinowego portfolio and its backups (backups). I have taken action have established that the disappearance of the data was the result of the introduction of virtual server settings, which he never would have introduced. Amazon Web Services Company, which is located servers, website says that the machine that has been cleared has been set up in such a way as to be irretrievably destroyed automatically with the data on disks attached to it at the time of her arrest by the shutdown. We are constantly trying to determine who made changes to these settings and whether it will be able to recover lost data. Unfortunately partnership with Amazon Web Services, which was placed servers service is difficult. Once I realized that I deleted the machine have redeemed the biggest package of technical support, I talked to the manager, asked about the security of disk space, I explained, so far unsuccessfully. Still exerts pressure on the Amazon Web Services to accelerate their activities but without concrete results. At the moment I am unable to clearly determine the causes of crashes, I suppose that it is the result of actions of third parties, which are causing the server tried to cancel to hide their illegal activities, or intentionally wanted to website disappeared. If my suppositions are confirmed, the fact will let police and prosecutors. At the same time if possible take action through which it would be possible to recreate lost data. But what I need to interact with the server's owner, and that as I mentioned above is difficult. At this point I wish to inform and assure you that your cash deposited into your bank account service and not converted into BTC and unpaid cash from the sale of BTC remain safe and intact. Any further findings will you keep. At the same time I am counting on your help in solving the problem. I realize that the situation is very difficult, and you fear for the fate of their BTC. We are constantly working on a solution to the crisis, and I'm open to your suggestions. Currently going to: cancel all active orders so far, to restore service to operate to allow the performance of any operation (in particular the payment of PLN). Please your suggestions and ideas. I wish to inform you that I had several conversations with potential investors from home and abroad. Www.bitomat.pl service is on sale for EUR 17,000 BTC. If interested, please contact us at bartek@szabat.com. Best regards Bartek Shabbat Service Administrator www.bitomat.pl
- StavrosK 15y ago
  > Www.bitomat.pl service is on sale for EUR 17,000 BTC What?
  - WarDekar 15y ago
    That was my reaction as well. Not just the fact that it's ambiguous whether they're trying to sell for 17k EUR or 17k BTC, but the fact that they're even trying to sell it at all, and then the buyer is presumably on the hook for the BTC that were lost as well! I currently had ~13 BTC in my Bitomat account- when I login they correctly show my balance, so I'm slightly confused as apparently their database wasn't lost, but their wallet data was? How does that happen? And why was the wallet data not backed up on a non-EC2 instance? All of this is making me lose some faith in the exchanges- between the MtGox BS and this, is TradeHill the only exchange that can be trusted? Can they even be trusted? It seems they are by far the most competent from a technical perspective, but at this point who wants to trust any of these exchanges with any significant amount of money?
    - StavrosK 15y ago
      Exactly, they screwed up big time by not knowing one of the fundamental things about EC2, now they're trying to sell the thing, and they can't decide on a currency on top of that? However, it looks like the original page says BTC, so it looks like just a translation error.
    - doublec 15y ago
      Given the price they're selling for I assume they'd use that money to refund the funds from the lost wallet.
      - Cushman 15y ago
        That'd be a very dangerous assumption for anyone considering the purchase.
    - scotty79 15y ago
otoburb 15y ago
Was this a relatively young BitCoin exchange? One would hope that the wallet.dat was backed up somewhere else (another EC2 instance, EBS, offline). This doesn't bode well for establishing credibility in BitCoin exchanges and operators. Although nobody necessarily needs to use the exchanges, for better or worse, people use them to establish market values to more easily value their transactions. It's obviously easy to criticize after the fact, but I am genuinely curious how backing up critical data wasn't considered. Unless, this was a very young / recently launched BitCoin exchange as a weekend hobby project that took off?
- WarDekar 15y ago
  They've been around for a few months and were one of the higher volume exchanges. They were doing ~800 BTC in trades/day for the month prior to this, so ~$11k/day with their commission of .006*2 (I think it was .006, and on both sides) they were pulling in ~$130/day.
  - scotty79 15y ago
    Everything (transactions, withdrawals, deposits) was free of charge. Only way of profiting legally from the exchange was interest on the capital deposited by users on exchange owners bank account.
    - djcapelis 15y ago
      Or "losing" the wallet.dat after a few months. You're operating in an unregulated market. Your legal protections for when someone outright steals your money are much weaker. You might be able to sue them... if you could get to Poland. Not only is your market unregulated, you don't share a jurisdiction with the "bank" unless you live in Poland. So it's not the only way of profiting legally as much as it's the only way of profiting ethically. I don't think this particular case was malicious, but I think people are vastly underestimating their risk exposure to a malicious exchange. Thankfully, the bad guys seem as incompetent as the people running bitomat.
      - 15y ago
kiba 15y ago
I guess the bitcoin economy is ruthless on its entrepreneurs and users. Failure to backup, improper trust in individuals, improper understanding of the technology, poor security practice, and bad decisions will wipe out early adopters' wealth continuously and relentlessly. I doubt we will see much of the early adopters retaining their bitcoin wealth from these early days. Those who did are either incredibly lucky, or incredibly competent. I am an early adopter of bitcoin and I hope to survive or avoid the many dangers and poor decisions that ensnared many of peers on the road to bitcoin richness.
- bcl 15y ago
  I think that's a bit over the top. It really isn't that hard to keep your coins in your own wallet and back it up. What this demonstrates to me is that people are too trusting. You really shouldn't trust any of these services until they become more transparent in who is backing them, what their infrastructure looks like, their disaster plans, etc.
  - againwiththe 15y ago
    He's referring to the relentless issues... Mt. Gox, now this. It will probably continue...
  - Duff 15y ago
    It isn't, but since the primary thing to do with Bitcoin is to speculate it, keeping it on your PC is problematic.
dedward 15y ago
Everyone keeping their bitcoins in exchanges/(think banks, or broker accounts) instead of their own wallets is completely subverting the point of the idea of bitcoin. BTC has some great unique properties as a p2p cryptocurrency - which goes out the window when everything sits in a few exchanges rather than a bunch of wallets.
- kiba 15y ago
  Find a way to easily trade bitcoin without centralizing wallets and you got the thousand bitcoin idea. Next step is to turn the thousand bitcoin idea into an actual reality and get rich.
  - aw3c2 15y ago
    I thought one can directly send bitcoin to another address without the need for a middleman?
    - kiba 15y ago
      Yes, but dollars and euro and yens almost always require a middleman, unless you're doing cash exchange.
      - aw3c2 15y ago
        Ah, I did not realise that this was about a "transformation" between bitcoin and normal money. But in that case wouldn't it make sense to keep the money on the exchange just as long as needed?
        wcoenen 15y ago
        The bitcoin exchanges typically require 6 confirmations of a transaction in the block chain before crediting your account with bitcoins. This takes about 1 hour. If you are speculating on bitcoins and you hear about some news that might cause the price to drop, then you don't want to wait 1 hour before you can sell them.
scotty79 15y ago
Other thread about same subject here: http://news.ycombinator.com/item?id=2828091 http://news.ycombinator.com/item?id=2828091
jonknee 15y ago
Sometimes you don't appreciate regulation until it's gone.
- kiba 15y ago
  An exchange failed on its incompetency and now they are trying to liquidate and giving back their customers' money. The market works even if the consequence is quite sour and painful. This will means that exchanges will tend toward competency rather than incompetency. Regulations is something that you will have to design first or else you get regulatory capture or "TOO BIG TO FAIL" or some kind of unjust monopoly. Adding a regulator means that we will have to shift our focus in making sure that the regulators are doing its job rather than ruthlessly killing off companies that can't keep customers' money safe.
  - jonknee 15y ago
    Except with a lost wallet.dat there will be a lot of BTC that cannot be given back. Customers are likely going to take a haircut because an incompetent exchange lost their money. In the real world the people running the exchange would be going to jail.
    - kiba 15y ago
      I don't understand the point you are trying to make. Incompetent exchange goes out of business. Said exchange try to compensate their customers. Customers learn better to scrutinize other exchanges for their backup policies and how they run their business. Of course, this is the free market. Failure to be competent, either as an investor, user, or exchange, result in monetary loss. To others, this is horrible. To me, this is the way I like it. I wish for the accurate consequence of my decisions, not a jacked up distorted picture of reality. This prevent crisis from becoming a minor blip in the bitcoin economy into something that fundamental destroy the bitcoin economy. Adding regulators who have a hold on the whole Bitcoin economy with no alternative for said regulators, with no incentives to for regulators to regulate the market right is a recipe for disaster. You want regulation and regulators? Show me the incentives for them to make things right. Show me why they will not fall prey to regulatory capture. Give me precise details of how this is all suppose to work and what the rules are.
sgornick 15y ago
> At this point I wish to inform and assure you that your cash deposited into your bank account service and not converted into BTC and unpaid cash from the sale of BTC remain safe and intact The funds are likely held in aggregate in a single bank account under a single name. Without having the data showing which accounts hold which amounts, I wonder how those funds could be returned to the rightful owners.
- sliverstorm 15y ago
  It sounds like they lost the bitcoins, not the database.
_delirium 15y ago
If this kind of thing keeps happening, isn't Bitcoin inherently deflationary? With gold, for example, only a small proportion is ever permanently "lost"; even shipwrecks can be recovered in the future. And of course more gold is always being dug up. But if bitcoins from a fixed set are slowly being lost in various ways, irreparably shrinking the money supply, it seems like it'd have trouble being a viable long-term currency.
- rsynnott 15y ago
  In practice, when used to back a currency, gold is usually also inherently deflationary; mining of new gold generally cannot keep up with real economic growth.
- wmf 15y ago
  The 21M BTC limit already made it deflationary, so lost BTC just increases the rate slightly. The early adopters tend not to complain.
- SkyMarshal 15y ago
  Yes, BTC is inherently deflationary, but one of the fascinating things about it is that since it can be infinitely subdivided, this may not be as much a problem as it for meatspace currencies. Currently BTC is divisible down to 8 decimal places, enabling a maximum possible 2.1 quadrillion atomic units. But that is only an artifact of the data structure used in the current implementation, and could potentially be modified to allow even more granularity. So, as the value of BTC rises against goods, services, and other currencies, the market can reprice in smaller and smaller increments of BTC, and the incentive to save/hoard that is typically associated with deflationary monetary systems may be weaker with BTC.
  - jahnu 15y ago
    > the incentive to save/hoard that is typically associated with deflationary monetary systems may be weaker with BTC. I don't see how that is possible. The coins may undergo a process similar to a stock split but any holders of the coins end up with equal purchasing power. The incentive to hoard does not go away if the currency is deflationary.
sliverstorm 15y ago
On the bright side, if the wallet has truly been lost and not stolen, everybody else's BTC got just a bit more valuable. In other news, funneling thousands of trades through one wallet.dat... how on earth do you successfully back that up when it has new data every minute? If exchanges are going to become a "thing", I'd think you'd want something like multiple redundant networked databases storing the BTC.
- doublec 15y ago
  The individual trades in exchanges don't hit the wallet. Only deposits and withdrawal's do. The trades themselves are handled by the exchanges database. You can pre-generate addresses in a wallet and then do a backup. This backup is valid and can be used to recover funds as long as that pre-generated pool doesn't run out. There's also a 'backupwallet' RPC command that the bitcoin daemon provides to safely copy/backup the wallet. So lots of options available.
- joe_the_user 15y ago
  Not necessarily, The hit to confidence in bitcoin might decrease the value of the remaining bitcoins more than the loss of these bitcoins increased it. I suppose we'll have to look at the exchanges...
tedjdziuba 15y ago
And nothing of value was lost.
- drivebyacct2 15y ago
  I can sell my BitCoins immediately for about $250 (what I originally put in). How can you sit and say it has "no value"?
  - astrodust 15y ago
    Theoretically you can sell them, but what if nobody's buying?
    - RyanKearney 15y ago
      Theoretically you can work to make money, but what if nobody's hiring? Seriously, was that your best argument? Supply and demand. Right now there is a demand for BTC which means people can supply them for a cost.
  - zb 15y ago
    Some people believe that price and value are the same thing. Others, not so much. It's not inconceivable that Ted here holds the latter opinion.
    - drivebyacct2 15y ago
      I don't really understand the difference I guess. Does Ted like to do something else with his dollar bills that I don't want to or can't imagine?
nradov 15y ago
Ha ha! A fool and his money are soon parted. Anyone stupid enough to waste real currency on bitcoins deserves what he gets. Bitcoins are the modern equivalent of speculating on "limited edition" Beanie Babies. The truth hurts so I expect all the bitcoin fanboys will downvote me now. Go ahead do your worst. :-)
noonespecial 15y ago
The time seems right for the first bitcoin insurance company.
- SODaniel 15y ago
  Only problem. Who would insure a data file of unknown value?
  - weavejester 15y ago
    That's not really a problem. You'd insure individual bitcoin addresses, and the amount of bitcoins assigned a bitcoin address is public. The real problem is figuring out whether an address has been actually stolen, or whether the user is indulging in a spot of insurance fraud.

117 points by mef 15y ago

mef 15y ago

Looks like the admin stored the wallet.dat and backups on an ec2 instance, and then shut it down while doing a RAM upgrade without realizing he would lose everything on the disk. Translation of post: DECLARATION I hereby inform all users of the service www.bitomat.pl of system failure that occurred on 26 July 2011 and its consequences. At the outset I would like to apologize for such a long delay in publication of this statement. I explained that it was dictated only by the good service investigation conducted to determine the causes of failure and the people responsible for it. Unfortunately, to date, despite intensive efforts, could not determine these issues. However, I believe that the longer pause to disclose this communication at this stage would be unreasonable. I am also aware that service users are the appropriate explanation. On 26 July 2011 at about 23:00, I noticed that absorbs all Bitcoin server machine resources, and probably not used for making. So there was need to increase the amount of RAM in the server. As a result of that procedure - suddenly the whole virtual machine has been erased, all data stored on the server has been lost!, Including records concerning bitcoinowego portfolio and its backups (backups). I have taken action have established that the disappearance of the data was the result of the introduction of virtual server settings, which he never would have introduced. Amazon Web Services Company, which is located servers, website says that the machine that has been cleared has been set up in such a way as to be irretrievably destroyed automatically with the data on disks attached to it at the time of her arrest by the shutdown. We are constantly trying to determine who made changes to these settings and whether it will be able to recover lost data. Unfortunately partnership with Amazon Web Services, which was placed servers service is difficult. Once I realized that I deleted the machine have redeemed the biggest package of technical support, I talked to the manager, asked about the security of disk space, I explained, so far unsuccessfully. Still exerts pressure on the Amazon Web Services to accelerate their activities but without concrete results. At the moment I am unable to clearly determine the causes of crashes, I suppose that it is the result of actions of third parties, which are causing the server tried to cancel to hide their illegal activities, or intentionally wanted to website disappeared. If my suppositions are confirmed, the fact will let police and prosecutors. At the same time if possible take action through which it would be possible to recreate lost data. But what I need to interact with the server's owner, and that as I mentioned above is difficult. At this point I wish to inform and assure you that your cash deposited into your bank account service and not converted into BTC and unpaid cash from the sale of BTC remain safe and intact. Any further findings will you keep. At the same time I am counting on your help in solving the problem. I realize that the situation is very difficult, and you fear for the fate of their BTC. We are constantly working on a solution to the crisis, and I'm open to your suggestions. Currently going to: cancel all active orders so far, to restore service to operate to allow the performance of any operation (in particular the payment of PLN). Please your suggestions and ideas. I wish to inform you that I had several conversations with potential investors from home and abroad. Www.bitomat.pl service is on sale for EUR 17,000 BTC. If interested, please contact us at bartek@szabat.com. Best regards Bartek Shabbat Service Administrator www.bitomat.pl

StavrosK 15y ago
> Www.bitomat.pl service is on sale for EUR 17,000 BTC What?
- WarDekar 15y ago
  That was my reaction as well. Not just the fact that it's ambiguous whether they're trying to sell for 17k EUR or 17k BTC, but the fact that they're even trying to sell it at all, and then the buyer is presumably on the hook for the BTC that were lost as well! I currently had ~13 BTC in my Bitomat account- when I login they correctly show my balance, so I'm slightly confused as apparently their database wasn't lost, but their wallet data was? How does that happen? And why was the wallet data not backed up on a non-EC2 instance? All of this is making me lose some faith in the exchanges- between the MtGox BS and this, is TradeHill the only exchange that can be trusted? Can they even be trusted? It seems they are by far the most competent from a technical perspective, but at this point who wants to trust any of these exchanges with any significant amount of money?
  - StavrosK 15y ago
    Exactly, they screwed up big time by not knowing one of the fundamental things about EC2, now they're trying to sell the thing, and they can't decide on a currency on top of that? However, it looks like the original page says BTC, so it looks like just a translation error.
  - doublec 15y ago
    Given the price they're selling for I assume they'd use that money to refund the funds from the lost wallet.
    - Cushman 15y ago
      That'd be a very dangerous assumption for anyone considering the purchase.
  - scotty79 15y ago

otoburb 15y ago

Was this a relatively young BitCoin exchange? One would hope that the wallet.dat was backed up somewhere else (another EC2 instance, EBS, offline). This doesn't bode well for establishing credibility in BitCoin exchanges and operators. Although nobody necessarily needs to use the exchanges, for better or worse, people use them to establish market values to more easily value their transactions. It's obviously easy to criticize after the fact, but I am genuinely curious how backing up critical data wasn't considered. Unless, this was a very young / recently launched BitCoin exchange as a weekend hobby project that took off?

WarDekar 15y ago
They've been around for a few months and were one of the higher volume exchanges. They were doing ~800 BTC in trades/day for the month prior to this, so ~$11k/day with their commission of .006*2 (I think it was .006, and on both sides) they were pulling in ~$130/day.
- scotty79 15y ago
  Everything (transactions, withdrawals, deposits) was free of charge. Only way of profiting legally from the exchange was interest on the capital deposited by users on exchange owners bank account.
  - djcapelis 15y ago
    Or "losing" the wallet.dat after a few months. You're operating in an unregulated market. Your legal protections for when someone outright steals your money are much weaker. You might be able to sue them... if you could get to Poland. Not only is your market unregulated, you don't share a jurisdiction with the "bank" unless you live in Poland. So it's not the only way of profiting legally as much as it's the only way of profiting ethically. I don't think this particular case was malicious, but I think people are vastly underestimating their risk exposure to a malicious exchange. Thankfully, the bad guys seem as incompetent as the people running bitomat.
    - 15y ago

kiba 15y ago

I guess the bitcoin economy is ruthless on its entrepreneurs and users. Failure to backup, improper trust in individuals, improper understanding of the technology, poor security practice, and bad decisions will wipe out early adopters' wealth continuously and relentlessly. I doubt we will see much of the early adopters retaining their bitcoin wealth from these early days. Those who did are either incredibly lucky, or incredibly competent. I am an early adopter of bitcoin and I hope to survive or avoid the many dangers and poor decisions that ensnared many of peers on the road to bitcoin richness.

bcl 15y ago
I think that's a bit over the top. It really isn't that hard to keep your coins in your own wallet and back it up. What this demonstrates to me is that people are too trusting. You really shouldn't trust any of these services until they become more transparent in who is backing them, what their infrastructure looks like, their disaster plans, etc.
- againwiththe 15y ago
  He's referring to the relentless issues... Mt. Gox, now this. It will probably continue...
- Duff 15y ago
  It isn't, but since the primary thing to do with Bitcoin is to speculate it, keeping it on your PC is problematic.

dedward 15y ago

Everyone keeping their bitcoins in exchanges/(think banks, or broker accounts) instead of their own wallets is completely subverting the point of the idea of bitcoin. BTC has some great unique properties as a p2p cryptocurrency - which goes out the window when everything sits in a few exchanges rather than a bunch of wallets.

kiba 15y ago
Find a way to easily trade bitcoin without centralizing wallets and you got the thousand bitcoin idea. Next step is to turn the thousand bitcoin idea into an actual reality and get rich.
- aw3c2 15y ago
  I thought one can directly send bitcoin to another address without the need for a middleman?
  - kiba 15y ago
    Yes, but dollars and euro and yens almost always require a middleman, unless you're doing cash exchange.
    - aw3c2 15y ago
      Ah, I did not realise that this was about a "transformation" between bitcoin and normal money. But in that case wouldn't it make sense to keep the money on the exchange just as long as needed?
      - wcoenen 15y ago
        The bitcoin exchanges typically require 6 confirmations of a transaction in the block chain before crediting your account with bitcoins. This takes about 1 hour. If you are speculating on bitcoins and you hear about some news that might cause the price to drop, then you don't want to wait 1 hour before you can sell them.

scotty79 15y ago

Other thread about same subject here: http://news.ycombinator.com/item?id=2828091 http://news.ycombinator.com/item?id=2828091

jonknee 15y ago

Sometimes you don't appreciate regulation until it's gone.

kiba 15y ago
An exchange failed on its incompetency and now they are trying to liquidate and giving back their customers' money. The market works even if the consequence is quite sour and painful. This will means that exchanges will tend toward competency rather than incompetency. Regulations is something that you will have to design first or else you get regulatory capture or "TOO BIG TO FAIL" or some kind of unjust monopoly. Adding a regulator means that we will have to shift our focus in making sure that the regulators are doing its job rather than ruthlessly killing off companies that can't keep customers' money safe.
- jonknee 15y ago
  Except with a lost wallet.dat there will be a lot of BTC that cannot be given back. Customers are likely going to take a haircut because an incompetent exchange lost their money. In the real world the people running the exchange would be going to jail.
  - kiba 15y ago
    I don't understand the point you are trying to make. Incompetent exchange goes out of business. Said exchange try to compensate their customers. Customers learn better to scrutinize other exchanges for their backup policies and how they run their business. Of course, this is the free market. Failure to be competent, either as an investor, user, or exchange, result in monetary loss. To others, this is horrible. To me, this is the way I like it. I wish for the accurate consequence of my decisions, not a jacked up distorted picture of reality. This prevent crisis from becoming a minor blip in the bitcoin economy into something that fundamental destroy the bitcoin economy. Adding regulators who have a hold on the whole Bitcoin economy with no alternative for said regulators, with no incentives to for regulators to regulate the market right is a recipe for disaster. You want regulation and regulators? Show me the incentives for them to make things right. Show me why they will not fall prey to regulatory capture. Give me precise details of how this is all suppose to work and what the rules are.

sgornick 15y ago

> At this point I wish to inform and assure you that your cash deposited into your bank account service and not converted into BTC and unpaid cash from the sale of BTC remain safe and intact The funds are likely held in aggregate in a single bank account under a single name. Without having the data showing which accounts hold which amounts, I wonder how those funds could be returned to the rightful owners.

sliverstorm 15y ago
It sounds like they lost the bitcoins, not the database.

_delirium 15y ago

If this kind of thing keeps happening, isn't Bitcoin inherently deflationary? With gold, for example, only a small proportion is ever permanently "lost"; even shipwrecks can be recovered in the future. And of course more gold is always being dug up. But if bitcoins from a fixed set are slowly being lost in various ways, irreparably shrinking the money supply, it seems like it'd have trouble being a viable long-term currency.

rsynnott 15y ago
In practice, when used to back a currency, gold is usually also inherently deflationary; mining of new gold generally cannot keep up with real economic growth.
wmf 15y ago
The 21M BTC limit already made it deflationary, so lost BTC just increases the rate slightly. The early adopters tend not to complain.
SkyMarshal 15y ago
Yes, BTC is inherently deflationary, but one of the fascinating things about it is that since it can be infinitely subdivided, this may not be as much a problem as it for meatspace currencies. Currently BTC is divisible down to 8 decimal places, enabling a maximum possible 2.1 quadrillion atomic units. But that is only an artifact of the data structure used in the current implementation, and could potentially be modified to allow even more granularity. So, as the value of BTC rises against goods, services, and other currencies, the market can reprice in smaller and smaller increments of BTC, and the incentive to save/hoard that is typically associated with deflationary monetary systems may be weaker with BTC.
- jahnu 15y ago
  > the incentive to save/hoard that is typically associated with deflationary monetary systems may be weaker with BTC. I don't see how that is possible. The coins may undergo a process similar to a stock split but any holders of the coins end up with equal purchasing power. The incentive to hoard does not go away if the currency is deflationary.

sliverstorm 15y ago

On the bright side, if the wallet has truly been lost and not stolen, everybody else's BTC got just a bit more valuable. In other news, funneling thousands of trades through one wallet.dat... how on earth do you successfully back that up when it has new data every minute? If exchanges are going to become a "thing", I'd think you'd want something like multiple redundant networked databases storing the BTC.

doublec 15y ago
The individual trades in exchanges don't hit the wallet. Only deposits and withdrawal's do. The trades themselves are handled by the exchanges database. You can pre-generate addresses in a wallet and then do a backup. This backup is valid and can be used to recover funds as long as that pre-generated pool doesn't run out. There's also a 'backupwallet' RPC command that the bitcoin daemon provides to safely copy/backup the wallet. So lots of options available.
joe_the_user 15y ago
Not necessarily, The hit to confidence in bitcoin might decrease the value of the remaining bitcoins more than the loss of these bitcoins increased it. I suppose we'll have to look at the exchanges...

tedjdziuba 15y ago

And nothing of value was lost.

drivebyacct2 15y ago
I can sell my BitCoins immediately for about $250 (what I originally put in). How can you sit and say it has "no value"?
- astrodust 15y ago
  Theoretically you can sell them, but what if nobody's buying?
  - RyanKearney 15y ago
    Theoretically you can work to make money, but what if nobody's hiring? Seriously, was that your best argument? Supply and demand. Right now there is a demand for BTC which means people can supply them for a cost.
- zb 15y ago
  Some people believe that price and value are the same thing. Others, not so much. It's not inconceivable that Ted here holds the latter opinion.
  - drivebyacct2 15y ago
    I don't really understand the difference I guess. Does Ted like to do something else with his dollar bills that I don't want to or can't imagine?

nradov 15y ago

Ha ha! A fool and his money are soon parted. Anyone stupid enough to waste real currency on bitcoins deserves what he gets. Bitcoins are the modern equivalent of speculating on "limited edition" Beanie Babies. The truth hurts so I expect all the bitcoin fanboys will downvote me now. Go ahead do your worst. :-)

noonespecial 15y ago

The time seems right for the first bitcoin insurance company.

SODaniel 15y ago
Only problem. Who would insure a data file of unknown value?
- weavejester 15y ago
  That's not really a problem. You'd insure individual bitcoin addresses, and the amount of bitcoins assigned a bitcoin address is public. The real problem is figuring out whether an address has been actually stolen, or whether the user is indulging in a spot of insurance fraud.