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> Not to victim blame, but it really is odd to me that someone would leave any amount of BTC on their phone, let alone millions of dollars worth. The SIM swap

> Not to victim blame, but it really is odd to me that someone would leave any amount of BTC on their phone, let alone millions of dollars worth. The SIM swap attack was used to access an online service where the BTC was stored. I know the classic cryptocurrency trope is that Bitcoiners will move money to a paper wallet and then store the passphrase securely somewhere, but in reality that's about as attractive as cashing it out as 46 x (hypothetical) $1 million dollar bills and storing it in a safe. In other words: Most people who have that kind of money really don't want to do anything like that. Most people who don't have that kind of money really overestimate how easy it is to safely and securely store something like that. But that's beside the point. We could debate all day about storing paper wallets in bank safety deposit boxes or using Shamir's Secret Sharing or any other number of increasingly complex scenarios, but in practice most with that kind of wealth aren't really interested in locking it away and not touching it. If they want to make an investment, trade, or purchase, do they jump through all of the hoops to unlock and move some of the money and then securely store it all away again? Surely someone might, but in practice most people want it somewhere that that can trade, invest, transfer, and access with reasonable security. This inevitably turns into one of those internet OpSec debates where people on the sidelines imagine scenarios where they are smarter than the victim (with the benefit of hindsight, of course), but in reality there are many, many people out there storing vast amounts of wealth accessible by 2FA with their phone and it's rarely ever a problem. Cryptocurrency makes this more complicated because the transactions are irreversible, fast, and (somewhat) easy to hide. So if you happen to be internet famous for bragging about your Bitcoin wealth, definitely take steps to make it impossible for people to access it via phones or anything else. But you also probably want to obscure your physical location and invest in personal security, because in-person attacks are the next step. But in reality, a huge number of people have access to a lot of funds via digital access without such problems on a regular basis. It's fun to fantasize about ultimate OpSec, but in practice most people want the money accessible and tradeable on short notice.

wmf 5y ago
Hardware wallets aren't that cumbersome to use; it only takes a few minutes to move coins on/off. Waiting for confirmations takes longer than dealing with the wallet. For daytrading you'd definitely want to keep coins in an exchange though. I'm speaking neither hypothetically nor in hindsight since I pre-ordered the first hardware wallet back in the day and have never lost coins.
trompetenaccoun 5y ago
A paper wallet can be password protected. Shamir's Secret Sharing can also be used with paper wallets. Practically everyone who messes around with serious amounts of crypto money has a more sophisticated setup than keeping it on a phone, even many people who only have a few hundred dollars worth have hardware wallets like a Trezor. Just because cases like the above happen doesn't mean they're the norm. Every once in a while you also read stories about someone leaving their suitcase full of cash on a train or such. But that doesn't mean the average cash user is that careless.
ziddoap 5y ago
I'll leave alone all of the comments which imply I don't know what I'm talking about and that I'm not very smart, suffice to say you don't need crazy secret sharing systems or bank deposit boxes or anything of the sort to prevent this attack. A dead-simple soft-wallet, which requires about 2 steps to setup and 2 more to transfer and hold your millions of dollars in, would have prevented this. Roughly 15 minutes of time, at most. You don't need to be the NSA to secure your crypto, as you seem to be implying.
- PragmaticPulp 5y ago
  > You don't need to be the NSA to secure your crypto, as you seem to be implying. I said that people keep their funds hot to use them, not that you need to be the NSA to secure them. Trust me, I know how to set up a crypto wallet and secure it.
  - ziddoap 5y ago
    The more important part of my comment was the "15 minutes tops to completely prevent this attack", but okay. (The reverse, getting your money back on the exchange, is even shorter! Maybe 2 minutes and a few clicks.) >Trust me No thanks.
    - 9935c101ab17a66 5y ago
      While you may disagree with what PragmaticPulp had to say, the tone of this last comment is unnecessarily hostile.
      - ziddoap 5y ago
        They make several comments alluding to the fact that I am dumb and have no idea what I'm talking about, ignores every important bit of my comments, then concludes with "trust me", and I'm hostile for saying "no thanks"? My apologies, I guess.
kragen 5y ago
> I know the classic cryptocurrency trope is that Bitcoiners will move money to a paper wallet and then store the passphrase securely somewhere, but in reality that's about as attractive as cashing it out as 46 x (hypothetical) $1 million dollar bills and storing it in a safe. That's very hypothetical, though. There are a few key differences: 1. Moving money to a paper wallet is not difficult in practice. Ideally, yes, you would generate the private key in an air-gapped computer running a secure operating system and print out the private key and the Bitcoin address, then incinerate the computer, storing away a second identical computer that doesn't have the wallet on it yet, and that would have a similar level of difficulty to buying and installing a safe. In practice, you can probably get better security than a physical safe just by generating a new wallet in Electrum, writing down the seed phrase, and deleting the wallet from Electrum. When you need to spend some of the coin you can reanimate the wallet, sign a transaction, and delete it from Electrum again. If your cellphone is backdoored then the thieves can loot your wallet at reanimation time, but that's probably harder than drilling a safe, most of the time. 2. As you point out, million-dollar bills are hypothetical. The largest US dollar denomination ever printed was US$10k, and the largest in circulation since 01969 is US$100. So, in practice, you're talking about a safe containing 460,000 US$100 bills, which will be very difficult to either acquire or dispose of without getting robbed. 3. The dollar inflates, by design, so it's a terrible investment. It's lost 96% of its value since the end of the gold standard in 01971, and an additional 6.2% over the last year. That's the reason why a safe full of dollar bills is a total failure for wealth preservation. Bitcoin suffers from a lot of volatility but it's structurally designed to not suffer from secular inflation, and in fact one of the principal criticisms of Bitcoin is that it's inherently deflationary. It seems to have returned an average of about 150% per year over the last 10 years: https://bitcoincharts.com/charts/bitstampUSD#tgSzm1g10zm2g25zvzl https://bitcoincharts.com/charts/bitstampUSD#tgSzm1g10zm2g25..., and while that trend surely must be nearly over (it can't continue for more than another 5 years and might already be over), it also clearly hasn't been suffering from inflation. In this sense, the most important difference, the dollar and Bitcoin are opposites. Yes, it's true that there are people who like to gamble by day-trading cryptocurrencies, but most people who do that end up losing all their money. Investing wealth doesn't require your assets to be "accessible and tradeable on short notice"; it requires rebalancing asset classes every three months. Berkshire Hathaway makes a few dozen transactions per year. You don't need to make more transactions than Berkshire Hathaway. You say, "there are many, many people out there storing vast amounts of wealth accessible by 2FA with their phone and it's rarely ever a problem," and in a sense that's true; it's relatively unusual to have a meltdown like the Argentine collapse of 02001 (where all bank depositors lost all the dollars they had in the banks), Mt. Gox in 02014 (where all Bitcoin depositors lost all their Bitcoin, about 850,000 BTC or US$450M), Bitfinex in 02015 (where their depositors lost about 1500 BTC), the Greek banking system in 02015 (where Greeks were prohibited from carrying more than 3000 euros out of the country and could only withdraw a limited amount of cash from their bank accounts for three years), and Bitfinex in 02016 (where their depositors lost 119,756 BTC). But it would be a terrible mistake to conclude that, just because an event like this happens only about once every four years, it is unlikely to happen to you. It's true that it's "rarely ever a problem", but when it is a problem, it's a problem for millions of people, sometimes hundreds of millions. Hosted wallets do not and cannot offer "reasonable security". Today I see a lot of people who are "trading Bitcoin" but actually holding Tether in Binance accounts (which has replaced LocalBitcoins as the retail hosted wallet of choice here in Argentina). Tether has historically been backed by fraud, and it's operated by Bitfinex, which (as noted above) has a history of its customers' money mysteriously disappearing, and which is locked out of the world banking system. Binance is banned in the US and UK, is being criminally investigated by both governments, and has had to move its headquarters from China, to Japan, to Malta, which also says they're investigating it. It's also being prosecuted in Thailand. Without casting any aspersions on the integrity of Binance's people, it's clear they're at significant risk of having their assets confiscated, at which point all of their depositors would lose their deposits. And Tether is at significant risk of collapsing, either due to fraud or to mismanagement. So these people are dancing on a tightrope, and most of them don't even know it. So, run a wallet on your own hardware. At least a thin wallet like Electrum. Or get a Trezor.

wmf 5y ago

Hardware wallets aren't that cumbersome to use; it only takes a few minutes to move coins on/off. Waiting for confirmations takes longer than dealing with the wallet. For daytrading you'd definitely want to keep coins in an exchange though. I'm speaking neither hypothetically nor in hindsight since I pre-ordered the first hardware wallet back in the day and have never lost coins.

trompetenaccoun 5y ago

A paper wallet can be password protected. Shamir's Secret Sharing can also be used with paper wallets. Practically everyone who messes around with serious amounts of crypto money has a more sophisticated setup than keeping it on a phone, even many people who only have a few hundred dollars worth have hardware wallets like a Trezor. Just because cases like the above happen doesn't mean they're the norm. Every once in a while you also read stories about someone leaving their suitcase full of cash on a train or such. But that doesn't mean the average cash user is that careless.

ziddoap 5y ago

I'll leave alone all of the comments which imply I don't know what I'm talking about and that I'm not very smart, suffice to say you don't need crazy secret sharing systems or bank deposit boxes or anything of the sort to prevent this attack. A dead-simple soft-wallet, which requires about 2 steps to setup and 2 more to transfer and hold your millions of dollars in, would have prevented this. Roughly 15 minutes of time, at most. You don't need to be the NSA to secure your crypto, as you seem to be implying.

PragmaticPulp 5y ago
> You don't need to be the NSA to secure your crypto, as you seem to be implying. I said that people keep their funds hot to use them, not that you need to be the NSA to secure them. Trust me, I know how to set up a crypto wallet and secure it.
- ziddoap 5y ago
  The more important part of my comment was the "15 minutes tops to completely prevent this attack", but okay. (The reverse, getting your money back on the exchange, is even shorter! Maybe 2 minutes and a few clicks.) >Trust me No thanks.
  - 9935c101ab17a66 5y ago
    While you may disagree with what PragmaticPulp had to say, the tone of this last comment is unnecessarily hostile.
    - ziddoap 5y ago
      They make several comments alluding to the fact that I am dumb and have no idea what I'm talking about, ignores every important bit of my comments, then concludes with "trust me", and I'm hostile for saying "no thanks"? My apologies, I guess.

kragen 5y ago

> I know the classic cryptocurrency trope is that Bitcoiners will move money to a paper wallet and then store the passphrase securely somewhere, but in reality that's about as attractive as cashing it out as 46 x (hypothetical) $1 million dollar bills and storing it in a safe. That's very hypothetical, though. There are a few key differences: 1. Moving money to a paper wallet is not difficult in practice. Ideally, yes, you would generate the private key in an air-gapped computer running a secure operating system and print out the private key and the Bitcoin address, then incinerate the computer, storing away a second identical computer that doesn't have the wallet on it yet, and that would have a similar level of difficulty to buying and installing a safe. In practice, you can probably get better security than a physical safe just by generating a new wallet in Electrum, writing down the seed phrase, and deleting the wallet from Electrum. When you need to spend some of the coin you can reanimate the wallet, sign a transaction, and delete it from Electrum again. If your cellphone is backdoored then the thieves can loot your wallet at reanimation time, but that's probably harder than drilling a safe, most of the time. 2. As you point out, million-dollar bills are hypothetical. The largest US dollar denomination ever printed was US$10k, and the largest in circulation since 01969 is US$100. So, in practice, you're talking about a safe containing 460,000 US$100 bills, which will be very difficult to either acquire or dispose of without getting robbed. 3. The dollar inflates, by design, so it's a terrible investment. It's lost 96% of its value since the end of the gold standard in 01971, and an additional 6.2% over the last year. That's the reason why a safe full of dollar bills is a total failure for wealth preservation. Bitcoin suffers from a lot of volatility but it's structurally designed to not suffer from secular inflation, and in fact one of the principal criticisms of Bitcoin is that it's inherently deflationary. It seems to have returned an average of about 150% per year over the last 10 years: https://bitcoincharts.com/charts/bitstampUSD#tgSzm1g10zm2g25zvzl https://bitcoincharts.com/charts/bitstampUSD#tgSzm1g10zm2g25..., and while that trend surely must be nearly over (it can't continue for more than another 5 years and might already be over), it also clearly hasn't been suffering from inflation. In this sense, the most important difference, the dollar and Bitcoin are opposites. Yes, it's true that there are people who like to gamble by day-trading cryptocurrencies, but most people who do that end up losing all their money. Investing wealth doesn't require your assets to be "accessible and tradeable on short notice"; it requires rebalancing asset classes every three months. Berkshire Hathaway makes a few dozen transactions per year. You don't need to make more transactions than Berkshire Hathaway. You say, "there are many, many people out there storing vast amounts of wealth accessible by 2FA with their phone and it's rarely ever a problem," and in a sense that's true; it's relatively unusual to have a meltdown like the Argentine collapse of 02001 (where all bank depositors lost all the dollars they had in the banks), Mt. Gox in 02014 (where all Bitcoin depositors lost all their Bitcoin, about 850,000 BTC or US$450M), Bitfinex in 02015 (where their depositors lost about 1500 BTC), the Greek banking system in 02015 (where Greeks were prohibited from carrying more than 3000 euros out of the country and could only withdraw a limited amount of cash from their bank accounts for three years), and Bitfinex in 02016 (where their depositors lost 119,756 BTC). But it would be a terrible mistake to conclude that, just because an event like this happens only about once every four years, it is unlikely to happen to you. It's true that it's "rarely ever a problem", but when it is a problem, it's a problem for millions of people, sometimes hundreds of millions. Hosted wallets do not and cannot offer "reasonable security". Today I see a lot of people who are "trading Bitcoin" but actually holding Tether in Binance accounts (which has replaced LocalBitcoins as the retail hosted wallet of choice here in Argentina). Tether has historically been backed by fraud, and it's operated by Bitfinex, which (as noted above) has a history of its customers' money mysteriously disappearing, and which is locked out of the world banking system. Binance is banned in the US and UK, is being criminally investigated by both governments, and has had to move its headquarters from China, to Japan, to Malta, which also says they're investigating it. It's also being prosecuted in Thailand. Without casting any aspersions on the integrity of Binance's people, it's clear they're at significant risk of having their assets confiscated, at which point all of their depositors would lose their deposits. And Tether is at significant risk of collapsing, either due to fraud or to mismanagement. So these people are dancing on a tightrope, and most of them don't even know it. So, run a wallet on your own hardware. At least a thin wallet like Electrum. Or get a Trezor.