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No dollars were actually stolen. Dollars are a real currency, the kind you can put in real banks so this kind of thing never happens to you.

by Steko 15y ago

badclient 15y ago
Oh, traditional banks have never been hacked and dollars transferred? Somehow I'm not buying it.
- seldo 15y ago
  Traditional banks have insurance which protects them in case money is stolen: http://www.fdic.gov/consumers/consumer/information/fdiciorn.html http://www.fdic.gov/consumers/consumer/information/fdiciorn.... Individual cash deposits are also guaranteed by governments in most countries. Bitcoins are not controlled by any government or central bank, but neither are they backed by one. And here we see the downside of that trade-off.
  - kylebrown 15y ago
    That doesn't mean banks won't decide to sue you if someone electronically steals your money the bank. http://krebsonsecurity.com/2010/01/texas-bank-sues-customer-hit-by-800000-cyber-heist/ http://krebsonsecurity.com/2010/01/texas-bank-sues-customer-...
    - ubernostrum 15y ago
      Um. In that case, the customer was demanding repayment of lost money, alleging the bank's security was negligent, and the bank was basically asking the court to say "it's not our fault somebody got his username/password".
      - kylebrown 15y ago
        Right. Which refutes seldo's conception that bank deposits are safe due to insurance or government guarantees.
        ubernostrum 15y ago
        The deposit in question exceeded that which is guaranteed by FDIC. And your summary was flat-out disingenuous; you presented it as the bank suing the customer, when in effect it appears to be the bank seeking a court declaration that the bank's own security measures were not at fault, as a response to the customer's claims against the bank.
    - mindslight 15y ago
      oof, I guess that's how terrible precedents are formed. The argument of the plantiff is all wrong - it's not that the bank failed to secure some nebulous "online account", it's that the bank performed an unauthorized transfer by whatever means. Online banking credentials aren't proof of identity, and banks have continually rejected capability security (which in this case would have taken the form of dynamically-generated secrets that enable one transfer up to $X). If they can't afford to eat ~$100k every time their mostly-reversible system gets taken advantage of, they shouldn't default to offering the ability to transfer $100k to the Internet in the first place. (and clearly bitcoin is the polar opposite, based on capabilities and being irreversible, for now)
  - perokreco 15y ago
    It protects the consumers, not the banks. Same, in this case bitcoinica is honoring all the money and is swallowing the loss themselves.
    - wccrawford 15y ago
      It protects both. Without the insurance, the bank would have to pay the customers what it could, and then possibly die if it can't.
Tossrock 15y ago
I think you're nitpicking. The goods stolen had a value corresponding to the amount listed. Is converting the amounts from a transaction carried out in euros to dollars objectionable? I would argue no.
kylebrown 15y ago
Unless someone gets your bank login/pw, transfers it out, and the bank decides that you were responsible for protecting your login/pw. http://www.wired.com/threatlevel/2011/06/bank-ach-theft/ http://www.wired.com/threatlevel/2011/06/bank-ach-theft/
27182818284 15y ago
I see what you're doing, you're being purposefully condescending. You aren't dumb enough to actually believe that something people trade for real dollars has absolutely no value. Whether you like it or not, people do use Bitcoins and a value can be assigned the same way a super model's legs can be insured for a value. Deal with it.
- nhebb 15y ago
  Yes, he's egging the crowd on, but his comment did make me wonder what the legal ramifications of someone stealing bitcoins are. If one of the account holders tried to take Linode to court, do you think a US court would even acknowledge the value of a digital currency?
  - bradleyland 15y ago
    Bitcoin's status as a currency may not even be relevant. Your car isn't currency, it's property. If I steal it, I will be charged with theft relative to the value of the car. I can't see how Bitcoins would be treated any differently. They're property, and they can be readily traded at an established value, so I don't see why someone couldn't be charged for stealing them.
    - evgen 15y ago
      They did not "steal" them, they merely made a copy. The original owner still has their sequence of numbers. Snarky perhaps, but every possible argument one can make about why torrenting a video is not theft applies equally to the "theft" of bitcoins.
      - Tossrock 15y ago
        Wrong, actually. Read up on how bitcoin (or cryptocurrency in general) works.
      - bradleyland 15y ago
        I'd love to see that tried in court. I have a feeling that argument won't work very well. I have some limited experience in this area, as I worked for a bankruptcy trustee for a number of years. Debtors tried all manner of convoluted arguments to escape the spirit of the law. Judges have very little patience for that sort of thing. The judge will make a limited effort to understand Bitcoins, but the core question will remain, "what harm was done and who was it done to?" The "owner" of the Bitcoins was, unquestionably, deprived of value. So see it however you wish: Bitcoins as tangible property that was taken, or Bitcoins as tangible property that was irreparably damaged. Either way, the judge will ask the same question. Who was harmed and how? Escaping the conclusion that the attacker's actions are responsible for the loss of value is impossible. You can bet that the State will consider these arguments very carefully if they catch the perp and bring charges against them. From there, it's up to the defense to find a jury so dumb that they'll buy the "Bitcoins aren't property" argument. Regarding the arguments relative to video torrents, I believe this to be an error in logic. If I copy a video from a friend, that friend can continue to derive the original value from the video. That is, the friend can continue to watch the video and enjoy it. The act is different in that the original holder of the Bitcoins can no longer use them once they have been "copied" (to use your terms).

No dollars were actually stolen. Dollars are a real currency, the kind you can put in real banks so this kind of thing never happens to you.

by Steko 15y ago

No dollars were actually stolen. Dollars are a real currency, the kind you can put in real banks so this kind of thing never happens to you.

badclient 15y ago

Oh, traditional banks have never been hacked and dollars transferred? Somehow I'm not buying it.

seldo 15y ago
Traditional banks have insurance which protects them in case money is stolen: http://www.fdic.gov/consumers/consumer/information/fdiciorn.html http://www.fdic.gov/consumers/consumer/information/fdiciorn.... Individual cash deposits are also guaranteed by governments in most countries. Bitcoins are not controlled by any government or central bank, but neither are they backed by one. And here we see the downside of that trade-off.
- kylebrown 15y ago
  That doesn't mean banks won't decide to sue you if someone electronically steals your money the bank. http://krebsonsecurity.com/2010/01/texas-bank-sues-customer-hit-by-800000-cyber-heist/ http://krebsonsecurity.com/2010/01/texas-bank-sues-customer-...
  - ubernostrum 15y ago
    Um. In that case, the customer was demanding repayment of lost money, alleging the bank's security was negligent, and the bank was basically asking the court to say "it's not our fault somebody got his username/password".
    - kylebrown 15y ago
      Right. Which refutes seldo's conception that bank deposits are safe due to insurance or government guarantees.
      - ubernostrum 15y ago
        The deposit in question exceeded that which is guaranteed by FDIC. And your summary was flat-out disingenuous; you presented it as the bank suing the customer, when in effect it appears to be the bank seeking a court declaration that the bank's own security measures were not at fault, as a response to the customer's claims against the bank.
  - mindslight 15y ago
    oof, I guess that's how terrible precedents are formed. The argument of the plantiff is all wrong - it's not that the bank failed to secure some nebulous "online account", it's that the bank performed an unauthorized transfer by whatever means. Online banking credentials aren't proof of identity, and banks have continually rejected capability security (which in this case would have taken the form of dynamically-generated secrets that enable one transfer up to $X). If they can't afford to eat ~$100k every time their mostly-reversible system gets taken advantage of, they shouldn't default to offering the ability to transfer $100k to the Internet in the first place. (and clearly bitcoin is the polar opposite, based on capabilities and being irreversible, for now)
- perokreco 15y ago
  It protects the consumers, not the banks. Same, in this case bitcoinica is honoring all the money and is swallowing the loss themselves.
  - wccrawford 15y ago
    It protects both. Without the insurance, the bank would have to pay the customers what it could, and then possibly die if it can't.

Tossrock 15y ago

I think you're nitpicking. The goods stolen had a value corresponding to the amount listed. Is converting the amounts from a transaction carried out in euros to dollars objectionable? I would argue no.

kylebrown 15y ago

Unless someone gets your bank login/pw, transfers it out, and the bank decides that you were responsible for protecting your login/pw. http://www.wired.com/threatlevel/2011/06/bank-ach-theft/ http://www.wired.com/threatlevel/2011/06/bank-ach-theft/

27182818284 15y ago

I see what you're doing, you're being purposefully condescending. You aren't dumb enough to actually believe that something people trade for real dollars has absolutely no value. Whether you like it or not, people do use Bitcoins and a value can be assigned the same way a super model's legs can be insured for a value. Deal with it.

nhebb 15y ago
Yes, he's egging the crowd on, but his comment did make me wonder what the legal ramifications of someone stealing bitcoins are. If one of the account holders tried to take Linode to court, do you think a US court would even acknowledge the value of a digital currency?
- bradleyland 15y ago
  Bitcoin's status as a currency may not even be relevant. Your car isn't currency, it's property. If I steal it, I will be charged with theft relative to the value of the car. I can't see how Bitcoins would be treated any differently. They're property, and they can be readily traded at an established value, so I don't see why someone couldn't be charged for stealing them.
  - evgen 15y ago
    They did not "steal" them, they merely made a copy. The original owner still has their sequence of numbers. Snarky perhaps, but every possible argument one can make about why torrenting a video is not theft applies equally to the "theft" of bitcoins.
    - Tossrock 15y ago
      Wrong, actually. Read up on how bitcoin (or cryptocurrency in general) works.
    - bradleyland 15y ago
      I'd love to see that tried in court. I have a feeling that argument won't work very well. I have some limited experience in this area, as I worked for a bankruptcy trustee for a number of years. Debtors tried all manner of convoluted arguments to escape the spirit of the law. Judges have very little patience for that sort of thing. The judge will make a limited effort to understand Bitcoins, but the core question will remain, "what harm was done and who was it done to?" The "owner" of the Bitcoins was, unquestionably, deprived of value. So see it however you wish: Bitcoins as tangible property that was taken, or Bitcoins as tangible property that was irreparably damaged. Either way, the judge will ask the same question. Who was harmed and how? Escaping the conclusion that the attacker's actions are responsible for the loss of value is impossible. You can bet that the State will consider these arguments very carefully if they catch the perp and bring charges against them. From there, it's up to the defense to find a jury so dumb that they'll buy the "Bitcoins aren't property" argument. Regarding the arguments relative to video torrents, I believe this to be an error in logic. If I copy a video from a friend, that friend can continue to derive the original value from the video. That is, the friend can continue to watch the video and enjoy it. The act is different in that the original holder of the Bitcoins can no longer use them once they have been "copied" (to use your terms).