4 ms·

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.

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.