4 ms·

This is why bitcoins will never gain mainstream use. It seems that every few months a high profile bitcoin site gets hacked.

by rbn 14y ago

darksaga 14y ago
Agreed. I know a lot of people who start to flirt with the notion of using Bitcoin, only to have their dreams smashed when they learn how frequently these companies and their accounts are hacked. It may be anonymous, but its far from being secure.
- j_s 14y ago
  > It may be anonymous, but its far from being secure. Would you mind clarifying what you're meaning by 'it' and 'secure'? To me, the (in-)security of a particular bitcoin site is orthogonal to the security of Bitcoin as a protocol/currency, though the security of bitcoin sites does have a huge impact on mainstream use.
  - darksaga 14y ago
    Sorry, should have been more clear. By "it" I meant the sites where bitcoins are being traded. And yes, seeing these sites getting hacked frequently makes mainstream acceptance a lot harder. Which in turn makes changing the paradigm take a lot longer.
- corysama 14y ago
  To my knowledge, the bitcoin system itself has never been compromised. Unfortunately, there are a lot of services built /around/ the bitcoin system that have been set up by teenagers... If you were to deposit $100K of platinum in a reserve set up by teenagers, I wouldn't have much sympathy when you lose it. Doesn't mean platinum is useless, however.
Valid 14y ago
It's just a matter of having proper security. I'm sure that hacking into any real bank would be quite lucrative to hackers, but their security is more difficult to penetrate. Yes, if a 'regular' bank was hacked and money was stolen, those stolen from would be reimbursed, whereas with bitcoins there is no chance of reimbursement, but the gain to the hackers would still be there. Bitcoin sites run by individuals are low-hanging fruit, but I wouldn't say they will 'never' gain mainstream use. They simply need to invest more into their own security before I would trust them with my own money.
- flatline 14y ago
  True, but you can never guarantee 100% security. Banks have the added bonus of accountability -- transactions can generally be traced to real people or organizations, so if a large scale breach occurs, there is at least the possibility of either restitution of stolen funds or the deterrent of criminal prosecution. With bitcoin, you have neither.
- smithzvk 14y ago
  > Yes, if a 'regular' bank was hacked and money was stolen, those stolen from would be reimbursed, whereas with bitcoins there is no chance of reimbursement This is not entirely true. When someone is holding a great deal of someone else's money, they can do exactly like banks do and insure their bitcoins, or they can just take the hit and pay for it out of their own pocket, like slush did when his mining pool's bitcoin wallet was comprimised: http://bitcoinmedia.com/compromised-linode-coins-stolen-from-slush-faucet-and-others/ http://bitcoinmedia.com/compromised-linode-coins-stolen-from... The end user isn't necessarily screwed, and should probably request whoever is holding their money to protect it not only via security but also via some guarantees against the worst case scenarios.
andypants 14y ago
This is a problem with the websites, not with bitcoin directly. This is what happens when teenagers try and write the equivalent of an online bank system... Think diaspora, but with money transactions. Of course, this affects how the general public perceives bitcoin.
- rbn 14y ago
  Yes. The technology behind bitcoin is brilliant. However in order for bitcoin to gain mainstream usage people should feel safe using it. it's hard for a regular non-techy to feel safe using bitcoins when some of it's biggest sites are getting hacked.
vsviridov 14y ago
That's why cash will never gain mainstream use. Someone could just walk in a bank with a gun and cart out all of it... Oh, wait...
- rbn 14y ago
  Money in bank vaults are insured and recently 200k is also insured by FDIC so even if the entire financial system crumbles, 200k is guaranteed by the government. When a robber steals money from a bank vault, its not like one day you see. oh shit look at that someone must have stolen my money from the bank. = If someone even robs your safety deposit box, i'm pretty sure that it's insured. Also when markets collapsed people did and still do bank runs and convert their paper money to gold. So it's not like the dollar hasn't experienced a lack of confidence before. Currency is all about confidence.
  - vsviridov 14y ago
    The only way it's so easily insured, is because they can print a boatload more at everyone's expense. At least when bitcoins are stolen the only party harmed is the original owner, not the society at large...

This is why bitcoins will never gain mainstream use. It seems that every few months a high profile bitcoin site gets hacked.

by rbn 14y ago

This is why bitcoins will never gain mainstream use. It seems that every few months a high profile bitcoin site gets hacked.

darksaga 14y ago

Agreed. I know a lot of people who start to flirt with the notion of using Bitcoin, only to have their dreams smashed when they learn how frequently these companies and their accounts are hacked. It may be anonymous, but its far from being secure.

j_s 14y ago
> It may be anonymous, but its far from being secure. Would you mind clarifying what you're meaning by 'it' and 'secure'? To me, the (in-)security of a particular bitcoin site is orthogonal to the security of Bitcoin as a protocol/currency, though the security of bitcoin sites does have a huge impact on mainstream use.
- darksaga 14y ago
  Sorry, should have been more clear. By "it" I meant the sites where bitcoins are being traded. And yes, seeing these sites getting hacked frequently makes mainstream acceptance a lot harder. Which in turn makes changing the paradigm take a lot longer.
corysama 14y ago
To my knowledge, the bitcoin system itself has never been compromised. Unfortunately, there are a lot of services built /around/ the bitcoin system that have been set up by teenagers... If you were to deposit $100K of platinum in a reserve set up by teenagers, I wouldn't have much sympathy when you lose it. Doesn't mean platinum is useless, however.

Valid 14y ago

It's just a matter of having proper security. I'm sure that hacking into any real bank would be quite lucrative to hackers, but their security is more difficult to penetrate. Yes, if a 'regular' bank was hacked and money was stolen, those stolen from would be reimbursed, whereas with bitcoins there is no chance of reimbursement, but the gain to the hackers would still be there. Bitcoin sites run by individuals are low-hanging fruit, but I wouldn't say they will 'never' gain mainstream use. They simply need to invest more into their own security before I would trust them with my own money.

flatline 14y ago
True, but you can never guarantee 100% security. Banks have the added bonus of accountability -- transactions can generally be traced to real people or organizations, so if a large scale breach occurs, there is at least the possibility of either restitution of stolen funds or the deterrent of criminal prosecution. With bitcoin, you have neither.
smithzvk 14y ago
> Yes, if a 'regular' bank was hacked and money was stolen, those stolen from would be reimbursed, whereas with bitcoins there is no chance of reimbursement This is not entirely true. When someone is holding a great deal of someone else's money, they can do exactly like banks do and insure their bitcoins, or they can just take the hit and pay for it out of their own pocket, like slush did when his mining pool's bitcoin wallet was comprimised: http://bitcoinmedia.com/compromised-linode-coins-stolen-from-slush-faucet-and-others/ http://bitcoinmedia.com/compromised-linode-coins-stolen-from... The end user isn't necessarily screwed, and should probably request whoever is holding their money to protect it not only via security but also via some guarantees against the worst case scenarios.

andypants 14y ago

This is a problem with the websites, not with bitcoin directly. This is what happens when teenagers try and write the equivalent of an online bank system... Think diaspora, but with money transactions. Of course, this affects how the general public perceives bitcoin.

rbn 14y ago
Yes. The technology behind bitcoin is brilliant. However in order for bitcoin to gain mainstream usage people should feel safe using it. it's hard for a regular non-techy to feel safe using bitcoins when some of it's biggest sites are getting hacked.

vsviridov 14y ago

That's why cash will never gain mainstream use. Someone could just walk in a bank with a gun and cart out all of it... Oh, wait...

rbn 14y ago
Money in bank vaults are insured and recently 200k is also insured by FDIC so even if the entire financial system crumbles, 200k is guaranteed by the government. When a robber steals money from a bank vault, its not like one day you see. oh shit look at that someone must have stolen my money from the bank. = If someone even robs your safety deposit box, i'm pretty sure that it's insured. Also when markets collapsed people did and still do bank runs and convert their paper money to gold. So it's not like the dollar hasn't experienced a lack of confidence before. Currency is all about confidence.
- vsviridov 14y ago
  The only way it's so easily insured, is because they can print a boatload more at everyone's expense. At least when bitcoins are stolen the only party harmed is the original owner, not the society at large...