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I'm not a security expert, but at least I have first hand experience with the Bitcoinica hack. It seems that all the security features you have mentioned are pr

I'm not a security expert, but at least I have first hand experience with the Bitcoinica hack. It seems that all the security features you have mentioned are present in many Bitcoin sites, including Bitcoinica,r and they don't prevent the easiest ways of losing wallets. Storing in the cloud is especially dangerous because for most (NOT all) cloud service providers, the front-end security (concerning authentication and authorization) is probably much weaker than your own implementation. For example, anyone can reset the password with an email, and change the root passwords of the servers. There isn't likely an option for second factor authentication. This does not apply to cloud services with serious security considerations, such as AWS. It has IAM as well as second factor authentication. However, in Bitcoinica's case, both Linode and Rackspace don't seem to be a good choice to host wallets: Linode hack was actually a result of their customer service system compromise (i.e. possibly any support agent can reset the root passwords). While Rackspace Cloud's support staff couldn't log out the hacker and preserve the servers even when the hack was detected and password being changed. These are really basic security features that cloud services are lacking. You made a good point that things can be upgraded as you grow. Please do that. It's exactly what I intended to do when I launched Bitcoinica last year. But after I sold the company last year, no one really think it's an urgent thing to do because there were no performance issues, no availability issues and everything went just fine. It's important to stick to the plan, and preferably allocate a fixed portion of revenue for upgrading security features and doing audits. I'm glad to give you more information so that you can make better decisions (just drop me an email). I have been leading Bitcoinica for half a year (until the handover in April) and I had some experience in running a Bitcoin site that scaled quite well. I'm working on a non-Bitcoin project at the moment but I really want Bitcoin to succeed.

kfreds 14y ago
Intent is not the same as action, and as you said, no one (including you) thought it was urgent to upgrade your security. Shortly thereafter you discovered that there are black swans. The above is also very easy for someone (like me) to say when you´re not in the middle of it. You want to grow your business, and the benefits of working on security are hard to measure. I get it. That´s when you need to ask yourself what your priorities are, and if you´re in the business of selling turnips, or handling valuables such as bitcoins. Brian, you are where Zhou Tong was a while ago, although there´s no hype around your service yet. It has great potential, especially with the backing of PG et al. Please don´t make the mistake of putting security on the back burner. If anything you should use it as your primary selling point. If you´re comfortable with it, subject your internal architecture to public scrutiny. If you´re not, think really hard before you say "trade secret".

kfreds 14y ago

Intent is not the same as action, and as you said, no one (including you) thought it was urgent to upgrade your security. Shortly thereafter you discovered that there are black swans. The above is also very easy for someone (like me) to say when you´re not in the middle of it. You want to grow your business, and the benefits of working on security are hard to measure. I get it. That´s when you need to ask yourself what your priorities are, and if you´re in the business of selling turnips, or handling valuables such as bitcoins. Brian, you are where Zhou Tong was a while ago, although there´s no hype around your service yet. It has great potential, especially with the backing of PG et al. Please don´t make the mistake of putting security on the back burner. If anything you should use it as your primary selling point. If you´re comfortable with it, subject your internal architecture to public scrutiny. If you´re not, think really hard before you say "trade secret".