5 ms·

This guy wasn't the one screwed, OKPay (a payment processor) was; he took advantage of a several-hour window during the blockchain fork that happened a few days

This guy wasn't the one screwed, OKPay (a payment processor) was; he took advantage of a several-hour window during the blockchain fork that happened a few days ago, to send them coins, wait until they gave him money for those coins, then take the coins back. This sort of thing is a risk for those operating exchanges and payment processors, not for end users. He returned the coins later - he had to, since he used an account linked to his real name - but a more-anonymous version of the same scenario is theoretically possible. (On the other hand, there have been a few high-profile instances of end-users getting their coins stolen - usually by keeping them in an unencrypted wallet on a computer that gets a virus, but also in more exotic ways, like depositing them in an "online wallet service" run anonymously and registered to the Cayman islands.)

Nursie 14y ago
"This sort of thing is a risk for those operating exchanges and payment processors, not for end users." How so? Any double-spend is a risk for anyone receiving BTC, surely? You sell something on an ebay equivalent, someone sends you BTC, you send the goods but later find out there was a fork and double-spend situation, what happens?
- aidos 14y ago
  It is - but how long do people wait before sending goods on ebay? If you're sending them a couple of hours later you check to make sure it's ok before you send. Ebay is a case where bitcoin works well because you can afford to wait before sending the goods. Realtime processing is where bitcoin really isn't safe. Is there a mechanism that alerts of these forks in the blockchain? In this case it seems that something as simple as a single machine watching a 0.7 miner and 0.8 miner would have been enough to alert everyone of the issue before it went as far as it did.
  - Nursie 14y ago
    "It is - but how long do people wait before sending goods on ebay?" Sometimes only minutes after payment. "If you're sending them a couple of hours later you check to make sure it's ok before you send." And if the fork lasts longer than a couple of hours?
    - aidos 14y ago
      Well if that's the case then they won't be excepting bitcoin. There's just no getting around that. That's why I'm saying there should be some overview mechanism to alert of these blockchain partitions. In general you can be sure the transaction is safe fairly quickly. If the network is obviously partitioned (as it was in this - so much so it was basically manually fixed) you'd be a fool to accept transactions until it's back to normal. The problem in this case is that someone handed over $1000 in cash while the network was partitioned without sense checking it. The bigger issue is that there doesn't seem to be a mechanism in place to help them do the checking. Really there should have been big red "bitcoin is not safe to use right now" flags going up. Personally I think that the place bitcoin could really win would be something like micro donations for content (instead of paywalls / ads). Read an article you like, click a button at the bottom to send over a small amount of money. That feels like the sort of use case it's really well suited for. Payments that can take a while / fail in very exceptional circumstances.
- lmm 14y ago
  For ebay-equivalent the window probably isn't large enough - we're talking hours, and this was a rare occurrence. Someone selling digital goods could well be vulnerable though.
makomk 14y ago
If someone did a big enough version of the attack on one of the smaller exchanges or payment providers there'd be plenty of end users hurting, trust me - with a big enough attack they're not going to be able to swallow the losses or pay back customer funds, and there's no FDIC insurance for Bitcoin deposits.

Nursie 14y ago

"This sort of thing is a risk for those operating exchanges and payment processors, not for end users." How so? Any double-spend is a risk for anyone receiving BTC, surely? You sell something on an ebay equivalent, someone sends you BTC, you send the goods but later find out there was a fork and double-spend situation, what happens?

aidos 14y ago
It is - but how long do people wait before sending goods on ebay? If you're sending them a couple of hours later you check to make sure it's ok before you send. Ebay is a case where bitcoin works well because you can afford to wait before sending the goods. Realtime processing is where bitcoin really isn't safe. Is there a mechanism that alerts of these forks in the blockchain? In this case it seems that something as simple as a single machine watching a 0.7 miner and 0.8 miner would have been enough to alert everyone of the issue before it went as far as it did.
- Nursie 14y ago
  "It is - but how long do people wait before sending goods on ebay?" Sometimes only minutes after payment. "If you're sending them a couple of hours later you check to make sure it's ok before you send." And if the fork lasts longer than a couple of hours?
  - aidos 14y ago
    Well if that's the case then they won't be excepting bitcoin. There's just no getting around that. That's why I'm saying there should be some overview mechanism to alert of these blockchain partitions. In general you can be sure the transaction is safe fairly quickly. If the network is obviously partitioned (as it was in this - so much so it was basically manually fixed) you'd be a fool to accept transactions until it's back to normal. The problem in this case is that someone handed over $1000 in cash while the network was partitioned without sense checking it. The bigger issue is that there doesn't seem to be a mechanism in place to help them do the checking. Really there should have been big red "bitcoin is not safe to use right now" flags going up. Personally I think that the place bitcoin could really win would be something like micro donations for content (instead of paywalls / ads). Read an article you like, click a button at the bottom to send over a small amount of money. That feels like the sort of use case it's really well suited for. Payments that can take a while / fail in very exceptional circumstances.
lmm 14y ago
For ebay-equivalent the window probably isn't large enough - we're talking hours, and this was a rare occurrence. Someone selling digital goods could well be vulnerable though.

makomk 14y ago

If someone did a big enough version of the attack on one of the smaller exchanges or payment providers there'd be plenty of end users hurting, trust me - with a big enough attack they're not going to be able to swallow the losses or pay back customer funds, and there's no FDIC insurance for Bitcoin deposits.