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$4.1m goes missing as Chinese bitcoin trading platform GBL vanishes
- atmosx 13y agoProbably not complete but interesting list of bitcoin heists: https://bitcointalk.org/index.php?topic=83794.0 https://bitcointalk.org/index.php?topic=83794.0
- nwh 13y agoAmusingly enough, this isn't even an uncommon occurrence in the Bitcoin world. Either compromises or shady actors seem to take down a large portion of their services, usually taking large sums of money with them. It does look like a similar case to inputs.io and a few other sites too, people "invest" or store large amounts of money with a person despite the community making every attempt to warn people that it is a terrible, awful, terrible idea to do so.
- dualogy 13y agoAll these incidents give more weight to the conspiracy theory that Bitcoin is a govt. or central-bank project. "See? This is what happens without central authority. Now go back to trusting our currency. While we don't guarantee decades of stable purchasing-power preservation, we're not as volatile and our banks don't just appropriate your deposits outright.." ;) They wouldn't even have to be behind every exchange and instead could let stuff like this (and off-shoots like LiteCoin etc.) happen quite organically and still prove their point, as clearly visible..
- sanskritabelt 13y agoCan bitcoin guarantee weeks of "stable purchasing-power preservation"?
- dualogy 13y agoAnd how does that question in any way relate to my little digression?
- sanskritabelt 13y agoYou brought up the failure to guarantee "decades of stable purchasing-power" as a failure of g.v.rnm.nt and actual money, which is a claim that you think this is a problem solved by bitcoin.
- dragontamer 13y agoThey'll need to choose a government to blame, before just generically blaming "some government" before I start listening. Last week it was Britain, the week before that it was the US Government. Today, its the Chinese Government???
- sliverstorm 13y agoIn what way do the incidents substantiate a conspiracy? This is exactly what I would expect to happen; electronic scams are older than the internet. Unless I misunderstand, your "evidence" is like saying "the moon landing is bulletproof, impossible to disprove- which is proof they faked it, because if they faked it they would make it as real as possible"
- nwh 13y agoIf a government produced Bitcoin, they probably would have made it work before they announced it. The original Bitcoin was awful. You could spend /anybodies/ coins! The fact that it gained a community is pure luck.
- dcc1 13y agoWhat are you talking about?
- jusben1369 13y agoNo they don't. People who are predisposed to conspiracy theories will view this as some sort of data point. But given their mind is already made up they don't need more weight.
- anigbrowl 13y agoOh please. Every anti-government ideologue I've ever met seems to think that absent government humanity is made up of angels or Rousseau-style noble primitives. There are plenty of scumbags to go round, always have been.
- 001sky 13y agoEvery anti-government ideologue I've ever met seems to think that absent government humanity is made up of angels or Rousseau-style noble primitives. The 'noble savage' [edit:absent government humanity is made up of angels meme] is more a favored construct of the left wing. See, for example the art of Gaugain, Picasso and early modernism. Unless your liberterian ideaolagues acquantences were closest cubists or something.
- tptacek 13y agoThis is like something out of a Markov generator. 'anigbrowl mentions "Rousseau" and here come "noble savages", Gaugain, Picasso, modernism, cubism, and "the left wing". Huh?
- 001sky 13y agohttps://en.wikipedia.org/wiki/Primitivism https://en.wikipedia.org/wiki/Primitivism also https://en.wikipedia.org/wiki/Walden https://en.wikipedia.org/wiki/Walden and https://en.wikipedia.org/wiki/John_Muir https://en.wikipedia.org/wiki/John_Muir
- vbuterin 13y agoThe anti-government ideologues I talk to recognize this perfectly well; in fact, it's a core part of their philosophy. They argue that any center of power will actually serve as a magnet for sociopaths and eventually become infested by them, thereby empowering scumbags more than it controls them in the long term.
- sliverstorm 13y agoA specious argument if I ever heard one. For starters, what's with conflating sociopaths with scumbags? Sociopathy doesn't make you a criminal.
- dualogy 13y agoWow! Well I didn't say I subscribe to that conspiracy theory and didn't mean to peddle it either. Just that these incidents work in its favour.. funny how emotional everyone is getting here immediately! :D
- verroq 13y agoFrom a game theoretic perspective where no parties can be held accountable, being a scammer or hacker will always yield higher pay-offs. This is why Bitcoin will tear itself apart.
- sneak 13y agoThe same problem applies to cash. Your argument does not support your conclusion.
- l0gicpath 13y agoCash on the other hand falls under institutionalized regulations that are backed up by legislations and law enforcement.
- tptacek 13y agoI don't understand. Who still makes significant purchases using cash? People buy McDonalds hamburgers with credit cards.
- voltagex_ 13y agoHere in Australia, we still have numerous retailers who don't accept credit cards or have minimum purchase amounts - due to, I presume, the cost of accepting credit and debit cards here.
- nopassrecover 13y agoI don't know whether costs are reduced for PayPass (tap to pay), but it seems anecdotally that any place supporting PayPass has removed credit card minimums.
- XorNot 13y agoI haven't carried cash in months due to PayPass (and discovering my debit card actually had it). I still don't like the "always on NFC" nature of it (I want a button on the card to turn it on), but it's quick and seems to go through a lot faster then the old PIN systems.
- kerkeslager 13y agoYou have so many options for storing your Bitcoins which don't even involve trusting that your own internet connection is secure, let alone trusting someone else with your Bitcoins. We need trustworthy exchanges for buying and selling BTC, but once you have BTC I am not sure why anyone would trust someone else to store them long-term.
- kybernetikos 13y agoBecause they don't trust themselves and their equipment not to lose their private key.
- iSnow 13y agoThat's toothing troubles. Smarter people store their coins offline or on a secure laptop only they control. Some years down the road, maybe we'll see large corporations offering exchange, escrow and hosted wallet services. Currently it's the wild west.
- frandroid 13y agoSo bitcoin has given us untraceable currency without the state, except that without traceability, you also have no accountability, no justice, no law. This libertarian nightmare will soon come crashing down.
- waterlesscloud 13y agoWhy do you imagine there's no traceability?
- Anderkent 13y agoYeah, exactly. That's why no one uses cash anymore. Just think of it! If you give someone your cash, they might just disappear! /s Bitcoin won't die just because people that want to ride the bubble lose some of their investments. It'll slow down, of course, but storing wealth is not bitcoins selling point, and trusted central exchanges are not essential to the model.
- dragontamer 13y agoHow do you exactly expect to convert your current dollars into BTCs without an exchange? Also, exchanges are natural monopolies. The more people that go to a particular exchange increases the network effect of an exchange. More people == faster trades, faster trades == more fair prices. Exchanges will centralize because the economics and network effects of exchanges demand centralization.
- waterlesscloud 13y agoThe exchange market is currently in the process of decentralizing. Counterintuitive, perhaps, but it's happening.
- dragontamer 13y agoIt sure is, because Mt. Gox messed things up with their customers. Mt. Gox WAS the central exchange for some time, but they have squandered their position. Anyway, the forces of physics can be resisted: A thrown ball goes against the flow of gravity, and even Airplanes and Birds can fly for extended periods of time. But in the long term... almost everything follows gravity in the long term. Similarly, centralizing market forces (in particular: the formation of "natural monopolies") are a known and documented phenomenon. But in the long term, the BTC Market gains more benefits from centralizing... than decentralizing.
- sashaeslami 13y agoDoes coinmkt.com or Mtgox.com solve this issue?
- sashaeslami 13y agoFrom my understanding Coinmkt.com is the only venture in the space that has the red tape as locked up as possible.
- pmorici 13y agoNo, you have to keep either coins or cash on deposit with an exchange in order to trade. The smart thing to do is not store your coins on the exchange unless you are actively buying to selling them but plenty of people get lazy and just let them sit there.
- dragontamer 13y agoAnd if you've got money holed up in Mt. Gox, who's exchange rate is significantly worse than every other exchange, what do you do? Ask anyone 9 months ago whether or not trusting Mt. Gox was a good idea. They were the largest and most reliable exchange, and now it has become increasingly difficult to get your money out of it. And now the exchange rate on Mt. Gox itself has been effected by their problems...
- pmorici 13y ago"And if you've got money holed up in Mt. Gox, who's exchange rate is significantly worse than every other exchange, what do you do?" I'll tell you what I did, I bought coins and transferred them out of there ASAP. The official line is that their bank will only do 10 outgoing USD wire transfers per day period. Of course limiting outgoing transfers is the same strategy you would want use if you were financially insolvent and wanted to forestall a run on the bank.
- dragontamer 13y agoYup, that is the correct strategy, but Mt. Gox's inflated exchange rates punishes you for adopting this strategy. But this is definitely the right way to go.
- antonius 13y agoBeing someone who got scammed out of ~5BTC back when they were ~$50 dollars, this happens way too frequently. We only get to hear about the large cases.
- hatred 13y agoI am new to BitCoin. Can someone help me understand how the money was stolen ? I thought coins are stored in user wallets ?
- Anderkent 13y agoPeople transfer bitcoins or fiat to the service, then never withdraw.
- vinhboy 13y agoGBL is for bitcoin like what Etrade is for US dollars (well, sort of). Imagine one day Etrade just disappeared... Then all the money people had in their Etrade account would disappear with it. If you had your money in your wallet, and Etrade disappears, nothing happens to your money. Same with a bitcoin wallet.
- MAGZine 13y agoThey are, but if you wish to exchange currency to/from real dollars, then you need to use an exchange like this, who will "trade" you BTC for currency. Unfortunately, if you had currency stored with the exchange, but did not make a transaction for real currency, it has simply disappeared.
- jafaku 13y agoYou can also trade in person, like people have done for thousands of years with gold.
- LAMike 13y agoUnfortunate. Hope it doesn't scare off China's BTC community
- malandrew 13y agoSeems to me like bitcoin is the perfect business opportunity for people with the security skills and know-how to do really really well. The bitcoin world needs solid reputable security professionals to operate the exchanges and wallets. I'd love to hear cperciva's or tptacek's take on bitcoin as a startup opportunity since they are prime examples of people who could startup a bitcoin business and instantly attract people since people would trust them to do what is right.
- dragontamer 13y agoYou mean, financial services? Financial Service companies build trust and relationships with people. This has nothing to do with "security", and everything to do with "How can I be sure that the other guy isn't a jackass??". Paypal became popular as a financial service to Ebay purchases. The startups that are running themselves as trustworthy businesses will get ahead. But a year, two years, or even three years is not enough to gain a decent relationship. Lets see if "Coinbase" can weather the storm
- simonebrunozzi 13y agoWhich storm is Coinbase going through?
- dragontamer 13y agoThe question that needs to be answered is: can Coinbase (and other reputable BTC services) establish a trusted reputation with their customers when so many other BTC services are either disappearing or outright scamming their customers? Or will the general public look at Coinbase and think "that newfangled unreliable Bitcoin thingy".
- PeterisP 13y agoThe current case has zero problems with technical security - it's the ages-old problem of someone holding money of consumers and then running off with it. There's a single solution (that bitcoiners tend to dislike) - regulate all such entities, requiring them to (a) verify their identities, and (b) post bonds/statutory capital in proportion to all held funds, to ensure that depositors are paid back if the company folds or turns out to be a fraud, i.e., the same rules as banks have to follow.
- avolcano 13y agoThis is why I always find skyrocketing conversion rates of Bitcoin so funny: it's certainly not impossible to get money out as a traditional currency, but it's damn sure fraught with peril.
- alttab 13y agoAlso known as theft. Pesky regulations... As more people use bitcoin, they can only react when things like this happen. Take that lesson and carry it with you.
- MysticFear 13y agoNothing to do with regulations, all to do with law enforcement. Theft is illegal.
- PeterisP 13y agoIt has everything to do with regulations - "theft is illegal" wasn't stopping bankers from simply running away with customers' deposits, which used to happen - only regulation did that.
- jusben1369 13y agoIt's important to remember that millions of dollars are lost daily globally to CC fraud.
- anigbrowl 13y agoOut of trillions of $ worth of transactions. It's the rate, not the absolute value, that matters here.
- Houshalter 13y agoTrue but credit cards are inherently vulnerable as you just need their number, whereas your bitcoin wallet is completely safe until you give it to someone else.
- sanskritabelt 13y agoWell you know if my CC number gets stolen, generally the worst thing that happens is my bank calls and says 'hey we're sending you a new card, sorry for the inconvenience' which ok is a real pain if you're traveling internationally or something, but but if something happens to your bitcoins, you're never getting those back.
- Houshalter 13y agoThe point is they don't get compromised in the first place because you don't just trust people with your bitcoin wallet like you have to with a credit card.
- goblin89 13y agoA system that is almost impossible (if used properly) to compromise still can be compromised. Meanwhile, ability to easily recover from such events reduces their significance and might be more valuable for some users.
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- vertis 13y agoThe currency may be P2P, but the trading of it is mostly certainly not. I wonder if it's possible to create a more P2P trading platform for digital currencies.
- fat0wl 13y agofor anyone unfortunate enough to have clicked this comments link.... the tl;dr is "the GOOOOVernment mannnn money money govt sucks MUGGERS. bitcoin is stupid. bitcoin is GREAT! credit cards are like bitcoin but the BANKS are the REAAAAL thiefs post-modernism post-modernism capitalism 'Hello!' the government. THE government. wallets were stupid to begin with. Electronic currency is flawed i hate bitcoin/creditcard cash is flawed cash. Rousseau." My 2 cents, FWIW... the people I see locally spoutin bitcoin aren't true patriots who believe in ultimate freedom, they're more like get-rich-quick-schemers lol
- fat0wl 13y ago(which for some reason makes me paranoid that it's always on the verge of erupting into some banking world version of Amway...)
- sanskritabelt 13y agoThe only bitcoin person I've met IRL consistently made a bunch of bad decisions on a wide variety of topics.
- clarkm 13y agoYou don't know very many techies, do you?
- betterunix 13y agoWhat makes you think Bitcoin is overwhelmingly popular among techies? I can only name 3 techie friends who have ever actually used Bitcoin at any point in their lives, and I do not think any of them are still using it.
- jafaku 13y agoSo I guess the moral of the story is "Take risks"? Surely those bad decisions don't nullify becoming a "bitcoin person" (or a rich person).
- sidcool 13y agoThe article mentions that GBL vanished "without a trace". It's a disconcerting statement.
- beagle3 13y agoAll the Bitcoin-doom prophets in this thread should just consider that larger amounts of money disappeared when Refco and when MF Global went down; and that did not spell the end of brokerage, USD or anything else
- deleted 13y ago[deleted]
- dror 13y agoTulips, tulips, tulips. Some people never learn.
- jafaku 13y agoWhat does that have to do with a theft? Is gold or the USD a tulip too?
- netcan 13y agoThe interesting thing about all these bitcoin headlines is how they don't seem to slow bitcoin's advancement. I guess if the proposition is compelling enough it can survive a lot of hiccups. Slightly tangental: I wish there was some way of judging how much bitcoin is being used as a medium of exchange as opposed to a value store/speculation vehicle.
- shangrula 13y agoThis looks like theft of fiat money, not BTC. I.e. you deposit and then buy BTC. So they took the deposits. Hence why it's not that traceable, iconically it's easier to start looking for BTC's as the transactions are public. Cash, especially internationally, can be fuzzier.
- wehadfun 13y agoNovice question. If the transaction history of every bitcoin is public why couldn't the owners find their bitcoin? Do you have to have the bitcoin to get the history? Does the transaction history not say where the bitcoin went?
- dwaltrip 13y agoIt tells you the bitcoins have moved to address 1ekcj57h2kde45... (made up example). But you have no idea who owns this random address