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Bitfinex has been hacked
- Tomte 11y agoHacked? A bitcoin exchange? No! It can't be! At least it's their first time. Others are hacked on a semi-annual basis.
- alvarosm 11y agoLet's hope it's actually the first time.
- nerdy 11y agoThough bitcoin exchanges being hacked seem common, it sounds like this one did a good job with layered security. Though we don't know what the damages total is yet, at least it isn't a complete loss.
- ryan-c 11y agoMaybe the post was edited, but I see "Although this incident is unfortunate, its scale is small and will be fully absorbed by the company." there currently. Hopefully it's true.
- ikeboy 11y agoTraced to https://blockchain.info/address/17owg8RWb73qfE5HeQk6gg6RAgEUfxPXks https://blockchain.info/address/17owg8RWb73qfE5HeQk6gg6RAgEU... 1581 BTC currently, or around $370,000.
- EGreg 11y agoI remember Bitfinex really stood outamong the other exchanes for its approach to technology and simplicity.
- the_mitsuhiko 11y ago[citation needed]
- chisleu 11y ago95% of the BTC aren't online, by their admission, which means 95% of the BTC might not even bet there. They could be using a 5% fractional reserve banking method and we wouldn't know unless everyone withdraws for a few days or so.
- brink 11y ago99.5%
- ikeboy 11y agoThat's every exchange, pretty much. Even if 100% of BTC are online, you usually have no way of verifying that. Cold wallets are considered essential for security, though.
- imaginenore 11y agoVerifying whether someone has bitcoins or not is trivial - all they have to do is sign a message with the wallet's private key. That functionality is included in the standard wallet software.
- ikeboy 11y agoYes, but most exchanges don't do that. The ones that do can do it with cold storage as well; it's orthogonal to where they are stored.
- kens 11y agoWhat do you mean by "fractional reserve"? I get the impression that the Bitcoin world means something different by that term than the banking world. Edit: I think some people are confusing fractional reserve (where reserves are less than deposits due to loans) with insolvency (where assets are less than liabilities). MtGox's problem was insolvency, not fractional reserve.
- ikeboy 11y agoThey mean that the company holds less bitcoins than the sum of their deposits. See MtGox for an example of when that went horribly wrong.
- tptacek 11y agoThe fact that people can be saying encouraging things about the technical design or security of Bitfinex should tell you a lot about how seriously to take message boards on this topic. Bitfinex was, according to reports I've read, derived from the source code for Bitcoinica, which was an exchange written by a 17 year old most famous for its spectacular security failures.
- waterlesscloud 11y agoDo you know anything about the current state of their security?
- tptacek 11y agoI won't do security work for companies like these.
- yellowapple 11y agoSo the answer, in other words, is "no".
- tedunangst 11y agoMaybe 2015 will be "year of the secure Bitcoin exchange".
- nerdy 11y agoMy comment was without any kind of adjudication about the hot wallet breach itself, just a friendly reminder that there's a lesson hidden here: situations where something "shouldn't ever happen" need to be considered in the context of our systems and businesses. It isn't a panacea but while $332k is a lot of money, $66.4M is a lot more.
- jedunnigan 11y ago>Bitcoinica They partnered with Alpha Point some time ago. A cursory google search will confirm that.
- alvarosm 11y agoThey should have stopped using that hot wallet immediately as soon as transfers not authorized by them happened. They detected that manually after a few hours, not automatically. There's still much to be improved in terms of security in Bitcoin exchanges.
- kushti 11y agoWe need for decentralized exchanges, like http://multigateway.com/ http://multigateway.com/ or Mercury
- alvarosm 11y agoNo, we need exchanges not built by a bunch of amateurs, opportunistic risk takers and outright scammers.
- vectorpush 11y agoThe guardian story earlier this week that talked about the NASDAQ using colored coins to represent ownership of financial assets seems like a pretty terrible idea when framed in the context of inevitable bitcoin theft. In this case, the hot wallet strategy minimized the financial damage incurred by the institution, but even this relatively small amount of bitcoin could have been a devastating loss if the coins had represented valuable NASDAQ financial assets.
- tinco 11y agoNot 100% certain on what their proposed colored coin protocol is, but any instrument that's not a block chain currency itself can simply be detached from the colored coin in case of fraud. I.E.: If you steal a colored coin linked to 5000 shares of Apple stock registered at a certain broker, then that broker might be informed that the colored coin was stolen, and then simply refuse to act out any transaction on the authority of the colored coin. NASDAQ, authorities and the broker can figure out amongst themselves what should happen to the 5000 shares of Apple stock represented by the colored coin. I imagine they'll simply fabricate a new colored coin and issue that to whoever lost the previous coin. It's important to note that because Bitcoin is a public ledger, it is trivial to tag and subsequently identify stolen colored coins. This tracability is probably exactly what makes NASDAQ interested in Bitcoin as a tool for financial transactions.
- vectorpush 11y agoWhat is the point of using bitcoin at all if a central authority is capable of rescinding the value of the coins at their discretion? The NASDAQ might as well skip the overhead of a global decentralized ledger and simply use a centralized system that they have complete control over.
- singlow 11y agoBecause NASDAQ does not need to be involved in each transaction unless there is a dispute or fraud is detected.
- noipv4 11y agocoincides with hacking of bitcointalk.org server. Interesting!
- jxm262 11y agocomment from elux on reddit seems like it gives some more plausible details. http://www.reddit.com/r/Bitcoin/comments/36uxxz/bitfinex_has_been_hacked/ http://www.reddit.com/r/Bitcoin/comments/36uxxz/bitfinex_has... I also remember this from a few days ago.. http://www.reddit.com/r/BitcoinMarkets/comments/353yu8/bitfinex_having_serious_lag_issues_be_very/ http://www.reddit.com/r/BitcoinMarkets/comments/353yu8/bitfi...
- kgc 11y agoAnd now Reddit is down...
- curiously 11y ago"hacked" = "stealing from your own website"
- ikeboy 11y agoThat would only be if they took customers' funds. They're saying that they'll eat the loss.
- bdcravens 11y agoThat's only fully realized if all customers pull out funds. If they're operating a fractional reserve, that's just a statement, nothing more. (There's zero reason why every exchange can't prove they're 100% funded on a regular basis)
- ikeboy 11y agoHow would they prove how much they have in deposits?
- alvarosm 11y agoSee https://www.cryptocoinsnews.com/bitfinex-passes-stefan-thomass-proof-solvency-audit/ https://www.cryptocoinsnews.com/bitfinex-passes-stefan-thoma... and https://www.bitfinex.com/pages/audit https://www.bitfinex.com/pages/audit But even if you trust that (just think that they could borrow the money or convert usd to btc specifically for the audit), it's only the BTC part. They have tons of USD deposited too, there's no proof for that. So there's no definitive proof that any exchange holds all the value it owes to its depositors.
- towelguy 11y ago> will be fully absorbed by the company So they'll pay with the money they stole themselves? At least they got some publicity out of it.
- PascLeRasc 11y agoThere's no connection between this company and the PC case manufacturer by the same name, is there?
- m0th87 11y agoNo, that one is spelled differently (Bitfenix.)