Bitcoin Forum

I cannot fathom what people are thinking who use "online" wallets, i.e., wallets controlled by someone other than themselves.

Anyway, those dumb enough to have more than 50 coins in Instawallet just got instascrewed:

http://arstechnica.com/business/2013/04/in-wake-of-bitcoin-spike-mt-gox-under-ddos-instawallet-shuts-down/

https://instawallet.org/

Seriously people, don't let other people store your coins unless you want to lose them.

Jan said everyone will get their money back.

I'm not so sure.  My wallet address returns a 404. 

Eventually is the key word in that sentence.

Also, if somebody hacked the wallet then obviously what they did is loot the biggest accounts. I think its pretty unlikely everybody will get their money back, especially if it was a big account.

stated on the instawallet website

INSTAWALLET SERVICE NOTICE

The Instawallet service is suspended indefinitely until we are able to develop an alternative architecture.

Our database was fraudulently accessed, due to the very nature of Instawallet it is impossible to reopen the service as-is.

In the next few days we are going to open the claim process for Instawallet balance holders to claim the funds they had stored before the service interruption.

Important information on claims submission:

For the first 90 days we will accept claims for individual Instawallets. Your wallet's URL and key will be used to pre-populate a form to file the claim.

After 90 days, if no other claim has been received for the same url, your Instawallet balance under 50 BTC will be refunded.

If several claims have been filed for the same url, we will process those claims on a case by case basis,
under the presumption that the claim we received first belongs to the legitimate balance holder.

Claims for wallets that hold a balance greater than 50 BTC will be processed on a case by case and best efforts basis.

The last sentence says it all  ( best effort basis )  :o

There's probably going to be some people who have less than 50btc with them that STILL wont get their money back due to the way their entire system was set up.

They are saying that if multiple people try to claim your wallet url that they give it to the person who claimed it first.  In other words, any thieves out there who have peoples wallet URLS just need to file a claim before the real account holder and the criminal will get that money not the real account holder.

How much do we know about the owners of sites like this ?  I'm guessing their personaly identity is pretty anonymous , I'm not making an accusation here but how many of these online BTC wallets are actually ran by hackers/criminals running a massive scam.

Multiple online wallets hacked recent, quite a few hacked in the past, 3+ DDOS attacks on major exchanges this week, Gambling BTC sites being DDOSed, larger Ebay scams, and Virtually no accountability or knowledge of who the owners are of the largest bitcoin services..........................  It's becoming more and more obvious that Bitcoins potentially biggest weakness is SECURITY.  And the whole idea of anonmity is nice but it's proving to be a haven for criminals and theives running scams.  Heck we don't even know for sure who created BTC , can we really say for certaincy that the entire BTC system isn't one massive bernie maddock level scam.

The only decent online wallet is blockchain.info, because you can backup your wallet and because everything is done client side. If the service disappear, people have the backup and are fine. If someone don't have a backup? Yeah well, nothing is idiot-proof  ;) If you don't backup your wallet it is your fault.

Saying that "nobody should ever use ewallets" is foolish.

There are many reasons why it's good to use ewallets. The guiding rules should be something like this:

1) Realize that funds stored with an ewallet have counter-party risk (though it removes some of the "user-risk" which is worth considering).
2) Some ewallets have more counter-party risk than others (based on design, reputation of owners, history, etc)
3) In general, it's not a good idea to store large amounts of funds at an ewallet for extended periods of time.

Ewallets can offer great advantages in certain circumstances, people just need to know how to use them intelligently.

Phew, I had 24BTC in Instawallet last year when it was $5.

Feel the same having coins in BTC-e while playing with a bit of trading now.

I limit my use of ewallets to store no more purchasing power than I would feel comfortable carrying around as physical cash in my IRL wallet.

I know the feeling!

The best advice would be to just use a limited amount of coins at an ewallet..  just what you need when traveling or whatever..