Bitcoin Forum

Just finished dinner and checked to find one of my hot accounts had been cleared of Bitcoin in a transaction at 6:22.  Block just had first confirmation 30 minutes later, must not have paid a fee on it.  Not sure if this is blockchain.info related or not, but here's the address:

https://blockchain.info/address/1JKJdYSZNrWSca1b9ajejdmjuqooE7TLFr

Sucks, but my guess is this is all gone.  Anyway of getting back?  From my understanding, no, but huge score for whoever pulled this off.  Jerk off.

Hot account?

What client are you using?  Or are you using a hosted (shared) E-Wallet (e.g., Paytunia, Mt. Gox,, etc.), or perhaps a hybrid E-Wallet (Blockchain.info/wallet) ?

Your reaction to this 'heist' is quite understated...

Understated given I never keep more than .5 BTC in a hot account.  Pissed, yes.  Extremely. But could've been a whole lot worse.  I have the address both locally on a bitcoin client and on blockchain.info.  Can't rule out either it was a hack on my system, but i keep everything pretty tied down.

I don't buy it.  You just signed up for a bitcointalk.org account on 4/9/13, yet you have quite a lot more than 500 Bitcoins, and you've had a number of regular transactions since at least as far back as 9/14/12?  But on the forum, you're dabbling in microtrades of LTC and FC worth less than 1 BTC?

Nope, sorry.  You found a large recent transaction, then posted it as if it was yours.  You're looking for sympathy and free handouts.

Want to prove me wrong?  Sign a message with any one of the addresses from which your funds were supposedly stolen.

OP said that only one of the above addresses was his.  I retract my statement.

I posted same thing couple topics down.

Second time in two weeks.  One coin each time. Changed pw on every account and activated logging.

No log of withdraw.

Now getting freaked little.

Also, 'prove' you don't own the desti address, etc  :-\

:bitcoin:

This kind of post  is why you are hero member SgtSpike :D

Anyone handing out private keys should realise they have been robbed, even if they haven't lost coins yet.

Address in question is 1HHwDwxpeq4ZxRDE3TDNVfhT6jyj6Cx6nE

I don't have nearly 500 BTC.  That's what is screwed up.  Only one of the accounts on that list is from me which seems very odd given not sure how transfers from multiple separate accounts could be under one transaction. 

SgtSpike - Just went back and re-read my original post.  Don't recall asking for handouts.  Just trying to do public service.  Don't jump down my throat.

GyFo+kcxewu+KG51xxXHI+JFOhnpXX0oSr08QzWV22im9mnD1ksVAKxxq7VYkyXR+7tqHczO8DZS94PK7UPJ30w=

Ok, we'll run with this.

So your address is 1HHwDwxpeq4ZxRDE3TDNVfhT6jyj6Cx6nE.  What Bitcoin wallet software are you using?

have the bitcoin-qt client (behind firewall and encrypted wallet), blockchain.info (pretty tough password) and also have the address on my phone using bitcoinspinner for android (could be weak link).

My phone was hacked the other day (posted in off-topic.)  I didn't investigate it in detail...just wiped the phone and moved on.  I would have a lot of trouble trusting the phone for anything at this point.  Certainly not a bitcoin client or access to any on-line wallet with more than a few dollars worth of value.  I now don't use it for e-mail on my main e-mail account.  Just set up a secondary e-mail for very limited data and use which is a drag (vs. being able to check my mail e-mail from my phone.)  I guess I'll do the same with on-line wallets which should be easy enough.  I have a Windows machine but would prefer to not access any wallet with more than a few BTC from it as well so this will kill several birds with one stone.

Well, i learned my lesson.  Having access on phone is nice so i can transfer when I'm not in front of my machine at home, but agree that's only good for limited amounts.  Fortunately, I've lurked here long enough to learn about cold storage and how to set that up disconnected from network so I'm safe.  I PM'd the other guy that got hacked in the same transaction but haven't hear back yet.  Right now it would appear blockchain.info is the common factor, but if he was running same program on phone I'd probably consider that another possible weak link.

New wallet, one location. 

Yeah - phones are worthless for security.  I keep less than $25 on mine - in Bridgewalker - just for showing people how it works and giving them a couple of bitcents to get started playing.

If I'm going to be away from home and in need of bitcoin I take my linux netbook with an encypted bitcoin-qt hot wallet loaded with what I think I'll need.  I consider that adequate for moderate amounts.  I enter passwords with an on-screen keyboard.

Probably unrelated, but in my case:  I had only one or two apps installed.  Android OS. The only app I remember was a GPS satellite monitoring program...I'd replaced the phone recently because the GPS had given out.  Phones generally are not my thing and I mainly use it for it's navigation functions.

I was out of cell range, but hooked up to a friend's satellite via wi-fi (way way out a rural area where there is just about zero chance that the wi-fi was hacked unless through the friend's hard-wired compute or ipad or router.)  I received a chat and it was in some foreign script.  I then noticed that my keyboard had changed to Arabic.

Later that evening, I noticed several unusual drafts in my outbox so I am pretty sure that the attacker had accessed my e-mail.  I left the house not long after my the chat, so it is possible that the attacker got cut off and did not get a chance to fully do what he wished and/or clean up successfully.

Oh -- is this that BTC-e (hope I'm remembering this right -- sorry if I didn't) chatroom javascript hack we saw a week or two ago, anyone? IIRC, it used a keylogger, too.

Unfortunately I think more users are likely to be affected by this transaction.

Any users who own an address used in the above transaction (https://blockchain.info/tx/89f8223bc1d9140889496dea843df1854f17aee35b8ac5006ec1efee2ba5bd80) please could you answer the following questions:

• Do you have a bitcoin app on your android phone?
• Do you have a blockchain.info wallet holding the address in question?
• If you have a blockchain wallet do you use a public alias the same as your bitcointalk, bitcoin-otc or irc username?
• Do you have accounts on one of the following sites: BTC-e, bitcoin-central or mining.bitcoin.cz?
• Do you reuse the same wallet password on different websites (specifically the above sites)?
• Do you read the BTC-e chat box?
• Does your browser have Java enabled? http://isjavaenabled.com

I know someone personally who lost 4 BTC in one of these blockchain.info wallet heists, where the transaction taking his funds was a multi-txin transaction that combined the funds of many others.

My guess is the OP is not complaining of losing 500+ BTC, he just lost whatever BTC he had, which was part of a single theft from multiple people, the theft totaling 500+ BTC.

And that my friends is experience and good judgement.

re: casascius -- you are correct, I didn't lose 500+ coins.  I only lost 0.78, still stings given I haven't been at this for long and don't have a ton, but you were right to think that through versus jumping to conclusion like SgtSpike did.  Signed a message for him proving him wrong and never heard back.

re: Piuk --  I'm PM'd the other user to see if we were sharing any apps.  Would be difficult to go through everything or what we've downloaded to ensure no keyloggers, but...

    Do you have a bitcoin app on your android phone?  Yes - BitcoinSpinner
    Do you have a blockchain.info wallet holding the address in question?  Yes.
    If you have a blockchain wallet do you use a public alias the same as your bitcointalk, bitcoin-otc or irc username?  No. Separate name and separate password.
    Do you have accounts on one of the following sites: BTC-e, bitcoin-central or mining.bitcoin.cz? Account on BTC-e
    Do you reuse the same wallet password on different websites (specifically the above sites)?  Different passwords
    Do you read the BTC-e chat box?  Can't say I "read" it but messages are flashing up all the time while I'm on the site.
    Does your browser have Java enabled? http://isjavaenabled.com  -- Tough call on this one.  I've been running noscript for a week or so on Firefox on a fresh install, so should be protected there, but have had that address for a while and know I was on btc-e prior to installing noscript, so all depends when person would gotten my privkey.

Or an artifact of speed-reading.  I would not rule out the OP being a sock-puppet account (or just a fresh account.)  These are neither discouraged by the forum owner, nor would it be a bad idea to report a security issue.

It also may be the case that certain people are fairly involved with Bitcoin without having early (or any) involvement with this forum.  It's not unfair in my mind to classify this forum as something of a cesspool, and it is certainly a waste of time...particularly for those like myself who have limited self-control and much free time.

Actually been on here for just about a year - just never had any reason or desire to post until recently.

When you say "hot wallet" do you just mean one linked to the Internet? Online wallet? What are the limitations of an offline wallet?

Can you post a link?  I couldn't find a thread either in Offtopic or your history at a glance.

What phone?  What do you mean "hacked"?  Would like to know given I store up to about 10 BTC on my phone most of the time.

By 'hot' i mean one connected to the network that can be used to send and receive.  'Cold' storage usually means setting up a key you can store things then printing out a paper wallet or something similar and not having the private key/wallet accessible by any means on your computer.

Looks like someone had a busy day yesterday.  Traced where some of my funds went and over 2500 BTC got dumped into this account all yesterday after being routed bunch of different places.

https://blockchain.info/address/16WcStW5Mef1KrmyC9pMBKzKdp5RFsFxjo

I love how you can watch your money being stolen from you LIVE and there's really nothing you can do. hopefully, during one of those jumps, someone catches on to it and returns the funds like in the case of Ozcoin.

Innovation will solve these issues unless regulation decides to stifle creativity.

I have a customer who is a victim of this particular theft.

Here are his answers to piuk's questions.


He insists that he is keeping a secure environment and that neither his computer nor strong password were compromised.

Any leads on what could have caused this? Or who the thief is?

Will reimbursing affected users be considered?

I was asked to run Java last time I logged in to Blockchain.info. Is this supposed to happen? Think I'll transfer my Bitcoins to a paperwallet to be on the safe side...

That shouldn't happen, you were infected by Java, most likely. But how did Java exploit end up on Blockchain.info?

I didn't press "accept", so I hope I'm safe. But I can't log into Blockchain now without it popping up... Maybe I should uninstall Java.

It's too bad that stolen bitcoins cannot be redflagged so they can't be spent or sold on exchanges. If every bitcoins previous chain of owners can be verified it shouldn't be too hard.

It wouldn't be hard, but part of Bitcoins being Bitcoins is that they are fungible.  We'd be in for a whole huge mess if people started attempting to determine whether coins were stolen.  What authority do you go by?  If one person says funds are stolen, and another person says they were legitimately acquired, who do you believe?  What if you do not have services available to check the stolen-ness of coins prior to accepting them?  Not to mention, a proper criminal could simply send the coins to a mixing service, and then the taint would be spread across many different people and addresses.

This has been discussed many times before, and always ends up that no one wants to uphold any kind of taint on Bitcoin coins.  It just wouldn't work, and would largely kill Bitcoin.

I see you're point. Trying to make bitcoin owners traceable would also have similar problems. They only way would be to be able to secure a wallet with something more tougher to crack than a password. Same with emails, passwords are the weak link to their security.

For 0.78 BTC you just got a very inexpensive lesson in security.  Don't let those coins be spent for naught.

hmmzzz armory?

I am not convinced this has anything to do with Android. I've seen some chatter about brute-forcing attacks against blockchain.info wallets. Is it possible some older wallets have passwords that aren't strong enough? The b.i KDF is SHA1 repeated only a handful of times, iirc, because JavaScript is slow.

Are you confusing Java for Javascript? Or does noscript disable Java now too?

noscript, if properly used disables all javascript and all other functionality other than plain html. Has been that way since I've been using it... which is for a couple years now.

How does one even do that?

I'm not sure that it's possible in blockchain.info, but in the QT client, there's a button that says "sign message" or something like that.

o_O people still have Java installed? After the latest problems I ditched that sh!t and haven't looked back. How many zero-days is it responsible for now? 105% of them?

Is it possible someone found a way to download all wallets from blockchain.info and just started bruting 'em? Maybe someone found a list of identifiers and is just pulling them as they have time. They did have those security issues recently...

OP, might make sense for a thread like this to be called "blockchain.info hack" instead of "bitcoin hack". The latter is somewhat misleading.

I see, thanks. I'd entirely overlooked that, but in retrospect it's always been a feature that one can prove identity via ownership of an address.

I am collecting all the information I can, still not clear of the exact root cause. There are a number a blockchain.info wallets compromised in this transaction but i'm not sure it is exclusively blockchain wallets, some of the input addresses look like wallets from other clients (i.e. they use change addresses and transactions are not shown as being relayed by blockchain). More data points are needed.


I think it is possible to rule out an android problem, several users have stated they do not use an android app.

Brute forcing is a possibility but I remain sceptical about the feasibility of brute forcing 10 character passwords. A 10 character password, 10 rounds of pbkdF2 with 36 possible characters at 5 million guesses per second would take 80,000 days to search the entire key space. I'm not sure it even possible to achieve 5 million guesses per second http://arstechnica.com/security/2012/12/25-gpu-cluster-cracks-every-standard-windows-password-in-6-hours/ estimates rates significantly lower speeds (if  pbkdF2 can be considered close to bcrypt speed). That is for one wallet as well, this seems to be multiple wallets in parallel. All wallets have a unique salt so precomputed dictionary attack shouldn't be possible. Also I have setup several wallets with deliberately weak passwords that are unemptied.

All users affected so far have had JAVA enabled possibly this is the result of some malware spread through a java applet. I can't find the post now but there was a report of a malicious Java applet designed to collect wallet data.

Other possibilities are XSS or a leak of passwords from another site although there is is no direct evidence of this.

Agree.  Already had cold storage so was trying to be diligent, just hadn't moved since withdrawing from BTC-e.  Definitely have learned a lesson.  Keep hot balances low and only access bitcoin-qt from clean/sandboxed computer that I don't do my daily surfing on to avoid any type of java/javascript exploits.  Recommend the same for others.

Yeah, can I change it after the fact?  Realized that after I did it and it's definitely misleading.  Nothing wrong with the protocol or bitcoin in general - more apropot would be wallet hack.

I also just uninstalled java from my machine.

I think you can just edit your original post (at the top of this thread), and change the subject.

Tried to change original post.  Dont' want to single out blockchain.info as source in fairness to piuk as it could've easily been a java exploit - don't think we've gotten to bottom of it yet.

I re-imaged my Windows laptop from the recovery partition to get rid of it (and the creepy taskbar it installed on my browser.)  But my Windows machine is used irregularly for limited things which are not practical on my main workstations so it was relatively easy for me to do.   Backed up what few interesting docs I had in mega.co.nz before performing this action.

Now I don't even like to allow Microsoft or HP to install updates.  Since phone vendors are so willing to pre-install rootkits, and OS vendors seem happy to make that possible, it seems likely to me that commercial laptop and workstation vendors would be happy to follow suit.  The momentum behind the trend to make the Internet significantly more invasive seems to be building at an alarming rate.

---

BTW, so far my blockchain.info wallet seems fine in spite of the phone hack and gmail theft.  This seems to lend strength to the idea that the issue of this thread is not Android related.

Looks to me like it worked. "Wallet Hack" seems like an appropriate choice.

Does not seem like Android is involved at all. In fact, I am not aware of any Android-related Bitcoin thefts in all these years.

Unless I am missing something, the common denominator here is Java.

I did notice a Windows update last week - one lone security patch, outside of regular schedule - which only provided the usual "an issue has been identified that may allow a remote attacker blah blah". Does anyone know what kind of hole was patched?

"Dropped your wallet on the sidewalk" seems more appropriate than "Wallet stolen"

Android runs almost exclusively in a java virtual machine

I think this is the most likely explanation.  My friend also had coins stolen, and apart form Java which I don't know the answer to, she'd be a no to all the questions.

Android's not at risk from this sort of Java exploit. Other hacks are different matter - usually from installing something dodgy nd giving it permissions it shouldn't have.

can someone please explain this to me nicely,

cold storage.

hot wallet.

please give me the definition and an example

the only wallet i have is the encrypted on on my client.
thanks just trying to figure this out and learn

since the addition of the bitcoin:// uri in windows. do any of those that have lost funds do any "free bitcoin" faucets regularly.

i remember last year there was one that actually made my QT client start running.

also

check all the programs installed EG the miners, drivers, etc that are not from the official websites. even check if you have a trading bot that was not created, compiled by yourself.

there was a guy named litecoin trader that hade a closed source trading bot. his version one last year was very very "iffy" and he soon went quiet when questioning him. he now has a version 2 which is also closed source.

do any of you use a trading bot for btc-e / mtgox?

best cold storage:
make a brain wallet. never import it into a bitcoin client. and simply deposit funds into the public address.. store it safely on paper in a fireproof safe.. thats about as cold as you can get

hot wallet
private key is imported into a wallet and is connected to the internet. whereby a rogue webhost or a hacker can get to the API calls to empty the wallet of funds.

im guessing by wallet your refering to an address genrated but never stored anywhere digital then typed in when needed?

and whats the private public key parts , sorry i know im dense

I read a thread like this and it just blows my mind that anyone thinks that Bitcoin will ever move away from a fringe casino hobby.

I would side with you at times on this Shinobi, but then you need to really step back and realize the lack of understanding of most things that people engage with on a daily basis.  You use VISA and pay your bill at the end of every month, but very very very few people understand the mechanics behind credit card transactions, payments via the ACH rails or anything else involved with day to day financial life in 2013.  Yet there are trillions of dollars spent each year by people typing in their passwords to online bank accounts and pull pieces of plastic out of their wallet that is representative of fiat money (which is a whole other rabbit hole altogether). 

I think there is something behind this, otherwise I wouldn't be wasting my time here. What will happen (and you can see it starting slowly) is that VC money, independent development and ingenuity with start to develop tools that will isolate the average end user from the complexity while still giving them the benefit fo the technology.  It has already begun with services like blockchain.info aggregating wallets and providing cloud based services.  It will eventually progress to hardware based tools (similar to the RSA key fob many people used to have at offices) and move on from there.  Long BTC public addresses will be replaced by alias services (how? I'm not sure, but they will) and people will slowly become accustomed to using this a method of money transport.  I could certainly be mistaken but it has attracted enough interest and has engaged enough people's aspirations that even if the current instance of BTC doesn't make it to prime-time, something similar will.

I once read that all it takes is for 10% of the population to be extremely excited about something (whether it be a fashion, technology, fad, etc) and it will become mainstream (given the average persons indifference and apathy).  While I don't think we're at the tipping point yet, the ideals behind this project is resonant enough with a population in turmoil to energize that portion of the population and turn this truly into a movement.

Yes, this is an area need improvement, currently the usage of the wallet is still too complex and dangerous. Maybe bitcoin will never be used by the majority, it seems many people really cannot/don't have time to take care the security of their own money, they have to rely on some secure money storage service like a bank

piuk, how are you generating keys for wallets? Is it possible it's not random enough and someone has just been able to find the keys by brute forcing the seed to your RNG? bitaddress.org uses mouse movements to add more randomness and it doesn't seem like you do something like that.

Thank you for the thoughtful reply. What I think, however, that you are missing in your comparison between BTC and electronic fiat  payment systems - and which is absolutely fundamental to why such fiat systems hold consumer confidence - is that there are "consumer protections" built-in to the electronic fiat infrastructure: reversibility of transfers, limited liability for fraud, etc. Whether we admit it to it or not, we use our credit cards with confidence because of the transaction protection built-in (and for which we admittedly pay a steep price in the form of high interest rates).

Admittedly, the transaction of fiat in its traditional form as cold, hard cash does not carry this benefit, and in this way, is identical to BTC in irreversibility. But BTC shares the worst of both worlds - the ease of theft introduced by the digital medium in which it exists and through which it is transferred and the fact that, for all practical purposes, it only exists in this medium.

The average person knows how to protect paper currency - hiding it in his pocket. If the average corporation continues to struggling with preserving data integrity, how can we expect an individual to safeguard his/her Bitcoins or, as importantly, feel comfortable enough in the safety of the medium to invest significant value?

This is why I feel that Bitcoin's success will have to come at the hands of a well-funding backing that can develop mature infrastructure. If we rely on a room of engineers in an office suite in Tokyo to be the de facto standard of security, along with a few open-source/not-for-profit organizations, then there really isn't much to offer the mainstream. But of course, this flies in the face of the anarcho-libertarian wet dream of a decentralized currency.

Easiest to implement would be XSS - just about every site seems to be vulnerable these days due to browsers and webapps sucking. I would look for that first.

Java is a giant POS - useless other than as an attack vector - even Macfags got 0wned via Java last year. I have no doubt there are hundreds of zero-days lurking...

If blockchain passwords are only SHA1-hashed, depending on the seed, if somebody got ahold of the DB passwords could be cracked using rainbow tables.

I think that the problem is not so much ignorance as it is that computers (including various devices) and networks are not designed for keeping information private.  Indeed, the trend is strongly in exactly the opposite direction (think Carrier IQ.)
 
If a person's pics from the wedding they attended the weekend before were as valuable as BTC there would be few which remain private for very long.  It is unlikely that things are going to turn around simply because it is needed to make Bitcoin safe for users.  Probably just the opposite in fact.  OTOH, I do expect that if Bitcoin is not quashed in it's early phases, there will be large and competent service providers who will kindly take care of user's BTC for them, and will likely do it...um..."for free" as is the case with e-mail, social media, etc, etc.  Problem solved.

So, interesting development this morning.  I shut down the wallet I had with blockchain.info yesterday after it was potentially compromised and decided to just start with a fresh new wallet hosted there.  Very strong password, different identifier.  Java not installed on my machine and scanned for malware.

Received this this morning -- from blockchain.info notification:

Authorize log-in attempt
An attempt to login to your blockchain.info wallet was made from an unknown browser. Please confirm the following details are correct:
Time: 2013-04-27 07:17:42
IP Address: 77.109.138.42 (Switzerland)
User Agent: Mozilla/5.0 (Windows; U; Windows NT 5.1; en-US; rv:1.8) Gecko/20051111 Firefox/1.5
If the above details are correct please use the following login link:
https://blockchain.info/wallet/[blocked out for obvious reasons]
If this login attempt was made by you this email can be safely ignored however you may wish to change your wallet alias.

and this...

An attempt to login to your blockchain.info wallet was made from an unknown browser. Please confirm the following details are correct:
Time: 2013-04-27 08:38:09
IP Address: 5.9.121.38 (Germany)
User Agent: Mozilla/5.0 (Windows; U; Windows NT 5.1; en-US; rv:1.8) Gecko/20051111 Firefox/1.5
If the above details are correct please use the following login link:
https://blockchain.info/wallet/[blocked out for obvious reasons]
If this login attempt was made by you this email can be safely ignored however you may wish to change your wallet alias.

Apparently there is still some sort of malware out there attempting to hack the blockchain.info service.  Machine was clean when I set this new wallet up, only way I think they could've possibly found the address is through scanning potential aliases.  Admittedly, my alias is a plain word so possible they could've just tried brute force finding an alias that would lead them to identifier and tried to log in from there.  Otherwise, can't imagine how they would've gotten it.  Just a lead for PIUK to follow if he's interested in trying to button up security on the site.

I probably missed it, but had any of the involved accounts 2FA enabled?

that could be quite true. blockchain.info should monitor access/ip patterns to spot such attempts.

more importantly, i stronly suggest to enable two factor authentication. (and if you use email, think about the email security … gmail has 2FA too)

Someone tried to login to my blockchain.info wallet, too. I don't have any coins there and can't even access it myself (lost the password), but the timing is curious.


The alias for that identifier is my username here, so it might be a coincidence. Just thought I'd let you know, in the off chance that this is related and might help. This is the first time I received such an email, even though I made that wallet last year IIRC.

so you seem to think they are getting passwords and usernames and alot of people use the same on diff sites...!

there's going to be some unhappy people in the next 48 hrs.

I note with the email I received, it checked out as me at my computer from my IP....?????

maybe my computer is infected????

the times appeared to be consistent with my own login...not malware...




but I do not run java

I got this email too:

----
Authorize log-in attempt

An attempt to login to your blockchain.info wallet was made from an unknown browser. Please confirm the following details are correct:

Time: 2013-04-26 22:03:19
IP Address: 46.167.245.50 (Czech Republic)
User Agent: Mozilla/5.0 (Windows; U; Windows NT 5.1; en-US; rv:1.8) Gecko/20051111 Firefox/1.5

If the above details are correct please use the following login link:

https://blockchain.info/wallet/<removed>

If this login attempt was made by you this email can be safely ignored however you may wish to change your wallet alias.
----

I don't have any coins there, so good luck with that. However, I used a common word as the wallet identifier, as some other people here apparently did. I am guessing someone is blindly trying weak identifier/password combinations.

I too have received 5 "login requests" in the past few days 1 from sweden and 4 from the USA. Too bad someone already hacked into my wallet and took my .5 btc on 4-21. They can have the .00000004 for all I care.

.5 hacked and sent to 1DvySR2sgb1iZHBePQ9H3Vv1PoVYrDsF5A


login requests from USA IP
USA Time: 2013-04-27 20:56:57
IP Address: 69.40.145.118

login request from Sweden on the  26th
Time: 2013-04-26 20:48:33
IP Address: 194.132.32.42 (Sweden)

that wouldn't be the case with me though Jubalix - I used a unique alias and unique password on blockchain.info - couldn't have pulled it from anywhere else.

okay....then the injected javascript or sever-side client re direct hack

Update - after speaking some more with my affected customer I am no longer convinced his password was indeed strong enough.

Maybe passwords were brute-forced after all? silvereagle - just how strong was your password?

Will be happy to hear about any progress in figuring this out.

I now believe I know how they got my friend's coins.


She'd given her account a short, 4-letter alias.  Her 10-letter password began with that alias, in a way that a human might be able to guess the first 8 letters(the final two were numbers).  Doh.
 
I believe that several attack vectors are being used, and that one is someone is cycling through short aliases, perhaps regardless of spelling, and longer aliases that are dictionary words. Knowing the alias used to be enough, without 2 factor, for blockchain.info to give up your encrypted wallet. They are then brute forcing passwords, trying both common passwords, dictionary words, and others beginning or ending with the alias.

Guess there are a lot of GPU clusters coming available now that are basically set up for brute forcing passwords .... "strong" password does not mean what it used to?

thats why you need 20 plus long password

Alias was very short so may have been hackable.  Password was 15 characters long but made up of multiple words that may have been found in dictionary.  Possible but permutations to put that many words together would still be extremely high.

Do any of those wallets have easily guessable aliases?  I imagine if they had, they would be empty now.  Of course, now you're forcing email confirmation for aliases (sometimes, always?) so it wouldn't work so easily.

Here is an example of my logins for banks and Mt. Gox:

Username: kl2uggsyf3yue9g4e2
Password: t#nocq2*l4c*b1yibxf%tazzh0^$)^ft0

Both are limited by what the system will accept. Some of my bank usernames only accept letters and numbers (alphanumeric). Some corporate bank accounts also include a bank generated company code (which I don't have control of).

The above is not an actual account, it is just an example.

For forums, like this one, I use a simple username, like, Dabs. The password is just as long and complicated.

Where my username is not likely to ever be seen by anyone else, I pick a long random username. Banks and bitcoin exchanges and bitcoin wallets are examples.

I would like to see sites use KEY files like true crypt does (but check client side never upload)....a JPG as a KEY file is basically unhackable, even keyloggers would be hard as they would have to record where you pointed your mouse

Keyfiles stored on your computer would have to be uploaded to their servers for hashing, OR your client side browser will have to perform the hashing offline, and submit your result online.

In either case, MITM or eavesdroppers can intercept the keyfiles. There would have to be some sort of public key or SSL encryption going on for this to work, so no one else can grab your keyfile or the hash of that keyfile.

If your computer is compromised, they can get your keyfile.

but how would they know which out of 1x10e6 files is my key file, or which combination of 2, 3 or more key files is are my key files?

how do they even know i use a key file???

Were you a victim of this? Are you providing evidence that this was not brute-force, or simply explaining how to properly choose passwords?

Just a friendly PSA that if you ever had a weak password or a weak alias on your blockchain.info account, then someone could be running bruteforce on your wallet as we speak, regardless of whether you later upgraded the security (e.g. added 2FA or added an IP block, or deleted/changed your alias)

So, if you upgrade your security, I recommend you move your bitcoins off the keys that might have been previously compromised.  It's not like changing your password on blockchain.info changes your keys.

If in doubt, generate a new blockchain.info wallet, set up 2FA and secure passwords, IP blocks etc etc, then move your bitcoins from your old potentially compromised wallet to your new one.  I personally would consider any keys stored under an 'insecure blockchain.info wallet' compromised (but not perhaps until some time in the future).

Will

Also having a feature to block other IPs from entering the account would be nice, with the ability to add exceptions(home,work,phone).

best user and password is= empty wallet

For storing large numbers of bitcoins an online bitcoin bank is needed. Unfortunately it will only be a matter of time before it is hacked or the owner of the site absconds with users bitcoins.

The keylogger trojan or malware is surely going to be capturing your screen. They can know which file is your keyfile. I'm not saying that this is being done now, I am saying this is possible.


I don't use block chain, so I am not a victim, merely showing how to properly choose good passwords.

no key loggers don't usually do screen captures....you would soon notice this as your hard-rive would be full or your bandwidth consumed or always slow....

it would probably help if blockchain's iphone and android app didnt store the main password in plaintext.

Blockchain.info's My Wallet service already offers this ability.  It can be found under the Security menu option on the Account Settings page.  (Of course, this won't help if a hacker already has copies of your private keys.)

There's an update available for Android that fixes this. https://bitcointalk.org/index.php?topic=40264.msg1966450#msg1966450

Create a new account from a Linux liveCD and consider your computer compromised. Use someone elses computer. Set up two factor authentication. Perhaps consider investing in a Yubikey.

Why?  If you're really that worried about losing your coins, do a paper wallet and put it in a safe deposit box.

Still, imagine that they have downloaded every wallet on Blockchain or at least very many. They can run each password against each wallet in turn, which may make for a viable / profitable attack.

Timeout, strong password or not, wouldn't complete 2 factor authentication have saved him here?

Yet again, 2-factor authentication would have saved the day.  It really should be standard for on-line wallets forcing users to turn it off instead of requiring them to turn it on. 

javascript or java?

Was there any more progress on what caused this? Only noticed today that the small amount I keep on Blockchain was taken.

Sort of relevant.
This article at ARS shows how hackers are increasingly able to crack passwords that we would think are strong.
http://arstechnica.com/security/2013/05/how-crackers-make-minced-meat-out-of-your-passwords/ (http://arstechnica.com/security/2013/05/how-crackers-make-minced-meat-out-of-your-passwords/)

I hope in the near future someone comes up with a viable solution for the authentication problems we face.
2 factor authentication is a big help. But, getting services to offer it is a challenge, and then an even bigger challenge to get users to adopt it.

Excellent article, thanks for this.