Bitcoin Forum

Bitstamp is open, now with multisig. Here's the interesting bit of a message from bitstamp's boss.

https://www.bitstamp.net/article/bitstamp-is-open-for-business-better-than-ever/

What’s new?

Our team has been working day and night to rebuild and restore security to the Bitstamp site so customers can resume transacting with us quickly, safely, and confidently. Bitstamp is now fully operational with a number of key improvements:

Multi-sig
* With the integration of BitGo multi-sig technology, Bitstamp is now the first and only major bitcoin exchange to incorporate the industry's best security practices available today.

Completely new hardware infrastructure
* The Bitstamp systems are running on 100% new hardware deployed from a completely secure backup of our code and data.

Amazon Web Services
* Bitstamp is now running on Amazon’s world-class AWS cloud infrastructure, architected to be one of the most secure and reliable cloud computing environments available.

Commission-free trading
* As a note of thanks to our loyal customers, all transactions conducted on Bitstamp through the end of the North American Bitcoin Conference -- January 17th (at 11:59pm UTC) -- will be commission-free.

We appreciate your patience and understanding during this disruption of services. Since 2011, we’ve worked hard to be one of the largest and most trusted bitcoin exchanges in the world. While this is a time of challenge for our company, we expect to emerge from this experience having set an even higher bar than before for trust and confidence in our services.

On a personal note, I’d like to thank the incredible teams at Bitstamp and at our lead investor Pantera Capital who have worked around-the-clock from multiple time zones in the last few days. I’m incredibly proud of the herculean work of this extended team, and grateful to the phenomenal show of support from customers, friends, and partners in the bitcoin community.

We look forward to serving you!

For additional information, please refer to our customer FAQ or contact our support team at support@bitstamp.net.

Thank you,
Nejc Kodrič
CEO of Bitstamp

panic buy! :)

No dump happening yet, appears the opposite in fact. Will be interesting to monitor how this unfolds.

Let me get this straight. If we use multisig is a hacker unable to steal our coins on Bitstamp?

However, Stamp still seems to be stuck on bitcoinwisdom. They're flatlined in fact and got bumped off my radar when I clicked from Bfx back to them.

Bitstamp is open,yeah (with multisig)! Nice that they improved the security.   ;D

You will hold (2) of the (3) keys needed to make a transaction.

Trading will resume at 21:00 UTC January 9th. I doubt they will be on bitcoinwisdom until then. They are not back on bitcoinity yet either, but the price on Bitfinex just peaked out at 297.3

No, multisig makes it more difficult to steal coins.

What happens if I hold (2) of the (3) keys needed to make a transaction, and the hacker cannot get my keys, but he can get the exchange's key? Can he steal my coins on the exchange?

No,the hacker cannot steal then the coins on the exchange,because he doesn't have your 2 keys.

No, he needs all three. Think of multisig like one of those fancy bank vaults where you must turn two keys at the same time, except with Bitcoin you can theoretically have as many keys as you like to unlock the address.

Thanks, that's good enough for me.

it's just raise the probabilty that your coins are stolen , 3! = 6 times more difficult

Good news for bitstamp users but not for bitcoin every one will start selling right now 

Bitstamp surprised me. They defused the whole situation with speed and grace. Compared to gox, this was very much a success (except for loosing the 18k in the first place).

Better than GOX :)

I would wait until trades resume and people able to get their money and their coins in and out before panic buying and consider the situation solved

I just withdrew a small amount of bitcoin as a test and it didn't take long. The trading's started and been going between 290 and 298 recently.

Multi-sig is great for individual customers and protecting their individual coins on the exchange, but how does one protect against theft of their protected coins from theft on the exchange (causing them to shut down and take your money)?

the bitstamp team showed the world that there is no goxxing around no more.

they deserve credit for handling the mess like pro's.

hasta la victoria siempre- bitcoin !

 8)


edit: frickin auto correction

how could they take your money without having your key as well ?
it maybe in their posession but they couldnt spend it without your key and you couldnt spend it without theirs
as far as thats how i understand they have implemented it but maybe there is another way ?

the fact that they had to "rebuild from the ground up" is pretty worrisome. glad to see them back up and trading, but my confidence in their competence is at an all time low. they have not been forthcoming about the nature of the attack, and i can't be sure that they are being forthcoming about the extent of the damage.

i mean, they could have done *worse* at damage control. but that's still where we are. damage control.

Could the panic buy be due to people who have cash on their accounts buying BTC as a quicker way to move their money out of Bitstamp?

gox alledgedly lost/stole   around 750,000 btc as well as tens of millions of dollars
its a big differnce when the hack is only 18,700 btc  and btcs are relatively cheap now in usd terms

I think Bitstamp will never be hacked again

Anyone with a sitting sell order on the books will have to give control of the Bitcoins to Bitstamp.  It's the only way to actually get execution on sitting orders.  Only Bitcoins that are not committed to an order on the books could be kept in a multi-sig wallet where Bitstamp has no access.  To go from that wallet to be able to use the Bitcoins in an order means waiting for confirmations.  So you either get multi-sig security with a confirmation delay to place an order, or you get no multi-sig security with no delay.

Seems valid.

no, they (should) use an internal database for trades.
all 3 keys will be needed when the btc are actually leaving bitstamp ( = when you withdraw your btc) - else multisig would make no sense and would be no advantage like you said

Very impressive.

This might become a problem in the long run. When you're trading, ease and swiftness of transactions is crucial. The constant signing and waiting could have negative effects on users of the exchange.

Since Stamp now uses multi-sig, does this mean that their wallets will all employ this technology when they are pushing their own money around in house? If not, traders will be stuck waiting while Stamp is making instant cash of facilitating trades fast on their end and slow on the trader's end.

Bitstamp has one key, BitGo has one key and a third key is stored offline.


http://bitgoinc.com/

They claim to use multisig now - can someone check if the deposit addresses start with 3 now?

If the not, then the hot wallet is not using multisig - and therefore not much has really changed security wise.

It seems they just migrated from cold storage to multisig for the cold wallet - which does not really improve security that much.

This means traders' Bitcoins are all in one or more community wallets controlled by Bitstamp.  Multi-sig protects their cold wallets.  But traders are not protected from Bitstamp themselves, and Bitstamp's hot wallets are still not protected from hackers as all keys required for withdrawals must be present on their AWS server for it to process the withdrawals.

Multi-sig implemented this way offers nothing to traders.

I guess they will use less coins in hot storage

Anyway, I think this proves that bitcoin isn't ready for mainstream yet. It's not secure and easy enough yet.
That doesn't stop it from going to $10k though as the market is still so fucking small for it's potential.
I can imagine it going to $10k and consolidate around $5k-$10k for several years(Where most of the infrastrucutre will be built) before getting into $50k range, $100k and eventually $200k

Its a good feature for us, but its a expensive feature for them

It does.

I wonder if it would be possible for miners to act as a clearinghouse? All trades through the exchange hot wallet are susceptible to attack. If you had miners both mining blocks and arbitrating transactions, you could have built in security at the level of the exchange as well.

Or would it be possible for an exchange to use placeholders for its hot wallet transactions? --The floating hot wallet keys on their server would be placeholder keys only for a quick processing. When the transactions completes and is confirmed, an instantaneous wallet key is used, transaction happens and repeat. Stamp would than be able to get their fiat or Bitcoin once the transaction posts and is confirmed.

Now transfer some Bitcoin out.  If it works quickly then Bitstamp has all keys required for withdrawals sitting on their AWS server.  A hacker can take multiple keys just as quickly as one key when they are all put on the same server.  A hacker may be slowed if they are on different servers.  But you cannot keep the keys offline and have functional withdrawals.  Offline keys would mean someone sitting in an office approving all withdrawals by entering a pass phrase for each one.

BitGo has one key and sign all transactions. They have spending limits and manual approval for large transactions.

Bitcoin Deposit
Send your bitcoins to this address:

3Jx ...

My main quibble with them is that they tout EC2/AWS as secure.  It is certainly reliable, it is certainly backed by a company that needs security, BUT, it is a virtual environment using Xen as the hypervisor. There have been security issues there and with paravirtual hosts in general.  It is kind of like private keys - if you don't have the keys, you don't own the coins, here, if you don't have the servers, you should be concerned about security.

I do have a non-Bitcoin server there and have for about 8 years, but it is a web server not handling potentially millions of dollars and could be restored elsewhere quickly.  It is quick, reliable, and not too expensive, but not rock bottom.

Much would depend on the architecture and multi-sig will sure help, but I would always worry about VPS when handling big money figures. Hopefully they worry about it too.

AWS does not necessarily imply EC2.  They did also reference new physical hardware as well so one can infer that they keep their secrets to themselves (and, in some people's theory, their less-than-fully-trustworthy staff :) )  Even if it is EC2 that they are using, there are a ton of things one could use a VM for which don't involve super-sensitive information.  Conversely, there are a lot of services besides EC2 that one could pass sensitive info through if the design sucks.

I've used AWS for various things in the past, and very possibly will in the future.  They are reliable, cheap, have got a large global footprint and are well peered.  One needs to have a rational design to avoid any potential lose secrets, but that's just standard system design.

good to see with great updates & free trade fee in bitstamp.

Stamp is no Gox, and I'm really glad to see them coming back to life.   :)

how is this multisig working?

I mean sure you can safely keep your bitcoins on stamp and then withdraw em.

But what if you'll want to trade? This will mean that every time you want to sell your bitcoins to some1 you would have to sign a transaction with the 2 keys. Or else the guy who bought bitcoins from you will be unable to use em as he needs the keys

https://i.imgur.com/re0ZnD0.gif

Surely multisig is 2-of3? Bitstamp holds one key, bitgo has one, the user has one. Two of these are required to spend the coins. Bitstamp likely clears funds with BitGo either in real time or periodically.

BItstamp = 100% SCAM-POTENTIAL

This multisig thing means that coins are stored on hot wallet all the time? Becuse Bitstamp can't move it? Or in private wallets of user? And every time they make a transaction user must provide third key?

I'm not up to scratch on how they have implemented multi-sig on their side (still reading up), but the bitgo website says: "BitGo can never access your keys or Bitcoin".

Edit: oh I see now that it says bitgo does hold one of the 3 keys and you hold 2 and each transaction requires 2/3 keys... not sure how that will work in conjunction with Bitstamp though and who would hold how many keys...

great news! i've put right my trust in you! I keep going to use your site!

not a word about 19k btc they've lost
are they going to refund em back somehow or we just supposed to forget about it?

I just wonder why the multi-sig wasn't being implemented in the first place and only after the hack took place. Also the 1btc tips at twitter seems to suggest that they are sending a message telling that the hack was simply nothing and they are fully recovered?

and my withdrawal is taking ages...  ???

Have you checked your account? Are you missing coins?

They had around 35k$ daily from fees so I think, that they wont have a problem with refunding people, who lost coins.

And since everyone will never withdraw all their coins at once, no one will ever miss those BTC.  Fractional reserve FTW!

Their hot wallet is empty. They need to fill it up from their cold storage when they wake up.

Hot wallet: https://blockchain.info/address/36mwH1Jg3AMVsEQqVaDSe9YFBTGebaHR1A
Cold storage: https://blockchain.info/address/1JoktQJhCzuCQkt3GnQ8Xddcq4mUgNyXEa

The fact that multi-sig is being implemented as part of the re-start tells me that it was pretty much developed and ready to go.  Seems plausible that this was the reality that caused someone to pull the trigger and take their payout while it was still relatively easy to do.  Indeed, most of these 'hacks' seem to be oddly well timed.  I'd guess that even the real hacks (if there even have been any real ones in bitcoinland amongst the staged events) leveraged exploits that had been in place and known to the attacker for a while.

looks like the volume went well back over finex in the last 24 hours, should imagine many people panicked and bought BTC to withdraw, expecting them to lose volume next few weeks.

i was watching the ticker during some of the high volume periods, and it looked a lot like huobi. no fee trades, then we start seeing hundreds bought and sold right at the spread within seconds/minutes of each other. and then the price hardly moves until other exchanges move. no fees = can't trust the volume.

if the exchange wanted to make it look like a high volume of trading was going on they could move funds around  to new  wallets they own anyway and nobody but them would know their not legitimate trades

(thats if they wanted to fake their trading volume )

Many site didn't accept to withdraw to multisig address and green address to . What the new in multiSig ?