Bitcoin Forum

I like to think most of us involved with bitcoins are not completely retarded and has some technical understanding of computers and internet...

SO WHY DO YOU GUYS CONTINUE TO STORE BITCOINS ON ANONYMOUS WEBSITES? Then come here to whine and cry when got taken out by said website.

- Every single bitcoins service operators currently in existence, no matter if it was pools or marketplace, are just basement outfits without ANY accountability and could disappear tomorrow. They are not regulated nor insured.
- Mtgox, mybitcoin, etc.. the list goes on and on of those sites losing your bitcoins.
- Everytime a major site gets scammed/hacked, bitcoin loses legitimacy and market crashes because so many idiots keep their bitcoins on those websites.  Are you all really this lazy that you cant be bothered to keep your own wallet file on an offline usb? I think it's in all of our interest to keep bitcoin alive.

Bitcoin by itself is a brilliant and secure system, it's the shady services operators and stupid people who trust those operators that gave false impression that bitcoin is not secure.

Below are some VERY SIMPLE steps you can take to protect yourself.

1) NEVER store more than 1 BTC on any website services for long periods of time.
 - To sell bitcoin, transfer the BTC to the motgox/tradehill etc.., sell immediately, then transfer the fund back to your bank.
 - To buy bitcoin, transfer the money to mtgox/tradehill, buy immediately, then transfer the btc to your wallet.

2) NEVER store more than 1BTC on any pools.  Deepbit etc..all allow automated btc transfer once they reach 1BTC.  If a pool doesnt allow that or need to wait a long time,  switch.

3) NEVER store your BTC online!  I honestly cannot wrap my head around why people would choose to store their BTC on some anonymous sites like mybitcoin.  If mybitcoin is a subsidiary of a sp500 company then i may consider it, otherwise no.  If i create a website tomorrow called mydollar.com and said i can keep your dollars safe, will you send them to me?

4) Create a separate wallet for long term BTC storage, have a USB drive with your wallet file, plug it to your computer to sync up and transfer BTC as needed, then unplug and store the USB offline.

It's really not rocket science, all this stuff is VERY basic. Bottomline: DONT STORE YOUR BITCOIN ANYWHERE ELSE BUT ON YOUR OWN COMPUTER/USB.   Then when the next website gets scammed/hacked (it is guaranteed to happen), you will not lose all your bitcoins and if everyone did that it in turn minimizes the market impact of bitcoin prices.



http://www.straferight.com/photopost/data/500/medium/double-facepalm.jpg

Holding them in your own client wallet has risks as well. Mainly due to user error... but user error is a risk. For this reason, it may make sense for people to store some amount online with exchange or ewallet, and some offline.

For a casual user with low amount of Bitcoins, I would not recommend even bothering with client software.

Online services will get more trustworthy over time as the market weeds out the bad ones. But it's very important for anyone involved with Bitcoin to understand that anywhere they are stored carries risks. Learn the risks and act accordingly. This is the price we pay to be early adopters of this new system without the taxpayer subsidized insurance of the FDIC =)

You are kidding right? tell me you are. Name ONE bitcoin online service that is legit and not just a guy running it out of his basement on some island.  The risk of storing your bitcoin on your offline usb vs on some anonymous website, isnt even up for debate. 

Now i can sort of understand how the scammers managed to get all the bitcoin so easily,  it's people like this guy.

What is your definition of legit? I don't think MtGox, Tradehill, ExchB or CampBX operate out of basements.

+9001

never have and never will trust a 3rd party to have claim over any of "my" coins. its just stupid.

I suppose Lehman Brothers and Countywide are "legit financial companies" not being run by some guy on an island.  How did they turn out?  There will always be people trying to take money from others, at least Bitcoin doesn't do it by force - like a taxpayer bailout/buyout.

it is just me or did almost every internet business start out of a garage, basement, dorm room, etc...
how in the flying pig do you think any business starts? with millions of dollars to create the perfect business with?

but i do agree i think it is stupid to keep btc on shady websites.

Storing your bitcoins on paper wallets is also a VERY SAFE way to go.

Generate your own paper wallet with open source software like the Casascius Bitcoin Utility (for Windows, source available at github).

If Mark Karpeles ups and walks away with all of the money on Mt.Gox, I will f*%king eat my shorts.

He's already walking with plenty as it is.  Just think - not just in fees, but in the ability to execute preferential trades knowing in advance what's going to happen.  (see a million dollars of bank wires coming in?  he'd likely buy before posting them!)

Great, but that doesn't mean he's stealing my Bitcoins, which is what this thread is about.

Sure, but it's relevant as a good reason for him to NOT steal your bitcoins, honest or not.

It's people like me that enabled scammers to get all the bitcoin so easily?

I merely said that holding one's own wallet carries risks, which it does. If you know how to safety use your own client and wallet, then it is safer than 3rd party sites, but that is a big IF. Before MyBitcoin scandal happened, more bitcoins were lost by mistakes by client users than from any online scandals.

My recommendation, if you have any substantial amount of coins, is to learn how to use your own wallet safely and store most bitcoins there. But, keeping a minority of them on a few ewallets and exchanges is not a foolish thing to do as long as one understands the risks.

And there are many online bitcoin services that are "legit." Can you name more than one ewallet service or exchange that "ran off" with everyone's money? The truth is that any established site that manages to gain the trust of the community to the extent that it has many bitcoins has an immense profit incentive to maintain that trust. This doesn't mean everyone is trustworthy, but saying something like "don't ever store any bitcoins anywhere online" is pretty silly.

Agreed.  That's why I disagree with the OP.  In many instances, MtGox being one of them, it's more profitable to run a legitimate business than to steal.

You guys dont seem to understand the basic concept of i am talking about. It has nothing to do with not supporting bitcoin startups, i am not saying dont use tradehill/mtgox. My point is dont store your bitcoins there for longer than you have to,  you have absolutely no protection against any of those service providers if they just got up and left, and it has already happened many times.  And everytime it happens, hundreds of thousands of bitcoins are stolen and dumped on the open market crashing the price and create chaos.  All because some of you idiots dont have common sense.

This is the very basics of how the business world works, your counterparty risk of storing your bitcoins on those anonymous websites is the same as you storing your money in some company in africa...

And i cant believe someone brought up mtgox, did you guys forget what happened to that site? The hacking, password dump, and the complete bs explanation they provided. The website is made by a bunch of guys running some scripts in their basement. They got lucky last time and didnt lose everything. I guarantee you if the loss was large, the site would be gone. Mtgox further reinforces what I am saying you are trusting your bitcoin to anonymous websites that 1) will purposely try to scam you then run or 2) poorly built, unsecure and easily compromised.

Why do you want to expose yourself to those risk when you could just keep your own bitcoins.  Is this really such a foreign concept to understand?  And everytime one of those sites get hacked with all the bitcoins you guys store on there, it shocks the market and make bitcoin less popular when they get dumped.  By contrast, if everyone kept their own bitcoins then if the website goes down it will be a non-event, as the loss will be minimal and it will not create market volatility.  

Cant believe I actually have to sit here and explain why storing your money on an anonymous unprotected website is a bad idea.   Is there a triple /facepalm photo somewhere?

yeah but if something happens to your machine or if that usb drive is corrupted, it's basically the same thing if not worse. Your argument is null.

Only those who take great risks will find great success.  Live a little!  If keeping a few hundred BTC on MtGox for immediate trading and profiteering means there's a slight chance that I could lose them all to a hacker, then I'm willing to take that risk.  FOR BITCOIN!!

Ahahahaha

I think most people here recognize (at least now) that keeping a lot of bitcoins online is fairly unwise. And that keeping one's entire stash in someone else's hands—whether a few coins or 25k—is just nuts.

That said, I'll ask you, what do you say to those wanting to spend their bitcoins on the go, wherever they may be? Keeping in mind that not everyone can setup an ssh to their home computer running bitcoin.

THEN BUY TWO USB DRIVE, OR THREE.  They cost $5 each.  I swear some of you would bought the brooklyn bridge if it was on sale, unreal.


How many people actually need bitcoin on the go? seriously why?

And you can use logmein.com  5min setup and free. 

Now that is a smarter idea. Don't store your bitcoins on a 3rd party web site/wallet, instead give a 3rd party remote control/access of your computer where your wallet should be stored.  ???

Mezze Grille. Personal "cash" exchange on the way from a meeting/party/hackerspace/whatever. You're waiting at the doctor's office and found a cool band you want to donate to that accepts btc. Replenishing your witcoin account (or anything similar that crops up.) Playing a quick round of bitcoin poker on the train. Etc.

The number of options here is only going to grow. I take it your answer to my question is "I don't know?"

And if I'm only going to trust any ewallet enough to hold a few coins, why on earth would I use some website/program/anything-not-open-source to remote access my computer?

because logmein is a legit company that is used by millions including fortune 500 companies, it is order of magnitude better alternative than storing your btc on some noname website. And most people dont need it, it's only for the 0.0001 that need to have "btc on the go" for whatever reason.

you are purposely trying to derail this thread, my whole point is you should not store btc on those unsecure websites ran by shady characters.  

but this basic concept is clearly lost with most of you, so i give up. Just dont come here and get all pissed off when mybitcoin2.com take all your btc.

i do believe there are independent alts to logmein, free and open sauce. as long as you make your own certs/signatures and exchange them before you leave you should be secure for the most part.

http://en.wikipedia.org/wiki/Comparison_of_remote_desktop_software
http://www.tigervnc.com/
http://www.uvnc.com/

if there is interest in this type of thing, i can do some more research and find the best solution, and perhaps do some videos on it.

So were do I store the USD I use to buy during downturns? In my wallet file?  :D
Actually, bitcoin has caused me to hold more usd than I have ever before. Isn't that ironic?

its better than having it in a bank i guess, unless you do have it in a bank or something.

and a continuation of my last post, tigervnc ended up sucking ass, and ultravnc is not FOSS. so im trying tightvnc, it looks more promising, im using windows btw, im sure you linux people are laughing at me right now.   :'(

tightvnc is good

no cert support, so i would not recommend it for anything where security is absolutely needed, like for anything over like $100 or so. although it runs the remote client in java so, it should be good on android from what i know. also, there is a really short password length max.

at this point unless someone says something else to try, id have to recommend something proprietary if you are going to deal with a lot of money.

I know that was in response to a question, but that deserves the Triple-facepalm (http://www.flickr.com/photos/rucken/4550667173/) picture you were asking for.

The real problem is that bitcoin infrastructure is immature and, due to the underlying immaturity of the computer industry, may remain so for decades. In particular, the "default" bitcoin client is largely a proof-of-concept. In order to use it securely, you need to understand at a fundamental level how your computer works. You need to not only guard against hardware failure with verified, off-site backups. You also need to make sure that any attacker compromising your day-to-day wallet is not also able to compromise your offline wallet (that may have been transiently written to the disk during creation).

The most secure way of generating a savings wallet is to generate bitcoin keypairs offline, then printing the result, then wiping the disk (or RAM if disk was not written to), then sending the coins to the public address from an Internet-connected computer. Secure storage of paper is a known problem that people understand well. However the are a few caviats to keep in mind: (1) You need a good quality, trusted random number generator, (2) any copy of the private key is equally valid, (3) AFAIK the 'default' client can not import such keypairs for spending.

If you are the average user who has not taken extreme measures to secure their computer, using an online service as your day-to-day wallet may be a reasonable way to limit the damage if your day-to-day wallet gets comprised. One difficulty is that the value of bitcoin has increased dramaticly over the past two years. What was once "spending money" may suddenly represent a substantial sum of money. Until the "default" client, or a third-party client that becomes trusted supports multiple wallets in a secure way; doing this separation on your home computer will be difficult and error-prone.

I think infrastructure is going to be a diffcult issue. If Bitcoin adpotion increases exponentially, I would expect transaction volume to also increase exponentially. The Asian-Pacific region is expected to run out of IP addresses by the end of the year, but few (north american) ISPs have made the transition to IPv6. Asside from the addressing issue is the fact that the Terms of Service attached to most consumer Internet connections prohibit hosting servers; or using more bandwidth than some arbitrary limit. If we don't carefully plan ahead, the bitcoin network will become even more centralized. I also feel that bitcoin nodes should be using hardware and software from diverse suppliers. I think the bitcoin community may run more diverse hardware and software than most.

putting your wallet on an offsite backup is not ideal. its best to use paper or some other offline medium like you said.

Same here, I now have over $0.05 USD... and I keep it in my bank pending its conversion to bitcoin.

I'm Linux/BSD nerd. I just use SSH for remotely logging into my machine. You can even do X forwarding with the 'XC' flags (X forwarding+compression). Unfortunately, I don't currently have my computers set up 'just so', so no bitcoin.

By "off-site" I mean: will survive building destruction by being somewhere else. At the risk of being accused of money laundering, I plan on using a safe-deposit box.

just a warning, a safe-deposit box is subject to the bank being nosy, and drilling your box and taking the contents, even if they say they wont.

Yes, but I expect to know about it if it happens.

I suppose they could re-key the lock to match my copy of the safe-deposit key.

If my Bitcoins get spent in the course of a police investigation, I'll be sure to bring it up.

OP is absolutely correct.  Considering the bitcoin industry has zero regulation, there is nothing stopping anyone from walking away with all of your bitcoins.  It wouldn't even be illegal.  The scammers know this and that is why they are getting away with it.

It would be a great help to the bitcoin community if something like that was found. Personally though, I'm still trying to keep an ear out for when the Android wallet app is proclaimed relatively bug-free by users.

I'm not derailing the thread, I'm challenging your premises, one of which seems to be that its imperative to NEVER use an ewallet that's not run by Google or Microsoft *shudder* because big companies can be trusted in all cases much more than individuals.

Obviously if one doesn't need to spend coins on the go, ewallets are almost useless. But to suggest no utility can ever come from storing even a single bitcoin on ewallet sites (you seem determined to lump them all into the same risk level) is unrealisticly extreme. People want to use bitcoins NOW, despite the immature infrastructure.

Those who don't take precautions when using ANY ewallet site, no matter who runs it, will learn the lesson the hard way. The FDIC can't just print new bitcoins if an ewallet misses a backup and loses your private key due to a crash. When they're gone, they're gone.

Something doesn't have to be regulated in order for you to take someone to court over them depriving you of it.

That said, in many cases, good luck tracking the person down to drag them into court.