OK, so if I read this correctly:


your utter incompetence cost company the content of hot wallet + 6 months of downtime.

And now you feel like you're in position to lecture anybody on security....

Dunning–Kruger at it's finest.

What are you talking about?

My point is that VPS should never be used to host projects which need to handle non-negligible amounts of users' bitcoins as virtual private servers have extra attack surface as compared to dedicated servers.

Which part of this you disagree with?

It's worth noting that I do not care about inputs.io or any crap like this, I'm just trying to warn people so that they'll have a chance to avoid obvious traps in future.

TradeFortess was warned that it is not OK to use Linode hosting back in July: https://bitcointalk.org/index.php?topic=251553.0

Migrating to a physical server could be trivial, but instead he decided to stay with Linode and ignored all warnings.

I think it's quite obvious that it was staged. Linode was chosen as a scapegoat, as previously Bitcoinica was hacked in the same way: http://bitcoin.stackexchange.com/questions/3629/what-is-the-story-behind-the-linode-problem

So this looks plausible.

If it isn't a scam, it is a criminal negligence.

It's your own fucking problem.

Do you represent geniuses who were running Instawallet?

If so, you have already proven that you have no effing clue. No surprise here.

I understand the problem. It consists of two parts:

• 1. we need some kind of digital tokens exist in the blokchain and have their value pegged to the value of asset they represent
• 2. an ability to exchange tokens for the asset

it is important to understand that these are two separate issues. You focus on the second one, but I believe it isn't particularly interesting: something similar to LocalBitcoins can be used here.

Basically, once you have digital tokens with stable value, the rest of the system is inherently decentralized as people can simply trade these tokens with each other... Of course, there will be people who will do this professionally, and there will be companies which provide this kind of service.

We already know that it works. This approach is/was used by a number of digital currencies such as LibertyReserve, WebMoney, e-gold etc. For example, there are several WebMoney exchangers in my city (it is kinda popular here), so getting money in/out of WebMoney isn't a problem, at all.

If this kind of exchange is profitable, people will do it. Consider it solved.

Wait a bit, why do we need this mumbo-jumbo with USD-coins, can't people exchange bitcoins directly?!

Of course, they can, but volatility make is extremely risky. It isn't an exchange business, it is a daytrader business.

Moreover, price discovery doesn't work very well within these peer-to-peer trading networks. Please check this chart: http://bitcoinity.org/markets/localbitcoins/USD

It just fluctuates wildly.

Now, again, suppose we have some kind of trustworthy USD-coins. Their price is certain, so there is no need for price discovery. Maybe you will pay 1.05 USD for 1 USD-coin, but if somebody wants 2 USD for it, it's an obvious rip-off (cf. LocalBitcoins: high: 500.15      low: 173.91).

If they are sufficiently trustworthy, local exchangers will be glad to work with them, as it is very simple business: they earn their commission and do not need to worry about price fluctuations.

Price discovery can happen on a decentralized exchange for digital tokens. Basically, we can make a global order book, and if it works properly, it will have one price.

So we need to focus on implementing digital tokens with stable value, as they can be used for buying/selling bitcoins.

Nice summary, thanks!


I think this is the most promising approach IF we can get truly serious player involved in this.

Ideally, a company which owns underlying assets should be 100% isolated from trading and other activities. Basically, it should be a trust (ETF-like) which simply owns USD and does nothing. Companies responsible for market making are not crucial to back the currency.

Then we can add an insurance layer: if both market makers and trust fail, insurance company will step in and compensate.


I believe it can be done using derivatives. Recently Vitalik Buterin described a way to implement trustless CFDs within Mastercoin, and people understood that it is actually superior to "escrow fund".

Something like that can be done using colored coins as well, but it is really complex and currently there are no plans to implement it.

While we are here, a claim that it's OK to have a web-facing server on a VPS because it has no wallet on it is outrageous.

A compromised web-facing server can be used for a MitM attack no matter what other tricks you use.

MitM attack can be used to steal funds of users who are currently use the site.

So if person tells you that VPS is OK because it doesn't have a wallet in it, we can decipher it as this:

"Well, we know that attacker will be able to steal coins from our users via MitM attack, but we don't give a fuck; after all, without VPS we'd have to pay whopping $70/month for a real physical server, and it takes a whole hour to set it up. No fucking way we'll go through this just to prevent a pesky MitM attack."

This is outrageous... If somebody claims that, he is either a complete moron or scammer.

Of course, inputs.io is already dead... But if somebody else will try using VPS to handle non-negligible amount of bitcoins, he should get scammer-tag right away, before the thing gets compromised. There is simply no excuse for this stupidity.

Physical dedicated servers are cheap. It isn't hard to set them up.

It was planned all along. Bitcoinica was also hosted on Linode, and was hacked in the same way. Now he can just point at Linode and claim he isn't guilty.

http://bitcoin.stackexchange.com/questions/3629/what-is-the-story-behind-the-linode-problem

The mere fact that you were using Linode is a definitive proof that it was an inside job.

It is a well known fact that virtual private servers are not secure enough to host Bitcoin wallets.

Moreover, Bitcoinica was hacked via Linode: http://bitcoin.stackexchange.com/questions/3629/what-is-the-story-behind-the-linode-problem

https://bitcointalk.org/index.php?topic=66979.0

Obviously, you knew about that, so you used Linode as a convenient disguise for an inside job.

There are two possibilities: either you're a complete moron who ignored a well-known attack, which was already demonstrated a couple of times; or it was an inside job.

Is this insulting? Well, you stole money from people, you deserve to be insulted.

We implemented decentralized exchange back in January. It worked, people made transactions with it.

I've described the difference between colored coins and Mastercoin approaches here: https://bitcointalk.org/index.php?topic=265488.msg3487339#msg3487339

I'll post an update to this thread when it's ready.

We have a lot (~5) of developers now and are making good progress, but still a lot is left to do...

I'll try to make an alpha release this week.


Probably nothing now, but after we'll make a release we'll need people to test it.

Just to clarify, we already released this kind of thing back in January: ArmoryX implemented p2ptrade. However, there was a problem with ArmoryX: being based on Armory, it required way too much RAM.

Then we implemented a wallet in JavaScript: http://bitcoinx.github.io/webcoinx/ (The problem with it is that it's quite a bit buggy and incomplete.)

So, I was talking about a third incarnation of p2ptrade in NGCCC. NGCCC is meant to be a secure and reliable wallet without inherent performance problems. So what's what we focus on now. However, we also consider fixing WebcoinX.

BTW I remember people here mentioned that colored coins are dead. Well, ~5 developers work on NGCCC now, so it isn't really dead.

---

And while we are here, there is an important difference between Mastercoin's distributed exchange and p2ptrade which is implemented for colored coins:

Mastercoin uses blockchain to store orders, while p2ptrade doesn't. p2ptrade can work with any communication medium.

Our first version simply uses a HTTP service for communication. This doesn't look like a distributed system, does it?

Well, it is decentralized in the sense that people are not tied to a particular server; they can launch their own and use it, for example. Moreover, some trivial add-on will let different servers to inter-operate, thus making a distributed communication medium.

Furthermore, there is a plan to use BitMessage as a fully p2p communication medium.

In any case, p2ptrade requires some additional infrastructure which, probably, isn't as reliable as blockchain itself. However, being flexible about orders has some advantages too:

• it is possible to cancel offers up until the point when they are being executed
• trading is as fast as communication; it is possible to make trade in matter of seconds
• it is possible to aggregate multiple trades in one transaction to reduce blockchain bloat and fees

So, to summarize, colored coins p2ptrade uses different approach and has different characteristics.

Да меня вообще несколько удивил этот форум... Я запостил вакансию на /r/jobs4bitcoin и freelansim.ru.

Там люди пишут что им этот проект интересен.  И, собственно, неделю как работают: уже добавили GUI, JSON-RPC API  и т.д.

Только вот тут начали обсуждать языки программирования...

Perhaps, hire a private investigator?

No. The difference is that thin Bitcoin client can check whether payment is valid using SPV. Have you read the original Satoshi's paper?

I use gmail, it isn't even in spam folder.

Why do you think it is necessary to confirm email?

This policy is outdated, it isn't a problem to register a one-time email on sites like mailinator. So it doesn't confirm user's identity in any meaningful way.

Just let user to pick password and skip this confirmation step.

Or even better: enable oauth/openid authentication, so that people will be able to login using their facebook, twitter, google accounts etc.

That's just like, your opinion, man.

В первой (пробной) версии я так и сделал. Я умею писать на С++ в достаточной мере чтобы модифицировать bitcoind.

Сейчас нужно немного дополнительной функциональности, так что мы делаем нечто вроде add-on'а к bitcoin-клиенту.


А вот не заметно. Насколько сложно понять, что торговля акциями требует существенного дополнительного функционала?