Centralized Exchanges are Bad!

[RealBitcoin]

How many more hacks does it take for people to realize that the centralized control models are vulnerable. Almost every centralized bitcoin exchange got hacked, if they didn't they probably will be in the future. And who knows how many of these hacks were actually inside jobs?

MTGox
BTER
Cryptsy
BTC-E
Shapeshift (althought shapeshift's model is stil safer, because they dont store customer funds)
Bitfinex
.... list goes on

Now everyone pays for this by bitcoin losing value, MTGOX crashed the price 80%, Bitfinex crashed the price 20%. Everyone pays for the stupidity and negligence of a few...

How many more hacks does it take for people to wake up and start storing their bitcoins on their own, and use decentralized exchanges like Bitsquare?

https://bitsquare.io

[RealBitcoin]

Customer: Should I store my bitcoins in your exchange?
Exchange Owner: Yes, our exchange is ultra-secure, impenetrable, unhackable.
Customer: Why?
Exchange Owner: Because we said so!
Customer: Ok.

[Hack happens]

[Herbert2020]

...
1) BTC-E
2) Bitcoin Savings and Trust
3) Shapeshift
...
4) https://bitsquare.io

1) when did btc-e get hacked? i can't find anything on the internet except newbie accounts on bitcointalk complaining about losing their account because of having week password.
can you give a reference?

2) Bitcoin Savings and Trust was a ponzi scheme in other words a scammy place to invest. why are you mentioning it among list of exchange services that got hacked, for a longer list?

3) shapeshift is not that kind of exchange service that you are thinking of. you don't keep anything there to get hacked. the hack was the owner's supply since people receive their money right after they click change.

4) can you explain about this, like a link to their announcement or how long they have been operating and how does it work?

[Divinespark]

Yeah, hopefully this will push users to migrate trading action to truly decentralised exchanges like bitsquare or shapeshift to take out the middle man risk

[RealBitcoin]

1) when did btc-e get hacked? i can't find anything on the internet except newbie accounts on bitcointalk complaining about losing their account because of having week password.
can you give a reference?

https://bitcointalk.org/index.php?topic=83794.0#post_toc_37

2) Bitcoin Savings and Trust was a ponzi scheme in other words a scammy place to invest. why are you mentioning it among list of exchange services that got hacked, for a longer list?

Still people invested in it, and 4000 BTC vanished...

3) shapeshift is not that kind of exchange service that you are thinking of. you don't keep anything there to get hacked. the hack was the owner's supply since people receive their money right after they click change.

Yes shapeshift is much better than the others, but you still have to trust them to give your money. A completely decentralized one is much superior.

4) can you explain about this, like a link to their announcement or how long they have been operating and how does it work?

Bitsquare is about 1-2 months old, it is still a fairly new software, but it's completely decentralized. It will take more time until it becomes established but I think it will become an inevitability with all these nasty hacks going on.

Just read more here: 
https://bitsquare.io/community/
https://bitsquare.io/faq/

Bitcoin loses legitimacy because of a few people, and it's not good. I know it's not bitcoin's fault, but just expect 2 months of mainstream media bashing of bitcoin....

[Herbert2020]

1) when did btc-e get hacked? i can't find anything on the internet except newbie accounts on bitcointalk complaining about losing their account because of having week password.
can you give a reference?

https://bitcointalk.org/index.php?topic=83794.0#post_toc_37

https://btc-e.com/news/81
apparently they have lost 4500BTC (i think about $50,000) from their own pocket and paid their users in full
and they are still active today and giving service to many users so it is not like other hacks.

2) Bitcoin Savings and Trust was a ponzi scheme in other words a scammy place to invest. why are you mentioning it among list of exchange services that got hacked, for a longer list?

Still people invested in it, and 4000 BTC vanished...

still it doesn't justify mentioning it among hacked exchange services. lots of scams, and hacks happen every day and people lose their money in many different ways.

3) shapeshift is not that kind of exchange service that you are thinking of. you don't keep anything there to get hacked. the hack was the owner's supply since people receive their money right after they click change.

Yes shapeshift is much better than the others, but you still have to trust them to give your money. A completely decentralized one is much superior.

again, this hack was also out of the owner's pocket not the users because you can not keep coin in there because there is no place to keep!

Bitcoin loses legitimacy because of a few people, and it's not good. I know it's not bitcoin's fault, but just expect 2 months of mainstream media bashing of bitcoin....

that is just not right at all.
people have accidents with cars and die every day, does the rest stop using cars?

[RealBitcoin]

https://btc-e.com/news/81
apparently they have lost 4500BTC (i think about $50,000) from their own pocket and paid their users in full
and they are still active today and giving service to many users so it is not like other hacks.

A hack is a hack, who knows if it will repeat again. If it happened once, it can happen twice...

still it doesn't justify mentioning it among hacked exchange services. lots of scams, and hacks happen every day and people lose their money in many different ways.

Ok removed.

again, this hack was also out of the owner's pocket not the users because you can not keep coin in there because there is no place to keep!

Yes I know, but a hack is still a hack.

Some shifts take a while to wait for confirms and who knows how many funds are stuck in limbo if a hack happens during that time, so customer fund loss is limited but still possible with shapeshift.

that is just not right at all.
people have accidents with cars and die every day, does the rest stop using cars?

Tell that to mainstream media shills and pundits. If they have an agenda against bitcoin they will find every weakness it has and magnify it and over-exxagerate it.

[Herbert2020]

A hack is a hack, who knows if it will repeat again. If it happened once, it can happen twice...

no argument there. but you can never find a perfect system that is un-hackable. every system has its flaws that can be exploited and used for hacking purposes.
the important thing is how the owners react to such incidents and how can they recover from it.

Tell that to mainstream media shills and pundits. If they have an agenda against bitcoin they will find every weakness it has and magnify it and over-exxagerate it.

this is nothing new, it has been going on for years starting with the day bitcoin was introduced to us. i agree that if it wasn't like this bitcoin could be in a better place but where we are now is not bad either.

[shinratensei_]

How many more hacks does it take for people to realize that the centralized control models are vulnerable. Almost every centralized bitcoin exchange got hacked, if they didn't they probably will be in the future. And who knows how many of these hacks were actually inside jobs?

MTGox
BTER
Cryptsy
BTC-E
Shapeshift (althought shapeshift's model is stil safer, because they dont store customer funds)
Bitfinex
.... list goes on

Now everyone pays for this by bitcoin losing value, MTGOX crashed the price 80%, Bitfinex crashed the price 20%. Everyone pays for the stupidity and negligence of a few...

How many more hacks does it take for people to wake up and start storing their bitcoins on their own, and use decentralized exchanges like Bitsquare?

https://bitsquare.io

Okay, I sure about your title of this topic the centralized exchange are very bad, but I have questions for you can you give a scheme about the working system of bitsquare? or giving short explained about it.

[RealBitcoin]

no argument there. but you can never find a perfect system that is un-hackable. every system has its flaws that can be exploited and used for hacking purposes.
the important thing is how the owners react to such incidents and how can they recover from it.

But you can reduce the risk by orders of magnitude if you decentralize it.

We already know that the middleman design is very unsafe from hacks to scams to accidents, all things could happen.

In a dencetralize mode like bitsquare you store all your coins and orderbook, and the exchange happens with escrow. It is a way superior trust model than: " hold the coins with me because I promise to store them safely".

this is nothing new, it has been going on for years starting with the day bitcoin was introduced to us. i agree that if it wasn't like this bitcoin could be in a better place but where we are now is not bad either.

And how many potential bitcoin users have we lost because of their hate campaign? It doesnt help bitcoin's reputation if it constantly gets painted with bad stuff from hacks to scams and to other bad things.

Okay, I sure about your title of this topic the centralized exchange are very bad, but I have questions for you can you give a scheme about the working system of bitsquare? or giving short explained about it.

Just read the faq, it's a very good design with local coin storage and local orderbooks and escrow system. It is trustless escrow-based P2P trading online basically.
https://bitsquare.io/faq/

[leigh2k14]

no argument there. but you can never find a perfect system that is un-hackable. every system has its flaws that can be exploited and used for hacking purposes.
the important thing is how the owners react to such incidents and how can they recover from it.

But you can reduce the risk by orders of magnitude if you decentralize it.

We already know that the middleman design is very unsafe from hacks to scams to accidents, all things could happen.

In a dencetralize mode like bitsquare you store all your coins and orderbook, and the exchange happens with escrow. It is a way superior trust model than: " hold the coins with me because I promise to store them safely".

this is nothing new, it has been going on for years starting with the day bitcoin was introduced to us. i agree that if it wasn't like this bitcoin could be in a better place but where we are now is not bad either.

And how many potential bitcoin users have we lost because of their hate campaign? It doesnt help bitcoin's reputation if it constantly gets painted with bad stuff from hacks to scams and to other bad things.

Okay, I sure about your title of this topic the centralized exchange are very bad, but I have questions for you can you give a scheme about the working system of bitsquare? or giving short explained about it.

Just read the faq, it's a very good design with local coin storage and local orderbooks and escrow system. It is trustless escrow-based P2P trading online basically.
https://bitsquare.io/faq/

 Blocknet is a "truly" decentralized exchange: https://bitcointalk.org/index.php?topic=829576.0

[RealBitcoin]

 Blocknet is a "truly" decentralized exchange: https://bitcointalk.org/index.php?topic=829576.0

What do you mean "truly?  I havent heard of it before but i have to learn more about it.

[xJuturna]

Folks will always use their money how they choose. There's always a handful that will be ignorant to the fact or tell themselves "Hey, it won't happen again" at their own risk. The fact is people will be people and no matter what they will vest their coins where they'd like. I'd like to think that the number of people will dwindle as more proof that it's not a good idea is presented, but hey, what can you do?

[MingLee]

A decentralized exchange is a good idea. The methods we currently have implemented are not. There have to be ways to independently verify the occurrence of an exchange, similar to how miners verify transactions through mining. If we can get something like that working (but it moves quite quickly), then we might see something of value come out of this idea, but there are still some things that have to be worked out. Not all of it is good enough yet for it to be implemented.

[Senor.Bla]

Somehow i get the feeling, that this is not the first time this is discussed.
a decentralized Exchange is not that easy and if you deal with money there is almost every time at some point trust involved. This will be hard to change.
My suggestion would be to start using Bitcoin full time and thus eliminate or minimize the need for Exchanges centralized and decentralized.   

[Yakamoto]

Somehow i get the feeling, that this is not the first time this is discussed.
a decentralized Exchange is not that easy and if you deal with money there is almost every time at some point trust involved. This will be hard to change.
My suggestion would be to start using Bitcoin full time and thus eliminate or minimize the need for Exchanges centralized and decentralized.   

Decentralized exchanges have been talked about for a fairly long time, and the first time I remember hearing about it was something like a month or two after the Mt.Gox collapse. I've heard it off and on since then, but I guess now it's really being talked about.

While your suggestion for using Bitcoin full-time is a good idea, there a lot of things that have to be built up and developed first. We need a quicker network system, and we need easier wallets for everyone. While they are already easy, it isn't easy for a lot of people.

[shinratensei_]

Somehow i get the feeling, that this is not the first time this is discussed.
a decentralized Exchange is not that easy and if you deal with money there is almost every time at some point trust involved. This will be hard to change.
My suggestion would be to start using Bitcoin full time and thus eliminate or minimize the need for Exchanges centralized and decentralized.   

It no needs a full time for using bitcoin but you must implement in yourself about every time you doing the trading and after finishing your trading you will always remember to sending all of your amounts into your wallet, without sacrifice a lot of your time.

[RealBitcoin]

Somehow i get the feeling, that this is not the first time this is discussed.
a decentralized Exchange is not that easy and if you deal with money there is almost every time at some point trust involved. This will be hard to change.
My suggestion would be to start using Bitcoin full time and thus eliminate or minimize the need for Exchanges centralized and decentralized.   

Decentralized exchanges have been talked about for a fairly long time, and the first time I remember hearing about it was something like a month or two after the Mt.Gox collapse. I've heard it off and on since then, but I guess now it's really being talked about.

While your suggestion for using Bitcoin full-time is a good idea, there a lot of things that have to be built up and developed first. We need a quicker network system, and we need easier wallets for everyone. While they are already easy, it isn't easy for a lot of people.

But now we have a fully functional one. It was really a question of time until they come out. And it's not just the hacks but all the red tape that exchanges make you go through, and the fact that they can freeze your account without any reason, anytime, is just unbearable.

[Dudeperfect]

I still can’t understand why people don’t store their bitcoins in offline wallets? Don’t they trust themselves? Or they find difficulties in tuning with technology?
I think there is lack of awareness among new comers about the security and how it works. Although I use online wallets and I have my funds in exchange too still I have my offline wallets to store main balance. I don’t think such exchange hacks will have any positive impact on bitcoin users, they will still trust exchanges till they personally meet any trouble.

[calkob]

yeah the price might take a hit in the short term, but bitcoin dos not care about hacks and just keeps plodding on.......