Bitcoin is fundamentally broken and unviable in current form

[Indamuck]

The security breach at Bitfinex is just beyond the pale. No online wallets/businesses are trustworthy. I can't with a clear conscience recommend that anybody invest in or hold cryptocurrency until the community puts an end to the rampant theft.

I'm slow, and overdue, but now taking all my coins offline to a cold wallet, and not coming back until there is some fundamental change in security protocols, such that I will never risk suffering a 100% loss like some have experienced at Bitfinex. **I didn't have a btc balance at bfx at the time of hack, but I only got lucky.

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[Laviathon]

I only transfer to coin to an exchange to cash out.  Bitfinex supposedly had all the coins that were stolen in cold storage so explain that.

[Holliday]

Bitcoin is broken because third parties continuously fail to secure their private keys and thus can't make good on their IOUs?

If you say so.

[kokojie]

I only transfer to coin to an exchange to cash out.  Bitfinex supposedly had all the coins that were stolen in cold storage so explain that.

They weren't in cold storage, Bitfinex had 120k Bitcoin in essentially a hot wallet.

[Holliday]

Bitfinex supposedly had all the coins that were stolen in cold storage so explain that.

Word is they stored the bitcoins in multi-sig wallets with Bitgo. This isn't cold storage.

[Jonaswakefield]

The security of paper money is just absurd. Credit created without transparency on a centralized digital system run by privately owned banks that currently represents 97% of the money supply is systemic robbery. I would advise every developed nation to flee from the central banking system. Until then I'm using all my paper money to buy crypto.

P.s. I hate getting robbed in these alleys.

[Indamuck]

Bitfinex supposedly had all the coins that were stolen in cold storage so explain that.

Word is they stored the bitcoins in multi-sig wallets with Bitgo. This isn't cold storage.

I'm not a tech expert, but BFX has always been the exchange gold standard for me. In the early days I inadvertently logged into a fake Bitfinex site and had about US$10k worth of coin taken from my account. Bitfinex was partially to blame because I was having issues and they gave me poor guidance. But they made me completely whole, earning my wholesale trust.

Later they lost or had stolen their stale accounts, so I lost some dust-like transactions then. Now this. It seems even the most experienced, largest exchanges/wallets/entities are unable to ensure security. I just don't trust the ecosystem anymore.

[Laviathon]

Why would a company have $72,000,000 us dollars worth BTC not secure.

[Indamuck]

Why would a company have $72,000,000 us dollars worth BTC not secure.

I'm sure they believed it was secure. That is the problem. Nobody knows how to ensure security. Pat answers like 'cold storage' or 'offline paper wallets' don't cut it. There needs to be some ironclad, ecosystem-wide protocol that all but ensure against wholesale theft like this.

[Indamuck]

Meanwhile today I've been busy withdrawing coins from several online sites (wallets, gambling, investment) that I have grown accustomed to using regularly. I don't trust any of it, and suspect I'm not alone. Multiply my retreat over thoussands of btc users and you see that transaction volume just plummets. I'm not coming back until there is some fundamental change ...

[Holliday]

I'm not a tech expert, but BFX has always been the exchange gold standard for me.

So, you fully understood how funds were secured with Bitgo's multi-signature solution and you were comfortable with that?

Could you direct me to a page describing their security practices in detail? Example: https://www.kraken.com/en-us/security/practices

[Indamuck]

I'm not a tech expert, but BFX has always been the exchange gold standard for me.

So, you fully understood how funds were secured with Bitgo's multi-signature solution and you were comfortable with that?

Could you direct me to a page describing their security practices in detail? Example: https://www.kraken.com/en-us/security/practices

That is the point. I don't feel competent to evaluate security practices. The best practice I've seen is the derivatives exchange Bitmex ... but they are only derivatives and don't accept US-based customers. Beyond that, I've reached the point where I don't trust anyone. Which means I'm done putting coins anywhere, and that hurts bitcoin businesses that I had been patronizing.

When you consider opening an account at a local Credit Union, BofA branch, or Citibank, do you need to consider their relative security measures? No. It is all basically the same. What one does consider is the level & type of service one will get.

[kokojie]

Why would a company have $72,000,000 us dollars worth BTC not secure.

I'm sure they believed it was secure. That is the problem. Nobody knows how to ensure security. Pat answers like 'cold storage' or 'offline paper wallets' don't cut it. There needs to be some ironclad, ecosystem-wide protocol that all but ensure against wholesale theft like this.

There is, it's exactly called "cold storage"/"offline wallet", exchanges that religiously follow this practice are not hacked, ie. coinbase/bitstamp as they put 95%+ of their funds in cold storage. Bitfinex did not, they had 120k Bitcoin in bitgo, which is essentially a hot wallet.

[Mauser]

The security breach at Bitfinex is just beyond the pale. No online wallets/businesses are trustworthy. I can't with a clear conscience recommend that anybody invest in or hold cryptocurrency until the community puts an end to the rampant theft.

I'm slow, and overdue, but now taking all my coins offline to a cold wallet, and not coming back until there is some fundamental change in security protocols, such that I will never risk suffering a 100% loss like some have experienced at Bitfinex. **I didn't have a btc balance at bfx at the time of hack, but I only got lucky.

That definitely makes sense to store your coins in a cold wallet. Of course online wallets are not secure. They are just much easier to use and access than any offline wallet. If you have only $50 to store in my opinion an online wallet is fine because a loss wouldn't mean the end of the world. But if you own more than 1 BTC you should never store than online.

[JeffBrad12]

Bitcoin is broken because third parties continuously fail to secure their private keys and thus can't make good on their IOUs?

If you say so.

But I'm always curious the factor can make the third parties always fail to secure the private key?Whether is always there are a chance it's caused by hacked or other intentions from the intern factor.

[Searing]

So along this theme of btc is broken will they pay back the 60 million in btc or will the exhchange go belly up?

edit:

added a thread with a poll on this

Bitfinex. Will they cover the 65 million dollar BTC Theft or just fold?

https://bitcointalk.org/index.php?topic=1573661.msg15797288#msg15797288

[kokojie]

Bitcoin is broken because third parties continuously fail to secure their private keys and thus can't make good on their IOUs?

If you say so.

But I'm always curious the factor can make the third parties always fail to secure the private key?Whether is always there are a chance it's caused by hacked or other intentions from the intern factor.

It's almost always due to failure to secure the funds in a cold wallet. So far 0 properly secured cold wallet has been hacked (ie. coinbase/bitstamp).

[kokojie]

So along this theme of btc is broken will they pay back the 60 million in btc or will the exhchange go belly up?

It's just like a bank robbery, if the robber made off with more than the bank can cover, then yeah it will go bankrupt. Though in the US your deposits are insured by FDIC up to 250k. It's a good idea to now start using exchanges that insure their customer deposits, ie. coinbase

[Indamuck]

So along this theme of btc is broken will they pay back the 60 million in btc or will the exhchange go belly up?

Must go belly up, I think. Unless some VC-type of angel investor wants the name and reputation of Bitfinex enough to buy them out. Not sure I see that happening. As a community we need a decent, large exchange with some characteristics of centralization to keep spreads tight and liquidity decent.

[Holliday]

I'm not a tech expert, but BFX has always been the exchange gold standard for me.

So, you fully understood how funds were secured with Bitgo's multi-signature solution and you were comfortable with that?

Could you direct me to a page describing their security practices in detail? Example: https://www.kraken.com/en-us/security/practices

That is the point. I don't feel competent to evaluate security practices. The best practice I've seen is the derivatives exchange Bitmex ... but they are only derivatives and don't accept US-based customers. Beyond that, I've reached the point where I don't trust anyone. Which means I'm done putting coins anywhere, and that hurts bitcoin businesses that I had been patronizing.

When you consider opening an account at a local Credit Union, BofA branch, or Citibank, do you need to consider their relative security measures? No. It is all basically the same. What one does consider is the level & type of service one will get.

Well, I don't know how you can blame Bitcoin when many users have had no issues what-so-ever securing private keys. Obviously huge thefts are going to be very visible to all, but what you won't see is the thousands of users, who keep their private keys secure, posting that another day has gone by where their coins remain safe. Bitcoin provides a user with monetary freedom, but this comes with the price of individual responsibility.

Hopefully you haven't misjudged BitFinex and they are able to make users whole again. I have my doubts.

It's good that you don't trust anyone anymore. This is why I started using Bitcoin in the first place. I took "be your own bank" to heart and I've never looked back since. It's unfortunate that such a terrible incident has had to occur to open your eyes to this (I don't know if you were personally affected by this or not). You are not a new user here, certainly you've heard many times that a cold storage/air-gapped wallet is a fool-proof method to be sure your coins are safe. When I first got involved with Bitcoin, a user named Allinvain was hacked, and at that point I learned everything that was required to protect myself. It was immediately clear to me that anything connected to a network was potentially insecure. Somehow, people forget this lesson and continue to make the same mistakes over and over again.

Consider patronizing bitcoin businesses which are not involved in holding users funds for them.

Yes, I would most certainly consider the security measures at any typical bank. In fact, I don't trust banks at all, so I don't use them to store funds (only for transferring amounts I can afford to lose).

[Searing]

The security breach at Bitfinex is just beyond the pale. No online wallets/businesses are trustworthy. I can't with a clear conscience recommend that anybody invest in or hold cryptocurrency until the community puts an end to the rampant theft.

I'm slow, and overdue, but now taking all my coins offline to a cold wallet, and not coming back until there is some fundamental change in security protocols, such that I will never risk suffering a 100% loss like some have experienced at Bitfinex. **I didn't have a btc balance at bfx at the time of hack, but I only got lucky.

Don't also forget the 'fundementally broken" part of all this when the Chinese miners and bitcoin core have their falling out and the miners fork bitcoin...already heard some talk
that bitcoin core would lock them out with a 1mb lock patch of some kind and cut the miners loose

add that to bitfinex saying oopsie we are folding can't refund the losses

and yippie skippy

back to 180 usd per btc again and deja vu 2014

silly hobby

AT a year and a half of block size debates I doubt they have reached consensus or they would be shouting it off the rooftops...so the other shoe shall fall wait for it

[Karartma1]

I do not wish to endorse Bitstamp but they recovered almost elegantly from their loss a while ago.

I really don't think finex will do something similar.

For Bitcoin as a whole this shit is really bad. It's not Bitcoin that's flawed in the end.

[TraderETH]

I don't think like that, bitcoin is has strong fundamentaly we can see it is still survive  until right now. The problem today is just bitcoin had be lost from the online wallet and not on bitcoin its self. Losing bitcoin  is not first time  but it is still survive.

[Labumi]

I don't think like that, bitcoin is has strong fundamentaly we can see it is still survive  until right now. The problem today is just bitcoin had be lost from the online wallet and not on bitcoin its self. Losing bitcoin  is not first time  but it is still survive.

Yeah, bitcoin will surely survive the decades. Because the Foundation is very strong bitcoin system or so it will be very difficult to be destroyed by its competitors, often happens does indeed lose bitcoin * theft * that's not caused by system security system provider but bitcoin wallet bitcoin inadequate.

[severaldetails]

I don't think like that, bitcoin is has strong fundamentaly we can see it is still survive  until right now. The problem today is just bitcoin had be lost from the online wallet and not on bitcoin its self. Losing bitcoin  is not first time  but it is still survive.

Yeah, bitcoin will surely survive the decades. Because the Foundation is very strong bitcoin system or so it will be very difficult to be destroyed by its competitors, often happens does indeed lose bitcoin * theft * that's not caused by system security system provider but bitcoin wallet bitcoin inadequate.

Of course, bitcoin will survive.
But for the next few months it will have problems.
I do not think that the community can grow much in the near future because the media will draw a very bad picture of bitcoin.
It will take time until that impression will leave the heads of the people.

[kokojie]

I do not wish to endorse Bitstamp but they recovered almost elegantly from their loss a while ago.

I really don't think finex will do something similar.

For Bitcoin as a whole this shit is really bad. It's not Bitcoin that's flawed in the end.

It's because Bitstamp had the sense of using cold storage, so only their hot wallet were compromised, and lost a tiny amount of funds, which they covered from their profits.

Bitfinex were legally prohibited from using cold storage by CTFC of US government, so they looked for answers and found BitGo, and thought it was as safe as cold storage, but turns out it's not.

[RodeoX]

Absolutely nothing wrong with bitcoin. It was a website that had a theft.
Obviously storing money at some site in another country, run by people you don't know... And then you give up total control of your private keys?   What did you think would happen?

[Karartma1]

I do not wish to endorse Bitstamp but they recovered almost elegantly from their loss a while ago.

I really don't think finex will do something similar.

For Bitcoin as a whole this shit is really bad. It's not Bitcoin that's flawed in the end.

It's because Bitstamp had the sense of using cold storage, so only their hot wallet were compromised, and lost a tiny amount of funds, which they covered from their profits.

Bitfinex were legally prohibited from using cold storage by CTFC of US government, so they looked for answers and found BitGo, and thought it was as safe as cold storage, but turns out it's not.

Yes, I read that as well, thanks.
They probably should have implemented cold storage in Hong Kong where their legal entity is.

[xdrpx]

Bitcoins not the one that's broken, it is the exchanges that fail to implement stringent security measures to ensure that their cold storage accounts are kept secure and breach free, as well as disconnected. This takes some level of dedication and constant monitoring to patch possible loopholes before others find and abuse it. Bitcoin by itself is good.

[franky1]

The security breach at Bitfinex is just beyond the pale. No online wallets/businesses are trustworthy. I can't with a clear conscience recommend that anybody invest in or hold cryptocurrency until the community puts an end to the rampant theft.

I'm slow, and overdue, but now taking all my coins offline to a cold wallet, and not coming back until there is some fundamental change in security protocols, such that I will never risk suffering a 100% loss like some have experienced at Bitfinex. **I didn't have a btc balance at bfx at the time of hack, but I only got lucky.

your OP explained the solution you are asking for.
take funds out of third party's hands and keep funds in your own cold store..

there your solution exists.. it always has

[BitcoinNewsMagazine]

Bitcoin can be trusted and is not broken, the problem was a security breach at one exchange which has had problems before, that was a warning shot to use some other exchange.

[kokojie]

I do not wish to endorse Bitstamp but they recovered almost elegantly from their loss a while ago.

I really don't think finex will do something similar.

For Bitcoin as a whole this shit is really bad. It's not Bitcoin that's flawed in the end.

It's because Bitstamp had the sense of using cold storage, so only their hot wallet were compromised, and lost a tiny amount of funds, which they covered from their profits.

Bitfinex were legally prohibited from using cold storage by CTFC of US government, so they looked for answers and found BitGo, and thought it was as safe as cold storage, but turns out it's not.

Yes, I read that as well, thanks.
They probably should have implemented cold storage in Hong Kong where their legal entity is.

They have to follow US regulations since they wanted to offer USD deposit/withdrawals directly to US banks.

[monsanto]

The security breach at Bitfinex is just beyond the pale. No online wallets/businesses are trustworthy. I can't with a clear conscience recommend that anybody invest in or hold cryptocurrency until the community puts an end to the rampant theft.

I'm slow, and overdue, but now taking all my coins offline to a cold wallet, and not coming back until there is some fundamental change in security protocols, such that I will never risk suffering a 100% loss like some have experienced at Bitfinex. **I didn't have a btc balance at bfx at the time of hack, but I only got lucky.

Anything is possible, but it is sure looking like it is "fundamentally broken" as you stated, at least in terms of its usability for large segments of the population.  The combination of anonymity and irreversibility makes it great for things like skirting currency laws and speculation, but for most anything else it may be too risky for widespread usage.  The implicit belief that many seem to have that there is a universal law that makes decentralization and irreversibility in currency a widespread improvement over alternatives looks to be on shaky ground. 

[tyz]

If that holds then every cryptocoin and every blockchain project is broken. Bitcoiin has failed to find a consensus for the problems which existing since a long time now. Those problems should be fixed. Otherwise it could really get broken soon.

Bitcoin is broken because third parties continuously fail to secure their private keys and thus can't make good on their IOUs?

If you say so.

[TraderETH]

I don't think like that, bitcoin is has strong fundamentaly we can see it is still survive  until right now. The problem today is just bitcoin had be lost from the online wallet and not on bitcoin its self. Losing bitcoin  is not first time  but it is still survive.

Yeah, bitcoin will surely survive the decades. Because the Foundation is very strong bitcoin system or so it will be very difficult to be destroyed by its competitors, often happens does indeed lose bitcoin * theft * that's not caused by system security system provider but bitcoin wallet bitcoin inadequate.

Of course, bitcoin will survive.
But for the next few months it will have problems.
I do not think that the community can grow much in the near future because the media will draw a very bad picture of bitcoin.
It will take time until that impression will leave the heads of the people.

Even if for next months will there are problem, the problem will be to price of bitcoin its self. And it is good for traders because of fluctuating they can make profit.

[Ferrero]

The security of paper money is just absurd. Credit created without transparency on a centralized digital system run by privately owned banks that currently represents 97% of the money supply is systemic robbery.

[European Central Bank]

bitcoin is like a river waiting to be dammed. it's gonna keep on flowing no matter what but people need to figure out the best way to approach it so they can make use of it.

it's clearer by the day that usual setups are not good enough for it. there needs to be a major rethink about the best way to harness it.

maybe in the future most action and investment is gonna be in etf style funds unless people can get direct exposure with zero risk.

[The One]

Anyone can set up an exchange. Build up the company. When one has millions in cryptocurrency, steal it and pretend it was an hacker.

One after another, exchanges rises and falls, due to 'hackers.'

Is it true?

Time to consider that it may all be an inside job.

[takingthis4]

Bitcoin can be trusted and is not broken, the problem was a security breach at one exchange which has had problems before, that was a warning shot to use some other exchange.

thats true, bitcoin itself is nearly perfect in my opinion and it shouldnt be blamed just because an exchange got robbed, in my opinion its not the first and not the last time it happened

[nmtrader100]

As they say with gold, "if you don't hold it, you don't own it".

[outatime1]

There is a security problem with these exchanges. I lost money when cryptsy stole my bitcoins. It's happened to others with mtgox and now bitfinex and maybe other exchanges. I now am trading with poloniex, but I am concerned about security on any of these exchanges.

[Chris!]

The security breach at Bitfinex is just beyond the pale. No online wallets/businesses are trustworthy. I can't with a clear conscience recommend that anybody invest in or hold cryptocurrency until the community puts an end to the rampant theft.

I'm slow, and overdue, but now taking all my coins offline to a cold wallet, and not coming back until there is some fundamental change in security protocols, such that I will never risk suffering a 100% loss like some have experienced at Bitfinex. **I didn't have a btc balance at bfx at the time of hack, but I only got lucky.

This has absolutely nothing to do with bitcoin being fundamentally broken?? What a you talking about?? What's broken is people thinking 'oh mt Gox went, but this exchange is somehow better because X, Y and Z.' t what's wrong. People don't learn from history. They don't listen to peo saying 'Don't u online wallets or keep money on exchanges ever!'

TL;DR learn your lesson for onc people. Stop leaving money on exchanges a online wallets. There will ALWAYS be another hack/breachginsid job o whatever you want to call it.

[The Sceptical Chymist]

Yeah, there's definitely an inherent vulnerability in cryptocurrency if you don't know what you're doing, and I would say it definitely isn't for grandma and grandpa.  Hackers will steal your funds if you don't protect them, but that happens with fiat currency too.

I do think all these exchanges need to prove themselves, i.e., time will tell which ones are going to scam.  It really is unfuckingbelievable that these assbags have gotten away with so much theft.  And I so rarely hear about law enforcement involvement in this, but maybe I'm just a stupid & selective reader.  Pirateat40 got jail time, as did Karpeles, but I can't recall others.  Cryptsy?  I think those folks got away scot free.

[silkylove]

Maybe I'm not seeing it, but I just don't think this is that cosmic of an event.  Bitcoin price is already recovering.  It's not like we learned something that we didn't already know (that keeping large sums on bitcoin exchanges can be lucrative for traders but is also playing with fire).  The 1% of total bitcoin stolen probably will either be returned to circulation by the hacker or by a combo of the exchange and miners.  And even if they are gone forever that just makes the remaining coin more valuable.

[DoomDumas]

The security of paper money is just absurd. Credit created without transparency on a centralized digital system run by privately owned banks that currently represents 97% of the money supply is systemic robbery. I would advise every developed nation to flee from the central banking system. Until then I'm using all my paper money to buy crypto.

P.s. I hate getting robbed in these alleys.

I like that, I agree, the current fiat monetary system (central banks) is a lot more broken than Bitcoin.  Bitcoin is'nt broken at all, it's only young, like the old times were bank robbery were happening often..

Ususally, my bitcoins are in cold storage, some on my computer and cell phone for everyday use, some in trading services as play money.

We should just try a bank run, this would show the truth.
Is a Bitcoin run possible ? No, and it will never be. 

Bitcoins are much more real that fiat money is in fact.

Can't unserstand why most humans dont seems to understand it.  Maybe to much tv news..  :/

Bitcoin forever, it will live longer than the current broken fiat monetary system !

[DoomDumas]

I'm not a tech expert, but BFX has always been the exchange gold standard for me.

So, you fully understood how funds were secured with Bitgo's multi-signature solution and you were comfortable with that?

Could you direct me to a page describing their security practices in detail? Example: https://www.kraken.com/en-us/security/practices

I flee MtGox a year before the fall.  It was obious, so I've no merit.  I used CaVirtex until they got bought by kraken, wich I like !

IMO, Kraken is very serious and seems to have a bright future.  I will never let, even kraken, in control of the majority of my whealth, banks eighter.  Better control it myself !

Just let play money or everyday money at risk.  Everything should be fine then.

I wont trust banks with my whealt eighter !

[DoomDumas]

I'm not a tech expert, but BFX has always been the exchange gold standard for me.

So, you fully understood how funds were secured with Bitgo's multi-signature solution and you were comfortable with that?

Could you direct me to a page describing their security practices in detail? Example: https://www.kraken.com/en-us/security/practices

That is the point. I don't feel competent to evaluate security practices. The best practice I've seen is the derivatives exchange Bitmex ... but they are only derivatives and don't accept US-based customers. Beyond that, I've reached the point where I don't trust anyone. Which means I'm done putting coins anywhere, and that hurts bitcoin businesses that I had been patronizing.

When you consider opening an account at a local Credit Union, BofA branch, or Citibank, do you need to consider their relative security measures? No. It is all basically the same. What one does consider is the level & type of service one will get.

Credit Union, BofA branch, or Citibank, or any banks, the problem is systemic, it will hurt much more than the lost of some BTC when their 'relative security measures' will fail, their failure is inevitable, that's math.  This banking failure will hurt like : f*ck, can't get food, gaz, no more electric..  Watch out guys, better put your purchasing power anywherelse.

[~Bitcoin~]

I don't even put 10% of my bitcoin in one single exchanger. I do day trading so i need to have bitcoin in exchangers but i have already learned not to put all bitcoin in one place and at the time of hack also i don't have any bitcoin in bitfinex. We need decentralize exchange platform with better security and peer to peer transaction.

[davis196]

The security breach at Bitfinex is just beyond the pale. No online wallets/businesses are trustworthy. I can't with a clear conscience recommend that anybody invest in or hold cryptocurrency until the community puts an end to the rampant theft.

I'm slow, and overdue, but now taking all my coins offline to a cold wallet, and not coming back until there is some fundamental change in security protocols, such that I will never risk suffering a 100% loss like some have experienced at Bitfinex. **I didn't have a btc balance at bfx at the time of hack, but I only got lucky.

There is no 100% security,even with a cold wallet.

Bitfinex`s weak defense is their own fault,this is not problem of the bitcoin community.

There are online btc businesses and wallets that ARE trustworthy.

[Karartma1]

I do not wish to endorse Bitstamp but they recovered almost elegantly from their loss a while ago.

I really don't think finex will do something similar.

For Bitcoin as a whole this shit is really bad. It's not Bitcoin that's flawed in the end.

It's because Bitstamp had the sense of using cold storage, so only their hot wallet were compromised, and lost a tiny amount of funds, which they covered from their profits.

Bitfinex were legally prohibited from using cold storage by CTFC of US government, so they looked for answers and found BitGo, and thought it was as safe as cold storage, but turns out it's not.

Yes, I read that as well, thanks.
They probably should have implemented cold storage in Hong Kong where their legal entity is.

They have to follow US regulations since they wanted to offer USD deposit/withdrawals directly to US banks.

If that's the case each and every company which would like to do that is bound to probably undergoing the same destiny.
This is where the "law" and the "regulations" show their worst.

[Kakmakr]

If you lose 100% of your bitcoins on these hacked exchanges, you deserve to take that hit. How many times did the members on this forum and on other platforms, warned against this? How many other exchanges needs to get hacked, before people start to listen? How many exchanges needs to get hacked, before these exchanges starts to beef up their security and go 90% cold storage?

I smell bullshit with these hacks. ^sniff sniff^

[pedrog]

Yes, it is impossible for mass adoption in current form, no only because of lack of scalability, but also there's no fraud protection.

I guess eventually someone will come up with a system to prevent this kind of stuff, until then just advise people to stay away from bitcoin.

[pedrog]

I do not wish to endorse Bitstamp but they recovered almost elegantly from their loss a while ago.

I really don't think finex will do something similar.

For Bitcoin as a whole this shit is really bad. It's not Bitcoin that's flawed in the end.

It's because Bitstamp had the sense of using cold storage, so only their hot wallet were compromised, and lost a tiny amount of funds, which they covered from their profits.

Bitfinex were legally prohibited from using cold storage by CTFC of US government, so they looked for answers and found BitGo, and thought it was as safe as cold storage, but turns out it's not.

That looks like bullshit, where did you see that?

[NorrisK]

The problems at bitfenix seem to have origniated from a very poor implementation of a split hot/cold wallet system that led the hot wallet request coins from the cold wallet. This is not a fundamental flaw in the bitcoin protocol, but rather the layer on top of that (the exchange).

Ofcourse it is never smart to leave your coins on an exchange for very long times and you should avoid it if it is not required for trading.

I guess it is best to assume that any place you trade is going to be compromised at some point. It is then your responsibility to find the places that have the best security of their cold storage (so minimal thefts occur) and not to leave your funds there too long.

[bitbunnny]

Exchangers are vulnerable, that is true. But so are the banks also. Is it one large centralized exchanger the solution? I don't think so. Everything in virtual word is exposed to certain amount of risk and we have to accept that. There is no such thing as 100% security..

[danfoda]

Bitcoin is broken because third parties continuously fail to secure their private keys and thus can't make good on their IOUs?

If you say so.

then use desktop software such as Bitcoin Core?

[Decoded]

I only transfer to coin to an exchange to cash out.  Bitfinex supposedly had all the coins that were stolen in cold storage so explain that.

It wasn't a cold wallet. It was a multisig wallet, partially hosted by bitgo. If Bitfinex though for more than a second 2 of 3 was safer than a cold wallet, then they were stupider than I thought.

[Supercrypt]

Bitcoin is been broken ever since the Chinese miners held more than 50% of the hashpower in the network, and it's yet to be fixed (I doubt it will ever be fixed nor perfect). Just one exchange was affected by the recent hacking, but it just shows that sometimes there's just not a good way of storing BTC.

[Karartma1]

I do not wish to endorse Bitstamp but they recovered almost elegantly from their loss a while ago.

I really don't think finex will do something similar.

For Bitcoin as a whole this shit is really bad. It's not Bitcoin that's flawed in the end.

It's because Bitstamp had the sense of using cold storage, so only their hot wallet were compromised, and lost a tiny amount of funds, which they covered from their profits.

Bitfinex were legally prohibited from using cold storage by CTFC of US government, so they looked for answers and found BitGo, and thought it was as safe as cold storage, but turns out it's not.

That looks like bullshit, where did you see that?

For your information

https://news.bitcoin.com/bitfinex-us-regulation-cold-storage/

https://www.reddit.com/r/Bitcoin/comments/4vxoj6/cftc_regulation_prevented_bitfinex_from_using/

https://finance.yahoo.com/news/bitcoin-hack-bitfinex-cold-storage-bitgo-cftc-225434534.html

As you can see that's true

[MangoSalsa]

Ideally Bitcoin is useful because it's a solid way to store your wealth. But still today in 2016 there is no proven way to fully secure your bitcoins. There is no consensus on how to keep coins safe and not getting coins stolen. This is a fundemental problem for me and until there is a universal consensus on a sure fire way to secure bitcoins I think Bitcoin is broken.

[bitbollo]

There is a security problem with these exchanges. I lost money when cryptsy stole my bitcoins. It's happened to others with mtgox and now bitfinex and maybe other exchanges. I now am trading with poloniex, but I am concerned about security on any of these exchanges.

Yes you forget bter.com a chinese exchange that was hacked at least 3 times

Ideally Bitcoin is useful because it's a solid way to store your wealth. But still today in 2016 there is no proven way to fully secure your bitcoins. There is no consensus on how to keep coins safe and not getting coins stolen. This is a fundemental problem for me and until there is a universal consensus on a sure fire way to secure bitcoins I think Bitcoin is broken.

Absolutely false

[Holliday]

Ideally Bitcoin is useful because it's a solid way to store your wealth. But still today in 2016 there is no proven way to fully secure your bitcoins. There is no consensus on how to keep coins safe and not getting coins stolen. This is a fundemental problem for me and until there is a universal consensus on a sure fire way to secure bitcoins I think Bitcoin is broken.

I'm sorry, but that is a ridiculous statement.

There is a very simple, very proven method to secure your bitcoins.

Create and store your private keys on a machine that never touches a network.

This is known as cold storage.

You can even take the additional step of dividing that cold storage with a M-of-N scheme of your choosing.

I would go so far as to say that cold storage combined with a M-of-N scheme makes Bitcoin the most secure asset on the planet. Done correctly it is impossible for anyone to touch your coins without your explicit permission.

[eternalgloom]

Ideally Bitcoin is useful because it's a solid way to store your wealth. But still today in 2016 there is no proven way to fully secure your bitcoins. There is no consensus on how to keep coins safe and not getting coins stolen. This is a fundemental problem for me and until there is a universal consensus on a sure fire way to secure bitcoins I think Bitcoin is broken.

I'm sorry, but that is a ridiculous statement.

There is a very simple, very proven method to secure your bitcoins.

Create and store your private keys on a machine that never touches a network.

This is known as cold storage.

You can even take the additional step of dividing that cold storage with a M-of-N scheme of your choosing.

I would go so far as to say that cold storage combined with a M-of-N scheme makes Bitcoin the most secure asset on the planet. Done correctly it is impossible for anyone to touch your coins without your explicit permission.

I wonder how many times we'd have to repeat that, and how many times companies will keep storing coins in a hot wallet while claiming that your coins are safe and secure?

[zodin]

There is a security problem with these exchanges. I lost money when cryptsy stole my bitcoins. It's happened to others with mtgox and now bitfinex and maybe other exchanges. I now am trading with poloniex, but I am concerned about security on any of these exchanges.

yes these are the big issues facing the crypto currencies, and these issues must be solve on priority basis because people are loosing their interest on crypto currencies because of these issues, as you can see the effect of the bitfinex problem on all the crypto currencies, most of the people withdraw their money from these kind of exchanges and there is still uncertainty in the market, therefore these issues must be solve.