Bitcoin is fundamentally broken and unviable in current form

[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.