[2016-08-06]Theft And Mayhem In The Bitcoin World

[WishICanTurnBackTime]

The schadenfreude of Bitcoin enthusiasts over Ethereum’s recent troubles ended abruptly last week. A major Bitcoin exchange, Bitfinex, was hacked and nearly 120,000 BTC (around $60m) was stolen. The price of Bitcoin promptly crashed, and Bitfinex was forced to suspend trading. Suddenly, Ethereum was not the only basket case cryptocurrency around.
It appears that Bitfinex’s security was seriously compromised. Customer coins were held in individual wallets secured with a 2 of 3 multisig arrangement: keys were held by Bitfinex itself and Bitgo, a professional custodian and signatory, with a third (backup) key held in secure offline storage. Customers could not withdraw funds from the wallets until any borrowings had been cleared. It was, if you like, a form of escrow.  And it should have been secure.

http://www.forbes.com/sites/francescoppola/2016/08/06/theft-and-mayhem-in-the-bitcoin-world/#65b8758851ae

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[Das]

Like you said, it should have been secure but it wasn't. I smell foul play here, looks like a senior official or employee is on the know.

How else do you explain the loss of private keys that have already been kept in escrow?

[Kprawn]

There is a major difference between the two hacks..... The Ethereum one was a direct exploit to the core of it's network and the Bitfinex was a third party service using Bitcoin as a currency token.

Bitcoin did not fail at anything at all, it's code is still secure and there is no need for a fork.  .... You need to see the difference between the two hacks or you will never understand Bitcoin. The

unfortunate part of this hack is that when these services fail, Bitcoin is blamed.... The people offering these services goes on as normal... spreading the blame and damage to other people. 

[cr1776]

This is like saying that a bank was robbed in the EU while in the US someone managed to get the Fed to "quantitatively ease" a cool billion $ in their account and yet both the dollar and the euro are to blame.  In fact, one is just a bank having poor security, the other is the system behind the currency was the problem.

When you get articles like this posted I always wonder what else in the articles they got wrong,:-)