Preventing Bitcoin Exchange Hacks: a question

[Uberse]

Why can't bitcoins held by third parties -- or any bitcoins -- be controlled by Ethereum smart-contracts?

[AGD]

Because you don't control the PrivKey.

[Uberse]

Why can't bitcoins held by third parties -- or any bitcoins -- be controlled by Ethereum smart-contracts?

Because you don't control the PrivKey.

I have the private key of the ethereum addresses that hold my Augur Rep tokens, and they are under the control of an ethereum smart-contract. I can move them around any time I want and sell or swap them too, but they remain Rep tokens under contract control.

[bob123]

Your question is pretty unspecified. Bitcoin can be held by third parties.. but you shouln't let anybody hold your bitcoins.
These "hacks" don't happen because of btc being broken or those people being to stupid for anything.
There are flaws in their web application which led the attackers to gain control over the private keys.
I could imagine thats the mistake of the devs. Usually audits are reliable and i think exchanges should invest more into security than they currently do.
So the only way to prevent such hacks would be to build more secured software. But you will never gain 100% security.

[Uberse]

Your question is pretty unspecified. Bitcoin can be held by third parties.. but you shouln't let anybody hold your bitcoins.
These "hacks" don't happen because of btc being broken or those people being to stupid for anything.
There are flaws in their web application which led the attackers to gain control over the private keys.
I could imagine thats the mistake of the devs. Usually audits are reliable and i think exchanges should invest more into security than they currently do.
So the only way to prevent such hacks would be to build more secured software. But you will never gain 100% security.

One story said it was also sophisticated social-engineering. But as a technical matter alone, can specific bitcoins be encapsulated by specific ethereum smart-contracts?

[btcjoin14]

Why can't bitcoins held by third parties -- or any bitcoins -- be controlled by Ethereum smart-contracts?

Bitcoin can be used by third parties, whether or not you decide to give them your money for them to store is up to you.

[Uberse]

Why can't bitcoins held by third parties -- or any bitcoins -- be controlled by Ethereum smart-contracts?

Bitcoin can be used by third parties, whether or not you decide to give them your money for them to store is up to you.

Of course, but what I'm wondering is whether bitcoins can be encapsulated by an ethereum smart-contract. Not as a scam or attempt to steal, but to protect them from being scammed or stolen. In other words, could ethereum smart-contracts replace centralized bitcoin exchanges? Perhaps a newly generated bitcoin address that you know the private key for, could, while still empty, be placed under the control of an ethereum smart-contract governed by whatever restrictions you want to apply to it. You would then move a certain amount of your bitcoins into that address.

[chukaday]

Why can't bitcoins held by third parties -- or any bitcoins -- be controlled by Ethereum smart-contracts?

They could be in theory but what difference is that than having a normal bank? It is like having a crypto bank but are you insured up for all of your funds? I highly doubt it and I would have a hard time trusting such a system put in place. Also I would be weary of who controls it because anybody with that much money probably has government or criminal backing and I don't want to associate with that at all.

[Uberse]

Why can't bitcoins held by third parties -- or any bitcoins -- be controlled by Ethereum smart-contracts?

They could be in theory but what difference is that than having a normal bank? It is like having a crypto bank but are you insured up for all of your funds?

With an ethereum smart-contract in control of your bitcoins, if that is possible, you would be fully ensured regardless of funds. In a regular bank in the U.S. you are ensured only up to $100,000. Banks do not yet accept proof of bitcoin possession (through public labeling, for example) for the purposes of collateral for loans or a higher-limit credit card, although this will probably be changing soon enough. A smart-contract is not necessarily under anyone's control once it is set in motion -- you will have burnt your bridges, as it were. But there are amounts for which you would be willing to do that. Sure, you could just do it all yourself without a smart contract -- keep the private keys in your bank box, etc. But it would be nice if you could put a host of public addresses that you created under your public control -- public because it would be publicly labeled as such.

[pooya87]

Why can't bitcoins held by third parties

we already have that option, it is called banks and fiat. they are third parties that control all your money that you place with them.
we created bitcoin so that nobody has to use a third party to store their money!

-- or any bitcoins -- be controlled by Ethereum smart-contracts?

that requires you to use Ethereum wallet and trust that it is not buggy, i personally do not trust an Ethereum smart contract because there are lots of exploits in it and i do not want to lose my money.

if you are looking for a way to store bitcoin with someone else and share the control, then use bitcoin features such as multi signature. although your question is not clear, i can not figure out what is it exactly you want to achieve by involving a third party here!

[TTITA]

Your question is pretty unspecified. Bitcoin can be held by third parties.. but you shouln't let anybody hold your bitcoins.
These "hacks" don't happen because of btc being broken or those people being to stupid for anything.
There are flaws in their web application which led the attackers to gain control over the private keys.
I could imagine thats the mistake of the devs. Usually audits are reliable and i think exchanges should invest more into security than they currently do.
So the only way to prevent such hacks would be to build more secured software. But you will never gain 100% security.

Discussed bitcoin security issues will never be finished. While Bitcoin can not only be controlled by 1 party only, therefore we are given the option through (desktop, hardware, web, mobile wallet) https://bitcoin.org/en/choose-your-wallet to make wallet and save btc, besides there are also some exchanges that offer similar services.
All of them certainly have their own security team, so it will be difficult
looking for common ground.
All wallet storage certainly has the risk of hack security, so making a backup of .dat wallet or storing private key in place is the most secure solution at the moment, although there are few instances where the backup file is corrupt so it can not be accessed again

[shacc]

control your private keys it iss best to use a wallet where you control your private keys. is the only way to have full control of your funds and not have to rely on third parties for security private keys to be hold by these third party services, that lead to don’t really have control of self own coins