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Author Topic: Freedom and Responsibility - or: why you FAILED if you lost money in MBC crash  (Read 8504 times)
dtime
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August 03, 2011, 06:23:41 AM
 #41

Before I start, this topic is not intended as trolling. I am entirely serious, and I hope I can wake up some people and make them realize what they are doing.

Bitcoin is about freedom. Freedom to do with your funds what you want. To store them in a way you want, in a way you deem them secure, without having to rely on a third party.

With freedom comes responsibility. Responsibility to take care of the security of your own funds, or to pick a provider you trust and have them take care of it.

If the MyBitcoin crash was a responsibility test, and you lost any considerable amount of money in there, YOU FAILED THE TEST.

Please explain to me how you had the idea that it was a good idea to store considerable funds in a service that has a proven poor track record - remember how hundreds of accounts were cleaned out, all to the same address, and not a single automated red flag regarding fraud was triggered, letting through all the payments? How such an obvious fraudulent transaction went through, and was claimed to have been 'stopped manually', with no real security measures in place? Remember how noone actually appears to really be running the site, and how it is rather 'faceless'? Why would you store any considerable amount of money there? Why did you not store (the majority of) it in a properly secured wallet.dat file on a local machine?

Even if this was not intended as a test, it was a very good one, and you definitely failed it if you indeed lost serious funds.

Just something to think about.

Hmm..  lets recap

1.   Mtgox gets hacked.   Funds stolen,  hashed password list published to internet
2.   Allinvain's computer gets hacked.  25,000 BTC stolen
3.   Coinpal gets paypal accounts frozen
4.   bitcoin4cash.com complains of postal strikes ... does not honor locked in trades
5.   TradeHill drops Dwolla
6.   Mybitcoin.com disappears
7.   Virus appears in wild that steals wallets

Could be that bitcoin in general needs a better track record.   Just something to think about.
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August 03, 2011, 06:55:34 AM
 #42

Hmm..  lets recap

1.   Mtgox gets hacked.   Funds stolen,  hashed password list published to internet
2.   Allinvain's computer gets hacked.  25,000 BTC stolen
3.   Coinpal gets paypal accounts frozen
4.   bitcoin4cash.com complains of postal strikes ... does not honor locked in trades
5.   TradeHill drops Dwolla
6.   Mybitcoin.com disappears
7.   Virus appears in wild that steals wallets

Could be that bitcoin in general needs a better track record.   Just something to think about.

How could you miss this one?
5.5  bitomat (Poland) - worlds 3rd largest bitcoin exchange 'loses' entire BTC holdings (estimate 17000 coins?)

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Bruce Wagner
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August 03, 2011, 07:06:30 AM
 #43


...

Which brings me to Bruce Wagner. I like Bruce. I like his show and his enthusiasm. He seems pretty smart, too. But the idea that he referenced a service without confirmation of real identity is very hard to understand. It is one thing to take such a risk yourself. It is quite another, especially if you are an expert with a reputation, to be advising others without full disclosure of the risks. I really hope Bruce was clear about those risks or, frankly, I would have a hard time showing my face around here again if I were him.

In conclusion, Bruce and anyone else who mentioned mybitcoin.com, without stating that they have not personally confirmed the trustworthiness of that site, should regret that they did that and should refrain from doing that for other services in the future.


Speaking of Bruce...

I sure hope that he is OK in all of this.  He obviously had a lot of hope, energy, and passion for the project.  I hope he is not prone to suicidal tendencies or anything like that, is strong enough to look at the whole picture, and experienced enough to know that all things pass.   (It seems at this point that...) Ya, he fucked up.  Big time.  But he is not the only one and he has done a lot of very good work for a very important project and that has not gone away.  I personally appreciate his work a lot and hope not only that he recovers but continues to contribute.

This was the oldest, longest standing bitcoin eWallet site in existence.   It had a strong record of stability.   It had been around nearly since the beginning of bitcoin itself.    People who trusted using an eWallet at all...  trusted it.   It had 10s of thousands of account holders.   Some of the smartest, most reputable, long-standing bitcoin community leaders used it.    Only two people ever complained about me recommending it.   But neither could ( or were willing to ) give me any concrete reasons why they shouldn't be trusted.... other than, "I just have a bad feeling about them."    At the time, that sounded like saying the same thing about MtGox.  They had never given me, or any other users any reason to believe that they were not reputable.   Also, it was by far --- and still to this day --- the easiest and most feature rich eWallet in existence.

You have no idea how much I regret recommending mybitcoin.com   I  do not have suicidal tendencies.    I have been through things even worse than this in my life.    What doesn't kill us makes us stronger.

In a few hours from now...  tomorrow morning.... I will tape an episode of The Bitcoin Show as a monologue....  just me, talking about all of this... all of my thoughts and feelings and lessons learned.... and my new convictions and new directions of advocacy ( as I'm sure you can guess what they include )...

I have not lost any faith in Bitcoin, nor in OnlyOneTV.    It has brought me back down to earth..... and HARD....  slammed my face down on the pavement.   I am no expert, and I try to emphasize that as often as possible.    But, at the same time,  I do not take my responsibility as "someone people listen to" lightly.    The pain of losing 25,000 of my own bitcoin is nothing.   Nothing at all.    Compared to the pain of knowing that my recommendations have led to the loss of so many others.   That tears my heart out.   You have no idea how much.

At first, it felt like I was kicked in the gut by an angry horse.   I've felt that pain in my gut constantly every since.   But on top of that, moments later, the realization that everyone I know and love and care about....  and how many other strangers who listen to me....  have lost their bitcoin in this as well....   and I've pretty much not stopped crying since Friday.    Even though I have been at the office, and I have put on a normal face for people...    That's why you haven't seen me on the air.     I have to regain my composure, get it together, get my head and my thoughts together, determine where to go from here, and what to say to the audience.

The worst is facing all the people I love most in my life....  and telling them what happened.... one by one.    They trusted my advice without hesitation.    And now I have to tell them what happened.    I suspect that nothing that could happen to me in my life will ever cause me as much pain as I am experiencing right now....  just thinking of how I will tell them.   These are not techie geeks like you guys.   These are normal people.   They are not to blame.   And, yes, in hindsight, I should have known better.   Hindsight is so 20/20.


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August 03, 2011, 07:29:18 AM
 #44

I have not lost any faith in Bitcoin, nor in OnlyOneTV.    It has brought me back down to earth..... and HARD....  slammed my face down on the pavement.   I am no expert, and I try to emphasize that as often as possible.    But, at the same time,  I do not take my responsibility as "someone people listen to" lightly.    The pain of losing 25,000 of my own bitcoin is nothing.   Nothing at all.    Compared to the pain of knowing that my recommendations have led to the loss of so many others.   That tears my heart out.   You have no idea how much.
This really sucks Sad I have no words for this. You of all people on this forum deserved this the least. Good luck from here...

Quote
These are not techie geeks like you guys.   These are normal people.   They are not to blame.
Exactly... this was an incredible setback in getting bitcoin adopted by the rest of the people. No matter what happens now, you did a great job trying.

All the armchair anarchists here can take a lesson from you... the amount of victim blaming here going on is abnormal.


Bitcoin Core developer [PGP] Warning: For most, coin loss is a larger risk than coin theft. A disk can die any time. Regularly back up your wallet through FileBackup Wallet to an external storage or the (encrypted!) cloud. Use a separate offline wallet for storing larger amounts.
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August 03, 2011, 07:49:02 AM
 #45


How could you miss this one?
5.5  bitomat (Poland) - worlds 3rd largest bitcoin exchange 'loses' entire BTC holdings (estimate 17000 coins?)


+1
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August 03, 2011, 07:49:39 AM
 #46

All the armchair anarchists here can take a lesson from you... the amount of victim blaming here going on is abnormal.
Who is responsible then? Noone?

I hate seeing a second early adopter lose 25k BTC and even worse many other people with him. If even we can’t secure our Bitcoins, even with the help of third parties, then how the hell are non-technical people supposed to?

The worst thing about this is that early adopters are losing Bitcoins they would probably invest back into the Bitcoin economy/infrastructure, losing them to people who will rather just sell them for fiat money.

Bitcoin is quite a useless currency if it continues to be more profitable to steal and betray than to do productive things in order to earn them.

"Bitcoin had been transformed from an anarachistic challenge to the financial status quo, to the crypto spawn of Satan, fuelled by cut-throat greed and delusions of avarice." - MatTheCat
"these people don't seem to want to stop till Bitcoin is completely destroyed and left like an old cum rag in the corner of the room." - ShroomsKit
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August 03, 2011, 07:52:24 AM
 #47

Good on you Bruce.
It's a tough way to learn a lesson.

Tempered by experience - you're well placed to track the fast-paced bitcoin world, asking the tough questions while sharing the excitement of new developments.

I've always enjoyed your optimism and infectious enthusiasm..  Don't lose that!

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August 03, 2011, 08:01:37 AM
 #48

Bruce, my sincere condolences to you and all the other people who have suffered a loss from this tragedy. Your enthusiasm has always been inspiring and I really hope that you will get over this and find back to your cheerful nature. I'm sure people are not blaming you - you always acted on good faith!

Exactly... this was an incredible setback in getting bitcoin adopted by the rest of the people. No matter what happens now, you did a great job trying.

All the armchair anarchists here can take a lesson from you... the amount of victim blaming here going on is abnormal.
+1

We're all in this together - even if you are not affected personally, this incident is surely going to have an effect on how the world views Bitcoin. Let's not blame the victims but see how we can learn from this and stand together as a community, helping Bitcoin to get up on its feet again.

Bitcoin is quite a useless currency if it continues to be more profitable to steal and betray than to do productive things in order to earn them.
Contrary to the saying, crime often does pay in the real world - regardless of the currency, so I don't see how anyone can blame Bitcoin for that. Bitcoin is real money and people steal Bitcoins and betray with them just like they do with other currencies.

You don't see big headlines all the time for all the useful things people do with their Bitcoins however.
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August 03, 2011, 08:05:50 AM
 #49

Contrary to the saying, crime often does pay in the real world - regardless of the currency, so I don't see how anyone can blame Bitcoin for that.
That’s true, but with Bitcoin, it is much easier to go undetected, the risk of facing any consequences is significantly reduced. Have you seen one Bitcoin villain face any law enforcement or even some kind of vigilante yet?

In the real world it’s high risk, high profit, but with us it’s low risk and high profit, so it’s much more attractive. Until we finally learn.

"Bitcoin had been transformed from an anarachistic challenge to the financial status quo, to the crypto spawn of Satan, fuelled by cut-throat greed and delusions of avarice." - MatTheCat
"these people don't seem to want to stop till Bitcoin is completely destroyed and left like an old cum rag in the corner of the room." - ShroomsKit
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August 03, 2011, 08:29:47 AM
 #50

Contrary to the saying, crime often does pay in the real world - regardless of the currency, so I don't see how anyone can blame Bitcoin for that.
That’s true, but with Bitcoin, it is much easier to go undetected, the risk of facing any consequences is significantly reduced. Have you seen one Bitcoin villain face any law enforcement or even some kind of vigilante yet?

In the real world it’s high risk, high profit, but with us it’s low risk and high profit, so it’s much more attractive. Until we finally learn.
I wouldn't say it is of lower risk than any other online crimes - unless you are really really careful you can eventually be tracked down. There are no well-established and provably secure ways to absolutely decouple the stolen Bitcoins from any traces to your identity if you plan on actually using them.

I'm sure with Bitcoin becoming more mature, there will be services to somehow mark and trace stolen Bitcoins, correlate them with known identities and detect and maybe reverse some types of mixing strategies. With all the history of Bitcoin being unerasably stored for eternity, future law enforcement techniques will probably be able to effectively investigate all major Bitcoin thefts of the past. With more and more victims, some lawyers might even make good money by specializing on such services.

The bigger the theft, the harder it is to get away with it. I for sure wouldn't feel very safe if I had stolen tens of thousands of Bitcoins...
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August 03, 2011, 08:45:42 AM
 #51

The only truly valuable things we have are the relationships we develop with other people. Money is ultimately just an idea, and the amplified emotional force of losing it is ultimately a result of the monetary system in which we have developed. Criminal behavior and monetary losses will continue to be ubiquitous until such time as we decide to leave this outdated and increasingly destructive system behind and start using our reason to provide for and care about all of our fellow human beings.

Ultimately, money does not care for or about us. We should stop caring for and about it.

Bitcoin combines money, the wrongest thing in the world, with software, the easiest thing in the world to get wrong.
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August 03, 2011, 08:53:37 AM
 #52

Only two people ever complained about me recommending it.   But neither could ( or were willing to ) give me any concrete reasons why they shouldn't be trusted.... other than, "I just have a bad feeling about them."    At the time, that sounded like saying the same thing about MtGox.  They had never given me, or any other users any reason to believe that they were not reputable.   Also, it was by far --- and still to this day --- the easiest and most feature rich eWallet in existence.
There was a very concrete reason they shouldn't be trusted anymore: at the time the site disappeared, no-one had been able to sucessfully get any kind of response from MyBitcoin to support queries for just under a month, nor had there been any other kind of communication from anyone involved in running the site. Several people reported being locked out of their accounts after forgotting their password because their requests for their password to be manually reset were ignored. Some have even made claims that their existing password stopped working. Apparently you didn't feel that was a good enough reason though.

(For those who haven't seen the threads in question, this was why people were complaining about Bruce recommending it.)

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August 03, 2011, 09:09:24 AM
 #53

The only truly valuable things we have are the relationships we develop with other people. Money is ultimately just an idea, and the amplified emotional force of losing it is ultimately a result of the monetary system in which we have developed. Criminal behavior and monetary losses will continue to be ubiquitous until such time as we decide to leave this outdated and increasingly destructive system behind and start using our reason to provide for and care about all of our fellow human beings.

Ultimately, money does not care for or about us. We should stop caring for and about it.
Agreed.

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August 03, 2011, 10:10:15 AM
 #54

This was the oldest, longest standing bitcoin eWallet site in existence.   It had a strong record of stability.   It had been around nearly since the beginning of bitcoin itself.    People who trusted using an eWallet at all...  trusted it.   It had 10s of thousands of account holders.   Some of the smartest, most reputable, long-standing bitcoin community leaders used it.    Only two people ever complained about me recommending it.   But neither could ( or were willing to ) give me any concrete reasons why they shouldn't be trusted.... other than, "I just have a bad feeling about them."    At the time, that sounded like saying the same thing about MtGox.  They had never given me, or any other users any reason to believe that they were not reputable.   Also, it was by far --- and still to this day --- the easiest and most feature rich eWallet in existence.

I think that the concrete reason why mybitcoin shouldn't be trusted isn't specific to mybitcoin: none of the websites that offer to to store your bitcoins under their central control should be trusted, and the reason is that giving control over your bitcoins to someone else is unnecessary. It kinda defeats the whole idea behind bitcoin, regarding that we shouldn't need to trust our money with some central control that can steal it (via inflation usually). Instead, you can for example store your encrypted wallet.dat (official bitcoin client v0.4 format) as dropbox public link, and then access it via open-source smartphone apps etc. where you provide your passphrase locally when you wish to send coins (the unencrypted wallet.dat private keys should never be sent anywhere, only the signed transactions should be sent).

It's true that v0.4 wallet.dat isn't available yet, and that mybitcoin is more convenient than secure options like encrypted dropbox public link. It's also true that for mtgox you have put your trust under central control because you cannot deposit dollars into a distributed network of honest participants (so you should withdraw BTC from mtgox occasionally, according to the level of risk that you're willing to take).

However, even if we agree that using something like mybitcoin for convenience can make sense, I think that you should minimize the level of trust involved, by only depositing a relatively small amount of bitcoins into the centrally controlled service, and when you spend most of it you deposit another such amount, and so on. Could you please explain why you decided to deposit 25k BTC into mybitcoin, instead of a smaller amount?
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August 03, 2011, 11:15:45 AM
 #55

Earlier this year...

"Let’s Make Some Predictions...
Finally, there will be massive breakage in bitcoins. If your laptop crashes and you didn’t back up your bitcoins, well, you’re SOL. If someone steals you laptop that has 10,000 bitcoins on it you won on Bitcoin Poker, you’re SOL. Lost your USB drive with 500 bitcoins on it after a night out on the town? You’re SOL."

from 
Bitcoin P2P Currency: The Most Dangerous Project We've Ever Seen
by Jason Calacanis and the LAUNCH team
http://launch.is/blog/l019-bitcoin-p2p-currency-the-most-dangerous-project-weve-ev.html
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August 03, 2011, 12:56:59 PM
 #56

Earlier this year...

"Let’s Make Some Predictions...
Finally, there will be massive breakage in bitcoins. If your laptop crashes and you didn’t back up your bitcoins, well, you’re SOL. If someone steals you laptop that has 10,000 bitcoins on it you won on Bitcoin Poker, you’re SOL. Lost your USB drive with 500 bitcoins on it after a night out on the town? You’re SOL."
I would like my dollar to be able to be 'backed up' in the sense that I can destroy what is in my wallet in front of me physically, and know the value can still be recovered.

Laptop theory is same with or without Bitcoin, including many user names or passwords that you used on that laptop and etc etc.   If you kept all your user names and passwords secure, then no doubt the wallet with digital money on your hard drive is secure too, no?

Lost your USB drive = lost your wallet.

Loved that link though.

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August 03, 2011, 02:01:01 PM
 #57

If even we can’t secure our Bitcoins, even with the help of third parties, then how the hell are non-technical people supposed to?

Third parties are the problem. You must secure your own bitcoins. You have nothing to gain from giving someone else 24/7 access to your money. Keep your bitcoins encrypted and backed up yourself. No one else should have access to them except your heirs in the event of your death.
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August 03, 2011, 02:59:16 PM
 #58

The worst thing about this is that early adopters are losing Bitcoins they would probably invest back into the Bitcoin economy/infrastructure, losing them to people who will rather just sell them for fiat money.

On the other hand... they're most likely selling them to a large number of new, interested people, eroding the complaint against early adopters controlling an inordinate number of Bitcoins... Silver lining?
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August 03, 2011, 03:29:00 PM
 #59

... and I've pretty much not stopped crying since Friday.    Even though I have been at the office, and I have put on a normal face for people...    That's why you haven't seen me on the air.     I have to regain my composure, get it together, get my head and my thoughts together, determine where to go from here, and what to say to the audience.

It may help to turn your feelings of pain into anger, and direct that into action to make sure that this issue is fixed and/or will never happen again. Good luck!

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August 03, 2011, 05:55:02 PM
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Quote
This was the oldest, longest standing bitcoin eWallet site in existence.   It had a strong record of stability.   It had been around nearly since the beginning of bitcoin itself.    People who trusted using an eWallet at all...  trusted it.   It had 10s of thousands of account holders.   Some of the smartest, most reputable, long-standing bitcoin community leaders used it.

So, before you "trusted" your money to mybitcoin.com, recommended to personal friends that they trust "mybitcoin.com", and recommended mybitcoin.com to people online, you spent +/- $2000 to fly down and meet the people behind it ... right.

I think you need to look up the word trust.

The second day I got into bitcoin I knew it mybitcoin.com was bad news and pulled everything out of mybitcoin.com.

The damage you have done to bitcoin is immeasurable.

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