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Author Topic: Enough with the online wallets  (Read 1970 times)
cbeast
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August 06, 2011, 01:13:07 PM
 #1

What's next, a rainbow wallet? Even if you keep your bitcoins in the pot o' gold at the end-of-the-rainbow, some little greedy dude will steal it. Secure your wallets with encryption and make multiple backups. 'Nuff said, mkay?

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Each block is stacked on top of the previous one. Adding another block to the top makes all lower blocks more difficult to remove: there is more "weight" above each block. A transaction in a block 6 blocks deep (6 confirmations) will be very difficult to remove.
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August 06, 2011, 01:42:09 PM
 #2

If the client doesn't offer easy to use support for such features then the vast majority of humans won't ever benefit from Bitcoin. Lets face it: operating a truly secure and trustworthy computing environment is not an easy task and probably never will be.

I don't see a fundamental problem with online wallet services - they can greatly increase security for all not so tech-savvy Bitcoin users out there. Everyone saying that people should stay away from online wallet services have to either face the fact that only a very small percentage of the people will ever be able to use Bitcoin or he/she should come up with a Bitcoin client that is easy to use and operates safely on a non-trustworthy, virus-infested operating system run by users who don't know jack about computer security.

Not having to trust a third party is a great advantage of Bitcoin but by far not the only one - I don't see what's wrong with letting people benefit from Bitcoin's other strengths by building reputable and trustworthy online wallet services for them!?
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August 06, 2011, 01:52:49 PM
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Banks are insured and regulated, online wallets are not. Would you take out your wallet or purse and hand it to a stranger gambling at a casino simply because you did not want to carry it around?

I agree that clients and apps need many more features. That's why I am optimistic about bitcoin itself, while cautious of each new development.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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August 06, 2011, 02:09:02 PM
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Keeping a low profile doesn't even require a back-up or encryption assuming you don't delete the wallet.dat by mistake.

The answer seems fairly obvious (to me) but is it safer to put your funds in a widely known public database, or on a computer in your basement to which no one knows even exists? The simple fact is no matter how much security a site has, it will *always* be penetrable.

Keep your funds in your own personal wallet and don't download countless closed-source bitcoin software and you'll be fine. If your worried about not being able to have access to your bitcoins on-the-run, keep an encrypted back-up on your usb drive or smartphone SD card. Might be a bit more of a hassle, but so is losing your hard earned bitcoins at the fault of someone you know won't be paying you back when he/she fucks up.

Help Bitcoins by buying clothes, technology, books, etc. through people/stores that accept BTC. This will increase overall value of BTC as well as mitigate unnecessary bank transaction fees.

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August 06, 2011, 02:12:24 PM
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Did the language 'e' ever lead on to something else, or was it a dead end?

I do not even know yet whether for example Erlang might be today's derivative or equivalent of 'e'.

There are various things offering distributed processing but what caused me to try to follow 'e' was its claim of being able to operate trusted (and distributed) computing on untrusted systems...

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August 06, 2011, 03:18:47 PM
 #6

Banks are insured and regulated, online wallets are not.

It's not inconceivable that online wallet services are insured and regulated as well - who says traditional banks could not be the ones offering Bitcoin services in the future? Who says current regulations for financial institutes are not extended to include companies dealing with cryptocash?

Of course we're not there yet by far and you're right insofar as current services have probably done more harm than good but then again - who knows how many of the Bitcoins from mybitcoin.com would have been stolen by hackers/viruses if they were all kept on private computers all the time instead?

Keep your funds in your own personal wallet and don't download countless closed-source bitcoin software and you'll be fine. If your worried about not being able to have access to your bitcoins on-the-run, keep an encrypted back-up on your usb drive or smartphone SD card. Might be a bit more of a hassle, but so is losing your hard earned bitcoins at the fault of someone you know won't be paying you back when he/she fucks up.

Yes - keeping most of your Bitcoins offline is a very advisable strategy but it is not impossible for an "online" wallet service to offer such a thing as well (requiring you for example to phone in personally if you want to withdraw your offline funds). It makes little difference though, if you lose your Bitcoins due to some own stupid mistake or due to some security breach at an online service. Everybody has to decide for himself which one he deems more likely - I'm just arguing that for many people it would not only be more convenient but also much safer if they let some reputable third party handle the bulk of their Bitcoins.

There are various things offering distributed processing but what caused me to try to follow 'e' was its claim of being able to operate trusted (and distributed) computing on untrusted systems...

While you can design systems that perform trusted processing tasks on untrusted remote environments - I think it is fundamentally impossible to make such guarantees for your local system without some hardware DRM support. If for example you have a rootkit tapping into the input and output channels of your computer (eg keyboard and screen) - undetectable for the normal operating system then you're pretty much out of luck.

I think people demanding that everyone must not trust anybody but themselves with their Bitcoins should get things into perspective: everybody not having performed an extensive code audit of the client by himself is implicitly trusting the core devs with _all_ his/her money anyway. While you're at it you better audit the sources for your operating system as well - how sure can you really be that its entropy pool isn't skewed?

It really strikes me as hypocritical to hear people laugh about others who trust third parties with their Bitcoins, when in effect we all do to some extent. Small portions of unwarranted trust are an essential building block of our society - no social structures could have evolved without us trusting each other even though we can't assess all the risks involved.

My point is: while Bitcoin can relieve us from some forms of third party trust - it is an illusion to think that we finally don't have to trust anybody anymore with our money. This is no black and white issue and everybody has to draw the line somewhere. For some that might be the confines of their own computer but many people are probably better off putting more trust into a reputable online service than in the software that runs on their laptop.
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August 06, 2011, 03:42:55 PM
 #7

While you can design systems that perform trusted processing tasks on untrusted remote environments - I think it is fundamentally impossible to make such guarantees for your local system without some hardware DRM support. If for example you have a rootkit tapping into the input and output channels of your computer (eg keyboard and screen) - undetectable for the normal operating system then you're pretty much out of luck.

[snip]

My point is: while Bitcoin can relieve us from some forms of third party trust - it is an illusion to think that we finally don't have to trust anybody anymore with our money. This is no black and white issue and everybody has to draw the line somewhere. For some that might be the confines of their own computer but many people are probably better off putting more trust into a reputable online service than in the software that runs on their laptop.

If you cannot trust your keyboard and mouse inputs how can anyone but you know whether it is the organic peripheral (you) or the comm link used to communicate with the organic peripheral (the keyboard and mouse channels) that are untrustworthy?

Nice point, it starts to become clear maybe why anyone other than that organic peripheral might prefer to trust "a reputable, well-backed online service that will make good even if some particular organic peripheral or its keyboard or mouse screws up" over any particular organic peripheral, mouse or keyboard...

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August 06, 2011, 03:54:37 PM
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It's not inconceivable that online wallet services are insured and regulated as well - who says traditional banks could not be the ones offering Bitcoin services in the future? Who says current regulations for financial institutes are not extended to include companies dealing with cryptocash?

Those banks that are INCOMPETENT and SCREWUP don't get punished much. They get bailout courtesy of the gubernment. Also, they are not immune to security breaches.

Also, people around here got their money stolen, forgot to backup, on their own fricking personal computer. You screwed yourself and go a little apeshit.

But when somebody screw up holding your money, you go apeshit crazy.

Backup your wallet with due diligence, scrutinize your ewallet service. Ask all kind of questions. Don't take your bitcoin for granted.

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August 06, 2011, 03:54:47 PM
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Banks are insured and regulated, online wallets are not. Would you take out your wallet or purse and hand it to a stranger gambling at a casino simply because you did not want to carry it around?

It's not just that banks are regulated that makes people trust them. People trust Google (e.g. Gmail) or Microsoft (e.g. Hotmail) with personal secrets, stuff that is more important than thousands of dollars. They do this because the service is convenient to use and because they are pretty damn sure that Google or Microsoft won't give away their secrets to anyone else.

Really, everyone use webmail instead of installed mail programs now. For most people online wallets will be the natural way to use Bitcoin in the future, we just need some reputable people running them. The recent scandals have been hobby projects who grew too quickly.

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August 06, 2011, 04:00:52 PM
 #10

Online wallets are good for holding small amounts of bitcoin to send people with your phone. Thats what I use them for. Its quite handy. However I wouldn't put a lot in one. Its very silly to see people putting large amounts in them.
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August 06, 2011, 06:57:05 PM
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Banks are insured and regulated, online wallets are not.

It's not inconceivable that online wallet services are insured and regulated as well - who says traditional banks could not be the ones offering Bitcoin services in the future? Who says current regulations for financial institutes are not extended to include companies dealing with cryptocash?

Of course we're not there yet by far and you're right insofar as current services have probably done more harm than good but then again - who knows how many of the Bitcoins from mybitcoin.com would have been stolen by hackers/viruses if they were all kept on private computers all the time instead?

Keep your funds in your own personal wallet and don't download countless closed-source bitcoin software and you'll be fine. If your worried about not being able to have access to your bitcoins on-the-run, keep an encrypted back-up on your usb drive or smartphone SD card. Might be a bit more of a hassle, but so is losing your hard earned bitcoins at the fault of someone you know won't be paying you back when he/she fucks up.

Yes - keeping most of your Bitcoins offline is a very advisable strategy but it is not impossible for an "online" wallet service to offer such a thing as well (requiring you for example to phone in personally if you want to withdraw your offline funds). It makes little difference though, if you lose your Bitcoins due to some own stupid mistake or due to some security breach at an online service. Everybody has to decide for himself which one he deems more likely - I'm just arguing that for many people it would not only be more convenient but also much safer if they let some reputable third party handle the bulk of their Bitcoins.

There are various things offering distributed processing but what caused me to try to follow 'e' was its claim of being able to operate trusted (and distributed) computing on untrusted systems...

While you can design systems that perform trusted processing tasks on untrusted remote environments - I think it is fundamentally impossible to make such guarantees for your local system without some hardware DRM support. If for example you have a rootkit tapping into the input and output channels of your computer (eg keyboard and screen) - undetectable for the normal operating system then you're pretty much out of luck.

I think people demanding that everyone must not trust anybody but themselves with their Bitcoins should get things into perspective: everybody not having performed an extensive code audit of the client by himself is implicitly trusting the core devs with _all_ his/her money anyway. While you're at it you better audit the sources for your operating system as well - how sure can you really be that its entropy pool isn't skewed?

It really strikes me as hypocritical to hear people laugh about others who trust third parties with their Bitcoins, when in effect we all do to some extent. Small portions of unwarranted trust are an essential building block of our society - no social structures could have evolved without us trusting each other even though we can't assess all the risks involved.

My point is: while Bitcoin can relieve us from some forms of third party trust - it is an illusion to think that we finally don't have to trust anybody anymore with our money. This is no black and white issue and everybody has to draw the line somewhere. For some that might be the confines of their own computer but many people are probably better off putting more trust into a reputable online service than in the software that runs on their laptop.

I do not believe you will ever get banks to back bitcoin and insurance companies to insure them against losses. It's a competing currency and it's a risk with a black hole for them.

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August 06, 2011, 07:59:22 PM
 #12

I do not believe you will ever get banks to back bitcoin and insurance companies to insure them against losses. It's a competing currency and it's a risk with a black hole for them.

Probably not this year.

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August 06, 2011, 08:02:56 PM
 #13

Joomla's slogan stands more true than any other, "Open source matters".

When there is an open source wallet service online, I expect security to be stronger than even a vault.

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August 06, 2011, 08:03:03 PM
 #14

What's next, a rainbow wallet? Even if you keep your bitcoins in the pot o' gold at the end-of-the-rainbow, some little greedy dude will steal it. Secure your wallets with encryption and make multiple backups. 'Nuff said, mkay?

Agreed. Tired of hearing about all the idiots who loose their coin.....

What if every time, someone in the world lost their Fiat cash we had to hear them whimper and bitch?
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August 06, 2011, 08:20:57 PM
 #15

Joomla's slogan stands more true than any other, "Open source matters".

When there is an open source wallet service online, I expect security to be stronger than even a vault.

According to latest MyBitcoin disclosure, they are going to release their code to public domain. So this idea can became true.
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