Linode and the law.

[muyuu]

Additionally, bitcoins are not the only valuable files that could be stored on VPSs.  Customer information and trade secrets (algorithms for example) can also result in $100k+ damages if stolen.

Have you read Linode's ToS?? they only guarantee up to the price of the hosting during downtime. Whoever places highly valuable trade secrets in Linode deserves to have them stolen. Not that I justify or approve Linode's part in this whole fiasco, but WTF! surely you can afford at least colocation for something like this.

As lons as wallets cannot be hosted in untrusted parties (multisig or whatever other means to ensure only approved operations are carried out) one has to love thrill to have 10000+ BTC where other people can see your privates.

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[Phinnaeus Gage]

From what I heard, 8 customers lost their bitcoins. I assume Bitcoinica lost the most. 43K BTC is a lot of money to lose. If I lost that amount of money, I'd certainly get law enforcement on the case. But it's important to act quickly, while the leads are still hot. Linode's reputation is already suffering and I think it would be in their best interest to be upfront about what really happened. And I still think the insider theory is a good one..

Bitcoinica was quick to mention that they would cover the lost without even mentioning law enforcement. Plus, if I understand this fiasco correctly, there wasn't a lost to cover, for it was their money. You gave me $5 USD and I put it in my wallet next to a $100 USB bill. The wind came along and ripped the $100 USD from my wallet. I lost it. Your $5 USD bill is still safe in my wallet. I will cover the $100 USD lost. When do you want your $5 back. And why is it important for me to even tell you that I'm covering the lost?

[muyuu]

From what I heard, 8 customers lost their bitcoins. I assume Bitcoinica lost the most. 43K BTC is a lot of money to lose. If I lost that amount of money, I'd certainly get law enforcement on the case. But it's important to act quickly, while the leads are still hot. Linode's reputation is already suffering and I think it would be in their best interest to be upfront about what really happened. And I still think the insider theory is a good one..

Bitcoinica was quick to mention that they would cover the lost without even mentioning law enforcement. Plus, if I understand this fiasco correctly, there wasn't a lost to cover, for it was their money. You gave me $5 USD and I put it in my wallet next to a $100 USB bill. The wind came along and ripped the $100 USD from my wallet. I lost it. Your $5 USD bill is still safe in my wallet. I will cover the $100 USD lost. When do you want your $5 back. And why is it important for me to even tell you that I'm covering the lost?

Bitcoinica does hold users' BTC. If what they lost amounts to less than what he can cover out of past benefit, that's something you have to take on face value as they have never disclosed their finances.

If there was a "bank run" with all users withdrawing all their BTC and US$, could bitcoinica cover it all? I don't know. They say they can, you either believe it or not.

[papa_snurf]

Idiot court would probably rule that they have to give the file back.

Proving theft is tricky. From a legal perspective, I am not sure if there was a theft. A bunch of numbers were copied, and Linode still has the original numbers on their hard drives.

[triplehelix]

Also, technically speaking, bitcoins are not property but information. In court this probably wouldn't be treated as a theft but a privacy breach.  You stop "owning" bitcoins the minute the wallet.dat files leave your physical computer.

i can't agree with this.  the vast majority of fiat currency exists only on accounting ledgers, as nothing more than information, yet its theft is treated the same as physical currency.

further, bitcoin hasn't technically been classified from a legal standpoint, and if i were a betting man i'd put a sizable wager down that when and if it reaches the point government agencies do make an official classification, it will be classified as a monetary instrument or derivative of one kind or another, not as the equivalent of a scanned image.  they can try to impose regulation on monetary instruments, but can less effectively try to regulate simple information.

i have no idea what logic your using to conclude that ownership of digital information is transferred when you store that information outside of your physical computer.  the entire cloud boom is based on the exact opposite tenant.  are you of the opinion that dropbox owns all my photos that i transferred from my computer to their storage service?  do you believe that mtgox owns the BTC users have deposited there?  i don't imagine any cloud storage service would last long that tried telling its users it owned their stored information.

[kjj]

Internet lawyering aside, a real court won't really care what bitcoin is, and will probably go very far out of their way to avoid setting any sort of precedent if they can possibly avoid it.

Instead, they'll rely on centuries and centuries of precedents from other cases involving intangible "stuff".  Regardless of what bitcoin may be, we still have a property interest in our balances.  The courts have a long, long, long history of protecting property interests in intangible stuff without much regard for what the stuff is.

[Gabi]

Idiot court would probably rule that they have to give the file back.

Proving theft is tricky. From a legal perspective, I am not sure if there was a theft. A bunch of numbers were copied, and Linode still has the original numbers on their hard drives.

They arrest lots of people for this things, they call it "piracy"

[Andrew Vorobyov]

Proving theft is tricky. From a legal perspective, I am not sure if there was a theft. A bunch of numbers were copied, and Linode still has the original numbers on their hard drives.

ROFL! Very nice

[Phinnaeus Gage]

Wait, so they lost ~$250k US, and have at least another $250k stashed somewhere else since Z said he was covering it. Ok that means they had at least $500k on hand, and they lost the bitcoins they did because they were on a cheap linux vps?? They couldn't afford their own server??? WTF?

Those coins weren't stolen. They were given away.

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