[ANNOUNCE] btctip.com- send bitcoins with a tweet

[amincd]

This can not work with you not touching the private keys like some other wallets do it.

Yes that's correct.

You may "loose" 5% or maybe even 10% if you can make plausible that you need 10% reserve on the server at any given time (like when you have only 5 customers) but loosing more would mean you lost money on purpose. I'm 100% sure any user would understand that withdrawing coins from your server takes up to 24h if he wants to withdraw more than 5% of your total holdings.

I don't have enough BTC on my server to make cold-storage worthwhile. I have no interest in losing BTC on purpose, but I clearly state on the site that it shouldn't be trusted to store more than small amounts of BTC.

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[giszmo]

This can not work with you not touching the private keys like some other wallets do it.

Yes that's correct.

You may "loose" 5% or maybe even 10% if you can make plausible that you need 10% reserve on the server at any given time (like when you have only 5 customers) but loosing more would mean you lost money on purpose. I'm 100% sure any user would understand that withdrawing coins from your server takes up to 24h if he wants to withdraw more than 5% of your total holdings.

I don't have enough BTC on my server to make cold-storage worthwhile. I have no interest in losing BTC on purpose, but I clearly state on the site that it shouldn't be trusted to store more than small amounts of BTC.

So there is no cold storage? "Guy tipps random stranger thousands of dollars" was a news at some point, so I assume you have tens of thousands if not more worth of bitcoin on your server and consider it "not worthwhile" to put parts in cold storage. What a joke. And I seriously had considered trusting you with some dollars. What a joke.

[amincd]

No it doesn't use cold storage and there aren't thousands of dollars of bitcoin on my server. The guy tipping thousands of dollars was using the Reddit tipping service, which is different from mine. You're right to be concerned and not trust your money on my site if security is a major concern.

[btcven]

I see btctip for twitter like a TipJar. Why would you put thousands of dollars in a TipJar in a bar? Why would you do the same on btctip?

btctip it's a twitter tipper with a TipJar, not an e-wallet to store your precious tons of bitcoins, but to tip people randomly using tweets instead of bitcoins addresses.

[giszmo]

I see btctip for twitter like a TipJar. Why would you put thousands of dollars in a TipJar in a bar? Why would you do the same on btctip?

btctip it's a twitter tipper with a TipJar, not an e-wallet to store your precious tons of bitcoins, but to tip people randomly using tweets instead of bitcoins addresses.

Hargnah! This is a service and it's planning to run with the money, preparing the excuse if they don't take precautions to not have more money on the server than they need to run business for a day or two.
Any hosted wallet - and btctip is a hosted wallet - has to make sure there is only a fraction of the money on the server at any given time. Anything else is just not serious.

I programmed a Facebook-"Tipping"-Wallet but didn't bring it public, because you have to take security precautions I was not ready to take. Bringing it life and loosing just one BTC would be just one more of these Bitcoin scammers Bitcoin is full of. I would feel obliged to replace any single coin lost to a hack or data loss and so should you. Thanks to plausible deniability, you running with the money is indistinguishable from you getting hacked and thus risking to get hacked equals to preparing to run with the money.

tbctip is designed to store moderate amounts of money to tip small amounts of money to many people of which some might end up receiving considerable amounts of money. The senders will have money to tip from for weeks as they don't want to charge it twice a day and the receivers might delay thinking about how to withdraw this strange … what was its name again? … money to some day in the future and will take action only when they can't sleep well at night knowing there is a fortune on some obscure server. Not taking aforementioned security precautions means the operator not only does not care about his users loosing their money but also that he almost begs the hackers to come to his server.

Edit: You made it on my signature.

[amincd]

^ This is your chance to say I told you so.

===

Unfortunately, the BTCTip service was hacked on March 12th, 2014, through a simultaneous withdrawal attack. A statement on the hack has been posted here:

http://btctip.com

===

To Giszmo, I don't regret launching the service, and I don't believe you're right that it's better to not launch anything, than to launch an amateur service that stands a high chance of getting hacked. I believe that as long as the risks are disclosed, more can be gained from giving people the option of using the service, than to deny them that option for their own good.

The reason I didn't challenge your post when you made it, was because I thought there was in fact a high likelihood of a hack occurring, and user deposits being lost, and I thought that your post could serve to warn people away from storing BTC on btctip.com.

13.96160671 BTC was lost in total, despite the service having run for two years. Your allegation that this could have been a long con by me to steal user funds is preposterous, given I could have sold the site for far more than this amount, or I could have encouraged users to deposit more BTC, by not having this warning on the site since the day it was launched:

Note this is a beta release and its security has not been extensively tested, so please do not store more than small amounts of bitcoin on here.

The amount of time and money I put into the site is much much more than the user funds lost. If I were trying to steal people's funds, I would have found a better way to do it.

Moving on, what was gained from the experience is worth more than what was lost in my opinion. BTCTip was the first Bitcoin-based social tipping service that I'm aware of. Tens, and maybe hundreds of thousands of Twitter users first learned about Bitcoin through the service.

Given it never purported to be a secure Bitcoin exchange, or somewhere people could otherwise trust to securely store their BTC funds, I don't think the reputational damage from the hack is much at all. The service never claimed to be a bank, so there was never any expectation for it to be used as one.

===

User funds

I will not be personally reimbursing the stolen funds, because users were duly warned that the site was not a secure place to store bitcoin. However, I am selling the service, which includes the http://btctip.com domain, and I will use any proceeds I receive to try to cover user deposits throughout a three month claims process. Since I have the Twitter handles of users, I will contact all users through Twitter to try to notify them of the reimbursement, and will manually handle withdrawals.

btctip.com for sale

Regarding the sale, copy-pasting from the notice on the site:

The BTCTip service is being sold as one package, and includes:

• the btctip.com domain, which is a premiem Bitcoin-themed domain name with a Google pagerank of 4
• the software behind the BTCTip service, which is compatible with the current Twitter API
• the @btctip Twitter handle, which has 3,955 followers, as well as @btctip’s helpers, which have been used to send tips on Twitter: @peepbitcoin (2,278 followers), @mightybitcoin (497 followers), and @sonarbitcoin (2,123 followers). These are all real followers, developed organically.

If a buyer is willing to cover the 13.96160671 BTC in user deposits, to continue running the service, the BTCTip service package will also come with all of the user profiles in the user database.

Also, I will need to ensure that any buyer of the service is not likely to use the site to spread malware, so only credible candidates (have a reputation in the Bitcoin community or have some kind of verifiable public profile) will be considered.

[giszmo]

Told you so.

Running this service for two years without a cold storage strategy is the profile of a scammer. If you intend to buy from him, make sure to get his real identity and better make sure the compensation of his victims works out as you are buying a huge liability. Your customers will go after you if you can't identify the former owner of the service beyond any doubt with. 

[amincd]

I think you throw the term 'scammer' out too easily. Claiming to be a Bitcoin bank, and not having a cold wallet strategy, is different than warning people that their deposits are not secure, and not having a cold wallet strategy.

Anyway, I have no problem giving my full ID, phone number, etc, to anyone interested in buying. These are prudent steps to take in any business transaction. I would also be open to using an escrow. If a buyer wants to co-administer and/or supervise the compensation process, I would also be more than happy to do that.

[giszmo]

I think you throw the term 'scammer' out too easily. Claiming to be a Bitcoin bank, and not having a cold wallet strategy, is different than warning people that their deposits are not secure, and not having a cold wallet strategy.

Anyway, I have no problem giving my full ID, phone number, etc, to anyone interested in buying. These are prudent steps to take in any business transaction. I would also be open to using an escrow. If a buyer wants to co-administer and/or supervise the compensation process, I would also be more than happy to do that.

Ok, look, so you only accumulated 14BTC and from the start told your users that you will not take responsability for the money you collected from them.
You refused to take the bare minimum of security measures which is cold storage. If you have any stats, you will notice that never ever did your bot need to touch more than 10% of its respective peak funds, so sending 90% to cold storage is not only a trivial change of 3 lines of code, it is therefore also an obligation to any bitcoin business like yours.

If your users don't get compensated, you did more harm than good as all those who got messages reading "you received money" actually did not receive money at all. How many are affected?

I still find it shocking how you can take it so lightly stealing $8800US from thousands of people.

Your claim that you were obviously not involved in the event you call a hack due to 14BTC not being worth all the hassle you went through is also quite halfhearted. Maybe you are just a stupid scammer who failed to do what pirateat40 did? But the pattern is the same: influx - withdraws = 0 -> cash out. I find it likely that your balance stalled around now, as a price rally usually is where people care about their bitcoins and might bother moving them out.

I don't have any proof of this and basically only play advocatus diaboli but if I had lost BTC to you I would go after you.

[amincd]

Ok, look, so you only accumulated 14BTC and from the start told your users that you will not take responsability for the money you collected from them.

You refused to take the bare minimum of security measures which is cold storage.

14 BTC over a course of two years is not a lot for an online wallet. Most users didn't hold their money on BTCTip, because they were fully warned it was not guaranteed to be secure.

I refused to take those security measures because they would have required a very large commitment of my time and/or money, and I was not interested in taking on a large project. As I explained in the notice, the choice was between launching the site as it was, or not launching anything.

If you have any stats, you will notice that never ever did your bot need to touch more than 10% of its respective peak funds, so sending 90% to cold storage is not only a trivial change of 3 lines of code, it is therefore also an obligation to any bitcoin business like yours.

If I had known there was a cold storage system that be could be implemented just by adding three lines of code, I would have done it, but from what I understand, it's much more involved in that. It also requires manually accessing the offline wallet every time the hot wallet is depleted, and transferring the coins over. I assume it would be more than three lines of code to handle the two separate wallets, and automatically shut off withdrawals when the hot wallet is depleted.

Maybe you are aware of some very easy way to implement it, but I am not. It's not reasonable to assume someone is a defrauding others because they don't do what you would have done.

If your users don't get compensated, you did more harm than good as all those who got messages reading "you received money" actually did not receive money at all.

Most of the deposits lost in the hack were BTC that had been stored on the site for a very long time. Anyone who wanted to ensure their tip wasn't lost could have easily withdrawn soon after receiving it. Leaving it on the site for months means they were aware of the risk it could be lost in a hack, and that they accepted the risk.

Launching the site did much more good than harm, because it helped tens of thousands of people, at minimum, learn about Bitcoin, beginning in 2012, when the technology was less well known. It also propagated the idea of social tipping, and could have inspired the creation of the Bitcointip bot on Reddit. Many of the new people brought into the Bitcoin community because they saw a Bitcoin tip on Twitter have undoubtedly gone on to create their own services, meaning the ripple effect of launching the tipping service is immense.

I still find it shocking how you can take it so lightly stealing $8800US from thousands of people.

You're mischaracterizing my reaction to demonize me.

Your claim that you were obviously not involved in the event you call a hack due to 14BTC not being worth all the hassle you went through is also quite halfhearted. Maybe you are just a stupid scammer who failed to do what pirateat40 did? But the pattern is the same: influx - withdraws = 0 -> cash out.

I would have to be an extremely stupid scammer to run a site for two years, spend countless hours updating it to stay compatible with the Twitter API, warn users to not store their BTC on my site, and come out of it with less than 14 BTC. I would not have been able to launch a Bitcoin-based service if I were that stupid. Your theory is ridiculous.

I find it likely that your balance stalled around now, as a price rally usually is where people care about their bitcoins and might bother moving them out.

That's not what happened. As I explained in the notice, I was notified that withdrawals weren't being processed on March 20th. I discovered the March 12th hack at that time, and immediately shut down the service. Here is the Tweet where I announce the shutdown:

https://twitter.com/btctip/status/446725764289789952

I don't have any proof of this and basically only play advocatus diaboli but if I had lost BTC to you I would go after you.

That's because you're a prick. Every user was warned that the site was not guaranteed to be secure. If you had stored your BTC on the site, and it had been lost in the hack, you would have no grounds for holding me responsible for your decision.

[giszmo]

Whatever you say. I guess I made my point and as I have not lost anything to your failure I will leave it to others to sue you.

Edit: I programmed a sloppy facebook tipping bot and did not bring it live because I neither would have taken the responsibility to secure shit and would definitely have gotten hacked. Assuming you did not profit from that hack, maybe we still both did it wrong and the solution would have been to release it as open source and have it have taken care of by some bigger player that knows both how to secure a server and how to implement cold storage.

Regarding the "3 lines change": Instead of having sendBitcoin() you would have try-catch and for the case of insufficien funds, you would have an error message "please be patient while my master refills the hot wallet"; mailMaster(). The other change would be to query your database for sum(balance) and compare it to what bitcoind reports as total balance and eventually send extra funds home to master. Sure it would not be 3 lines but most likely less than 20 or less than a day of work. I guess you will have more work with the lost funds than that. Refunding the hot wallet would be a trivial job until that day you actually get hacked and have to refill twice in one hour.

[amincd]

And no one will sue me, because there's no case here for a lawsuit.

With the benefit of hindsight, the right way to do it would have been to sell BTCTip after I had made it compatible with the latest update to the Twitter API. A group with more resources could have developed it into a professionally run tipping service, with features like cold wallet storage. Open sourcing it without launching anything would have been a gift to the Bitcoin ecosystem, but I personally wouldn't have done that, because I wouldn't have been able to justify the investment. You however should have open sourced the Facebook tipper, since you went to the trouble of writing it, and ended up not launching it.

Refunding the hot wallet would be a trivial job until that day you actually get hacked and have to refill twice in one hour.

I guess neither of us know if it would have been trivial, as neither of us have run a cold wallet storage system before. For a one-man operation that I wanted to keep as a low-maintenance side-project, it seemed like taking on too much. Maybe the claims process, assuming the site finds a buyer, will end up being just as much work, so maybe it was a mistake to not go to the trouble. We'll see.