Bitstamp is open - now with multisig

[600watt]

the bitstamp team showed the world that there is no goxxing around no more.

they deserve credit for handling the mess like pro's.

hasta la victoria siempre- bitcoin !

 


edit: frickin auto correction

[CoinCidental]

Multi-sig is great for individual customers and protecting their individual coins on the exchange, but how does one protect against theft of their protected coins from theft on the exchange (causing them to shut down and take your money)?

how could they take your money without having your key as well ?
it maybe in their posession but they couldnt spend it without your key and you couldnt spend it without theirs
as far as thats how i understand they have implemented it but maybe there is another way ?

[AceWallen]

the fact that they had to "rebuild from the ground up" is pretty worrisome. glad to see them back up and trading, but my confidence in their competence is at an all time low. they have not been forthcoming about the nature of the attack, and i can't be sure that they are being forthcoming about the extent of the damage.

i mean, they could have done *worse* at damage control. but that's still where we are. damage control.

[eboard10]

Could the panic buy be due to people who have cash on their accounts buying BTC as a quicker way to move their money out of Bitstamp?

[CoinCidental]

the bitstamp team showed the world that there is no goxxing around no more.

they deserve credit for handling the mess like pro's.

hasta lässt victoria siempre- bitcoin !

 

gox alledgedly lost/stole   around 750,000 btc as well as tens of millions of dollars
its a big differnce when the hack is only 18,700 btc  and btcs are relatively cheap now in usd terms

[rikfredsy]

I think Bitstamp will never be hacked again

[Raystonn]

Anyone with a sitting sell order on the books will have to give control of the Bitcoins to Bitstamp.  It's the only way to actually get execution on sitting orders.  Only Bitcoins that are not committed to an order on the books could be kept in a multi-sig wallet where Bitstamp has no access.  To go from that wallet to be able to use the Bitcoins in an order means waiting for confirmations.  So you either get multi-sig security with a confirmation delay to place an order, or you get no multi-sig security with no delay.

[Morecoin Freeman]

Could the panic buy be due to people who have cash on their accounts buying BTC as a quicker way to move their money out of Bitstamp?

Seems valid.

[criptix]

Anyone with a sitting sell order on the books will have to give control of the Bitcoins to Bitstamp.  It's the only way to actually get execution on sitting orders.  Only Bitcoins that are not committed to an order on the books could be kept in a multi-sig wallet where Bitstamp has no access.  To go from that wallet to be able to use the Bitcoins in an order means waiting for confirmations.  So you either get multi-sig security with a confirmation delay to place an order, or you get no multi-sig security with no delay.

no, they (should) use an internal database for trades.
all 3 keys will be needed when the btc are actually leaving bitstamp ( = when you withdraw your btc) - else multisig would make no sense and would be no advantage like you said

[Eamorr]

Very impressive.

[B.A.S.]

Anyone with a sitting sell order on the books will have to give control of the Bitcoins to Bitstamp.  It's the only way to actually get execution on sitting orders.  Only Bitcoins that are not committed to an order on the books could be kept in a multi-sig wallet where Bitstamp has no access.  To go from that wallet to be able to use the Bitcoins in an order means waiting for confirmations.  So you either get multi-sig security with a confirmation delay to place an order, or you get no multi-sig security with no delay.

This might become a problem in the long run. When you're trading, ease and swiftness of transactions is crucial. The constant signing and waiting could have negative effects on users of the exchange.

Since Stamp now uses multi-sig, does this mean that their wallets will all employ this technology when they are pushing their own money around in house? If not, traders will be stuck waiting while Stamp is making instant cash of facilitating trades fast on their end and slow on the trader's end.

[Kupsi]

Bitstamp has one key, BitGo has one key and a third key is stored offline.

Introduction to the BitGo Secure Wallet

Typical Bitcoin wallets have a single private key, making your Bitcoin susceptible to theft and loss. Our multi-signature technology issues three keys for your wallet, two of which are required to send Bitcoin.

We hold one key, you control a second key, and a third key is stored offline as a backup. If a single key is compromised, your Bitcoin can’t be stolen. This makes our wallet virtually hack proof.

Unlike most other Bitcoin companies, BitGo doesn’t have the ability to access your Bitcoin. We only hold one key, which isn’t sufficient to transact on your behalf.

BitGo requires two-factor authentication and uses enterprise-grade security measures to ensure full protection of your Bitcoin.

Read more technical details in a whitepaper authored by BitGo’s CTO about how we use P2SH (BIP 16) to create a multi-signature wallet. Below is a diagram from the whitepaper comparing Bitcoin wallet architectures.

http://bitgoinc.com/

[true-asset]

They claim to use multisig now - can someone check if the deposit addresses start with 3 now?

If the not, then the hot wallet is not using multisig - and therefore not much has really changed security wise.

It seems they just migrated from cold storage to multisig for the cold wallet - which does not really improve security that much.

[Raystonn]

This means traders' Bitcoins are all in one or more community wallets controlled by Bitstamp.  Multi-sig protects their cold wallets.  But traders are not protected from Bitstamp themselves, and Bitstamp's hot wallets are still not protected from hackers as all keys required for withdrawals must be present on their AWS server for it to process the withdrawals.

Multi-sig implemented this way offers nothing to traders.

[podyx]

They claim to use multisig now - can someone check if the deposit addresses start with 3 now?

If the not, then the hot wallet is not using multisig - and therefore not much has really changed security wise.

It seems they just migrated from cold storage to multisig for the cold wallet - which does not really improve security that much.

I guess they will use less coins in hot storage

Anyway, I think this proves that bitcoin isn't ready for mainstream yet. It's not secure and easy enough yet.
That doesn't stop it from going to $10k though as the market is still so fucking small for it's potential.
I can imagine it going to $10k and consolidate around $5k-$10k for several years(Where most of the infrastrucutre will be built) before getting into $50k range, $100k and eventually $200k

[EsBitcoin.org]

Its a good feature for us, but its a expensive feature for them

[Kupsi]

They claim to use multisig now - can someone check if the deposit addresses start with 3 now?

It does.

[B.A.S.]

I wonder if it would be possible for miners to act as a clearinghouse? All trades through the exchange hot wallet are susceptible to attack. If you had miners both mining blocks and arbitrating transactions, you could have built in security at the level of the exchange as well.

Or would it be possible for an exchange to use placeholders for its hot wallet transactions? --The floating hot wallet keys on their server would be placeholder keys only for a quick processing. When the transactions completes and is confirmed, an instantaneous wallet key is used, transaction happens and repeat. Stamp would than be able to get their fiat or Bitcoin once the transaction posts and is confirmed.

[Raystonn]

Now transfer some Bitcoin out.  If it works quickly then Bitstamp has all keys required for withdrawals sitting on their AWS server.  A hacker can take multiple keys just as quickly as one key when they are all put on the same server.  A hacker may be slowed if they are on different servers.  But you cannot keep the keys offline and have functional withdrawals.  Offline keys would mean someone sitting in an office approving all withdrawals by entering a pass phrase for each one.

[Kupsi]

Now transfer some Bitcoin out.  If it works quickly then Bitstamp has all keys required for withdrawals sitting on their AWS server.  A hacker can take multiple keys just as quickly as one key when they are all put on the same server.  A hacker may be slowed if they are on different servers.  But you cannot keep the keys offline and have functional withdrawals.  Offline keys would mean someone sitting in an office approving all withdrawals by entering a pass phrase for each one.

BitGo has one key and sign all transactions. They have spending limits and manual approval for large transactions.