Mousey
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Hacker steals $250k in Bitcoins from online exchange Bitfloor
- Thread starter Mousey
- Start date
Yikes!. I'd love to hear what our resident bitcoin expert J Strike makes of all this. As if his life was not complicated enough. Jstrike... you still out there?
- Joined
- Jun 30, 1998
- Location
- Bierland
Geeze - this sucks! I hope they are able to trace these funds and are able to retrieve them.
I'm not a big bitcoiner but I have found them useful for depositing occasionally, and bitfloor was by far the best exchange in terms of convenience. I planned on playing at 3Dice this week with the $100 I sent them over the weekend, looks like that isn't gonna happen lol! Guess we'll see how this pans out and if/when I get my money back.
Speaking of J Strike and bitcoin. StrikeSapphire was mentioned in a Bitcoin article on calvinayre.com the other day:
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bit coins demanded in romney,s tax returns capture
hackers are demanding 1million in bit coin for ransom currency presidential Romney's hidden tax returns supposedly cyber abducted
hackers are demanding 1million in bit coin for ransom currency presidential Romney's hidden tax returns supposedly cyber abducted
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Oh, hey guys, sorry I didn't see this until now 
So, first of all the Bitfloor theft. This was one of the smaller Bitcoin exhcanges, and I'm pretty sure it was run by just one guy. And as a guy who runs a casino that's similar to that, I can feel his pain - sort of. He admitted to making a stupid mistake and leaving a copy of a file on an unencrypted drive. Having said that, it's a mistake anyone could have made. When you work with Bitcoin, not f*ing up like that is basically the only line of defense between yourself and having your money stolen. All your Bitcoins are stored as basically a big fat wallet file on your computer / server / whatever. There's no central authority that can reverse a transaction in the case of theft. There are no chargebacks. If you copy your wallet file to a hard drive, for example, and then someone steals that hard drive, then whichever copy of your wallet gets used to send someone money first is considered the "real" file as far as the Bitcoin network is concerned, and the other file is a fake. So leaving any unencrypted copy lying around is bad news. In this case, someone got the owner's password to his server and stole all his money, and there's nothing he can do about it. This has happened with a lot of Bitcoin websites, even ones written by pretty-good programmers, because securing your own money in a chaotic environment like a trading house or a casino requires a serious and constant effort. This is especially true when a million hackers out there are trying every day to steal it. And doing it properly gets expensive, and most Bitcoin businesses are underfunded and flying by the seat of their pants. That doesn't mean Bitcoin is inherently unsafe, it just means you have to treat it like cash and keep it someplace hidden. Operating with a high degree of paranoia has worked for us so far. Every day I move our funds to an offline wallet that I keep on a thumb drive wedged in the change pocket of my jeans. Most of the operational money isn't in Bitcoin at all, it's in bank accounts that are ready to swing into action when we need to pay people out with big winnings. So if someone wants to steal StrikeSapphire's money, they're gonna have to steal me and/or my identity, not just hack a server somewhere.
Secondly, the Mitt Romney thing. I tend to think this is bullsh*t cooked up by some bored 14 year old somewhere. I would say the people who move the price of Bitcoin themselves are split between thinking this is a hoax, and thinking the price is about to skyrocket to $30 again when the next bit of information is released. I'm on the hoax side, partly because I hope this person isn't dumb enough to think that Bitcoin is truly anonymous. It's not. Yes it's somewhat hard to trace, but if the secret service is after you, it's pretty much impossible to pull a million dollars out of Bitcoin without having some record of which bank accounts it went to.
Another thing is that if you take Bitcoin, you can't rely on some intermediary payment processor to deny transactions from the US or to watch out for red flags and money laundering. I'll say that StrikeSapphire is aware of and tracking this, and we take our own measures to prevent ML activity, or anyone trying to wash Bitcoins through us. Including limiting weekly deposits, and returning deposits if we find out players might have been in the US, which we aren't required to do under any country's laws.
We take Bitcoins because it's all we can do - because I wrote the software and launched it with just enough money to book $1 blackjack, and now we're booking $25 blackjack, but we're still based in Costa Rica, still not licensed, and still just trying to get together the funds to become serious and start taking other payment methods. We're not doing it because it's fashionable, easy, or pays well. It might be all those things in the next couple of years, but at this point it is definitely a headache because you have to watch your own back, and no one's on your side with it. Visa and Mastercard actually do a lot of useful things in exchange for that 5% they take. Doing it yourself is only worth it if you have a lot of time on your hands... and DIY is very much the name of the game in Bitcoin.
Having said that, I think it's bred two things: A lot of bad actors and scam artists, and at the same time a lot of really decent and noble attempts to self-regulate and create an even playing field. A lot of people who're basically self-made have come into Bitcoin, and some of them are just trying to rip people off and make a quick score... other ones, like StrikeSapphire, and like BitZino (our competition, who the Calvin Ayre and Forbes articles were mainly about) are trying some clever new approaches to proving that they're fair casinos. It's twice as important to do that in Bitcoin, because it's anarchy out there...there are a lot of scammers, nobody trusts anybody... so if you're in it for the long haul, a new level of transparency is really called for, and the leading places are rising to that and providing players with a wealth of statistics that you would never see in a regular online casino, let alone a brick-and-mortar.
Be happy to answer any questions. BTW IanO, turns out I'm going to be in Barcelona so...... beers!!!
So, first of all the Bitfloor theft. This was one of the smaller Bitcoin exhcanges, and I'm pretty sure it was run by just one guy. And as a guy who runs a casino that's similar to that, I can feel his pain - sort of. He admitted to making a stupid mistake and leaving a copy of a file on an unencrypted drive. Having said that, it's a mistake anyone could have made. When you work with Bitcoin, not f*ing up like that is basically the only line of defense between yourself and having your money stolen. All your Bitcoins are stored as basically a big fat wallet file on your computer / server / whatever. There's no central authority that can reverse a transaction in the case of theft. There are no chargebacks. If you copy your wallet file to a hard drive, for example, and then someone steals that hard drive, then whichever copy of your wallet gets used to send someone money first is considered the "real" file as far as the Bitcoin network is concerned, and the other file is a fake. So leaving any unencrypted copy lying around is bad news. In this case, someone got the owner's password to his server and stole all his money, and there's nothing he can do about it. This has happened with a lot of Bitcoin websites, even ones written by pretty-good programmers, because securing your own money in a chaotic environment like a trading house or a casino requires a serious and constant effort. This is especially true when a million hackers out there are trying every day to steal it. And doing it properly gets expensive, and most Bitcoin businesses are underfunded and flying by the seat of their pants. That doesn't mean Bitcoin is inherently unsafe, it just means you have to treat it like cash and keep it someplace hidden. Operating with a high degree of paranoia has worked for us so far. Every day I move our funds to an offline wallet that I keep on a thumb drive wedged in the change pocket of my jeans. Most of the operational money isn't in Bitcoin at all, it's in bank accounts that are ready to swing into action when we need to pay people out with big winnings. So if someone wants to steal StrikeSapphire's money, they're gonna have to steal me and/or my identity, not just hack a server somewhere.
Secondly, the Mitt Romney thing. I tend to think this is bullsh*t cooked up by some bored 14 year old somewhere. I would say the people who move the price of Bitcoin themselves are split between thinking this is a hoax, and thinking the price is about to skyrocket to $30 again when the next bit of information is released. I'm on the hoax side, partly because I hope this person isn't dumb enough to think that Bitcoin is truly anonymous. It's not. Yes it's somewhat hard to trace, but if the secret service is after you, it's pretty much impossible to pull a million dollars out of Bitcoin without having some record of which bank accounts it went to.
Another thing is that if you take Bitcoin, you can't rely on some intermediary payment processor to deny transactions from the US or to watch out for red flags and money laundering. I'll say that StrikeSapphire is aware of and tracking this, and we take our own measures to prevent ML activity, or anyone trying to wash Bitcoins through us. Including limiting weekly deposits, and returning deposits if we find out players might have been in the US, which we aren't required to do under any country's laws.
We take Bitcoins because it's all we can do - because I wrote the software and launched it with just enough money to book $1 blackjack, and now we're booking $25 blackjack, but we're still based in Costa Rica, still not licensed, and still just trying to get together the funds to become serious and start taking other payment methods. We're not doing it because it's fashionable, easy, or pays well. It might be all those things in the next couple of years, but at this point it is definitely a headache because you have to watch your own back, and no one's on your side with it. Visa and Mastercard actually do a lot of useful things in exchange for that 5% they take. Doing it yourself is only worth it if you have a lot of time on your hands... and DIY is very much the name of the game in Bitcoin.
Having said that, I think it's bred two things: A lot of bad actors and scam artists, and at the same time a lot of really decent and noble attempts to self-regulate and create an even playing field. A lot of people who're basically self-made have come into Bitcoin, and some of them are just trying to rip people off and make a quick score... other ones, like StrikeSapphire, and like BitZino (our competition, who the Calvin Ayre and Forbes articles were mainly about) are trying some clever new approaches to proving that they're fair casinos. It's twice as important to do that in Bitcoin, because it's anarchy out there...there are a lot of scammers, nobody trusts anybody... so if you're in it for the long haul, a new level of transparency is really called for, and the leading places are rising to that and providing players with a wealth of statistics that you would never see in a regular online casino, let alone a brick-and-mortar.
Be happy to answer any questions. BTW IanO, turns out I'm going to be in Barcelona so...... beers!!!
Since he's the republican nomination for president wonder if this was fed by the democrats somehow.
really is turning into an ugly and smear race.....
wish they would all just get down to the facts and stop the bullshit
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