Another Bitcoin company has fallen victim of a massive cyberheist. BIPS, one of the largest European Bitcoin payment processors, lost 1,295 Bitcoin (currently worth $1 million) after a cyberattack.
As the price of Bitcoin continues to rise, cybercriminals are targeting companies with large holdings of Bitcoins in their servers. The attack on BIPS happened just a few weeks after inputs.io, which allegedly lost 4,100 BTC, worth more than $1 million at the time.
SEE ALSO: Bitcoin Goes to Washington: The Case for and Against Digital Currency
Hackers launched their initial Distributed Denial of Service (DDoS) attack on BIPS on Nov. 15, the company wrote in a Reddit post. The hackers attacked again on Nov. 17, overloading BIPS servers and somehow getting access to several online wallets, which allowed them to steal the 1,295 BTC.
BIPS, which claims to have more than 20,000 customers, offered free online wallets to store their Bitcoin online. It also offers a payment processors for merchants who want to accept payments in Bitcoin.
The company released a statement saying the attack compromised "several consumer wallets." However, it didn't specify how many accounts were hacked. BIPS' CEO Kris Henriksen told Mashable that "most of the missing funds were from our company’s own holdings," but declined to be interviewed for lack of time. "This is my fifth day without sleep," he added in an email.
After the attack, Henriksen advised his customers to avoid online wallets altogether, despite the fact that his company offered them to users. BIPS' online wallet service is now suspended.
"Attacks are not isolated to us, and if you are storing larger amounts of coins with any third party, you may want to find alternative storage solutions as soon as possible," he wrote in a BitcoinTalk forum message.
"Web Wallets are like a regular wallet that you carry cash in and not meant to keep large amounts in," he added.
But several BIPS customers, who still don't know if they'll ever get their Bitcoin back, aren't convinced by Henriksen's advice, saying he never warned them of any danger before the attack. On the contrary, the company said it was secure.
Responding to Henriksen's claim that web wallets are only meant for little amounts of Bitcoin, a BitcoinTalk forum user that goes by the name of Cubicdissection said: "At NO point did you EVER say hey you shouldn't keep your BTC with us."
"In fact, your website said: 'Your data is secure at BIPS.' So yeah, I felt pretty goddamn secure leaving my BTC balance there," he added. "Why don't you speak in plain English and quit giving us the runaround? Because it makes me think you're a liar and have something to hide."
Another user, nicknamed Genghis34, said he had 90 Bitcoin (around $73,000) in his BIPS wallet. He his now asking other victims to sign up online to form a group to potentially sue BIPS and use the threat of a lawsuit as a "negotiating block" for a settlement.
Henriksen's conclusion that online wallets aren't safe echoes what the founder of inputs.io said after his website's loss of 4,100 Bitcoin.
"I don't recommend storing any Bitcoins accessible on computers connected to the Internet," he wrote at the time.
But for victims of the BIPS heist, these warnings come too little too late.
"Bitcoin is the wild west," wrote Genghis34. "And I really doubt this was intentional on the part of bips.me — just probably overconfidence to run a wallet service without proper security."
2013年12月1日 星期日
A Bitcoin Puzzle: Heads, It’s Excitement. Tails, It’s Anxiety
Bitcoin isn’t ready for popular consumption, and it may never be.
It doesn’t fit into a neat product category. Often called a virtual currency, it’s not legal tender anywhere on the planet. It’s not an income-generating asset class suitable for most investors. Its value, in dollars, fluctuates wildly from one minute to the next. And while it can be a cheap way of transferring money, there are too many glitches in its emerging network for bitcoin to be entirely reliable.
Even its advocates have been raising red flags. As Patrick Murck, general counsel for the Bitcoin Foundation, a nonprofit devoted to “fostering the bitcoin ecosystem,” acknowledged in a Senate hearing last week, “It’s very much still an experimental currency and it should be considered a high-risk environment for consumers and investors at the moment.”
Yet bitcoin has been receiving plenty of attention, and not just because well-publicized speculators have been making money on it.
High-risk experiment though it may be, bitcoin embodies an elegant and disruptive technology. It uses file-sharing, the peer-to-peer computer innovation that spawned early music services like Napster, Kazaa and LimeWire. In their early days, they sometimes walked on the wild side, but their experiences led to a wholesale digital transformation of the music business.
Bitcoin gives file-sharing a brilliant twist. In essence, it has created “a decentralized virtual currency that uses a peer-to-peer consensus system to confirm and verify transactions,” two researchers at the Federal Reserve Bank of St. Louis concluded in a recent study. And François R. Velde, a senior economist at the Federal Reserve Bank of Chicago, made this assessment in a new report on bitcoin: “It represents a remarkable conceptual and technical achievement, which may well be used by existing financial institutions (which could issue their own bitcoins) or even by governments themselves.”
It doesn’t fit into a neat product category. Often called a virtual currency, it’s not legal tender anywhere on the planet. It’s not an income-generating asset class suitable for most investors. Its value, in dollars, fluctuates wildly from one minute to the next. And while it can be a cheap way of transferring money, there are too many glitches in its emerging network for bitcoin to be entirely reliable.
Even its advocates have been raising red flags. As Patrick Murck, general counsel for the Bitcoin Foundation, a nonprofit devoted to “fostering the bitcoin ecosystem,” acknowledged in a Senate hearing last week, “It’s very much still an experimental currency and it should be considered a high-risk environment for consumers and investors at the moment.”
Yet bitcoin has been receiving plenty of attention, and not just because well-publicized speculators have been making money on it.
High-risk experiment though it may be, bitcoin embodies an elegant and disruptive technology. It uses file-sharing, the peer-to-peer computer innovation that spawned early music services like Napster, Kazaa and LimeWire. In their early days, they sometimes walked on the wild side, but their experiences led to a wholesale digital transformation of the music business.
Bitcoin gives file-sharing a brilliant twist. In essence, it has created “a decentralized virtual currency that uses a peer-to-peer consensus system to confirm and verify transactions,” two researchers at the Federal Reserve Bank of St. Louis concluded in a recent study. And François R. Velde, a senior economist at the Federal Reserve Bank of Chicago, made this assessment in a new report on bitcoin: “It represents a remarkable conceptual and technical achievement, which may well be used by existing financial institutions (which could issue their own bitcoins) or even by governments themselves.”
Bitcoin Black Friday Lists Sales and Discounts for Bitcoin Purchases
Web: If you are looking to spend some bitcoins this Black Friday, then Bitcoin Black Friday has a listing of all the sales and some exclusive discounts for bitcoin-only purchases.P
The value of bitcoin recently went past $1000, so if you have a few in your e-wallet and are looking to spend them during Black Friday, this should get you some great deals. P
There's a wide variety in the dealers that have already signed up. You can buy Reddit gold for a cheaper price, unlocked phones from GSM Nation, art, t-shirts and much more. Discounts start on November 29, with a promise of more to come.P
We have already shown you some of the best apps and websites for holiday shopping deals, but Bitcoin Black Friday even has a charity element to it, featuring merchants who let you buy and give (like the Humble Bundle) or straight donations to charitable organisations.P
The value of bitcoin recently went past $1000, so if you have a few in your e-wallet and are looking to spend them during Black Friday, this should get you some great deals. P
There's a wide variety in the dealers that have already signed up. You can buy Reddit gold for a cheaper price, unlocked phones from GSM Nation, art, t-shirts and much more. Discounts start on November 29, with a promise of more to come.P
We have already shown you some of the best apps and websites for holiday shopping deals, but Bitcoin Black Friday even has a charity element to it, featuring merchants who let you buy and give (like the Humble Bundle) or straight donations to charitable organisations.P
Bitcoin payments with a simple tap? Multi-purpose nio Card gets added functionality
A British startup called Bluenio has revealed what it claims is the world’s first Bitcoin payment smartcard – or at least it will be if no others have popped up by the time it ships in March.
Bluenio is already in the middle of a Kickstarter campaign for the nio Card, which was initially pitched as a security chain for helping to cut down on the loss of smartphones and wallets. It still does that – it does a few things, actually — but on Friday the company said it would also function as a Bitcoin wallet-slash-payment-card that can transfer money “in a single tap” using near-field communication (NFC) technology.
Easier Bitcoin payments
“It’s a cool way to provide secure Bitcoin payments in a way you currently can’t do,” Bluenio co-founder Ben Hounsell told me. “The way of making a Bitcoin payment right now can be a little bit convoluted, or certainly not as easy as making a traditional chip-and-PIN payment or a tap. You have to scan a QR code, read it in, validate the payment, enter private keys… it can be quite irritating.”
nioCard_bitcoin“Having a card where you tap to make a payment securely bring s [Bitcoin] in line with more conventional ways of making payments.”
You can already get Bitcoin wallet apps for Android devices that allow funds to be paid and received via NFC. However, nio Card allows owners of iOS devices, which unlike most modern Android phones do not have built-in NFC technology, to enjoy the same convenience.
Ultimately, Bluenio would like the nio Card to be able to replace traditional payment cards, Coin-style, but the company hasn’t struck the necessary deals with the banks yet. Europe largely uses chip-and-PIN cards, which are more advanced and secure than the magnetic-strip norm over the U.S., but that means you can’t simply swipe in any old card and have the device replace it, as you can with Coin.
Bluenio is already in the middle of a Kickstarter campaign for the nio Card, which was initially pitched as a security chain for helping to cut down on the loss of smartphones and wallets. It still does that – it does a few things, actually — but on Friday the company said it would also function as a Bitcoin wallet-slash-payment-card that can transfer money “in a single tap” using near-field communication (NFC) technology.
Easier Bitcoin payments
“It’s a cool way to provide secure Bitcoin payments in a way you currently can’t do,” Bluenio co-founder Ben Hounsell told me. “The way of making a Bitcoin payment right now can be a little bit convoluted, or certainly not as easy as making a traditional chip-and-PIN payment or a tap. You have to scan a QR code, read it in, validate the payment, enter private keys… it can be quite irritating.”
nioCard_bitcoin“Having a card where you tap to make a payment securely bring s [Bitcoin] in line with more conventional ways of making payments.”
You can already get Bitcoin wallet apps for Android devices that allow funds to be paid and received via NFC. However, nio Card allows owners of iOS devices, which unlike most modern Android phones do not have built-in NFC technology, to enjoy the same convenience.
Ultimately, Bluenio would like the nio Card to be able to replace traditional payment cards, Coin-style, but the company hasn’t struck the necessary deals with the banks yet. Europe largely uses chip-and-PIN cards, which are more advanced and secure than the magnetic-strip norm over the U.S., but that means you can’t simply swipe in any old card and have the device replace it, as you can with Coin.
Bitcoin Going Off The Rails On A Crazy Train
On Monday I wrote an article for TheStreet.com about the psychology of the Bitcoin craze. Since that article it had rallied another 50% into early trading on Friday. According to Bitcoincharts.com, the price is at $1213 as I write this post.
Part of the equation for the currency is that it is not inflationary, which is supposed to be in contrast to central banks which are inflationary by the nature of their policies. The chart captures the price action and I took the screenshot where the cursor hovered over a time from early in the year when the price was below $25.
Although Bitcoin is intended to be a currency, this sort of volatility hurts the chances that it can be widely adopted at some point (I realize some are using it for transactions). This is not to say Bitcoin should not exist, people should be able to speculate on whatever they want to and own the consequences good or bad but a vehicle for speculation (up 50% in a couple of days) makes for a poor choice for a currency.
Typically when a chart goes vertical as the Bitcoin chart has, it comes back down almost as fast (check out Andrea Electronics (OTCQB:ANDR) and Comparator Systems). If you can point to an instance where something went vertical and did not subsequently crash, please leave a comment with the particulars.
If it turns out that years of ZIRP and QE have distorted markets leading to some horrible consequence, then things like the mania with Bitcoin will be looked back at and with full conviction of hindsight bias we will regularly hear things like "we knew Bitcoin was a warning." In past posts I have noted that the equity markets have defied consequence and maybe there will never be a consequence from the last few years, but the divergence of the S&P 500's fortunes and Main Street's fortunes should at least increase your index of suspicion.
Part of the equation for the currency is that it is not inflationary, which is supposed to be in contrast to central banks which are inflationary by the nature of their policies. The chart captures the price action and I took the screenshot where the cursor hovered over a time from early in the year when the price was below $25.
Although Bitcoin is intended to be a currency, this sort of volatility hurts the chances that it can be widely adopted at some point (I realize some are using it for transactions). This is not to say Bitcoin should not exist, people should be able to speculate on whatever they want to and own the consequences good or bad but a vehicle for speculation (up 50% in a couple of days) makes for a poor choice for a currency.
Typically when a chart goes vertical as the Bitcoin chart has, it comes back down almost as fast (check out Andrea Electronics (OTCQB:ANDR) and Comparator Systems). If you can point to an instance where something went vertical and did not subsequently crash, please leave a comment with the particulars.
If it turns out that years of ZIRP and QE have distorted markets leading to some horrible consequence, then things like the mania with Bitcoin will be looked back at and with full conviction of hindsight bias we will regularly hear things like "we knew Bitcoin was a warning." In past posts I have noted that the equity markets have defied consequence and maybe there will never be a consequence from the last few years, but the divergence of the S&P 500's fortunes and Main Street's fortunes should at least increase your index of suspicion.
Second major Bitcoin heist this month allegedly takes over $1 million
Hackers have allegedly stolen over a thousand bitcoins from the European payment processor BIPS in a theft that's now valued at over $1 million. BIPS tells Mashable that most of the bitcoins — 1,295 in total — came from the company's own holdings, but "several consumer wallets" were also compromised in the hack. The payment provider says that it was initially hit with a DDoS attack on November 15th, followed by a second attack on November 17th that managed to take the funds. Though BIPS disclosed some information on the attack just two days later, full details don't appear to have been given until last Friday.
"YOU MAY WANT TO FIND ALTERNATIVE STORAGE SOLUTIONS AS SOON AS POSSIBLE."
BIPS says that the attacks appear to have originated from Russia and neighboring countries. It's now turning to law enforcement for help, but BIPS says that it'll first ask users for permission to turn over data about their bitcoins. Even with law enforcement's involvement though, users likely won't be seeing their lost bitcoins again — and at a time when they're becoming increasingly valuable. Because of the rapid fluctuation of Bitcoin's price, the stolen bitcoins were only worth around $650,000 at the time of the alleged theft, while they're now significantly more valuable.
Since the hacks, BIPS — which offers a free online wallet for storing Bitcoin — has been telling bitcoin owners that they should really be storing large quantities of the digital currency offline, where it can't be hacked. "Web wallets are like a regular wallet that you carry cash in and not meant to keep large amounts in," Kris Henriksen, BIPS founder, writes in a forum post. "Please be advised that attacks are not isolated to us and if you are storing larger amounts of coins with any third party you may want to find alternative storage solutions as soon as possible."
Another major hack took around 4,100 bitcoins from the wallet service Inputs.io earlier this month, then worth over $1 million as well. While Bitcoin hacks have contributed to crashes in the currency's pricing in the past, Bitcoin has only been rising lately — likely only making the currency all the more attractive to hackers.
"YOU MAY WANT TO FIND ALTERNATIVE STORAGE SOLUTIONS AS SOON AS POSSIBLE."
BIPS says that the attacks appear to have originated from Russia and neighboring countries. It's now turning to law enforcement for help, but BIPS says that it'll first ask users for permission to turn over data about their bitcoins. Even with law enforcement's involvement though, users likely won't be seeing their lost bitcoins again — and at a time when they're becoming increasingly valuable. Because of the rapid fluctuation of Bitcoin's price, the stolen bitcoins were only worth around $650,000 at the time of the alleged theft, while they're now significantly more valuable.
Since the hacks, BIPS — which offers a free online wallet for storing Bitcoin — has been telling bitcoin owners that they should really be storing large quantities of the digital currency offline, where it can't be hacked. "Web wallets are like a regular wallet that you carry cash in and not meant to keep large amounts in," Kris Henriksen, BIPS founder, writes in a forum post. "Please be advised that attacks are not isolated to us and if you are storing larger amounts of coins with any third party you may want to find alternative storage solutions as soon as possible."
Another major hack took around 4,100 bitcoins from the wallet service Inputs.io earlier this month, then worth over $1 million as well. While Bitcoin hacks have contributed to crashes in the currency's pricing in the past, Bitcoin has only been rising lately — likely only making the currency all the more attractive to hackers.
Hard drive containing £4m in bitcoins trashed
James said he was devastated when he realised what he had done: "I was in front of my computer, the drawer where the drive was kept was only a few yards away and the first thing I did was move to that drawer, and look, even though I knew it wasn't there, it was still the first thing I did."
"From the very first time I came across bitcoin I knew it was going to be a good investment and I knew it was going to be the next big thing. I mean, devastating really. What else can I say?" he added.
Bitcoin trades 24 hours a day, every day. The supply of the currency, which is "mined" by solving math problems, is limited, and recently stood at 12 million bitcoins, worth about £8 billion at recent prices.
"From the very first time I came across bitcoin I knew it was going to be a good investment and I knew it was going to be the next big thing. I mean, devastating really. What else can I say?" he added.
Bitcoin trades 24 hours a day, every day. The supply of the currency, which is "mined" by solving math problems, is limited, and recently stood at 12 million bitcoins, worth about £8 billion at recent prices.
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