Ugh. There are much better solutions than keeping user funds in the hot wallet (fully cold storage with manual withdrawals, multi-signature wallets), but many "reputable" businesses STILL uses them. I don't understand why. If you want to store your customers funds online, do it the right way, or don't do it at all.
I know it makes for a better headline to say $1M stolen, but unless actual USD was taken in the theft, I wish these headlines would say "X BTC stolen, valued at $Y."
But then again, the headline made it to the front page and got me to comment...
If you are new to bitcoin-related sites, you might find this story legitimate. But anyone that reads the article will see there is a basic flaw: DDoS attacks do not give access to the server, they just make the service inaccessible. If you read past (paid) articles about this very same service, you will see claims about how secure the system is, and how expert everyone that developed it is. The same was claimed by inputs.io, I'm sure you have read about that story earlier.
The thing is, if you want to use bitcoin, you cannot trust third parties to hold your coins for you. If you want to support bitcoin in your business, you cannot trust other sites to handle the payment for you. Yes, it is not convenient. But you have everything available to handle this yourself and, yes, you will need someone competent to do that for you if you are not into it. Bitcoin is not meant for the average user or the unaware merchant and it might never be, people need to start accepting this fact.
Misleading. 1295 BTC were stolen, no USD.
Whale Communications, before they were purchased by Microsoft, had a hardware solution where a shared HDD disk was used to physically switch it between 2 different hosts to enable file sharing in a shared directory. would be almost perfect to secure the hot wallet of a BT service. MS seem to discontinued the product. I wander if something like this still exists from another vendor?
Can we get a break from all these Bitcoin posts please?
I'm not a bitcoin expert, so I may end up off base, but...
The US government seemed surprisingly warm to bitcoin in the senate hearing. I suspect that if governments end up getting involved in bitcoin, each merchant will require some form of ID for each wallet that they interact with. This will mean that tracking down crimes like this will be fairly easy, since there's a record of each transaction. Trace down the chain, find the people involved, and if an anonymous wallet shows up, you investigate the people that it transferred to or from.
Sure, it erodes privacy, but bitcoin has the potential to make things much easier for law enforcement (and anyone else interested in money transfers) by causing registration of endpoints, giving very strong leads to investigators.