1. The user had 1,400 BTC in an old wallet using this software
2. An old version of the software was vulnerable to phishing
3. The user attempted to use the software, and was phished
4. Massive payday for the scammers
Really unfortunate - and goes to show with software you manage yourself you need to be diligent about making sure it's updated. For all the shit coinbase gets, it's difficult to lose your coins in this manner.
If you trick me into an ACH transfer of 16 million, there will
a) Trigger some random human based audits at my bank before the money can leave (likely involve some phone calls)
b) Have actual recourse, like court orders to hold the funds at the other bank
c) Take some amount of time to happen, to allow for A & B
It's not perfect, and it has bugs.. but I would never store actual money of value in crypto anything.
Fun recent case - Citibank claims they fatfingered $900 million over:
https://www.bloomberg.com/opinion/articles/2020-08-25/citigr...
And they're having some trouble getting all of it back although the commentaries suggest that they (eventually) will.
Aside from U2F, Coinbase offers TOTP and SMS-based 2FA, both of which are vulnerable to phishing. So no, Coinbase is not immune to losing coins in this manner. If Coinbase wanted to prevent being vulnerable to phishing they would i) only allow U2F 2FA, and ii) make U2F mandatory for all accounts.
2. The vector of the attack isn't important. The user ultimately lost his coins because he wasn't running the latest version of the software. He could have have easily lost his shirt from an RCE. That is much more difficult on a managed SaaS platform.
I am curious when crypto will get there. Maybe 10 years or so?
For that matter, a sizable percentage of cryptocurrency advocates either don't know or care either; their only concern is how much fiat they can trade cryptocurrency for.
I do not know about US, but in EU bank transfers are generally not reversible (except forced by courts). If you send money to wrong bank number, you cannot cancel the transaction in bank, you need to ask the owner of that account to send them back.
Compared to BTC, there are two differences - it is possible to identify an account holder and justice system can effectively force bank transfers.
E.g. when that pirate bay founder hacked a bank's mainframe and transferred money out internationally the banks sorted it out, sending it back, without a court.
Maybe you're thinking something specific about "reversing a transaction", but the main point here is that yes if needed a court can just make that reversing happen. Not the case for cryptocurrency. And no matter what the coiners say, irreversibility is very much a bug that society doesn't want.
https://www.vox.com/2019/6/18/18642645/bitcoin-energy-price-...
But I generally agree with the advice that the service banks and fiat currency provide is probably worth the cost for almost everyone.
I’ve heard of this happening to others and have argued that the money is lost and cannot be recovered. People think it’s crazy the money is lost and cannot be recovered. From what I’ve heard it cannot be recovered.
Is your friend able to recover the funds?
How did it happen? Did the instructions for transfer get altered by someone?
Thanks.
I mean, it is always the state, if you follow the string to the end, that oversees and enforce compensation, rollback and error correction.
What kind of fully-distributed non-autoritative algorithm can do that?
https://www.nytimes.com/interactive/2018/05/03/magazine/mone...
What he did was reckless. Some people are going cry that Bitcoin is unsafe because of this. It's not. You must handle large amounts of cash or gold or other valuables with care.
In this case, it's just the fact that the access was granted at the application level when the user logged into their wallet, which is like giving someone keys to your car by mistake.
The knowledge gulf is so wide in cryptocurrency that schemes are resurrectable every bull market
Like, some people will use this to reinforce their juvenile binary argument about why “crypto bad”, and then they enter next bull market after someone they respect shows them something they didn't consider. But then they are still a decade late in knowledge while chasing every new shiny thing. If people want to learn its there, permissionless, lucrative.
I had 1,400 BTC in a wallet that I had not accessed since 2017. I foolishly installed the old version of the electrum wallet. My coins propagated. I attempted to transfer about 1 BTC however was unable to proceed. A pop-up displayed stating I was required to update my security prior to being able to transfer funds.
I installed the update which immediately triggered the transfer of my entire balance to a scammers address.
Read more here:
Full nodes: https://en.bitcoin.it/wiki/Full_node
Lightweight nodes: https://en.bitcoin.it/wiki/Lightweight_node
Hardware wallets are relatively new and uncommon, so not much is known about their security risks. That said, there are no glaring, obvious issues and you could use one if you want.
Read: https://en.bitcoin.it/wiki/Hardware_wallet#Security_risks
As always, do not take advice from strangers on the internet about storing your crypto without doing extensive research on your own. The Bitcoin wiki is a great starting point: https://en.bitcoin.it/
Is the report of being scammed a scammer trying to make extra money on a sale? How would anyone know?
I mean they definitely could have seen that transaction and just acted like it was their stolen money.
Would it have been possible to exchange that much BTC for US dollars? Ignoring taxes for a few seconds. Would it have actually been possible to get real fiat money for the 1,400 BTC?
I’ve always heard of complete incompetence trying to get an account set up on any exchange. Getting verified, etc.
This guy is most likely somewhat technically literate, and this happened to him.
https://en.wikipedia.org/wiki/Bitcoin
It's clear that the purpose of Bitcoin is to replace existing banking institutions by providing a trust-less alternative. This means that using an exchange to store Bitcoin is essentially useless. If your purpose is to protect your money by handing it over to a trusted institution, then you're better off putting it into a bank that's FDIC insured.
Of course, the real reason that people store their Bitcoin on Coinbase is so that they can easily profit from speculation by exchanging their coin for USD.
>Coinbase holds less than 2% of customer funds online
So you're not really insured against some human getting the offline key https://help.coinbase.com/en/coinbase/other-topics/legal-pol...
It's a good example of why regulation is necessary in banking.
But doesn't know what IRC or freenode is, as illustrated by a comment in that thread.
Unless you hold and control it personally, it's not yours at all.
While it's definitely convenient in good times for your wealth storage to be in the hands of others, you're completely dependent on the goodwill of those others. In bad or difficult times, you're not going to keep that wealth for very long.
Honestly , while I found BlockChain & Immutable Ledger disruptive technology , I have zero trust in cryptos.
The amount of scam in this industry is just obscene, unlike banking , there is no such thing as insurance for your wallet or legal recourse to get back your assets, your pretty much on your own and I'm fairly convinced he won't get back his 1.5M$ Bitcoin .
I feel bad for him , but there is very little surprise playing with unregulated stuff.
The user experience where you personally still have your money might be something you like.
Also it was $16m bitcoin
So the author may have lost 1.4 BTC, or ~16k. Still a loss, but not 16m.
We are at the community stage with crypto.
Scams, in and outside of banks happen really frequently, so turning to traditional structures of control just because new ones failed at some point is defeatist. We can have nice things, but they need time to evolve properly.
But as we understood the world better, this one went out of fashion
"I got pickpocketed once and lost all my cash. This means that cash is inherently unsafe and should not be used by anyone ever."