Instawallet Hacked(notice.instawallet.org)
notice.instawallet.org
Instawallet Hacked
http://notice.instawallet.org/
19 comments
And when all of their wallet URLs were indexed in Google, I am pretty sure they're saying that nobody is getting a refund here.
I know it's been said many times before, but we're only going to see a rise in bitcoin thefts. With the price being over $100/coin and you're stealing virtually untraceable currency, I'm honestly just surprised that there hasn't been more thefts. I'm sure the security team at Mt. Gox is top notch as they probably have dozens of hack attempts per day.
I for one believe the barrage of attacks and attempted thefts will inevitably make Bitcoin safer. Just like Google Chrome's pwning contests, eventually nobody will be capable of claiming the prize.
It's not really comparable to Pwn2Own. Pwn2Own's only vector of attack is by finding flaws in the software directly.
All of these wallet service companies employ people and many, many successful hacks are performed by exploiting the people involved / mistakes the people make.
So while software with enough hardening can eventually get to a state that's quite safe, as long as people are an active part of the security chain, you're going to have valid attack vectors.
All of these wallet service companies employ people and many, many successful hacks are performed by exploiting the people involved / mistakes the people make.
So while software with enough hardening can eventually get to a state that's quite safe, as long as people are an active part of the security chain, you're going to have valid attack vectors.
How are attacks on $yourbitcoinservice supposed to make $mynewbitcoinservice safer?
Because $mynewbitcoinservice will realize, "whoa, we should make sure we are hack-proof," and then use HTTPS to make sure they are hack-proof.
Growing pains.
Which is going to be a huge limit on sustained value/adoption, for better or worse. Bitcoin's rooted in the community most capable of stealing it.
The bitcoin community spends a ton of time trying to educate people on cold-storage wallets and two-factor authentication for online wallets.
MtGox has even given away free YubiKeys in the past to help keep people's accounts secure. Does Chase or BofA anyone else offer that kind of security? :)
https://en.bitcoin.it/wiki/Cold_storage https://mtgox.com/press_release_20120215.html
MtGox has even given away free YubiKeys in the past to help keep people's accounts secure. Does Chase or BofA anyone else offer that kind of security? :)
https://en.bitcoin.it/wiki/Cold_storage https://mtgox.com/press_release_20120215.html
The thing is, Chase and BoA are often capable of reversing fraud and catching the people behind it. Bitcoins don't really allow for that sort of restitution.
Bitcoin is not a bank, and does not replace banks.
There's nothing stopping anyone from setting up a bank that handles your bitcoin transactions, and therefore can reverse transactions between two parties.
Replace "Bitcoin" with "Dollar" and you see how strange your statement is.
There's nothing stopping anyone from setting up a bank that handles your bitcoin transactions, and therefore can reverse transactions between two parties.
Replace "Bitcoin" with "Dollar" and you see how strange your statement is.
I think the issue would be more that bitcoin is philosophically incompatible with services like that.
Bitcoin is anonymous, so I could transfer my money to my account at another bank, report fraud, and the bank could never know unless the other bank told them. If the other bank tells them, or you set up a centralized register of transfers or accounts, you're just mirroring the current systems.
Bitcoin doesn't have The Man, so there's no motivation not to do so fraudulently - what's the worst that happens if a bank realizes you're trying to defraud them? You've already moved your money elsewhere.
Bitcoin is anonymous, so I could transfer my money to my account at another bank, report fraud, and the bank could never know unless the other bank told them. If the other bank tells them, or you set up a centralized register of transfers or accounts, you're just mirroring the current systems.
Bitcoin doesn't have The Man, so there's no motivation not to do so fraudulently - what's the worst that happens if a bank realizes you're trying to defraud them? You've already moved your money elsewhere.
Yes, they do. https://www.bankofamerica.com/privacy/online-mobile-banking-...
Chase has a thing where it texts you a code as well.
Chase has a thing where it texts you a code as well.
interactive brokers has various type of two factor authentication depending on how much money you have stored with them.
dont know bout the US but in Germany every bank requires 2FA for transfers
Eh that is nothing, just imagine when people who have no ability to steal it and thus no awareness of how it might be stolen get pulled in by the hype.
Not to mention the costs that security brings, a friend of mine is locked out of what is now $50k worth of bitcoins, just can't remember the password on the encrypted store.
Not to mention the costs that security brings, a friend of mine is locked out of what is now $50k worth of bitcoins, just can't remember the password on the encrypted store.
This [https://news.ycombinator.com/item?id=5475389] conversation suggests that there might have been a very large withdrawal of funds just prior to the system shutdown.
It points out again how careful you have to be when suddenly there is "real money" on the line.
I've yet to see the "exit strategy" where an enterprising crook sets up an exchange and then loots it once its net value is high enough. But I would not be surprised to see that happen. It has happened in the brick and mortar world with banks, no reason it shouldn't be any different in the digital world.
It points out again how careful you have to be when suddenly there is "real money" on the line.
I've yet to see the "exit strategy" where an enterprising crook sets up an exchange and then loots it once its net value is high enough. But I would not be surprised to see that happen. It has happened in the brick and mortar world with banks, no reason it shouldn't be any different in the digital world.
So everyone knows the destination address of fraudulent transfer.
I wonder if it would make sense to mark it as "dirty" and mark as "dirty" every other address where the funds will be transferred from this address.
And then every legitimate merchant, after receiving bitcoin payment would validate incoming address against "dirty" list to allow tracking of thief?
This of course works only if every merchant and service in bitcoin world would do that.
Just an idea ...
Just an idea ...
I doubt the miners would accept this idea. It goes against a key principle of Bitcoin: that transactions are irreversible and no authority can appropriate your coins.
Even the 0.8->0.7 reversal was hard for some miners to swallow. And in that case it was only accepted because only doubly-spent transactions would be reversed. Singly-spend transactions would just transfer over to the new chain.
I don't expect to ever see a Bitcoin fork where a cryptographically valid, singly-spent, included-in-a-block transaction is reversed.
Even the 0.8->0.7 reversal was hard for some miners to swallow. And in that case it was only accepted because only doubly-spent transactions would be reversed. Singly-spend transactions would just transfer over to the new chain.
I don't expect to ever see a Bitcoin fork where a cryptographically valid, singly-spent, included-in-a-block transaction is reversed.
That would be totally merchant-driven, nothing to do with miners. No reversals needed.
I don't understand how your proposal is tenable. There's nothing preventing the fraudulent party with their blocked Wallet A to just create a new Wallet B, transfer funds to that, and then use it.
If you're a merchant, you'd have to do origin tracing of the funds in all the wallets you accept. It's not as simple as just creating a blacklist, that would be very easily avoided. The only thing that might work is getting all miners to refuse to accept transfers from the "bad" address to ANY other address (good luck, that's never going to happen).
If you're a merchant, you'd have to do origin tracing of the funds in all the wallets you accept. It's not as simple as just creating a blacklist, that would be very easily avoided. The only thing that might work is getting all miners to refuse to accept transfers from the "bad" address to ANY other address (good luck, that's never going to happen).
Your list could get pretty big, but I think it's a decent idea.
Some merchants don't give a shit, AKA "it's your own fault if you get robbed," but lots of people don't like to help thieves.
It's been a while since I looked at the protocol -- can you "reject" a payment? Or return it?
Some merchants don't give a shit, AKA "it's your own fault if you get robbed," but lots of people don't like to help thieves.
It's been a while since I looked at the protocol -- can you "reject" a payment? Or return it?
Isn't the whole point of bitcoins to get away from that kind of thing though? Someone has to maintain a list of what is 'dirty' and that maintainer becomes a central authority in the market. And, as I understand it, part of the philosophy of bitcoins is to have an open and free market. So while your idea is theoretically possible, once things like that start I fail to see how bitcoins are different from any other currency.
The counterattack to this is to transfer small amounts of the "tainted" btc to the addresses of the people who are leading the effort (or to outgoing addresses for large exchanges, faucets, and so on). This is effectively the same as laundering through dice/the late instawallet/et cetera
>and mark as "dirty" every other address where the funds will be transferred from this address
One problem is that bitcoin launderers could intentionally send a portion of stolen coins to legitimate wallets. That would make a blacklist difficult to maintain, to say the least.
One problem is that bitcoin launderers could intentionally send a portion of stolen coins to legitimate wallets. That would make a blacklist difficult to maintain, to say the least.
I expect nothing less from Instawallet. Previously, they used to keep private keys in the URL and allowed google to index these URLs. It took a lot of pestering and hand-holding to get this fixed. I should have figured this would have happened sooner or later, given their incompetency regarding security.
Dunning-Kruger is an order of magnitude stronger for security.
If you are doing security for a Bitcoin site, your motto should be "I am an idiot and am forgetting something very basic." Then you should try to figure out how to protect yourself from your own idiocy despite being stupid.
And you should never assume you just got smart.
And you should never assume you just got smart.
And then a 17 year old launches before you and takes your customers.
In that case, you need to out-last the 17 year old until his site dies from the security breach.
And the 17 y/o takes their customers' wallets, what's your point?
The market can stay irrational longer than you can stay solvent. Everybody who tried to "do it right" (TradeHill, CampBX, etc.) seems to have failed while users flock to the joker du jour.
Wouldn't it then be hard to be the joker du jour for long?
That should be your motto all the time, for everything.
> Instawallet hacked
Another alternative is that the Instawallet people just decided to keep the "money" you had stored there, and retire to a small Caribbean island.
You'll never know.
Another alternative is that the Instawallet people just decided to keep the "money" you had stored there, and retire to a small Caribbean island.
You'll never know.
This type of incident is a key reason the US Treasury's Financial Crimes Enforcement Network ("FinCEN") issued sensible guidance requiring those who offer wallet (bitcoin transfers between persons and/or merchants) and currency conversion services to be regulated as money transmitters. While money transmitter regulation isn't perfect and is expensive for providers, it can provide some consumer protections in these scenarios.
Edit: Forgot to link to their guidance
http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001....
Edit: Forgot to link to their guidance
http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001....
Clicking the logo directs the user to http://localhost:3000.
On a side note... New Business plan:
1. Setup an online Bitcoin wallet service 2. Wait a while till people actually trust/use it 3. "We got hacked"
On a side note... New Business plan:
1. Setup an online Bitcoin wallet service 2. Wait a while till people actually trust/use it 3. "We got hacked"
>On a side note... New Business plan:
>
>1. Setup an online Bitcoin wallet service 2. Wait a while till people actually trust/use it 3. "We got hacked"
Something tells me you're not the first to come up with this.
Something tells me you're not the first to come up with this.
Very high risk for moderate reward, assuming you're based in a country with functioning law enforcement.
Depends on the countries laws. What makes you think anyone attorney is going to prosecute the theft of a "digital currency." At this time in the world most people when informed of bitcoin think it's a toy currency.
Law enforcement aren't necessarily terribly keen on pursuing difficult crimes, especially when the victims are as uncooperative with the investigation as Bitcoin users have historically been
not suggesting this is what happened as it's the first time i even hear about them.
but i've seen people do worse illegal risk/reward decisions before. much worse.
but i've seen people do worse illegal risk/reward decisions before. much worse.
It is impossible to prove either way.
How many more times do we need to go through this?
People: Only keep an amount you are willing to lose in an online wallet. Keep the rest offline and encrypted.
People: Only keep an amount you are willing to lose in an online wallet. Keep the rest offline and encrypted.
If only "Keep the rest offline and encrypted." didn't sound like Charlie Brown's teacher speaking to 99% of the world...
If you are using it as a currency, "offline and encrypted" is "unusable."
If you are using it as a commodity to trade, well, it's perfect.
If you are using it as a commodity to trade, well, it's perfect.
Maybe. Perhaps it might be useful to compare online bitcoin storage with cash in your pocket. You wouldn't convert your entire nett worth to cash, stick it in your pocket (or for "added security", hide it in your sock!) then go out clubbing.
Unless you're about to buy a car or a house with bitcoin, there's no need to store tens or hundreds of thousands of dollars worth in an immediately useable (and hence potentially stealable) status.
Unless you're about to buy a car or a house with bitcoin, there's no need to store tens or hundreds of thousands of dollars worth in an immediately useable (and hence potentially stealable) status.
What made Instawallet better than Blockchain for an online wallet? why did people use it? what was the selling point??
When depositing to Instawallet, your money would be stored in a common pool, so upon withdrawal you'd get different coins back. So it functioned as a "mixing service", which helps improve anonymity for those who need that. And it was super easy to use, which made it popular with newbies with little understanding of how foolish it is to give a service like this full control over your money.
From the description, it sounds like a money laundering service.
Lol, and i think that's where it's main business came from.
Law enforcement hired hackers to screw it and now awaiting at the front door to take a much closer look at everyone who'll start whining about lost funds. :)
Law enforcement hired hackers to screw it and now awaiting at the front door to take a much closer look at everyone who'll start whining about lost funds. :)
They'd do much better to subvert it and observe the movement of funds.
You made me think "if there's a site for online storage of wallets and someone has paid the amount of money needed for decent security for it, it's probably because the government is running it."
Probably is the key here. There is the off-chance that some motivated people can enlist the help of talented up and coming experts.
Also, this is something that a smart and savvy government would do. If large governments are ever smart and savvy, they're only that in specific contexts.
Also, this is something that a smart and savvy government would do. If large governments are ever smart and savvy, they're only that in specific contexts.
No that's already bitcoin itself.
"Just use Bitcoin" is a money laundering meme governments should love.
Blockchain.info does this for a small fee.
Who ever said that it was better?
No online wallets are secure, nobody should be using them, but unfortunately the bitcoin system is still a bit too complicated for a lot of people.
No online wallets are secure, nobody should be using them, but unfortunately the bitcoin system is still a bit too complicated for a lot of people.
It's not that it's impossible to for online wallets to be secure, it's that most of the people implementing them are amateurs when it comes to security.
The Bitcoin industry needs bank level security. They're doing some things right (most exchanges offer 2FA), but they've got a long ways to go.
The Bitcoin industry needs bank level security. They're doing some things right (most exchanges offer 2FA), but they've got a long ways to go.
Nobody besides Gox is making enough money to afford real security AFAIK.
This what i don't get. Banks can secure themselves, large e-commerce sites as well. Do any of these guys run Hardware security modules and use them to manage encryption of the keys?
Instawallet's only form of a login was a URL, which Google indexed 1,000s of just last week: http://www.adaptiveglass.com/?p=656
Honestly, I am curious if the security researcher (who alerted them to this problem and then griped out lack of payment in the article) is the person responsible.
Honestly, I am curious if the security researcher (who alerted them to this problem and then griped out lack of payment in the article) is the person responsible.
Ya know, that blog you linked to - I don't like that he's upset he didn't get a reward for his good deed. He should be just happy to do a good deed, IMHO.
Yeah, if you were expecting a reward, it's not a good deed.
I informed some BTC places of security problems a few years ago, and was roundly ignored, although they put the fixes in place, from what I recall. I wasn't upset because I wasn't expecting anything.
EDIT
Reading that page . . . depending on a URL staying secret as your security? Wow, that is asking for disaster.
I don't like to shame people who make security mistakes, but if you are online wallet vendor, shouldn't you have some common sense?
I informed some BTC places of security problems a few years ago, and was roundly ignored, although they put the fixes in place, from what I recall. I wasn't upset because I wasn't expecting anything.
EDIT
Reading that page . . . depending on a URL staying secret as your security? Wow, that is asking for disaster.
I don't like to shame people who make security mistakes, but if you are online wallet vendor, shouldn't you have some common sense?
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Instawallet always made it clear that no one should keep anything more than spare change there.
I don't think they said that on the homepage, they advertised themselves as a bitcoin wallet.
They did say so at one time or another I believe, but that was long long ago.
They did say so at one time or another I believe, but that was long long ago.
Given the recent trends in Bitcoin values, yesterday's spare change was today's real money.
It wasn't better as in more secure, it was instant and easy. It was a low-security wallet designed for trying out bitcoin.
Wow, could become a clusterfuck of epic proportions:
1. It takes three months to get you BTC back, and only up to a max of 50. If you have more, it will take longer.
2. If the hackers can figure out your url and key, they can dispute your claim. If they actually get their claim in before your legit claim, their claim is favored.
Yikes. I would not want to be either an Instawallet employee having to sort that mess, or a client with their BTC frozen for months and potentially at risk of being stolen.
"Important information on claims submission:
For the first 90 days we will accept claims for individual Instawallets. Your wallet's URL and key will be used to pre-populate a form to file the claim.
After 90 days, if no other claim has been received for the same url, your Instawallet balance under 50 BTC will be refunded. If several claims have been filed for the same url, we will process those claims on a case by case basis, under the presumption that the claim we received first belongs to the legitimate balance holder.
Claims for wallets that hold a balance greater than 50 BTC will be processed on a case by case and best efforts basis."
1. It takes three months to get you BTC back, and only up to a max of 50. If you have more, it will take longer.
2. If the hackers can figure out your url and key, they can dispute your claim. If they actually get their claim in before your legit claim, their claim is favored.
Yikes. I would not want to be either an Instawallet employee having to sort that mess, or a client with their BTC frozen for months and potentially at risk of being stolen.
"Important information on claims submission:
For the first 90 days we will accept claims for individual Instawallets. Your wallet's URL and key will be used to pre-populate a form to file the claim.
After 90 days, if no other claim has been received for the same url, your Instawallet balance under 50 BTC will be refunded. If several claims have been filed for the same url, we will process those claims on a case by case basis, under the presumption that the claim we received first belongs to the legitimate balance holder.
Claims for wallets that hold a balance greater than 50 BTC will be processed on a case by case and best efforts basis."
Also troubling is their logo links to localhost:3000. Why would you hard link that in the first place?
https://bitcointalk.org/index.php?topic=83794.0
A good look at previous thefts. The last page contains links to the current Instawallet issue.
A good look at previous thefts. The last page contains links to the current Instawallet issue.
[deleted]
If this is what it sounds like, and the "exploit" was google indexing a bunch of URLs which allowed direct access to the funds they referenced, how did google discover them in the first place?
There was mention of a missing/broken robots.txt which allowed GoogleBot to index them, but what I'm stuck on is how it learned about them in the first place; where they actually doing something utterly insane like autopublishing a sitemap, or was there some bug allowing g'bot to sniff/guess the URLs?
I've seen odd behaviour in my logs from google crawls in the past, like g'bot traffic within minutes of adding a new DNS entry/vhost to a domain, with absolutely assuredly no mention of it publicly available. I suppose it's possible they're watching DNS zone changes and scheduling a tentative probe, but it's a bit creepy (especially if you're disorganised and haven't got the robots.txt set up right away)
There was mention of a missing/broken robots.txt which allowed GoogleBot to index them, but what I'm stuck on is how it learned about them in the first place; where they actually doing something utterly insane like autopublishing a sitemap, or was there some bug allowing g'bot to sniff/guess the URLs?
I've seen odd behaviour in my logs from google crawls in the past, like g'bot traffic within minutes of adding a new DNS entry/vhost to a domain, with absolutely assuredly no mention of it publicly available. I suppose it's possible they're watching DNS zone changes and scheduling a tentative probe, but it's a bit creepy (especially if you're disorganised and haven't got the robots.txt set up right away)
In an authority-less and irreversible transaction currency it still surprises me when I hear about someone losing money to a service such as this - without an authority the burden of security truly is on the user themselves and they are at the mercy of the (supposed) security of whatever exchange or service they are attempting to use. In this case, having someone manage your wallet for you.
I personally keep my bitcoin wallet encrypted with GPG, I manually (like a safe) decrypt it when I want to make a bitcoin transaction and encrypt it when I'm done.
I personally keep my bitcoin wallet encrypted with GPG, I manually (like a safe) decrypt it when I want to make a bitcoin transaction and encrypt it when I'm done.
Given the fact that instawallet was rarely used in the previous few years, I doubt this will have much of an impact on the Bitcoin market: http://www.alexa.com/siteinfo/instawallet.org
> rarely used in the previous few years
Yeah it's only worth $1 800 000. Nothing to worry about.
Sources: https://blockchain.info/address/1LrPYjto3hsLzWJNstghuwdrQXB9... (btc amount) https://blockchain.info/stats (current price)
Yeah it's only worth $1 800 000. Nothing to worry about.
Sources: https://blockchain.info/address/1LrPYjto3hsLzWJNstghuwdrQXB9... (btc amount) https://blockchain.info/stats (current price)
FWIW Alexa isn't accurate and can easily be gamed.
I am aware, but at least it doesn't look like this: http://www.alexa.com/siteinfo/bitcoin.org
Faking a high alexa ranking may be possible, but faking a low alexa ranking is not.
You can't fake the fact that next to nobody went to instawallet.
Faking a high alexa ranking may be possible, but faking a low alexa ranking is not.
You can't fake the fact that next to nobody went to instawallet.
I'm talking about the sites with a lower alexa ranking who potentially are gaming the results. For instance, I have a "junk" site (its kindof lame) which took about ~30 minutes of my time to make in 2007 and I haven't touched it since and this site is by far the largest in its niche. I know it’s the largest in the niche because, I know some of the other webmasters in this niche & we’ve shared traffic info. Anyway my “junk” site has a significantly higher alexa ranking than its competitors - for instance they are nearly in the top 100k (they get ~60-70% of the traffic) and this site is nowhere near that.
"Faking a high alexa ranking may be possible, but faking a low alexa ranking is not."
You need to be the sort of idiot who runs feature-free bloatware before you can contribute to their ranking system.
You need to be the sort of idiot who runs feature-free bloatware before you can contribute to their ranking system.
That is not a counter to his argument.
If you think it is not a counter to his argument, you're missing the point, that low scores are not indicative of low traffic, and high scores are not indicative of high traffic (except among a very specific demographic.)
How does Alexa get the information to rank websites? From a toolbar a user has to install ... maybe the people using some place like instawallet wouldn't be too keen on sharing data with a 3rd party.
About 0.4% of all Bitcoins currently in existence are stored there. Hopefully most of them find their way back to their rightful owners.
How would that happen?
I use coinbase. How long until they are hacked? Who can I trust! This is the one con to bitcoin.
stop. storing. your. wallet. online. (I wanted to write this in caps, but I resisted)
I'll add this to my list of things that people know they should do but are too lazy to take a few minutes and setup: don't repeat passwords, use a password manager, make regular backups, don't use GoDaddy.
Stop thinking you're the exception dammit, these things don't take that much effort to do properly.
I'll add this to my list of things that people know they should do but are too lazy to take a few minutes and setup: don't repeat passwords, use a password manager, make regular backups, don't use GoDaddy.
Stop thinking you're the exception dammit, these things don't take that much effort to do properly.
I have my coins split between a wallet that I control and an online wallet that I have some faith in.
Because honestly, I don't actually fully trust myself. The chance is not negligible that I get a trojan with a keylogger that watches for me to open my wallet. So I store some of my coins online as a hedge against my own stupidity and the inherent insecurity of desktop computing.
I may, in the future, move a large portion of my coins into a fully offline (generated on a machine that's never seen the internet), safety-deposit-box stored wallet. But that's a little bit excessive at this point.
Because honestly, I don't actually fully trust myself. The chance is not negligible that I get a trojan with a keylogger that watches for me to open my wallet. So I store some of my coins online as a hedge against my own stupidity and the inherent insecurity of desktop computing.
I may, in the future, move a large portion of my coins into a fully offline (generated on a machine that's never seen the internet), safety-deposit-box stored wallet. But that's a little bit excessive at this point.
Wouldn't a keylogger watch you open your online wallet too, and therefore provide the criminal access to your online wallet as well?
Yeah, it's really not too hard to use a live linux disc to boot into to do transactions, etc. Keep the wallet encrypted in the client, keep the USB drive you store the wallet on dm-crypted. Keep the wallet (and it's daily backups) backed up to your DropBox in case you lose your jump drive.
The weakest link is then DropBox + your BTC-client password. Or I guess if someone has modified the live environment on your jump drive or if they have a sophisticated attack on your UEFI/BIOS.
The weakest link is then DropBox + your BTC-client password. Or I guess if someone has modified the live environment on your jump drive or if they have a sophisticated attack on your UEFI/BIOS.
And this ladies and gentlemen is the reason that Bitcoin has a lot of work to go before it will be accessible to the non-technophile community.
To me, this signals a strong need for more secure bitcoin storage options, and since this is hacker news, perhaps some of us should get started on that :)
I may be spending a little karma in saying so, but this is exactly what DRM would be most useful for, when utilized by individuals in their own interest, as opposed to corporations using it to exercise power over individuals. This is exactly where being able to detect if an iPhone is non-jailbroken would be useful.
Or, we can dispense with having DRM on hardware we personally won. How about a protocol for providing a secure bitcoin wallet in the cloud? Basically, everyone runs their own open source mini-OS in their own obfuscated VM (1), which a smartphone app sets up for you and to which a smartphone app only acts as an interface. The wallet information is never on the smartphone, and the DRM is never on your own hardware.
Such an infrastructure would have many other uses, not just bitcoin.
(1) The security of each VM instance would be on an economic basis. Each one might be breakable within a week, say, but the system could be set up in a such a way that the week old information isn't work enough to motivate the effort.
Or, we can dispense with having DRM on hardware we personally won. How about a protocol for providing a secure bitcoin wallet in the cloud? Basically, everyone runs their own open source mini-OS in their own obfuscated VM (1), which a smartphone app sets up for you and to which a smartphone app only acts as an interface. The wallet information is never on the smartphone, and the DRM is never on your own hardware.
Such an infrastructure would have many other uses, not just bitcoin.
(1) The security of each VM instance would be on an economic basis. Each one might be breakable within a week, say, but the system could be set up in a such a way that the week old information isn't work enough to motivate the effort.
I think I could do a pretty good job keeping wallets secure. But it would need to be a full-time job, not a side project, and it would need a big budget.
You don't bootstrap a bank.
(Plus I did some basics with Bitcoin a few years ago and got pissed off at the protocol and moved onto less annoying things.)
You don't bootstrap a bank.
(Plus I did some basics with Bitcoin a few years ago and got pissed off at the protocol and moved onto less annoying things.)
I don't like to spam with links, but http://www.bitalo.com aims to be the service you described, and will be launched soon. "Most secure" really means that no one, even the site admins/hosting platform can never touch your coins. This will be enforced by the technology used, not just some internal policies.
And also, the site will be backed by a german AG company, which is basically a type of "Public limited company" backed by minimum of 50,000 EUR.
How do they plan to accomplish this without using javascript crypto?
I plan on using Javascript crypto. I've spent many hours reasoning over this idea, also studying security community reactions on mega.co.nz and I think it is possible to do now. I don't want to disclose all details now for obvious reasons, but all I can tell that I will not reinvent the wheel here - all parts needed are already available and mature, you just have to assemble them into a complete solution.
> you just have to assemble them into a complete solution.
Many (if not most) of the security vulnerabilites of the past years come from perfectly safe components assembled in an unsafe way.
Crypto-engineering is hard.
Many (if not most) of the security vulnerabilites of the past years come from perfectly safe components assembled in an unsafe way.
Crypto-engineering is hard.
The point is that you are overstating the security benefit of your solution. A breach of the server will now only compromise wallets of anyone who logs in until the breach is detected instead of all wallets instantly.
No one can never touch my coins? Uh oh!
Blockchain.info can't touch my coins. But if there servers are compromised, a hacker could inject a tiny, tiny amount of JS and have my ID/password sent to... anywhere... and then the hacker could access my account. I'm curious to know how you'll get around that vulnerability.
Blockchain.info can't touch my coins. But if there servers are compromised, a hacker could inject a tiny, tiny amount of JS and have my ID/password sent to... anywhere... and then the hacker could access my account. I'm curious to know how you'll get around that vulnerability.
The security on the client side will be on the level that blockchain.info provides, but this will be more than just a online wallet - it will also be an exchange.
I'm aware about injecting JS vulnerability. Of course you can't get around it with anything on the main server. It's possible however to setup an external server that will be monitoring the files and firing alarms the minute something's wrong (asset checksums doesn't match). And that's exactly what we'll do. Another thing is that all SSH/SCP access is also logged and the whole team gets an email immediately when it happens.
Paper wallets are easy to make and relatively easy to use. Slightly harder to spend money with.
I suppose someone could customize a small Linux live CD to boot, not touch the hard drives, load an encrypted wallet off a secure jump drive and encourage backups. It's fairly straightforward if you use a dm-crypted jumpdrive and, say for example, Tails.
I suppose someone could customize a small Linux live CD to boot, not touch the hard drives, load an encrypted wallet off a secure jump drive and encourage backups. It's fairly straightforward if you use a dm-crypted jumpdrive and, say for example, Tails.
Hmmm, how about paypal linked to a bank account? Just as bad probably. They have a two factor authentication available with your phone, but perhaps even that is a bad idea.
Can you then please provide specific, step-by-step steps, for turning online BTC (in say, Coinbase or MtGox) into an offline, printed, "paper wallet"?
Thanks.
Thanks.
This isn't "perfect" in my mind, but it's close: https://blockchain.info/wallet/paper-tutorial
I like BlockChain. There's still an amount of trust and I can think of ways it could be compromised, but they do a pretty good job architecturally of preventing your loss in the case they're compromised (well, depends on how they're compromised)
Anyway, those instructions will give you a secure paper wallet and an account that will enable you to still check your balance through blockchain.info.
(Note, this method keeps your private keys on the paper wallet, and the public key with Blockchain which enables balance checking but prevents compromise via blockchain.info)
I like BlockChain. There's still an amount of trust and I can think of ways it could be compromised, but they do a pretty good job architecturally of preventing your loss in the case they're compromised (well, depends on how they're compromised)
Anyway, those instructions will give you a secure paper wallet and an account that will enable you to still check your balance through blockchain.info.
(Note, this method keeps your private keys on the paper wallet, and the public key with Blockchain which enables balance checking but prevents compromise via blockchain.info)
Agreed. As a long-time Bitcoin participant, I'm very impressed with blockchain.info They're by far the securest online wallet. The problem is, most people aren't able to distinguish between what blockchain has set up and something like instawallet.
shit
Is this a joke? They can't be serious.