1. 16

A wallet built up trust and popularity over the course of a year, and now redirects all Ethereum transactions to their wallet while claiming the network is being DDOSed. Total amount stolen is over USD $8 million at today’s exchange rate (this page shows how much is currently there, but several thousand ETH have already been passed on to other new wallets).

  1.  

  2. 21

    Oh gee I wonder why central banking was invented

    1. 7

      You should’ve said regulated banking with a court system. Over a long period of time, it reduced how much we get screwed over by the third parties that can make financial accounts and transactions safe most of the time. A stop payment, insurance, or court-ordered restitution in some other cases. It helps in those situations that victims’ legal targets have piles of real money [1] as opposed to fake money.

      [1] Cuz the Fed or foreign banks says it’s real and other countries have good reasons to participate in that bullshit. Other bullshit currencies, especially cryptocurrencies, haven’t achieved that much influence.

      1. 8

        As Matt Levine put it, “Again, we have reached a point in the U.S. financial system where major banks almost never communicate with customers by tweeting “DO NOT PANIC” in all caps, which is something to consider when you hear blockchain and smart-contract proponents sneering at the backwardness of bank money transfer protocols.”

        1. 3

          That’s great. Funny enough, the crypto currencies are less safe than banking back in John Dillinger time where it was mainly daring crooks, not bank owners, making the news regularly. It took Wall St a while to start legally robbing people using “complex, financial instruments” like derivatives.

          Wait, what else sounds like a complex, financial instrument that resulted in a massive, legal robbery and fork? Damn, the blockchain and DAO people got to advanced, mathematical fraud decades faster than the traditional banks. Maybe that’s what they mean by rapid pace of innovation.

      2. 6

        Definitely increases efficiency… that way you can steal everyone’s money.

        1. 3

          People often say Robert Mugabe of Zimbabwe is stupid…. until I explain how he managed to a steal a whole country and transfer ownership of it into his hands and the hands of a few core supporters.

          1. 2

            Legitimately, with political backing!

          2. 6

            FreeWallet and its ilk are the cryptocurrency equivalent of central banking. The whole point of cryptocurrency is that you can fully control your finances if you want to (unlike with a bank, where you’re fundamentally trusting your money to someone else).

            Ethereum, for whatever reason, seems right now to be even more bubbly and scam-ridden than Bitcoin ever has. I think a lot of people are going to re-learn lessons with ethereum that people have already learned with bitcoin.

            1. 8

              FreeWallet’s victims did think they were fully controlling their finances. They’d installed a personal wallet instead of trusting a site, following all the standard security advice. I guess the true scotsmen security will have to come from writing one’s own wallets from scratch and having it audited by multiple independent security teams.

              1. 3

                Nah, high-assurance is really active in smartcard hardware and OS’s. Just leverage one built that way. One person I taught is already building one for an EAL6+, tamper-resistant chip. He pointed out there’s a few hardware designs doing it right with one even doing red-black separation at chip level where you isolate leakage. He’s working on JavaCard solution. There’s 2 or 3 of those formally verified. Two OS’s done in strong way.

                This area is actually easiest to build secure solutions for. It wouldn’t be cheap. It would be doable though. That there’s an active market for such tdch with many suppliers no robbing customers corroborates it. All this bullshit seems to mostly happen with blockchain- or crypto-coin related companies.

                EDIT: Here was one he spoke positive of on security architecture. We didn’t like the complex peripherals but market demands them. (Shrugs)

          3. 9

            It’s almost like math isn’t a replacement for a regulatory system.

            Almost like that.

            1. 3

              It’s not like this is a problem in Ethereum or any Blockchain. It’s the stupidity of users being abused. Not suprising at all.

              1. 12

                When the expected outcome of average users using your service is that they get scammed out of all their money, the service is broken and it’s not the users at fault.

                1. 4

                  Exactly. All these comments negative of the traditional system aren’t coming with plentiful examples of regulated banks opening up, taking a lot of deposits, and then closing keeping the money. It might happen but I can’t recall one instance in recent years. Shit happens all the time with these crypto currencies and exchanges.

                  People wanting more trustworthy banking can just start a credit union or non-profit bank with protections in its charter. Charge fair prices with Stripe-like payment processing. Maybe try to make transfers as cheap or free as possible. Offer secure methods with assurance going up as monthly/yearly fees do. Invest in stuff to keep money coming in. And so on.

            2. 3

              Trusting any site to act as your long term wallet is insane IMO. I’ve used Coinbase etc as a convenient way to convert $ into bitcoin, but I do my business and get out. Nothing is solid in that world.