The Bitcoin Richest: Accumulating Large Balances
forbes.com
forbes.com
Person(s), who did it 1) were definitely very good at it, since they got root permissions on all machines (all 3 running different versions of Ubuntu) and 2) believe in it to the point where they think withdrawing it at this point in time not required - coins still did not move after hack event.
For me it sounds like very professional people interested in it and they believe bitcoin will be stable enough to keep coins where they are right now for a long time.
I find these sorts of attacks very interesting (and very frightening) because if a sysadmin's desktop is compromised, without the sysadmin noticing, the attacker has access, essentially, to everything the sysadmin accesses with that desktop. The best you can do, as far as I can tell, is to use some sort of 'the private key never leaves the smart card' system, and to run some sort of tripwire-esque intrusion detection system; the latter is key, because even with a theoretically perfect smartcard, if the attacker owns my ssh client binary when I authenticate to the server... it's over.
basically somebody was able to get root permissions on the webserver, 'cos (s)he removed all system log files.
Then (s)he was able somehow to hack into my laptop and desktop connected to this webserver via VPN. My local machines were running regular dev stuff: apache, nginx, mysql, etc, but nothing with obvious vulnerabilities. And on top of it - (s)he removed log files, which could be done only by having root access to both machines. Nothing in authlog (i restored it), nothing in wtmp.. I made byte copy for later research, but at this point in time - no clue how this could happened.
While I can suspect hosting staff doing this on server - it really boggles my mind how it could be done on two home remote machines, both running different Ubuntu versions.
ps: bizarre part was - once i realized it happened, I started doing research on webserver and (s)he started kicking me out and banning IP address in firewall! the only way to finally get to the machine was to reboot it in single mode (my hosting provider allows to reboot it in single mode and start ssh for root account with random password)
Erm no. Someone could have mined those BitCoins at the very start for very little effort. For example in 2010, someone offered 10,000 bitcoins if you bought them a pizza ( https://bitcointalk.org/index.php?topic=137 ). Bitcoins were worth very little then.
In the early days it was very easy to clock up huge amounts of bitcoins.
The market is very thin, any large selloffs would make the price drop significantly.
That would be enough to liquidate even the largest portfolio in 8 months. Certainly if you were uneasy about the market, that's exactly what you'd be doing (and maybe they are).
But I agree with your sentiment; a top 10 list on Forbes culminating in ~$2m isn't terribly impressive.
It was also very very easy to just lose huge amounts of bitcoins, too. Unless mined coins have moved at some point, the odds are pretty good - especially by now - that the owner has just lost or forgot about them.
An open source distributed software system is available for free and is able to offer privacy, cross-border protection and prevention of asset seizure. But these characteristics are properties of the code and its forks, not of a specific coin or Bitcoin in particular.
What offers Bitcoin value is the level of marketing that makes people pour money and graphic cards in this specific implementation of the code. It doesn't have any scarcity - the code is forkable, there aren't any laws making it mandatory to use it for commerce/taxes, nor any laws that prohibit alternative coins from appearing. In fact, many other coin systems do exist, with the same advantages:
- https://en.bitcoin.it/wiki/Namecoin
- http://bitcoin.stackexchange.com/questions/1895/what-bitcoin...
It's only by actually doing something like bitcoin that you can actually make a difference.
It's a bit like Jon Blow writing Braid to make his point about the immorality of the game industry.
Yes, like I've said, the power of Bitcoin is solely in its marketing.
I can accept bitcoin, e-gold, marks, cattle, whatever I want as payment... no problem, until tax day rolls around.
At that point, I need to figure the value, in dollars, of the two sheep that bob gave me for helping him scale his wool broker website, and then I need to figure the value of the rusted out nissan I gave joe for the 128GiB ram that I used in the project, and from that figure the profit I made. I then need to pay taxes, in US dollars, on that profit.
So, it's not so much that I'm forced to accept payment in dollars as that accepting payment in anything else is a huge pain in the ass for my accountant.
(I am forced to pay my taxes in dollars, of course, but to me that seems pretty reasonable. All businesses choose what currencies they accept payment in. The fact that it's harder to avoid doing business with the government than with other businesses doesn't really change that.)
Bitcoin is what everyone knows and it's what has a shot at success. If the choices get muddied, I don't think anyone benefits.
However, bitcoin is not perfect, interestingly, it seems as though bitcoin's creator did not predict the rise of mining pools. They could eventually exert the same amount of influence over the bitcoin economy as banks do today with government backed money.
There are other technical issues which could relatively easily be fixed in the code but would require a "hardfork", a change in the protocol meaning that either all nodes upgrade to the new protocol, or a new blockchain is started.
More specifically, people trust Gavin Andreeson and the BTC core team more than any of the people behind the other forks. Gavin & co. have a pretty good record of commitment to transparency, openness, and doing the right thing for the community.
Some of the other forks, like SolidCoin for example, were done with some sketchiness (holding large pools of initially mined coins in reserve).
Each passing month so far only solidifies Bitcoin's lead in that crucial aspect of a virtual currency.
Ultimately, the value of a currency is derived from its supply relative to its demand, the same as any other commodity. Governments can artificially stimulate demand by making it legal tender and only accepting taxes in it, or by managing the supply via gold/silver-backing or central bank monetary policies, etc.
Same with BTC, and the drivers of that demand will vary over time and as economic conditions change.
http://blockchain.info/charts/balance?address=1DkyBEKt5S2GDt...