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Comment by zhemao | Hacker News Reader

Well this will be used for totally legitimate purposes I'm sure.

I work for Rackspace, we have a cloud. Sometimes people do illegitimate things with it -- but attackers using resources fall generally into two groups:

1) Fraudulent Payment method (eg, stollen credit card)

2) Someone hasn't patched Wordpress (or another app) in 3 years, box gets hacked, then used for bad things.

So, at least with paying via BTC for compute, you pretty much eliminate #1 -- in all cases the provider gets paid, no chargebacks, etc.

you don't eliminate #1, it just has less consequences for the hosting provider.

Bitcoins can still be stolen (albeit perhaps not as easily as credit cards). But since there's no chargeback system, the victims don't have much recourse.

The expectations that we'll eliminate 100% of fraud are fundamentally flawed. Fraud will always exist. The Bitcoin blockchain provides a good amount of fraud resistant technologies that can be used by external systems to help lower the incidences of fraud in their own systems. Unfortunately, some systems that have connected to the blockchain have been vulnerable to being broken into, which is where the coins usually get stolen. It's companies like Coinbase and Blockchain that carry that responsibility for the rest of us, and for that, I'm grateful.

I would hazard the amount of fraud will go down considerably (compared to credit card fraud) once we've sorted around the best practices for securing your coin.

> once we've sorted around the best practices for securing your coin.

The same theory applies to credit cards (single-use card numbers, etc)

If we always applied best practices for CC data, there wouldn't be much fraud with that system either. Sadly, we live in the real world.

Isn't the problem of someone breaking in and stealing coins avoidable in the 'selling sth. for coins' scenario by just looking for incoming payments to a particular address, but without ever keeping any secret keys on a live system?

Nearly 10% of current public cloud transactions are fraudulent and utilized by bad actors.

To address that, I've added a feature that allows private appliance groups to be formed between trusted entities. The Twitter bot thing doesn't use that feature - it's just a way to show off the other stuff I've built to try to get beta testers helping out. You can see the private appliance group feature if you grab an account on StackMonkey. Keep in mind the pool isn't ready for primetime yet...

I fully expect people to abuse and break this stuff. That's what innovation is about, after all.

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