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Comment by downandout | Hacker News Reader

> This is strange.

It is indeed strange...and strangely familiar. Every Bitcoin company that has had massive holes in its books has first claimed that technical difficulties were the reason they had to suspend withdrawals. Then over the following weeks comes the annoucement that the money has been stolen, lost, or law enforcement moves in and says it has been embezzled.

I would be extremely uncomfortable at the moment if I had money in Bitstamp. If withdrawal capability does come back online, try to get your money out ASAP.

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Bitstamp has a blog, a web site, a Facebook page, and a Twitter feed. None of these have any mention of problems.

There's a report on Reddit that withdrawals stopped 16 hours ago: http://www.reddit.com/r/Bitcoin/comments/2rayix/bitstamp_bit...

Yet no official comments from Bitstamp. Just a strange email, possibly forged. That's a very bad sign.

"It is indeed strange...and strangely familiar."

Right. This is a pattern we've seen so many times before in the Bitcoin world.

"If withdrawal capability does come back online, try to get your money out ASAP."

Yes. Definitely.

When logged in on the balance page it says: "DO NOT DEPOSIT TO PREVIOUSLY PROVIDED BITCOIN DEPOSIT ADDRESSES. Deposits sent to previous address will not be honored. New deposit addresses are forthcoming.".

Well, at least they're doing that. But there's still no explanation on their site, blog, Twitter, or Facebook, and it's after 8 AM on Monday in London.

Expect this to start hitting the financial press in London in the next hour or two.

I think you overestimate Bitcoin's media profile. FT Alphaville is just mentioning yesterday's crash. Apart from that, only the Bitcoin press and fragments of the tech press (Wired, TechCrunch) have mentioned Bitstamp.

edit: whoops, added to the FT Alphaville article! http://ftalphaville.ft.com/2015/01/05/2079012/who-needs-cave... Come in via Google News for full text. They're using it as one example in a piece on how Bitcoin's infrastructures and the community's ability to assess expertise are not very good.

I think you overestimate Bitcoin's media profile.

Two days later, it's in the Economist, Wall Street Journal, USA Today, etc.

Mt. Gox underestimated Bitcoin's media profile. When they went down, they acted as if the event would mostly be ignored and they could quietly get away with it. Instead, they got coverage in just about major business newspaper worldwide: WSJ, NYT, Forbes, South China Morning Post, China Daily, even al-Jazeera and Russia Today.

Bitstamp seems to be dead. They said they'd be down for "24-48 hours". Two days later they're still down. They haven't issued any new statements. There's a good chance they're in "take the money and run" mode.

Evidently I underestimated it.

It's pretty clear Bitstamp is buggered.

Wonder what Bitpay are going to do, since their "aggregate price" turns out to have long closely tracked ... Bitstamp. How in the bag are they? Did they in fact cash out daily?

::sigh:: This is one of the reasons that Bitcoin core discourages address reuse.

It looks like they use a specific/unique deposit address for each user. Where exactly is the address reuse in this case that you mention?

I think he means you use a new address for each deposit.

How is this supposed to work in the real world? Imagine if you had to mail the payment for your electric bill to a different address every month.

The site gives you a new address for each deposit. You are not going to remember the address anyway. So it doesn't matter if it changes.

More generally, though. "Bitcoin core discourages address reuse." I work for the company of the future and I get paid in bitcoins. I'm supposed to log into the payroll system and enter a new address every two weeks?

If you trust the other party, you don't have to clear the transaction through the block chain.

You could also just log in and supervise two automated systems interacting, rather than entering numbers.

(Mind you, I don't believe in the glorious future of bitcoin, but any wider usage will certainly be accompanied by better UX)

There are two similar methods for generating addresses for a recipient.

Hierarchical deterministic wallets (HD wallets, BIP 32): https://github.com/bitcoin/bips/blob/master/bip-0032.mediawi...

Stealth addresses: http://sx.dyne.org/stealth.html

The former is more broadly supported.

Thanks. That's interesting, though I have to admit I'm not excited about the prospect of using it.

If the analogy is accurate, then the pre-addressed envelope that comes with your bill already has the unique address on it, so you don't have to do anything special. What's the problem?

Ah, good point. I said electric bill, but was mentally focusing on the few checks I still hand address, for which I don't necessarily receive monthly bills (rent, etc.).

For that scenario, you'd presumably have some system worked out where you can quickly say, "hey, what's the address for this payment?" And being on the internet instead of going through the mail, you don't have to wait a week for the answer.

I believe the "Payment Protocol" is supposed to help solve this. Look up BIP 0070 if you're interesdted.

Thats a pretty fundamental confusion, but it's forgivable due to bad naming.

An address isn't a destination in Bitcoin, it functions more like the serial number of a bill (though the system is able to handle duplication). It would be better thought of as an invoice number.

You don't expect to reuse a different invoice number of separate payments.

> try to get your money out ASAP.

This is probably what a lot of people will try to do, which will lead to further drops in price.

I wouldn't be surprised to see prices break the 1y low at this point.

"I wouldn't be surprised to see prices break the 1y low at this point."

Already happened. Yesterday.

Bitstamp now has a huge PR problem. Even if they "fix" the problem and resume withdrawals, no one will believe they're solvent without an outside audit. They had a sort-of audit once before (Bitcoins only, not fiat), but now customers will want a full audit.

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