Bitcoin Price Crashes After Exchange Admits Security Breach, Over $60 Million St

[Silent_Bob]

http://www.zerohedge.com/news/2016-08-02/bitcoin-crashes-after-exchange-admits-security-breach

Bitcoin prices are crashing on extremely heavy volume  - down over 30% in the last 2 days - after Hong Kong-bassed Bitcoin exchange Bitfinex halted all trading after it discovered a security breach. As CryptoCoinsNews reports, the theft of 119,756 bitcoins has now been conclusively confirmed which makes it the largest theft in bitcoin's space since MT Gox.

Representatives from the exchange told CoinDesk engineers were seeking to uncover issues at press time, though the company had confirmed roughly 120,000 BTC (more than $60m) has been stolen via social media.

Bitfinex statement:

Today we discovered a security breach that requires us to halt all trading on Bitfinex, as well as halt all digital token deposits to and withdrawals from Bitfinex.

We are investigating the breach to determine what happened, but we know that some of our users have had their bitcoins stolen. We are undertaking a review to determine which users have been affected by the breach. While we conduct this initial investigation and secure our environment, bitfinex.com will be taken down and the maintenance page will be left up.

The theft is being reported to—and we are co-operating with—law enforcement.

As we account for individualized customer losses, we may need to settle open margin positions, associated financing, and/or collateral affected by the breach. Any settlements will be at the current market prices as of 18:00 UTC. We are taking this necessary accounting step to normalize account balances with the objective of resuming operations. We will look at various options to address customer losses later in the investigation. While we are halting all operations at this time, we can confirm that the breach was limited to bitcoin wallets; the other digital tokens traded on Bitfinex are unaffected.

We will post updates as and when appropriate on our status page (Bitfinex.statuspage.io) and on the maintenance page. We are deeply concerned about this issue and we are committing every resource to try to resolve it. We ask for the community's patience as we unravel the causes and consequences of this breach.
The result appears to be broad-based selling across all major bitcoin exchanges...

The bulk of the selling occurred once the statement had been issued.

As CryptoCoinsNews adds, Bitfinex has, however, been experiencing numerous problems over the past few months, leading to an unexpected freezing of trading on at least two occasions, both of which caused a crash in bitcoin's price by almost $100 in each instance.

Bitfinex was also fined by CFTC $75,000 "for offering illegal off-exchange financed retail commodity transactions and failing to register as a futures commission merchant," in early June, but Zane Tackett, Director of Community and Product Development at Bitfinex, strongly denied any connection between previous outages and CFTC's fine.

[Erroneous_Logic]

Aha. I was wondering why it was going down. I figured it was just disappointment after the price failed to scream into the sky after the block reward halving.

[Free libertarian]

 "Money" ought to be backed by something tangible, cuz we all know the fiat was a really shitty car.  If it were "allowed",  a cannabis backed currency might be a good one. 

The details of  how the Weeda Bucks currency would work are still being worked out, but "fort knox" probably shouldn't have ash trays to discourage "sampling".    (I have no emoticon ability, so use your imagination please)

[Erroneous_Logic]

Nah. Bitcoins a great currency. The reason to back currencies is to prevent printing to excess like they do with the dollar. But you can't print excess bitcoin, it's limited by design.

[Free libertarian]

Nah. Bitcoins a great currency. The reason to back currencies is to prevent printing to excess like they do with the dollar. But you can't print excess bitcoin, it's limited by design.

  I have multi trillion dollar Zimbabwe note, so at least they didn't waste a bunch of paper.   

[Erroneous_Logic]

I don't know what you mean.

[WithoutAPaddle]

Wake me up when the Box Top market crashes.

https://en.wikipedia.org/wiki/Box_Top_Robbery

[Free libertarian]

I don't know what you mean.

When the Zimbabwe overlords printed a shit ton of "money" , they had the "forethought" to print extremely large denominations, thus they 'saved" a bunch of paper.

It was a variant of the many ways I  harsh on government.  I tend to do that by laughing at them.  It makes me feel smug, warm and cynical all at the same time.

[MikeforLiberty]

It's good to know that computer code can't be altered.

But you can't print excess bitcoin, it's limited by design.

[Erroneous_Logic]

This thread is confusing me, I thought this topic was about bitcoin, but everyone's talking about government created fiat currencies.

Except mikeforliberty:

It's good to know that computer code can't be altered.

You're correct. Code can be changed. However, in order to change the bitcoin code, you need to convince thousands of people who are generally very well informed about the realities of currency manipulation and who generally have a vested interest in bitcoin not being inflated into nothingness to inflate their currency into nothingness.

[Free libertarian]

This thread is confusing me, I thought this topic was about bitcoin, but everyone's talking about government created fiat currencies.

Except mikeforliberty:

It's good to know that computer code can't be altered.

You're correct. Code can be changed. However, in order to change the bitcoin code, you need to convince thousands of people who are generally very well informed about the realities of currency manipulation and who generally have a vested interest in bitcoin not being inflated into nothingness to inflate their currency into nothingness.

My apologies.    My non sequitur gene is sometimes redundant, plus I don't know much about bitcoin.

[Erroneous_Logic]

Most people who criticize it usually don't know much about it. I've seen a lot of people compare it to the old liberty dollar concept, which is not an accurate comparison.
In order to change the code of bitcoin, 51% of the miners* would have to accept that new code and implement it. Since their entire business model is built around bitcoin having value, I highly doubt they're going to go for something that will make bitcoin basically not have value.
Also, the crash in general was no big deal. It happens all the time, because, while bitcoin is great, it's also very small in the current grand scheme of money markets, and it doesn't take a large amount of bitcoin dumped to cause the price to noticeably shift. One day, many more people will use bitcoin, and it will be much more resistant to such turbulence.
And as far as the theft goes, do understand that -bitcoin- wasn't hacked. The blockchain has never been hacked. It was the server at the exchange on which the private keys were stored that was hacked.

*51% of the network hashrate would be necessary, which may or may not require 51% of the actual individual miners

[blackie]

In order to change the code of bitcoin, 51% of the miners* would have to accept that new code and implement it.

That can't be true. Open issues would never be fixed, or very slowly. I am pretty sure the core developers can change the code as they see fit.

https://github.com/bitcoin/bitcoin/issues

I'm not big on currencies that require electricity and the internet.

[Russell Kanning]

gotta agree

[Erroneous_Logic]

In order to change the code of bitcoin, 51% of the miners* would have to accept that new code and implement it.

That can't be true. Open issues would never be fixed, or very slowly. I am pretty sure the core developers can change the code as they see fit.

https://github.com/bitcoin/bitcoin/issues

I'm not big on currencies that require electricity and the internet.

There are no "core" developers. It's an open source code, and anyone can push out new clients to the network. The question is, will anyone ACCEPT the new clients. Generally, issues are talked about online, and people announce that they're putting out a new client, and they try to let lots of people know about it a month or so ahead of time, and there's usually a 'clause' in the code, where it will only activate if a certain percentage of the network, generally 51% or more, is also using it. It's how they handled the recent fork with the block size, from 1 MB per to, I think it was 2 MB per block.
But absolutely, as far as the worrying about internet and electricity, don't use something you're not comfortable with.