Another Cryptocurrency Gets Hacked, Money Disappears. Here are the 30 Biggest Crypto Hacks

Hackers are dogging cryptocurrencies.

It starts with nightmarish messages like this:

Yesterday, we discovered that funds were improperly removed from the Tether treasury wallet through malicious action by an external attacker. Tether integrators must take immediate action, as discussed below, to prevent further ecosystem disruption.

Disappeared: $31 million in tether tokens. This was reported Monday night by Tether, the company behind the cryptocurrency “tether,” with a market capitalization of $673 million, according to CoinMarketCap. The value of tether, which is “tethered” to the US dollar, continued to hover around $1.

But bitcoin plunged 5% and then recovered. Tether is used is used as a medium to transfer cryptocurrencies to other exchanges in other countries without using the dollar and without using banks.

The hack had taken place on November 19, Tether said. The tokens were sent to an “unauthorized bitcoin address.” The company said it’s trying to prevent the stolen tokens from being converted into dollars or enter “the broader ecosystem.”

Sure, there are thefts of all currencies. But there’s a difference. When someone steals money from your bank account by hacking into the bank, the bank is responsible and makes you whole. When someone hacks into a cryptocurrency, no one covers it.

These hacks of cryptocurrencies are just about as old as cryptocurrencies themselves. In June, 2011, a user named ALLINVAIN made off with 25,000 bitcoins, at the time valued at $775,000, today valued at $200 million. It went on from there.

The biggest hack remains Mt. Gox, which at the time was handling 70% of the global bitcoin transactions. The exchange, located in Tokyo, revealed the hack in February 2014. Apparently 650,000 bitcoins ($473 million at the time) had disappeared over a period of several years. At today’s prices, the hack would have amounted to $5.2 billion.

Here are some of the major cryptocurrency hacks:

August 2017, Enigma ICO (Initial Coin Offering)  was hacked, 1,500 Ether ($500,000) stolen. Store of Value writes:

The hacker was able to break into Enigma’s website, Slack group, and mailing list and sent fraudulent messages to the project’s community asking for money. This allowed the hacker to gather almost 1,500 Ether (about $500,000). This is despite a previous warning by Enigma that it would not collect money in this way until its ICO in September.

July 2017, Veritaseum’s Ether wallet hacked, about $8 million stolen after its ICO on May 26th. Store of Value:

[O]n July 23rd, Middleton [founder Reggie Middleton of the Boom Bust Blog] claimed in Veritaseum’s Slack group that hackers stole 36,000 VERI tokens out of a wallet held by the company. This is how Middleton described the hack: “The hackers thwarted 2FA, on two different accounts, and finagled 3rd parties security among several other things. They went through quite a bit of effort, alas going through that much effort caused them to leave a bread crumb trail as well. I hate thieves.”

July 2017, Parity Multisig Wallet was hacked, according to ParityTech. “A vulnerability in the Parity Wallet library contract of the standard multi-sig contract has been found,” the company said. Via this vulnerability, hackers drained 153,037 Ether ($32 million) from three multi-signature contracts that were used to store funds from prior ICOs (Swarm City, Edgeless Casino, and æternity).

July 2017, Bithumb, the world’s fourth largest Bitcoin exchange and largest Ether exchange, was hacked, according to Hacker News. Claims “started to surface” that “billions of won” disappeared from compromised accounts at the Korean exchange. At the time, actual loss data remained unclear.

July 2017 (a busy month for cryptocurrency thefts), CoinDash ICO was hacked and 37,000 ether ($7 million) were stolen. Store of Value:

CoinDash is an Israeli startup that conducted an ICO in July of this year to raise funds. However, just 13 minutes into the crowdsale, a hacker was able to change the Ethereum address posted on the ICO’s website. This address is where interested investors should send their Ether to in order to receive CoinDash tokens in return.

October 2016, Bitcurex, a bitcoin trading platform in Poland, suddenly shut down. A few days later, it posted a notice on the otherwise dead site that an update had gone awry and asked customers to be patient. January 2017, the owner of the exchange “disappears,” as the exchange remained shut down and its 2,300 bitcoins ($2.6 million) are gone. Polish authorities started investigating.

August 2016, Bitfinex, which doesn’t even disclose where it is located (it’s incorporated in the British Virgin Islands at a mailbox address and files some paperwork in Hong Kong), was hacked again, after its May 2015 hack. This time, 119,756 bitcoins were stolen ($72 million), at the time the second largest heist, after Mt. Gox. The exchange is the world’s largest dollar-based bitcoin exchange. The same people that own Bitfinex set up Tether, also in the British Virgin Islands, a fact that became known via the leaked “Paradise Papers.”

July 2016, social media blockchain Steemit was hacked, 260 accounts compromised, and $85,000 in Steem and Steem Dollars stolen.

June 2016, Ethereum project Decentralized Autonomous Organization (DAO) was hacked, “more than 3,600,000 ether” ($72 million at the time) were stolen. Hackers had exploited a known vulnerability. CoinDesk explains:

Unfortunately, while programmers were working on fixing this and other problems, an unknown attacker began using this approach to start draining The DAO of ether collected from the sale of its tokens.

May 2016, Gatecoin, a Hong Kong based exchange, was hacked. It claimed it lost 250 bitcoins and 185,000 Ether, about $2.14 million at the time.

March 2016, Canada-based Cointrader shut down after an audit showed “a deficiency of bitcoin.”

March 2016, ShapeShift which on its site claims to be “the safest, fastest asset exchange on Earth” was hacked three times in a two-week period. Each time, the hot wallets were cleaned out. Disappeared: 469 bitcoins, 5,800 Ether, 1,900 Litecoins ($230,000 in total).

January 2016, Cryptsy claimed it had been hacked and shut down. Disappeared: about $6 million in bitcoin and Litecoin. In August 2016, CoindDesk reported:

Cryptsy CEO Paul Vernon may have stolen as much as $3.3 million from the now-defunct digital currency exchange and destroyed evidence of his illicit actions. That’s according to new court documents from the ongoing class action lawsuit filed against the troubled industry exec.

May 2015, Bitfinex announced that it was hacked and its “hot wallet might have been compromised.” Turns out, 1,500 bitcoin (at the time $350,000) were stolen.

January 2015, Bitstamp was hacked after a phishing expedition that targeted employees, as was later revealed. In total, 18,866 bitcoins ($4.3 million at the time) were stolen.

January 2015, BTer in China was hacked, 7,170 bitcoins ($1.8 million at the time) were stolen.

January 2015, KipCoin in China was hacked, about 3,000 bitcoins were stolen ($800,000 at the time).

And there more:

Going deeper into history, here are some more cryptocurrency hacks, via Bitcoin Exchange Guide:

July 2014, 3,700 bitcoins ($2 million) stolen on Mintpal.

July 2014, 5,000 bitcoins ($1.8 million) stolen on Bitpay.

March, 2014, 150 bitcoins ($101,000) stolen on bitCoin.

March 2014, 896 bitcoins ($572,000) stolen on Flexcoin.

February 2014, 650,000 bitcoins stolen on Mt.Gox, largest heist so far (see above).

November 2013, 1,296 bitcoins ($1.46 million) stolen on BIPS.

November 2013, 4,100 bitcoins ($5.6 million) stolen on Inputs.

November 2013, $6,000 bitcoins ($6.7 million) stolen on PicoStocks.

November 2012, 263,024 bitcoin ($3.4 million) stolen on ironically named Bitcoin Saving & Trust. That would amount to $2 billion at today’s price.

September 2012, 24,000 bitcoins ($250,000) stolen on Bitfloor.

March 2012, 46,703 bitcoins ($6 million) stolen on Bitcoinica.

June 2011, 25,000 bitcoins ($775,000) stolen by a user known as “ALLINVAIN.”

Is his Peak Crypto Craziness? This is what happened over the weekend ten days ago. Read…   “Bitcoin Cash” Quadruples in 2 Days. Bitcoin Crashes by $35 Billion




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  80 comments for “Another Cryptocurrency Gets Hacked, Money Disappears. Here are the 30 Biggest Crypto Hacks

  1. Rob
    Nov 21, 2017 at 2:51 pm

    A fool and their money are lucky enough to get together in the first place as Gordon Gekko said.

    • nick kelly
      Nov 23, 2017 at 8:45 pm

      Here’s an odd one, courtesy of Globe and Mail ( I think )
      Apparently some preppers are storing bitcoin as insurance against the crash, I guess, of either civilization or maybe just the economy.

      Whatever anyone thinks of a crypto as an ‘investment’ or as an exchange medium, I do not get storing it as safety net against the type of scenario preppers worry about.
      What if there’s no power, internet or exchanges?
      Do they take those for granted?
      Odd.

  2. Old Engineer
    Nov 21, 2017 at 4:00 pm

    As I understand it a bitcoin is just a pseudorandom number and with block chains the “legitimate” transfers of the bitcoins is traceable. I don’t understand why stolen bitcoins can’t be invalidated and substituted for with a new pseudorandom number. It seems it should be virtually impossible to get away with theft, once the theft is detected.

    • michael
      Nov 21, 2017 at 4:11 pm

      unless the whole thing is a scam…….

      • SquarePeg
        Nov 21, 2017 at 4:55 pm

        The whole thing looks like a ponzi scam where they’re using all these cryptos to buy each other and I imagine it possible that there is more than one claim to many a unit, token and coin.
        Does anybody know who put out the cash value that all the cryptos represent and who has it now? Where would the money come from if everybody tried to cash out at once. A run on bitcoin. Hmmm.

        • Coaster Noster
          Nov 22, 2017 at 4:25 pm

          “more than one claim”. No, that is power of blockchain. Once a crypto-currency amount is put into a transaction, it cannot have “more than one claim”. You may nefariously print out “check 1001” copies, pointing to your bank checking account, by the dozens, and each receiver would make a claim on check 1001, without knowing who else is making a claim. But that cannot happen with cryptocurrencies.
          I dislike the whole cryptocurrency scheme, by the way.

    • Bobby Dale
      Nov 21, 2017 at 4:43 pm

      The most important feature of a currency as a means of exchange is CONFIDENCE in its value going forward.
      I repeat myself: Cryptocurrencies will be rendererd valueless two minutes after the first quantum computer goes online.

      • Nikos
        Nov 21, 2017 at 8:31 pm

        If you think so, you should check The Quantum Resistant Ledger (QRL), the only cryptocurrency which han post-quantum cryptography. My bet.

      • Shawn
        Nov 22, 2017 at 12:05 pm

        So you are saying quantum computing can crack crypto-encryption by brute force? How and how about a link?

        • d
          Nov 23, 2017 at 4:01 am

          “So you are saying quantum computing can crack crypto-encryption by brute force”

          No encryption has remained unbroken for that long for well over 1000 years.

          Even the Israleis can hack “i phones” as has been proven.

          Why should “block chain” be any different.

          My money says it has already been broken the issue is that the people who have arent talking about it.

          The FBI was really quiet sloppy, admitting they had somebody hack the “i phone” for them.

          Do state agencies tell you, what Biological pathogens they have, and have developed???? Waht teh Nuclear launch codes are.

          No and you don’t need to know.

          Only in Stupid countries like America can the state be forced to admit it can hack/De-crypt various items.

          Without thinking to hard about it, you start to De-crypt block-chain the same way you start to De-crypt a cell phone transmission, “Spoof” a Node/Tower in the network.

        • Leo
          Nov 23, 2017 at 6:47 am

          Shawn, try Google.

    • Christoph Weise
      Nov 23, 2017 at 4:12 pm

      Absolutely. This a question that is rarely asked and never answered. I am struggling to understand which is the logic that people apply which put a lot of money in crypto albeit the coins can obviously vanish without leaving a trace and their former owners a chance to pursue the the pilferers and bring them to justice.

  3. Bobber
    Nov 21, 2017 at 4:09 pm

    I’m starting to think cryptos may be a more reliable store of value than USD, which saw $4.5T printed in a few years. At least with cryptos, there are rules to prevent arbitrary creation of the currency.

    Developed market currencies are being debased at a rapid pace. The coordinated debasing hides the damage, but the fact remains these currencies are losing value anywhere from 2% to 15% per year, depending on how you gauge inflation.

    In fact, the inflation created by central banks is a matter of POLICY, so you are guaranteed to lose value if you hold USD.

    Given the uncertainty the Fed and other central banks have created, we need an alternative to developed market currency. The only viable alternative in the long term is an electronic platform like the top cryptos have. The security issues will clearly get cleaned up over time.

    Also, consider that the top 2 or 3 cryptos are seeing network effects as adoption and users increase. Network effects can increase value quickly. For example, see Facebook, Microsoft, Google, etc.

    Gold might continue to have value, relative to USD, but platforms like bitcoin will clearly beat out gold. The supply of something like bitcoin is actually more restricted and transparent than gold.

    • Nov 21, 2017 at 4:41 pm

      There have been over 1,000 cryptos created over the past few years. Anyone can create them. There are no rules. Some cryptos like bitcoin have a mechanism built in that limits further mining of that particular crypto, but it doesn’t stop other cryptos from being created. Hundreds of cryptos have already become worthless. People have lost a lot of money on them. No one writes about them.

      • James
        Nov 22, 2017 at 12:25 am

        That doesn’t negate what Bobber wrote, though.

        The failed crypto currencies failed because they were unsuccessful at developing a network. The same can be said about the innumerable “social networks” that did not gain mass adoption. Despite the massive amount of failed networks, though, social media is one of the most powerful movers in the information age.

        Most cryptocurrencies will fail. This does not make them worthless as a whole, though. The crypto that eventually reaches critical mass and adoption will become a central part of life, not unlike Facebook.

        My money is on Ethereum and OmiseGo.

        • RagnarD
          Nov 22, 2017 at 6:08 pm

          No. If I intially have a 1000 sheet stack of green paper (Stack1) to print usd, does that fact set a hard limit on dollar creation? If bitcoin Set a hard limit of 20,000 coins, (blockchain1) does that mean that there can be no more bitcoins created?

          I think in both situations the answer is obvious. you can have stack2 and you can have blockchain 2. Unless the paper in stack1 and the bit coin‘s in blockchain1, Are distinctly tied to a hard asset like gold, they simply can be proliferated to infinity. Because these are currencies, they are simply mediums of transaction, they are not a store of value. They only become stores the value if they become legally attached to a finite
          money asset such as gold / oil.

      • Kasadour
        Nov 27, 2017 at 9:55 pm

        And what about tethers? It seem like they can just add new tethers anytime they want to. For example right after the $31mm hack, $50 mm tethers were added. But then they don’t make any public statement on whether they fixed the security problem. Nope, they just print up new tethers at will the same way the FED prints dollars. There is no difference.

    • Andy
      Nov 22, 2017 at 10:17 am

      You say, “The only viable alternative in the long term is an electronic platform like the top cryptos have. The security issues will clearly get cleaned up over time.”
      Precious metals (gold and silver) are historically a viable alternative. Future Crypto-currency security is a hope, not necessarily reality. When cryptocurrency use becomes too widespread, governments will step in and control them, as China has done. Governments like to have control of currencies.

  4. rdelguidice
    Nov 21, 2017 at 4:23 pm

    The NSA can hack any of these cryptos anytime they want.

    They have MASSIVELY parallel processing power and UNLIMITED electricity–the only 2 things you need to “mine” bitcoins.

    The question is can the Russians, or the Chinese do it as well?

    The answer is almost certainly yes.

    Something to keep in mind.

    • James
      Nov 22, 2017 at 12:30 am

      This is true for a Proof of Work crypto. Many currencies are moving to a Proof of Stake protocol, though. On a PoS protocol, consensus is reached through using your network share instead of your computing power to “vote” on the next version of the blockchain.

      On a PoS protocol, you can’t attack the blockchain simply by investing money into computers and electricity. You have to buy a part of the network.

      Trying to buy 50% of outstanding coins on any network would drive the cost per coin into the stratosphere. Ethereum is a great example. Currently, 1 ETH costs approximately $370. If a single person tried to buy out 50% of all ETH, this would spike the cost to hundreds of thousands of dollars per ETH.

      This would be prohibitively expensive for even the NSA, as they would need 50M ETH to gain control of the network.

      • fajensen
        Nov 22, 2017 at 2:45 am

        Easier to hack a coin exchange or the block chain ….

      • Suzie Alcatrez
        Nov 22, 2017 at 2:56 am

        You only need to own 50%+1 of the Bitcoin miners in order to reject all transactions.

        I have no doubt the NSA has this capability at least in the short term.

  5. Kent
    Nov 21, 2017 at 4:39 pm

    I’m a software engineer by trade. It is possible to write perfectly secure software. But you have to be extremely knowledgeable about writing software and software security. And as the software gets larger and more complex it becomes exponentially more difficult to make sure your software is secure. In larger systems, you cannot trust that everyone has the level of knowledge required. So you must do extensive code reviews and write to extremely tight coding standards. This is exceptionally expensive, which means few organizations do it. Which is why systems get hacked so often.

    That having been said, this is why I will never keep my money in bitcoins or other electronic coin technology. And I will never own a self-driving car. Nor will I ever let a UPS delivery guy enter my house with an electronic Amazon key system. Nor will I involve the County I work for in the Internet of Things. But to each his/her own.

    • TJ Martin
      Nov 21, 2017 at 5:28 pm

      Well sir .. I am the family member of a DHS employee as well as friends with several within the NSA and I can guarantee you point blank that there is no such thing as perfectly secure software .e.g.

      Code Breaking 101 ;

      Any code written by a human or a machine created by a human can and will be broken by another human or a machine created by another human regardless of the complexity or sophistication assuming enough motivation and/or gain is in place justifying the time and effort to do so

      e.g. The higher the stakes ,, the higher the motivation .. the higher the probability .

      • Gerald Smith
        Nov 23, 2017 at 3:30 pm

        Well said, whatever the human mind can do it can undo. It is as futile as making an pickable lock. What you have to do is make breaking the system more trouble (or higher risk) than it is worth.

        jerryBear

    • Jeremy
      Nov 21, 2017 at 5:58 pm

      You can write software that – itself – doesn’t have known vulnerabilities. If you have the budget and skill set, you can even keep that software patched as new vulnerabilities publicly surface.

      There’s several problems though:

      a) the underlying programming language may have issues.
      b) software needs to be hosted on servers, and there’s simply no such thing as a completely secure server (even ones not connected to the internet have been known to get “air gapped”).
      c) there are many parties with lists of vulnerabilities that aren’t publicly known (and the disclosure may be restricted by nation states).
      d) and there’s always a disgruntled, dishonest employee somewhere, who can leverage internal access.

      The best programmer in the world can’t fully mitigate these issues.

      I think a better solution entirely would be for the industry to understand that this isn’t about preventing all hacking attempts, but rather the intelligent mitigation of potential damage up front:

      a) don’t collect data that isn’t actually required;
      b) don’t insist on all data being available online if it isn’t necessary for the functionality of the system;
      c) have appropriate policies in place (and enforced, and tested) for who can access what;
      d) and for crypto-currency, store the tokens in an offline wallet (boy are people lazy; it’s just a few small extra steps, for goodness sake).

    • fajensen
      Nov 22, 2017 at 2:51 am

      Another thing about security – don’t bet the entire farm on one barrier!

      People here would put the amazon lock on a small box outside their home for the delivery person.

    • Álvaro
      Nov 22, 2017 at 8:31 am

      “I’m a software engineer by trade. It is possible to write perfectly secure software.”

      I’m also a software engineer. There is absolutely no way you could ever be completely sure of having written a perfectly secure software.

      No. Way.

      Uncertainty will always be there, giving you nightmares.

      • prepalaw
        Nov 22, 2017 at 10:46 am

        Since USPS carries and delivers the last couple of miles for Amazon, your postman will enter your house, drink your scotch and video your interior (videoclip for sale to others).

      • Dead at 18 buried at 65
        Nov 24, 2017 at 9:05 pm

        I also am a software engineer and I too agree that it is not possible to create a software program or system which cannot be compromised.

        Even though Kent is technically correct, any compromised individual can undo the hard work of any impeachable software system.

    • RD Blakeslee
      Nov 22, 2017 at 1:25 pm

      Kent,

      I’m not a software engineer but for micro=analogous reasons to yours, I will also never do any of the things in your last paragraph.

  6. Jive Bunny
    Nov 21, 2017 at 4:45 pm

    I don’t understand cryptocurrencies. Can you actually exchange them for real US dollars or UK pounds? If so who buys them? If not why bother with them?

    No, I haven’t participated in any of the aforementioned heists nor any other undiscovered ones and nor am I planning such a heist. I’m just curious.

    • Nov 22, 2017 at 1:57 am

      You can exchange certain crypto currencies for fiat. I can’t speak for the full range spectrum, but in the US, you can sell bitcoin, litecoin and etherium tokens for fiat on Genesis, Coinbase, and Kraken. In Europe, Russia and Asia, they are more savvy on cryptos. Example- in South Korea, they’ve had bank ATM machines where you can buy and sell bitcoin (with proceeds, I imagine, coming from and going into a bank account. In these

      In Japan, bitcoin is a legal currency.

      As for why bother with them: it is trustless- you do not need a third party to verify trust. Open source software, and a decentralized ledger of transactions ensures consensus.

      It is peer-to-peer- you bypass having a centralized authority/body dictate transaction costs and permission of who to transmit (and by that transaction, communicate information via store-of-value) to. No SWIFT network bans. As for transaction costs, you can send any value in Litecoin for about $0.15, literally within seconds (the Lighting network is FAST,) to anyone, anywhere in the world that has an internet or wireless connection (if they have a digital wallet installed on their smart phone.) Compare that to the time and costs of wiring money somewhere.

      Also, the open blockchain ensures that the money doesn’t take the scenic route to get to intended end party and earn a few overnight loan dollars along the way.

      If you want a good primer on crytpocurrencies, watch some videos with Andreas Antonopoulis – he’s been talking crytpos for years and puts it’s utility and application into simple language.

    • MC01
      Nov 22, 2017 at 6:42 am

      The answer is that, yes, you trade cryptocurrencies like you would trade any other financial commodity.

      The most common way to trade cryptocurrencies is to create an “exchange wallet”, meaning an account where both cryptocurrencies and money are kept, in an exchange website.
      Yes, just like Mt Gox, Cryptsy and ShapeShift.
      When you want to sell cryptocurrencies these exchanges allow you to trade them like stocks or bonds: you submit a selling order and the system will take care of selling your cryptocurrency units at the price you want. The exchange owner will obviously take a fee (usually a fixed sum per operation) and the money from the sale will then appear in your “exchange wallet”. You can then choose whether to transfer it to your bank account, buy other cryptocurrencies or just leave it there while you make up your mind.

      However since cryptocurrencies are not tightly regulated, you can also sell through a variety of informal means, including putting an ad in a local newspaper or in an online forum. While there’s no middleman and hence no extra fees, here you are working on trust alone. If you send the cryptocurrency units and the buyer doesn’t pay you, getting your “money” back is extremely hard.

      Who buys these currencies? The only reliable Bitcoin numbers we have is volume by country and here countries can be broken down in three categories: early adopters and steady users, which include those countries where Bitcoins have been traded in large quantities since its inception such as the US, the UK, Sweden and Switzerland, early adopters but occasional users, which include those countries where Bitcoins have been traded since their inception but in frenzied fits of trading activity followed by long spells of little or even no volume such as Iran, Dubai, Japan and South Africa, and then those countries where Bitcoin volumes literally exploded in 2016 to take off like a rocket the present year. The present mania started off on the so-called Pacific Rim, with very large volumes starting to be traded in The Philippines in April 2016, followed in close order by Malaysia and Indonesia. China didn’t start to trade Bitcoins in meaningful quantities until February 18 2017 when they jumped from literal pocket change to over 60 million yuan in a single day.
      Geodata are more or less all we have to try paint an identikit for Bitcoin users and they aren’t really helping that much, but that’s the whole point of cryptocurrencies: anonymous, hard to trace transactions.

  7. Laughing Eagle
    Nov 21, 2017 at 5:35 pm

    The blockchain may be useful for other accounting procedures, but it is too slow for digital money transactions. Placing your account on the internet opens it for theft from a infinite number of thieves, and then nobody is liable to pay for the loss.
    Cryto’s more an asset class to be traded and stolen, than use as digital money.

    • RagnarD
      Nov 23, 2017 at 3:31 am

      Rather, i see it as the exact opposite. They are not an asset because they are essentially just infinitely reproducible digital code. But they are useful as currency to be bought seconds before making a transaction and then being sold out of the second the transaction is over.

      All the while, ideally, keeping your assets tied to the non infinitely inflatable physical world.

  8. Gershon
    Nov 21, 2017 at 5:56 pm

    Meanwhile, my physical precious metals sit in quiet repose in my safe deposit box, unthreatened by any hackers.

    • Rates
      Nov 22, 2017 at 12:14 am

      You can’t make money out of certainty. That’s why cash reliably loses value.

    • d
      Nov 22, 2017 at 4:02 am

      “Meanwhile, my physical precious metals sit in quiet repose in my safe deposit box, unthreatened by any hackers.”

      The ignorance of banking systems in this statement is HUGE<

      • prepalaw
        Nov 22, 2017 at 11:11 am

        Agreed. As of 2015, you can not store cash or gold in a JPMorgan safe deposit box. Box contents are not FDIC insured. Bank employees open boxes without customer knowledge or consent. Many banks have sold or leased their safe deposit vault and box businesses to third parties. You have no recourse if something goes missing in your safe deposit box.

        Better solution: store your valuables in the trunk underneath the spare tire of an old car with no license plates parked in your garage. No old car that no one will steal: cut the heart out of good steak – put your encased stuff in the cavity and wrap, freeze and store in your freezer.

        And, if you use these or other private methods, tell no one (other than one trusted adult you live with) what you are doing. Secrecy is what will protect you. Unfortunately, I know people who use these means and can not keep their mouths shut. Better to write the info down in handwriting together with the list of all your passwords and account Ids and keep the envelope in a separate place.

        • RD Blakeslee
          Nov 22, 2017 at 3:12 pm

          Or, if you’re like I am, colon cancer survivor but fecaly incontinent, keep a fiew gold pieces in your underpants.

        • d
          Nov 23, 2017 at 3:38 am

          You arent telling me much new here, but some other might hopefully learn from it.

          Did you know frozen Weed is odorless?

          Boat keels are interesting, when boat is ugly, and Moored in safe Shallow water Anchorage. Especially since bolt on “keel bulbs” which are then glassed over, have become common these days.

          Remember greece.

          When the banks reopened

          NO Bank controlled safety deposit box, in the whole country, could be opened, for the first time since the closure’s. With out the presence of a state tax Auditor/Inspector.

          Some people in greece, are still waiting, for that regulation to be rescinded.

          Bank safety deposit boxes are pretty worthless for keeping much beyond Birth certificates Etc.

        • BertK
          Nov 23, 2017 at 3:46 am

          I like the wheel well of the old car idea cuz u can’t find with a metal detector. The old steak can get tossed by someone cleaning house. My fave is to bury it in the woods of a large public park that u can be pretty sure is not gojng to be developed (dig up or built over) without your knowing it.

    • thelocalpragmatist
      Nov 22, 2017 at 11:52 am

      “Meanwhile, my physical precious metals sit in quiet repose in my safe deposit box, unthreatened by any hackers.”

      “Gershon,
      …and currently unthreatened by the Federal Government…currently unthreatened.

      And what if your worst fears come to pass? Gold is at $20,000 per ounce, and you want to buy a $100 loaf of bread? The bodega on the corner may not make change for your one oz. bullion coin…what to do? Who will convert the coin to currency? At what discount? At what risk to your wellbeing? I assume you will be heavily armed.

      I expect that you can trust your local pawnbroker….yeah….

      • Curtis
        Nov 22, 2017 at 10:28 pm

        Point of gold is in a economic system fail you can preserve some wealth to start over. Not to buy consumables. every down turn has a recovery….. except 2008…lol….in a recovery you most likely will be able to buy the new currency with gold. Honestly unless you have 5 million you don’t care about holding for generations gold is pretty meaningless. The average person is probably better just to start over vs hold gold for years with minor gains. Being useful is the true gold.

        • RagnarD
          Nov 24, 2017 at 11:20 am

          Minor gains / meaningless ?
          Ever looked at a not so long term gold chart? Say starting at year 2000. Compare it to stock market index. Compare it to the money printing that has occurred since 2000.

      • nick kelly
        Nov 23, 2017 at 9:01 pm

        You can’t pay for a McBurger with gold but unless you are WAAAY out in the boonies there will be a precious metal dealer within an hour. In my city of 100K there is one ten minutes away.
        Of course you wouldn’t go to a typical pawn broker.
        You will find that a reputable gold and silver dealer will buy and sell at very low spreads. Bid and ask will be a couple of percent apart on a larger deal. For many currencies you will pay a higher commission to sell or convert.

      • RagnarD
        Nov 24, 2017 at 11:29 am

        How to convert the $20,000 gold coin? rich persons problem.
        Who to turn to complain when your 401k and IRA Retirement assets are socialized by Uncle Scam? poor persons problem.

    • Thi skeptic
      Nov 22, 2017 at 8:38 pm

      Your safe box in the bank does not belong to you…

  9. Gershon
    Nov 21, 2017 at 7:51 pm
  10. John Doyle
    Nov 22, 2017 at 1:12 am

    What’s the percentage of actual bitcoin coins compared with the numbers representing bitcoin in accounts? Like 3% of dollars is in cash the rest is electronic. So cannot they just be deleted ,written off?

    • Mel
      Nov 22, 2017 at 10:42 am

      Now that I think about it, I don’t know. There’s a lot of established legal weight thrown behind dollar banking, which means that the dollars you have in the bank can be used whether they’re electronic or not, and you have recourse if the bank breaks its promises.
      I think that if you have Bitcoins in a wallet with your own cryptographic keys, then you have real Bitcoins. Whereas if you have someone’s promise to clear your Bitcoin transactions for you, then in extremis you have nothing.

  11. Ricardo
    Nov 22, 2017 at 1:39 am

    Seems like the best currency is called “startup”. It appears to draw in money from every where.
    There’s a scam born every minute.

  12. d
    Nov 22, 2017 at 4:05 am

    All these Crypto hacks yet no FX brokerage hacks, of any note, where FX brokerages have way more liquidity.

    Every picture, tells a story.

  13. raxadian
    Nov 22, 2017 at 8:52 am

    And I thought people who invested in Juicero were stupid. It seems Cryptocurrencies is the real suckers magnet.

    • junior_kai
      Nov 22, 2017 at 8:13 pm

      I was half expecting Elon Musk to only take bitcoin for his latest car (that will likely never be made en masse). Just stitch together all the ponzis he can, make the new car have a built in juicero to keep you occupied while its charging at a rate that defies physics!

  14. Edger Unner
    Nov 22, 2017 at 11:31 am

    Lets see, a government prints it’s own sovereign fiat currency, an endless amount, then it gets transfered into bitcoin. So how is bitcoin not just another form of fiat currency? I find it esp silly that governments print fake money and allow one another to trade fake currency for real commodity money such as gold.

  15. Enrique
    Nov 22, 2017 at 11:52 am

    My favourite are the people who think that “GoingtoZeroCoin” or whatever the latest one is will be a medium for dodging the evil government(s) of WhereverStan.

    Uh, if the intel agency of WhereverStan wants your “GoingtoZeroCoin” it gets it at a few keystrokes I imagine. Same as if they want to confiscate your actual currency, but quicker and theoretically with no legal recourse.

    It’s a trade. Nothing more. And anyone who trades this is an idiot.

    • Kent
      Nov 22, 2017 at 1:59 pm

      I am going to guess that 99% of the folks buying any of these alt-coins have no idea who is behind said coin and how the software actually works. Which means it could just as easily be the FBI getting notified every time you import fentanyl from China or order gay snuff porn. Useful knowledge when you want to run for Congress.

      • thelocalpragmatist
        Nov 23, 2017 at 11:54 am

        “I am going to guess that 99% of the folks buying any of these alt-coins have no idea who is behind said coin and how the software actually works”

        Kent,
        No, Nooo, Alt-coins are a good investment…
        trust me….

  16. Mike Earussi
    Nov 22, 2017 at 12:15 pm

    My heart bleeds…

  17. stan
    Nov 22, 2017 at 1:23 pm

    I know nothing about crypto-currencies and I can’t predict the future, but I do know what makes a good monetary token.

    Money is a token in an accounting system that tracks the exchange of promises for goods and services. The accounting system must be accountable. If the accounting system becomes full of fake accounting entries, then it is no longer trustworthy.

    Think Enron which was worth $70 billion one day and worth nothing two weeks later. Did the money just quickly disappear? No, the accounting system was fraudulent.

    Remember playing monopoly as a kid? The first rule of being the banker was that you were not allowed to commingle your money with the banking money, and all banking transactions had to be made in full view of the players.

    If you didn’t trust your friends in a friendly game of monopoly, why are we trusting a financial system (accounting system) which is maintained in secret?

    Money is a promise. Don’t believe promises from people or groups you cannot trust. But there is no perfect money. All money has its vulnerabilities of theft, embezzlement, default, etc.

    • RagnarD
      Nov 23, 2017 at 3:52 am

      Nice simple point. Thanks

  18. JB
    Nov 22, 2017 at 1:53 pm

    give a person 5 % compounded interest on their hard earned principal insured money and many of the topics/issues discussed in this forum will become non existent .

    • Gershon
      Nov 22, 2017 at 7:43 pm

      How do you expect the Fed to bilk savers out of interest income and force them to play in Wall Street’s rigged casino if they get 5% compound interest?

  19. Gershon
    Nov 22, 2017 at 7:42 pm

    Meanwhile, gold popped nicely today as the Fed FOMC notes revealed – shocker – continued Fed “dovishness” i.e. debasement of the currency. Imagine that….

  20. Charlie
    Nov 22, 2017 at 8:00 pm
  21. Curtis
    Nov 22, 2017 at 10:16 pm

    Long time reader…..I don’t understand people’s hostility towards bubbles and asset appreciation. Why be upset by it. It’s not your money….unless you count the housing bubble….thanks tax payers…..but who cares if crypto fails. Imagine if it works and takes off. Way too much negativity on this site. Love it but it kinda feels like the golf club 50 year olds that didn’t quite make it. Smart enough to understand the market but because of bad luck or bad decisions they are less successful vs their peers…..now I sound negative…..on a side note I would love to see wolf explain how leases work for cars nowadays. I remember 2008 where Ford and Chev lost their shirts on leasing…..we are looking for a new suv the past week and have been pushed by ever dealer to lease…..

    • Nov 23, 2017 at 1:47 am

      If someone invested $100,000 in eUSD on October 22, he or she would by now have lost 97.4%. All they would have left is $2,600.

      There are hundreds of these types of cryptocurrency examples.

      It’s form of online gambling, some big winners, a lot of big losers, and if you keep playing long enough, you can lose it all.

      • d
        Nov 23, 2017 at 4:09 am

        “It’s form of online gambling, some big winners, a lot of big losers, and if you keep playing long enough, you can lose it al”

        Its worse than Gambling.

        Your listing of “Disappearances” of funds and the fact that in some case the same peopel have had more than 1 disappearance. In more than 1 entity. Which is simply not credible.

        Reminds me of.

        “The best and safest way to rob a bank, is to own it”

  22. Snotfroth
    Nov 22, 2017 at 10:54 pm

    I think a lot of the hostility towards cryptos comes from people who are not comfortable with rapid change and feel like they’ve missed the boat. If someone ‘invested’ $1000 in Etherium two years ago, they’d have $360,000 today. It’s hard not to be resentful when you see supposedly foolish people making those kinds of gains.

    As far as cryptos themselves, I see them as just another currency to FX speculators to play with. With the inherent computational and energy costs of bitcoin transactions, it doesn’t seem like we’ll be using it for everyday purchases. I’ve read that a single bitcoin transaction burns on average around 200 KWh of energy. According to my electric bill, that’s enough to run my house for about a week and a half — not exactly an eco-friendly long-term outlook.

    The benefit of cryptos versus other currencies is cryptos they are limited, and thus cannot be forever inflated through ‘money printing’ as traditional fiat currencies. Yes, sure, anyone can create other parallel cryptos, but so also can anyone create their own traditional paper currencies. That doesn’t automatically devalue existing, established systems.

    The proof of the pudding is in the eating: there’s about 1400 cryptos listed by CoinMarketCap and probably thousands more in the works, but that doesn’t seem to be dragging down the apparent value of the established ones.

    • RagnarD
      Nov 24, 2017 at 11:12 am

      “Doesn’t seem to be dragging down the value….”
      What of the volatility surrounding emergence of bitcoin cash, forking, etal?

      Anyway, the “history” you are hanging your hat on is minuscule, especially given that cryptos haven’t been through a full market cycle. Ie a bear market in assets.

      Besides that Who would argue that any paper currency has been a store of value over the last 100 years relative to gold?

  23. dan
    Nov 23, 2017 at 12:26 pm

    people should stay away from tethers and this Exchange it,s the new mtgox.
    A part from that Bitcoin’s blockchain capacity will not be augmented bitcoin is like a store of value .You will simply have a few sidechain network like litcoin in which to transact. In a strategic sense could work or maybe not?
    bitcoin satellites is also a interesting concept or maybe not?even more fun then a james bond movie like moonraker
    The next battleground in crypto will be mining to break the monopole of bitmain and the chinese miners

  24. c_heale
    Nov 24, 2017 at 7:20 am

    One problem with cryptocurrencies is the amount of electricity needed to mine them. This is already at unsustainable levels (more than many countries). I think this is an existential problem for cryptocurrencies and one that cannot be solved.

  25. Sammy
    Nov 24, 2017 at 12:40 pm

    For holding physical coins, I prefer a large jar of peanut butter shoved to the back of a dumb fridge.

  26. andrew yarnot
    Nov 24, 2017 at 7:07 pm

    Bitcoin is not sound money, it is not currency and it is nothing like gold so:

    Please ask yourself to clearly explain to everyone –> how does a cryptocurrency perform when a bad transaction takes place?
    • Such as a grocer in good faith buys, using bitcoin, some avocados and they turn out to be poison. Who sold them and where is that person located? How do you correct this bad transaction and horrible situation, when the transaction itself is anonymous and irreversible?
    This is a nightmare waiting to happen for this and other reasons.
    A crypto should only be:
    • Totally free to purchase
    • Mining limited to very modest universal income amount
    • Mining available to all on a random basis to everyone equally and purely voluntary and compensated only up to the universal income
    • Completely distributed across all hardware and networks
    • Secure in an off-line electronic/paper vault under the owner’s strict control
    • Open source with quantum compatibility
    Remove the anonymity and governments with their central banks will control your money as they do now, Bitcoin then becomes nothing but a nuisance. And you still have the irreversibly of the transaction to deal with, evil businessmen love it.

    Bitcoin has little use other than to launder money and conduct other illegal transactions. However, it does provide a strong way to hide even legal transactions but there are other ways to accomplish this (cash for example).

    When the “Financialization” wheels finally come off… if Bitcoin or any other crypto won’t buy gold then you will know which one won and not until then.

    Blockchain technology is useful, and that is all there is.

  27. Gershon
    Nov 25, 2017 at 4:41 pm

    Today’s Bitcoin ripoff de jour. But…but…secure wallets! Uncrackable block chain!

    https://cointelegraph.com/news/bitcoin-account-holder-loses-100k-over-public-wireless-network

  28. Gershon
    Nov 26, 2017 at 11:54 am

    Bitcoin hitting new highs. How long with the Fed tolerate the existence of a competitor that creates funny money out of thin air with zero intrinsic value? How long can the IRS tolerate the existence of untaxed fortunes and nominal wealth gains?

  29. Kratoklastes
    Nov 26, 2017 at 6:05 pm

    The assertion that exploiting an aggregator is the same as exploiting the cryptocurrency itself, needs to die in a fire. It shows that whoever wrote the story is ignorant of the thing they’re writing about.

    If someone exploited a vulnerability in the data backend of this site (and I can say with probability 1 that exploitable datasec vulns exist on this site), it would be a category error to assert that “financial analysis” had been hacked.

    Literally none of these events is a ‘hack’ of a cryptocurrency: they are all exploits of poorly-structured data security at the cryptocurrency “clearinghouse” (for want of a better word).

    If someone tunnels into a bank vault, or scams a teller by “soc-eng”-ing them into giving access to another client’s account, nobody would assert that the US Mint had been ‘hacked’.

    There has never been a hack of the blockchain – and that would be the ‘big get’, since any successful hack could credit themselves with new BTC, undetectably.

    We all know that journalists have little more than a dilettante understanding of literally any subject of moderate complexity, so perhaps it’s not sensible for folks like me to expect dilettantes to wait until they understand an issue before they write clickbait drivel about it.

    So here’s what actually happened (aside from the outright fraud where the site owners make off with the loot directly… which is hardly a ‘hack’).

    A bunch of datasec neophytes built websites for people to transact in cryptocurrencies. Those websites (and their associated backends) were riddled with known security vulnerabilities. The vulnerabilities were exploited and some people who entrusted their cryptocurrencies to the site owners, lost some or all of their value. The end.

    So the ‘take-away’ from this: it turns out that datasec neophytes are the wrong person to write a secure backend. (Captain Obvious… please go to the nearest courtesy phone).

    The corollary to this: people who entrust their purchasing power to institutions without performing adequate due diligence will be over-represented in ‘bad outcomes’.

    New tech predictably results in a rush of charlatans claiming expertise in a bid to make bank. These charlatans exploit the enthusiasm of risk-tolerant but boundedly-competent individuals who are early-adopters of the tech.

    .

    I have spent some time trying to convince

    In much the same way, economic dilettantes (mostly arbitrageurs from various forms of utter charlatanry – e.g., psych) have built careers and reputations by asserting that they’ve ‘falsified economic rationality’ as a result of some pointless ‘trick question’ study (where N = 15 white middle class undergrads).

    • d
      Nov 27, 2017 at 12:06 am

      “There has never been a hack of the blockchain – and that would be the ‘big get’, since any successful hack could credit themselves with new BTC, undetectably.”

      That you are aware of.

      You have just said there is no god. When there might be.

      But you would need to die, to find out, if there is, or isnt.

      Just because you dont know something has or hasn’t been hacked dosent mean, it has or hasten.

      Its an encryption medium. It is possible to break it.

      just like the iphone, broken by Israel.

      My money says, the possibility that the same unit, that broke the iphone, has already broken Blockchain. Is very high.

      Its what they do. All day, everyday, sometimes for decades.

      They were very unhappy with the Americans. After helping them, the Americans unnecessarily admitted they had hacked the iphone.

      So the last people they will tell they have hacked blockchain will be anybody in the US Intelligence/security establishment.

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