“My PGP key is compromised, and at least many of my bitcoins stolen”

https://twitter.com/LukeDashjr/status/1609613748364509184

by TylerE • 4 years ago

345 471 4 years ago

twitter.com

belmarca• 4 years ago

This is the tweet: https://twitter.com/LukeDashjr/status/1609613748364509184

dang5• 4 years ago

Ok, we changed to that from https://preview.redd.it/fovmtx7gjh9a1.jpg?auto=webp&s=d5b896.... Thanks!

Submitters: "Please submit the original source. If a post reports on something found on another site, submit the latter."

https://news.ycombinator.com/newsguidelines.html

mccorrinall• 4 years ago

Would be interesting to know how his BTC were stolen. Because he is a BTC core developer, I believe he followed the best practices, like not writing down his password. So infection or keylogger?

sosodev5• 4 years ago

Storing most of his bitcoin in a single hot wallet seems to go against the best practices, no?

mateuszf• 4 years ago

He said it was not most of his bitcoins.

https://twitter.com/LukeDashjr/status/1609618498027753472

EDIT: Right, maybe it's all

gnull• 4 years ago

What is hot wallet, btw?

throwaway9870• 4 years ago

I am not a security person, but I can't help but wonder where the advice of not writing things down comes from? I think my wife's password book on her desk is a lot more safe than most computer experts.

cma• 4 years ago

Someone kept theirs in their wallet, and their passphrase showed up on a publicly released police body cam the other day when their insurance was checked or something.

andrewstuart3• 4 years ago

Say your wife is a well known Bitcoin billionaire.

And your wife bought something from my eBay store. Now I have your home address.

And if I am a ruthless character then I quietly break into your house one day with th3e objective of leaving no sign I was ever there. Search for written down passwords, take a photo, leave.

rileymat2• 4 years ago

It comes from the threat model, having a password book on your desk in a cubicle is absolutely not secure.

On a desk at home? It is marginal, certainly a burglary is a low frequency event, but we also have events like fire that make it insecure in other ways.

jeroenhd• 4 years ago

Password books are basically physical password managers. The only problem I have with them is that the passwords in most password books I've seen aren't very creative or random. As long as you write down randomly generated passwords instead of permutations of the names of your kids/pets/parents, I don't know what people are panicking about.

The perfect password book is combined with a word you remember but don't write down as a pepper, but I doubt it's much of a problem in practice; it takes one leak of an u hashed password to break the code.

I think for many the risk of someone breaking in and stealing your password book is much smaller than the risk of a centralised password manager getting hacked (LastPass and friends).

kube-system3• 4 years ago

That advice mostly originates from security folks working in workplace environments, where passwords that are written down may be visible to people who are threat vectors.

dan-robertson• 4 years ago

I think it’s reasonable advice for most people. The alternative is usually having a simpler password which is worse if your threat model is ‘hashed password shows up in big breach’. If your threat model is ‘someone turns up to your house to get your password’ your worry should not be theft of the paper.

im3w1l• 4 years ago

The biggest threat with this scheme is you. After that your kids, your house keeper, your friends and visitors.

nextaccountic• 4 years ago

he should been using a hardware wallet

and the bulk of it should be on a paper wallet, in the vault of a bank or another real world institution. the hardware used to generate this key should be wiped out. so if he followed best practices, he didn't lose this money

edit: just found out that the btc was stolen from a dedicated server on ColoCrossing. this makes no freaking sense. no server connected to internet should have access to the keys to your btc (or access to any keys that could be used to later on grab cryptocurrency keys). hot wallets should be hardware wallets, cold wallets should be acid free paper

treeman79• 4 years ago

How on earth are normal people supposed to trust bit coin. When best practice is to treat it like paper money.

paulpauper10• 4 years ago

Yes, he likely made a fundamental rookie error. Large sums should be stored completely offline.

paulpauper10• 4 years ago

writing down password does nothing when there is a digital copy too and your computer is compromised

TedDoesntTalk2• 4 years ago

What the heck @FBI @ic3 why can't I reach anyone???

Uh, because it’s New Year’s Day? Don’t get injured or become a crime victim on a holiday, if possible.

Sebb767• 4 years ago

Slightly off-topic, but who is this @ic3 and why does he tag them in the same way as the FBI?

Here's the account, for reference: https://twitter.com/ic3 . Doesn't look like an official to me.

kube-system3• 4 years ago

Clearly he meant https://www.ic3.gov/ but tagged a wrong account.

kristianc• 4 years ago

Every crypto hack is followed by a swift call for a centralised authority to intervene.

nemo44x4• 4 years ago

Why is that inconsistent? There’s a lot of people that believe governments only legit purpose is to protect people and their property.

mrtksn3• 4 years ago

I'm confused why he even is interested in reaching these governmental organisations. Isn't it the idea of "code is the law" a pillar of the crypto movement?

I don't claim that the person in question did this but as a thought experiment IMHO stealing Bitcoin is oxymoron because the transactions are happening in the realm of zero trust computational environment. The whole premise is that this is a trust-less system which means that we shouldn't even attempt to trust in anything about the wallet movements.

Maybe it was a handshake deal that went sour afterwards?

paulpauper10• 4 years ago

And there is nothing they can do anyway

like they are going to summon resources to try to find some guy who is probably in Russia or something

hnarn2• 4 years ago

You think the entirety of the FBI takes a day off on national holidays?

green-eclipse3• 4 years ago

"Nevermind many. It's basically all gone"

https://twitter.com/LukeDashjr/status/1609647203890372609

tromp3• 4 years ago

Loss of his bitcoin is not yet confirmed.

It's possible that only his twitter account got hacked, and the hacker is having some fun with it.

Beyond being a bitcoin core dev [1], Luke-Jr is also the author of an independent node and wallet implementation known as Bitcoin Knots [2].

[1] https://github.com/luke-jr

[2] https://bitcoinknots.org/

urza2• 4 years ago

It looks like it is just twitter hack. The wording in those tweets doesn't fit Luke's writing style.

This is his mastodon, let's see if he posts anything there:

https://bitcoinhackers.org/@lukedashjr

theCrowing2• 4 years ago

You believe that someone keeps their normal "writing style" when his livelihood gets stolen? :>

yuvadam• 4 years ago

Peter Todd claims he has confirmation [1]

[1] https://twitter.com/peterktodd/status/1609655629903265795

gjsman-1000• 4 years ago

If a Bitcoin Developer with >$3M in Bitcoin didn’t use a hardware wallet… God help the typical Bitcoin user. It’s a tragedy, and inexcusable.

kumarm2• 4 years ago

As soon as trouble comes to paradise, they wonder why traditional institutions they dissed all along is not dropping everything and take up their case (FBI in this case).

dang5• 4 years ago

Ok, but please don't post repetitive flamewar comments to HN—this kind of thing has been posted a thousand times by now; the only value left in it is indignation, which is the opposite of the curiosity we want here.

Perhaps you don't owe paradise better, but you do owe this community better if you're participating in it.

https://news.ycombinator.com/newsguidelines.html

kumarm2• 4 years ago

Got it. I agree the comment was useless.

tibbydudeza• 4 years ago

Yeah FDIC is for loosers - we are stepping out of the matrix.

sophrocyne• 4 years ago

Turns out the advice “not your wallet, not your coins” still holds true in this context.

jtchang• 4 years ago

If you hold a large amount of bitcoin your threat model should be way above the average person. It sounds like his infrastructure was specifically targeted. It can be very difficult to protect against targeted attacks from adversaries.

Alex3917• 4 years ago

It can be very difficult to protect against targeted attacks from adversaries.

Not really. The device used to sign transactions should never be connected to the Internet.

tsimionescu4• 4 years ago

If the level is millions of dollars, that device could be physically stolen, or some aspect of the cryptography/auth scheme could be attacked through a 0-day.

Of course, it's also possible he just wanted something closer to the convenience of a bank account/credit card instead of a pile of cash and failed in the opsec.

krisoft• 4 years ago

Not really?

“Targeted attack” can mean many things. If you have control over wast sums of hard to trace treasure a determined attacker might just kidnap you and/or your loved ones, and win your cooperation using threats of violence.

Your suggested safety precaution is a sensible start, but far from enough if you have a lot of bitcoin.

green-eclipse3• 4 years ago

Incredibly difficult to defend against nation state attackers and such. North Korea is very persistent in crypto hacks, for example:

https://www.npr.org/2022/12/22/1144996480/crypto-hacking-nor...

paulpauper10• 4 years ago

if something is cryptographically secure, it should not matter how big the threat actor is

lrvick6• 4 years ago

It is actually really simple, albeit tedious, to defend your bitcoin against remote state actors. Do keygen and signing with reproducibly built binaries on a reproducibly built minimal OS and never connect it to the internet.

revskill• 4 years ago

Is this a trick to let BTC dip more (as planned), then when there's enough accumulation, good news comes ? ;)

echelon2• 4 years ago

I've never been a fan of crypto (despite holding some for diversification), but I think some tweaks could be made to make it safer and more reasonable without comprising what its proponents like about the system.

Crypto prtocols need a way to reverse transactions if the original address as well as some quorum of elected "supervisory overseers" agree [1] to it within a week or so. There should also be a mechanism to move the balance to another address with the original owner and these parties.

This wouldn't allow the "regulators" to themselves steal or coerce, but they could provide assistance in large thefts like this.

[1] Obviously the attacker would vote no, but a single yes from the true account owner would override.

dns_snek2• 4 years ago

Since nobody has offered a response, I'll offer my 2c. Your suggestion flies in the face of what Bitcoin and other cryptocurrencies that operate according to the same principles were designed to be (trustless, some degree of anonymous) and it would make the system ripe for abuse (more than it already is). What if Luke Jr is lying and he spent those bitcoins in return for goods and services?

Suddenly you have to establish a department that would hear from both parties which introduces the problem of identifying the other party and getting in contact with them, then they would have to evaluate the evidence and make some kind of judgement. Paypal attempts to do what you're describing and it's constantly abused by both buyers and sellers alike.

Bitcoin might not be perfect, it might not even be fit for most purposes (highly subjective), but scrapping the idea outright would be a much better outcome than bastardizing it with "trusted" middlemen to the point where it's not fit for any purpose at all.

I think progress could be made in UX design, by pushing users towards using hardware wallets and other areas, but changing the protocol such that trustless transactions now require trust is not an appropriate solution. It's the core of what cryptocurrency is as a concept.

echelon2• 4 years ago

Thanks for the response! I appreciate it much more than the downvotes, and it gives me a position to consider.

I still find myself in disagreement - there need to be safeguards at the protocol level, and not just for ordinary people.

Escrow and restitution could be built as a feature where trustless and anonymous transactions can still take place. Taking into account my previous post, imagine this setup:

There are now two types of wallets/addresses. One type functions exactly as Bitcoin does today. The other type, however, automatically subjects transactions to temporally-gated restitution systems and allows you to recover funds if a side channel refund request is made.

Funds in the original Bitcoin wallet type experience transactions that are instant and non-refundable, and you can keep "hot" funds here. The "cold" wallet type requires more time to pass before the funds "settle". It can function as your bank and offer lots of additional security.

It'd be easy to make the wallet type an identifiable part of the address so that all parties know what types of transactions they're involved in.

This extension to the protocol could be 100% opt-in.

green-eclipse3• 4 years ago

Dude has 8 kids and someone is claiming it was around 200 BTC. That's ~$3.3M down the tubes. Ouch.

notsrg• 4 years ago

Looks like 3.6M: https://www.blockchain.com/explorer/addresses/btc/1YAR6opJCf...

dinkblam• 4 years ago

no big issue because surely he must have 96M more. no one would ever store all of his wealth in one single asset - and especially if its a very risky asset that isn't backed by any real value. or would he?

sosodev5• 4 years ago

https://bitcoinhackers.org/@lukedashjr his mastodon feed indicates that one of his servers was physically compromised multiple times. Seems like he should have been more paranoid about securing his coins with that knowledge?

perihelions2• 4 years ago

Speaking of paranoid, that link you've posted, isn't that a link to a server that's known to be compromised, and also an apparent watering hole for crypto wallet holders? Am I unreasonable in thinking that's a very scary link?

sosodev5• 4 years ago

Dunno, it's unclear if that Mastodon instance is hosted on his compromised servers.

doodlesdev4• 4 years ago

1. Disable JavaScript.

2. Access (almost) any website in the internet

3. ?????

4. Profit

edit: Mastodon doesn't work without JavaScript, holy hell. We truly are living in a dystopia. Thankfully you can still access his profile from another trusted instance such as mastodon.social at https://mastodon.social/@lukedashjr@bitcoinhackers.org

Dma54rhs• 4 years ago

Weird he cheaped up on servers paying 55 a month to some random vps provider.

doodlesdev4• 4 years ago

And even after being hacked once due to !!! physical access to the servers !!! he was still looking for an "accessible" dedicated server instead of a trusted service or self hosting somewhere he could keep safe. He had more than 200 bitcoins. People are weird.

MuffinFlavored4• 4 years ago

some random vps provider.

devil's advocate: is DigitalOcean in this category?

dibt2• 4 years ago

How do you spend $55/month on a VPS? Isn't that the amount you spend on a reasonably popular application host?

He obviously is more of a software developer than an sysadmin, so maybe it's just a poorly optimized personal app host.

scottiebarnes• 4 years ago

Strange, a month ago he tweets about his server being compromised:

https://twitter.com/LukeDashjr/status/1593227756841578496

Go figure

bpanon• 4 years ago

Supreme negligence on his part. He knows his server was accessed, but he didn't transfer the coins to a new address.

theCrowing2• 4 years ago

Worse he just "purged" what he found instead of nuking the whole system.

phphphphp• 4 years ago

Apparently his servers keep getting hacked, which doesn’t reflect well on his security practices: https://twitter.com/LukeDashjr/status/1606885577843957762

technion3• 4 years ago

Assuming this physical access claim is truthful (and i have doubts), I would feel at this point its budget letting him down. If your threat model includes "targeted attacks from people with physical access", it's time to run a vm on aws or azure and use the tooling they make available to secure it further. If you want tonnes of resourcing at a quite low budget, there's only a certain amount of "calling out" the group that supplied it that's reasonable.

tinus_hn• 4 years ago

If he has enough Bitcoins for it to be possible for ‘many of them’ to be stolen, he doesn’t have a small budget.

r1ch• 4 years ago

I believe most of these "physical attacks" are datacenter support teams being socially engineered and not state-level actors. They hook up a USB rescue drive to "help" you back into your server, using full disk encryption or locking down the BIOS can thwart such attacks.

sureglymop• 4 years ago

Probably bad security practices. Maybe he has accessed a compromised server over ssh and used agent forwarding or something. Anyhow, looks like a pretty bizarre profile...

blibble3• 4 years ago

it's even more amazing, he's posted:

    > So... Any trustworthy companies offering affordable  dedicated servers?
    >
    > Currently paying $55/mo for:

so if you offer him some crappy free dedi appearing to be in an IP block of a reputable company all you have to do is wait a bit and presumably he'll upload his wallet.dat for you!

hnarn2• 4 years ago

I wonder if this is the same server that “wasn’t fully rebooted in years”.

https://bitcoinhackers.org/@lukedashjr/107769287522154866

resonious• 4 years ago

Evidence suggests the attacker installed 2-3 remote shell backdoors, but didn't touch anything else.

Well, I guess he now has evidence that maybe they touched something else.

seba_dos1• 4 years ago

Just a few days ago he popped into friend's Twitter thread about similarities between Freenode and Twitter situations, and announced that it was Libera Chat that conducted a hostile takeover against Freenode.

Somewhat I'm not surprised at all.

simonw• 4 years ago

I still think the reason Satoshi vanished is that he lost his private key and couldn't handle the embarrassment.

MattPalmer1086• 4 years ago

That is the most plausible explanation I've ever heard. And it made me smile! Happy New Year :)

tiahura• 4 years ago

Agreed. Another plausible reason is that he died.

xrd2• 4 years ago

Almost right. He spilled two (!) beers on the paper he wrote his private key upon, and he died of embarrassment.

dennis_jeeves1• 4 years ago

Now, what was the brand of beer he was having?

richbell• 4 years ago

This is nonsense. He spilled tea on the papers — whether they had cream and sugar is widely debated.

pyuser5833• 4 years ago

I figured he’s a guy who works in the national security sector and didn’t want his extra curricular work drawing attention to himself.

If he had to pass occasional polygraphs, it could create some weird situations.

And if he signed a contract giving all intellectual output to his employer (including side projects), he could find himself in a lawsuit.

pydry• 4 years ago

If polygraphs worked that is.

jki2755• 4 years ago

I've always believed that Satoshi is a pseudonym for a group of people working for some intelligence agency.

timdaub2• 4 years ago

Assuming you're right and Satoshi did lose their private key, one thing I find implausible is assuming embarrassment. Satoshi was, for what we know, a pseudonym that has held really well (we still don't know their real name). Personally, I'm embarrassed when somebody can acurately pin a weakness to my character that I feel vulnerable about. For example: Satoshi could have been playing a persona that they aren't in real life, similar to how an actor plays a role in a movie. In that case, if e.g. someone criticizes a personality trait of the movie role, the actor won't personally feel embarrassed since the critique doesn't fall back to their own personality. I believe the same logic is transferable to the case of Satoshi, where even if they lost the key, they wouldn't truly have to feel embarrassed consider that they've acted the online personality from the get go.

w1nst0nsm1th4• 4 years ago

I think satoshi never really vanished.

Google 'satoshi dorian nakamoto newsweek' and you get to know him. Unless the journalist made the whole thing up or at least a big part of the article is a lie.

After reading that, you start asking youself very serious questions about the whole crypto charade.

EamonnMR• 4 years ago

I think the consensus was that he wasn't the guy. The guy didn't have relevant experience and didn't act like the guy, plus it would be very strange to use your real name but then not expect anything to come of it.

b3nji• 4 years ago

Anyone noticed there are no repeat messages on his Mastodon, that historically reflected his Twitter, or vice versa?

samwillis• 4 years ago

Context now that the editorialised title has changed, this is a core Bitcoin developer.

These things happen every day, but happening to a core developer (if confirmed!) who has a deep understanding of the systems and security indicates just how fragile crypto can be (in my opinion)

spicymaki• 4 years ago

Exactly! if the experts can’t secure their accounts, what hope does anyone else have?

Soon you will see people saying you should have done this or that complicated thing, or how somebody so smart could should have known better.

No matter what they say it is never enough. This is why lack of consumer protections suck.

psychphysic5• 4 years ago

That's why hardware based security is really the only way at this point.

He might be a bitcoin core Dev but does he use ledger/trezor etc?

Is his PGP key on his hardrive or a smartcard?

In this day and age your computer not a bastion it once was. (It never really was but it's more of a problem in 2022 than 1982).

300bps• 4 years ago

This is why lack of consumer protections suck

Agreed, and the problem is that this is a feature. Without that feature of a lack of central control, Bitcoin's main use case is invalid.

bsder• 4 years ago

Give someone enough incentive and they will hack you.

Internet security is 99% "nobody gives enough damn to do it".

2OEH8eoCRo02• 4 years ago

if the experts can’t secure their accounts, what hope does anyone else have?

This is my opinion of the entire software industry.

Chrome exploits, iPhone hacks, etc. These are nearly trillion dollar companies. If they can't do it then nobody can. Something is fundamentally broken.

willnonya2• 4 years ago

"This is why lack of consumer protections suck"

So, rather than the consumer being responsible for their actions you support consumers engaging in whatever risky behavior they like as long as someone else is there to protect them or give them a do-over?

bawolff4• 4 years ago

Experts are also bigger targets and face more risks than ordinary people.

Like in the non-crypto world, banks are the experts on storing money securely, but people still try and rob banks despite ordinary people being much easier targets.

gruez14• 4 years ago

Exactly! if the experts can’t secure their accounts, what hope does anyone else have?

A lot of hope, actually. If he followed the simple and oft repeated advice of using a cold wallet and/or offline computer, this attacked would have been mitigated. Hell, if some of the comments/speculation in this thread is true (ie. he kept his wallet.dat on a server connected to the internet), then this hack wouldn't have affected the user with the most basic setup of a software wallet running on a computer behind a NAT firewall.

DoItToMe812• 4 years ago

He left his keys on an insecure server exposed to the internet. This is the equivalent of "LOCKSMITH LEAVES KEYS IN LETTERBOX EVERY DAY AND THEY GET STOLEN, HOW CAN U TRUST PEOPLE 2 LOCK HOME?????"

paulpauper10• 4 years ago

Experts make mistakes all the time, fail to see hidden risks, like Challenger explosion. This will never see mainstream adoption at this rate. If the hacker is smarter, being smart is not good enough.

nkrisc• 4 years ago

So? Just proves how difficult it is to make rockets that never explode. Are you saying that a non-expert would have more success?

georgyo• 4 years ago

This is not quite the same.

Experts did make mistakes for the challenger explosion, but they did much better than the average person. Put 1000 people at complete random into a room and say design and build a rocket, I suspect they won't even get to the build phase after several years.

When it comes to something everyone should be able to do, an expert making a mistake is a bad omen for the rest of us.

hgsgm6• 4 years ago

The only mistakes experts made in the Challenger explosion was failing to draw pretty a enough picture to convince barely numerate management to stop the launch.

TylerE2• 4 years ago

The experts told NASA not to launch, and exactly why, and were right.

Management chose not to listen.

SkyMarshal2• 4 years ago

Looks like possibly a supply chain attack targeted specifically at Luke Jr's server:

https://twitter.com/naka_frodo/status/1609655813789949959/ph...

MonkeyMalarky• 4 years ago

The salty posts about his hosting provider are confusing to me. He is paying $55/month and is expecting aid in forensics and audits? Is that normal for a low cost provider?

Edit: Also it sounds like he didn't immediately shut down the server after the first hack? That is completely insane. I understand you want to investigate but you are leaving yourself wide open leaving the system running. It's been compromised. End of story.

mikojan• 4 years ago

I do not understand any of this.

1. Was he storing important secrets on a random server somewhere? A PGP key? Why?

2. Before this went down, he noticed someone broke in TWICE and he didn't shut down the server? What was the rationale? Security wise, is there something preventing you from downloading what is important to you and wiping the whole thing?

johnklos3• 4 years ago

Let's see:

1) he thinks that "dedicated servers" are in any way secure

2) discovers malicious intrusion, but doesn't burn down the whole server and re-key everything

3) is supposed to be knowledgable enough to be a core Bitcoin developer but stays on a "dedicated server" after finding malicious intrusion.

This is highly suspect. Either you have stuff that's not worth much, and therefore you don't pay to physically colocate your own server, or at very least you don't pay enough to get a server from a smaller company where you're dealing with real humans with names and reputations... Or you're storing things that really matter, have a large value, or likely both, and you'd pay extra to get better things.

What kind of hubris would lead to continuing to use a compromised server, particularly when the compromise appears to have come from the hosting provider?

Perhaps we need to wait for more information, but from what I've seen so far, there's something not right here.

tmpburning3• 4 years ago

These things happen every day, but happening to a core developer (if confirmed!) who has a deep understanding of the systems and security indicates just how fragile crypto can be (in my opinion)

Because no one can create secure software yet, Bitcoin isn't 100% secure.

willnonya2• 4 years ago

What percentage secure would you say it is?

lrvick6• 4 years ago

This has nothing to do with the security of Bitcoin. No one has ever compromised the Bitcoin protocol.

This is a case of someone expecting a single machine connected to the internet that had been compromised in the past, to not be compromised again.

Very little software has rigorous security review, even the Linux kernel. Linux Odays sell for $50-100k. If you are storing anything more valuable than that on an internet connected Linux machine, it will eventually be stolen.

Use an offline machine or a hardware wallet for anything that matters to you.

VMG• 4 years ago

by that logic, no banking software can ever be secure either

nope96• 4 years ago

He also lost a lot of Bitcoins on the Mt Gox hack b/c he thought it would be safe. He's just one person and I wouldn't draw any big conclusions about it. (One person who has been a massive target for something like this for many years, I would add)

gruez14• 4 years ago

These things happen every day, but happening to a core developer (if confirmed!) who has a deep understanding of the systems and security indicates just how fragile crypto can be (in my opinion)

Based on the other comments in this thread it looks like he didn't bother using a hardware wallet (which is literally something that's recommended on bitcoin.org[1]), and kept his wallet.dat on a server exposed to the internet. You're trying to paint a story of "well if a bitcoin core developer can't secure his coins, then who can!?!?", but in this case it looks like he was being an idiot. You can lead a horse to water, but you can't make him drink.

[1] https://bitcoin.org/en/choose-your-wallet

edit: on twitter he denied that he kept his wallet file on a server

fshbbdssbbgdd8• 4 years ago

So you’re saying that to use crypto properly, I have to secure a physical object that grants irrevocable ownership of my wealth? That sounds bad.

Is there a way I can get my crypto held my an institution with SIPC insurance, the way I hold stocks at a brokerage, so I can outsource this issue to someone else who is backed by a government guarantee? (I obviously don’t expect them to guarantee the value of the crypto, just that the broker doesn’t lose it).

giardia• 4 years ago

The implication of your comment is that Bitcoin is developed in part by someone who acts like an idiot.

pornel4• 4 years ago

That's a No True Scotsman answer — it's not hard to make people keep their wallets secure, because people who got their wallets stolen don't count.

throwaway2902• 4 years ago

Your argument doesn't negate the point though...

bbbbb513• 4 years ago

kept his wallet.dat on a server exposed to the internet

Luke has specifically denied this (before you posted your comment)

EVa5I7bHFq9mnYK2• 4 years ago

He probably run a full node and an LN node on his server, to contribute to Bitcoin network. This requires storing wallet.dat on the server, and keeping non trivial amount of coins in it.

rhaway84773• 4 years ago

If a Bitcoin core developer couldn’t be bothered to keep a hardware wallet, why would a regular Joe be bothered to do so.

Also, how is having a hardware wallet supposed to be secure? Hardware wallets may get stolen, lost, damaged, etc.

Edit: Also, the link you have shared doesn’t even allow you to choose the “New” user type option if you pick a hardware wallet, allowing you to choose only the Experienced user type option.

IOW, a hardware wallet is something that’s only considered usable by someone who is experienced.

hinkley• 4 years ago

Doctors make the worst patients.

Bloede• 4 years ago

The original argument is still valid.

It doesn't matter if he did it right or not.

He got robbed and he will never see his crypto again.

How on earth would anyone with less knowledge than him be able to do it right.

You probably give up explaing my mom why she should have used a hardware wallet...

sfmike3• 4 years ago

Sorry but bring a horse to water is more of an analogy for the unitiated and enlightened can he shown and not adopt. In this case they were at the highest level of crypto so not really. I think saying idiot isnt true considering what theyve accomplished in career. Sounds more like core design flaws. People want convenience with finance and hardware wallets arent convenient, so he knowingly sacrificed security for convenience.

chris123• 4 years ago

Nice straw-man argument. Eventually, you will understand that bitcoin is not crypto. There's bitcoin and there's everything else. Everything else is a scam. Bitcoin is the hardest money ever.

_zllx2• 4 years ago

Please, stop doing that. You won't get anywhere by saying all other major projects that occupy the same space as Bitcoin are scams. You're not helping bitcoin by doing that. You're not convincing anyone that bitcoin isn't crypto; it's the first crypto, and frankly it's been superseded by other FOSS projects like Monero and Ethereum in various places. Either all of crypto is a scam, or we have to take things on a case-by-case basis. By using this Bitcoin-only logic, you're just turning more people over to the former position. Many of the best innovators in the scene have been working on anything but Bitcoin for a long time.

louloulou• 4 years ago

If it's even true. Seems more likely that his twitter account was compromised than his bitcoins.

rsync• 4 years ago

"Context now that the editorialised title has changed, this is a core Bitcoin developer."

I don't know this person, I am not involved in any way in the bitcoin ecosystem ... but I have thought about it a fair amount, specifically wrt opsec and security practices, self custody, etc.

One of the conclusions I have always come to was:

If I was known to have a lot of bitcoin, for any reason, I would work hard to make it public knowledge that all that bitcoin was gone.

dang5• 4 years ago

Submitted title was "Top Bitcoin dev gets owned". It's great to post that kind of explanation in the comments, but please don't use the title for it. That's against the site guidelines: "Please use the original title, unless it is misleading or linkbait; don't editorialize." https://news.ycombinator.com/newsguidelines.html

reducesuffering• 4 years ago

"the pedos who took over Vatican City are NOT Catholic"

Sympathy cratering...

Macha• 4 years ago

A broken clock being right twice a day and all that.

Prior to becoming Pope, Benedict did lead the Congregation for the Doctrine of the Faith which was responsible for covering up the child sex abuse scandals of the Catholic Church in Ireland. In addition, while he was Pope, someone high up in the church instructed the Irish part of the church to stymie the government's efforts to investigate said child abuse scandals which resulted in threatened expulsion of the vatican ambassador[1] (recalled by the vatican before it came to that), the closure of the Irish embassy to the Vatican[2] and a public condemnation by the Irish government[3].

What is much less up for debate is that Benedict and his sucessor Francis (who to be fair, has not had the same pre-papal track record as his predecessor) were fairly elected leaders of the catholic church by its own mechanisms.

Also don't take this as approval or support for the guy's reactionary views of what he thinks catholicism should be.

[1] https://www.bbc.com/news/world-europe-14281441

[2] https://www.huffpost.com/entry/ireland-closes-embassy-to-vat...

[3] https://www.irishtimes.com/news/kenny-condemns-vatican-respo...

WFHRenaissance• 4 years ago

Going to go out on a limb and say this is a Twitter account compromise.

wereallterrrist• 4 years ago

This all stinks. Between the bio, the vague tweets about server hacks (implying Intel ME or a physical server compromise is at fault, really?), the vague tweets about this situation... Something fishy is going on or wow, really proof that sometimes it's just about being in the right place at the right time because wow dude does not have the first clue about security. Hot wallet, compromised, unrotated servers, come on.

"My colo'd server that stores my hot wallet keeps getting compromised. <days later> Welp the wallet is emptied".

I don't know how to take this seriously?

nemo44x4• 4 years ago

Luke Jr is rather famous in the crypto world and has been for over 10 years. This isn’t a rando posting something.

It could be his Twitter has been hacked? We don’t know the whole story.

nibbleshifter• 4 years ago

The mans a halfwit, basically.

shortcake27• 4 years ago

I’m struggling to understand it. I hate crypto but I thought the ease of spinning up new wallets was a benefit. With that amount of money and the knowledge I was being targeted, I’d have hundreds of cold and hot wallets to distribute the attack surface. Perhaps I’m misunderstanding crypto or the situation.

turtleman1338• 4 years ago

Not to defend Luke but I nowhere read that he stored wallets on the hacked server and I think he explicitly stated that the server was not used for wallets.

CyberDildonics• 4 years ago

Just for a little context luke jr was infamous on cryptocurrency forums for being adamant that the sun revolved around the earth, all religions other than catholicism are evil, there is an "ethical aspect to slavery" and that bitcoin's 1 KB/s throughput was too much and should be cut down even further.

https://archive.is/sS5Ml

https://archive.is/DrP83

https://np.reddit.com/r/Christianity/comments/36w6nw/why_did...

https://np.reddit.com/r/Bitcoin/comments/490dyi/serious_ques...

I would take what he says with a grain of salt.

vorpalhex• 4 years ago

I'm not going to comment on his overall opinions, but it does seem like his judgement is severely compromised. I wonder if that led to the negligent behavior which allowed the coins to be compromised and stolen - a discount server host with a history of being compromised seems like the absolute wrong place to store large sums of value.

bbbbb513• 4 years ago

Inclined to agree here. Luke is going on about Intel ME backdoors on Twitter, but in reality there will be a far less crazy explanation for how he got owned.

Raed6672• 4 years ago

The funny thing is that they had to go back to the geocentric world view in order to get the satellites to orbit properly.

So people are trusting Bitcoin with someone who thinks GPS is a lie

tromp3• 4 years ago

Someone in the bitcoin parody group r/Buttcoin compiled this "gigathread" of all his hair-raising quotes

https://www.reddit.com/r/Buttcoin/comments/4936kw/lukejr_is_...

throwaway1281282• 4 years ago

"Gigathread" would become a "bongthread" in Tonal.

andoli• 4 years ago

Wow he really seems a full-blown moron

ea550ff70a• 4 years ago

Shocked Pickachu face

hgsgm6• 4 years ago

You are misrepresenting the slavery discussion. "Ethical aspects" means "analyzing the ethics of slavery". It "slavery is ethical". And the diacus5 was about (awkwardly defined) theoretical models of voluntary lifelong servitude (but still called "slavery"), in explicit contrast to existing historical models of slavery.

But yes, Luke Jr's comment was a non sequitur for two reasons. (Any Catholic analysis of Jesus is necessarily a bit of a non sequitur, since Jesus and his disciples weren't... Catholic. )

The geocentrism discussion is interestingly similar: in the same thread he makes two claims, one saying that geocentrism is equivalent to heliocentrism (which is mathematically true, and which is better depends on what specific system you are modelling), but then also says that the Sun orbits the Earth is true and scientific consensus, contradicting himself.

There is a very easy rewrite of what he wrote that makes it totally fine, and probably what he "meant": models are broadly equivalent, choose one based on convenience for the problem at hand, and spirtual truth is independent of science. But since he appears to have strict religious beliefs in the infallibility of Scripture, he can't go all the way to commit to saying that the Scripture is scientifically wrong, though he did hint at it.

He's either a very poor communicator (like many forum posters are in forum posts) or his thought process is quite inconsistent and self-contradictory without him noticing.

TillE• 4 years ago

It's certainly not the cause of this hack, but nobody should be using asymmetric encryption to protect their own stuff. It should only be used for communication with another party. Quantum computing will eventually be a thing.

So use symmetric encryption whenever it's at all possible.

eastbound• 4 years ago

Is symmetric encryption safer? Why so?

As well, if asymetric encryption is ever broken, then nothing is safe on the internet.

dtech• 4 years ago

From quantum computing attacks it is safer, specifically because there is a fast quantum algorithm for prime factoring [1].

However, including working quantum computers in your threat profile is ridiculous for things like this at the moment.

[1] https://en.wikipedia.org/wiki/Shor%27s_algorithm

MuffinFlavored4• 4 years ago

asymmetric encryption

PGP? RSA? Can you elaborate please?

symmetric encryption

AES?

Is this what you mean? What's the best way to do AES these days? AES-256-CBC? Is there "symmetric encryption" that is public key/private key? I know AES you just need IV + key and you're "good to go"?

torben-friis2• 4 years ago

I think he’s just implying that since asymmetric depends on the reverse operation being slow, there will eventually be a system fast enough or a non slow algorithm for the operation.

A bit far fetched IMO if the threat model depends on quantum computing but I have no idea about the subject so…

kinnth• 4 years ago

Would this happen if his wallet was a hardware wallet like a ledger or trezor?

tromp3• 4 years ago

999,999 times out of a million, the answer is no. the 1 time out of a million is when an attacker manages to intercept the hardware wallet being shipped to the victim and tamper with it.

paulpauper10• 4 years ago

read Reddit. way more people being hacked than 1/1,000,000 . Having malware that changes the destination address for example.

ChrisClark• 4 years ago

Probably not, he was storing his bitcoin private key on a low cost server, that regularly got hacked, as recently as a month ago. And he kept using it.

Raed6672• 4 years ago

One of the linked transactions: https://www.blockchain.com/explorer/transactions/btc/432ded9...

The destination address (https://www.blockchain.com/explorer/addresses/btc/1YAR6opJCf...) seems to have received ~216 BTC yesterday in the span of 4 minutes

sillysaurusx2• 4 years ago

The hacker will have a rough time converting these to USD without exposing himself. If they’re in Russia they probably don’t need to care, but there’s a reasonable chance they live in a country that the FBI can reach.

On the other hand, no one can do anything until the coins are moved or more information is uncovered. What a nightmare to lose $3.6m overnight.

mrtksn3• 4 years ago

Or just make a deal with someone in Russia?

integricho• 4 years ago

couldn't he convert it to monero, perform a couple of wallet to wallet transfers (maybe even divide the amount along the way), and then sell from there?

Yizahi• 4 years ago

Just use Defi - take a loan from a "smart" script with a collateral of tainted bittokens, then cash out loaned tokens, and never repay the loan. Isn't Finance 2.0 amazing? :)

moogly• 4 years ago

Does the FBI care about individuals losing bitcoins?

tgsovlerkhgsel2• 4 years ago

Isn't it surprising that an early Bitcoin adopter has "only" 216 Bitcoin? Didn't he join at a time where you'd be mining full blocks solo?

(One of his later tweets claimed that "it's basically all gone" or something like that, implying this wasn't just a small fraction of his total coins.)

Thorrez3• 4 years ago

It looks like his oldest commit is from February 28, 2011[1], and the first pool was created in 2010[2]. I'm not sure when he started using bitcoin.

[1] https://github.com/bitcoin/bitcoin/commits?after=d8bdee0fc88...

[2] https://compassmining.io/education/bitcoin-mining-pools-hist...

jki2755• 4 years ago

People forget bitcoin wasn't worth anything for a long time. You take care of an asset worth millions very differently than an asset worth pennies and too much of a pain to transact for cash anyway.

SkyMarshal2• 4 years ago

Update: https://twitter.com/naka_frodo/status/1609655813789949959/ph...

Looks like possibly a supply chain attack targeted specifically at Luke Jr's server.

gigatexal• 4 years ago

Color me surprised … haha nvm rofl

Havoc2• 4 years ago

He put info connected to 3.6m BTC onto a colo crossing server? Jikes

dannyw3• 4 years ago

He is also looking for new "affordable" colo options. Budget $55 a month.

Havoc2• 4 years ago

pytorch supply chain thing related perhaps?

bigiain• 4 years ago

I was wondering if he used LastPass. If I had those exfiltrated vaults, a key Bitcoin dev would certainly be high up in my list of who to brute force first.

doodlesdev4• 4 years ago

Could this be a "boating accident" since it's tax season? Or maybe only his Twitter was hacked? No info from him at his mastodon https://mastodon.social/@lukedashjr@bitcoinhackers.org

If true this is absolutely devastating. Somewhat funny too, but devastating.

edit: Well, it's confirmed. Insane.

https://twitter.com/peterktodd/status/1609655629903265795

https://twitter.com/peterktodd/status/1609666001251229696

hgsgm6• 4 years ago

Peter writes in that thread that "computer security is a mess" and also that any competent IT professional can secure their cryptoc with [whatever is considered state of the art this year].

Imagined banking was only available to people with equivalent of a college degree in finance and ongoing continuing education ..but also half the education is provided by criminals trying to rob use across national borders.

cuteboy19• 4 years ago

It all seems so implausible that boating accident seems true enough

bagels• 4 years ago

I believe there is a relatively low limit for theft losses when it comes to tax writeoffs.

tim333• 4 years ago

Also tax losses are usually calculated as cost minus value received. In this case the cost is probably minimal as I imagine he mined them way back.

mjg59• 4 years ago

When referring to Peter Todd, it's worth remembering that he's accused of rape and may not be a reliable source: https://storage.courtlistener.com/recap/gov.uscourts.cand.34...

michaelcampbell• 4 years ago

While not excusing anything alleged, that's a curious non-sequitur.

wkdneidbwf• 4 years ago

a hot wallet on a $55 dedicated server from some rando colo?

he would have been more secure having it at coinbase…

paulpauper10• 4 years ago

hmm cold wallet compromised too?

https://twitter.com/LukeDashjr/status/1609661811455819776

adql11• 4 years ago

I don't think author truly understands what cold wallet was supposed to entail lmao.

jwie• 4 years ago

It’s unfortunate. Though what do you expect when possession is ownership and there’s no mediating institution to help you with theft.

If your brokerage account somehow gets hacked and all your funds gets stolen that’s not an unsolvable problem. You’ll likely get made whole after a while. There’s people, institutions, and laws to help you.

Store digital cash in your mattress and someone will steal it, and no one will or can help.

from2• 4 years ago

It may come as a surprise you to that the recovery rate for BEC incidents that are not immediately detected is very low and that victims often spend years suing their banks for faulty fraud protection in court for either only a partial settlement or nothing in return.

bbbbb513• 4 years ago

Not only BEC, the recovery rate for ridiculously named authorized push payment fraud fraud (i.e. craigslist car scams) is also very low.

Reg E at least protects consumers from some banking malware, but still does not provide protections for phishing victims (despite new non-binding CFPB guidance)

somenewaccount1• 4 years ago

Having worked in banking for 20 years and knowing how many fraud transactions are reversed, I do indeed find that false information to be surprising.

lizknope2• 4 years ago

I needed a good laugh to start off the new year!

Couldn't have happened to a more awful person.

https://www.reddit.com/r/Buttcoin/comments/4936kw/lukejr_is_...

torben-friis2• 4 years ago

Jesus. Why is it that people with this level of crazy keep appearing at the top of important tech projects??

bhaak• 4 years ago

My guess is that he makes the other developers look sane in comparison.

lizknope2• 4 years ago

That thread I linked to is 6 years old. The people in charge of the Bitcoin software know this and keep him on the project. To me that says a lot about the core Bitcoin people.

Maybe Ethereum people are better? Let's see what Vitaly thinks about child pornography.

https://www.reddit.com/r/Buttcoin/comments/v0n5d5/vitalik_bu...

I'll proudly go on record saying that I think 99% of crypto related things are scams, money laundering, or for illegal activities including sanctions evasions, but the people at the top are pretty disgusting.

MisterBastahrd• 4 years ago

Yeah, I'm not sad about any of this. The guy is an ivory tower conspiracy theorist and moralistic extremist whose crazy apparently does not reach to the point of doing the bare minimum to ensuring that his stash was safe. Not even the first time he was hacked in the past 2 months.

dang5• 4 years ago

Please don't post like this to HN. Perhaps you don't feel you owe devs who lose their Bitcoins better, but you owe this community better if you're participating in it.

If you'd please review https://news.ycombinator.com/newsguidelines.html and stick to the rules when posting here, we'd appreciate it.

amadeuspagel• 4 years ago

The irony here is Luke being a dev probably made it easier for him to be complacent. His security setup was frankly a lot worse than what most plebs seem to use.
The standard advice of buy a Trezor and write down your seed on paper is much better than a Gentoo hot wallet.

https://twitter.com/peterktodd/status/1609667983298658304

MuffinFlavored4• 4 years ago

So most crypto users should:

1. Sign up for Coinbase (where you give your driver's license + bank account ACH and get validated as a legit US citizen or whatever)

2. Transfer USD into Coinbase

3. Purchase BTC with that USD

4. Transfer that BTC from Coinbase to a $80 Trezor Model One wallet from Amazon?

DJBunnies• 4 years ago

From Trezor directly.

mancerayder• 4 years ago

5. Make sure you didn't forget the pin to your Ledger wallet and you still have your magic words printed somewhere or in the Keepass file you haven't unlocked -- all in several years.

Coinbase is lower risk here. There are more things that can go wrong in process or memory than the above than Coinbase going belly up or getting fully hacked.

daniel-levin• 4 years ago

Coinbase unironically suggests using PKI to protect oneself. It’s unbelievable self-satire.

https://www.coinbase.com/blog/celer-bridge-incident-analysis

gafferongames• 4 years ago

Moron loses 3.6 million. News at 11

andrewmcwatters• 4 years ago

Makes good entertainment.

adql11• 4 years ago

Byecoin

xslvrxslwt• 4 years ago

Can't wait for MentalOutlaw's cover of this topic. This dude looks like he's part of Jehovah's witnesses and listens to Kanye west day-night, how can someone like that be a core BTC developer..

3232• 4 years ago

Even a 10 year core developer failed to secure his keys. Not your keys, not your bitcoin is a dumb thing for the general public.

Exactly why we don't keep our money in our house, but in banks.

Nobody says "not under your mattress, not your cash".

tkiolp4• 4 years ago

Maybe off topic: is it fine to publicly say that you have $3.6M in bitcoin using a profile name that exposes who you are in real life? Wouldn’t the IRS (or local equivalent) come to knock your door and ask for taxes on that money?

petesergeant2• 4 years ago

Assuming you’re not committing tax fraud, you’ve already told the local tax authority whatever you’re required to about it. Not an accountant, but in many places then unless it’s income generating, you may not need to declare it until you actually sell it / convert it / use it.

creatonez• 4 years ago

As of 2021 the IRS asks about cryptocurrency assets, so anyone who screws this up and lies to the IRS is already under threat of perjury.

gruez14• 4 years ago

Wouldn’t the IRS (or local equivalent) come to knock your door and ask for taxes on that money?

Not sure about other countries, but at least in the US any gains on crypto is only taxable after you've sold (or transacted with) it. Given that he just got his bitcoin stolen, my guess is that he hasn't sold yet, and therefore doesn't owe any taxes yet.

usrusr• 4 years ago

So we can add another possible explanation to the list: it could all be theatre in preparation of selling in the unregistered way?

tgsovlerkhgsel2• 4 years ago

It's particularly fine to say it publicly when you're going to try to get a write-off for the loss...

SangareEel• 4 years ago

I wouldn't wish this upon anyone.

But I don't believe him. Lukejr has done irreparable damage to Bitcoin. His role in the mass censorship and gaslighting program that locked Bitcoin into sluggish, expensive, tiny blocks (ostensibly in order to carve out a market for Lightning, in which he had significant interest) is disgraceful, condemnable, and must never be forgotten. This exploitation of opportunity and power spat in the face of every early Bitcoin adopter and evangelist as it violated the perfect system we came to know and love from the whitepaper for commercial gain, arguably starting the trend of charlatans and fraudsters in the crypto space looking for a quick buck with reckless, corrupting abandon.

He will say anything to get what he wants, and he will truly believe he is right and entitled to do so. He has a casual, naive tone to everything he says but this man is far from either. He would look right into his own mother's eyes and tell the most wicked lies for the $5 in her purse. Don't believe anything.

throwaway1281282• 4 years ago

Wow, the Tonal Bitcoin guy got hacked!

s53002• 4 years ago

This twitter account is quite wild. Timeline of dunking his frozen store bought pizzas (still in bag) into hydrogen peroxide to

“kill the coranavirus” before putting them into long-term freeze, then getting mad & @‘ing the pizza company’s twitter account upon liquid ingress to aforementioned packing…

This is what has come of the cool thing (bitcoin - twitter user is a core dev to my knowledge) I learned of as a tween, well over a decade ago.

netheril962• 4 years ago

If I had 200 BTCs I would use several multi-sig wallets. Stealing any single wallet would grant the hacker no access, and stealing multiple would grant them only access to a slice of the asset. Maybe 200 BTC isn't just worth much to the developer to warrant so many protections.

greatgib• 4 years ago

Side note: twitter really sucks now. I have to click 200 times on "view the replies" to unroll the thread comments. I gave up in the end

DangitBobby• 4 years ago

It's never really been a joy to navigate, tbf.

Cub3• 4 years ago

It never loaded for me, I had to use threadreader to see the original tweet

Maybe because I'm behind a VPN

qualudeheart3• 4 years ago

Malarky like this is why I am a nocoiner.

darthrupert• 4 years ago

I used to be a proponent of anonymous money transfers. Then I read a few books about the extent of money laundering of criminal organisations, largest of them Putin's Russia, and how difficult and dangerous it is to investigate those crimes.

Now I think the priority should be maximum transparency. The job of solving a money laundering scheme should be as simple as a single search query, or a GPT bot question. BTC could be a part of this solution, since its ledger is open.

This is not a perfect solution, but the amount of power these criminals distill from money laundering is far too great.

birracerveza• 4 years ago

How to have this not happen to you:

1) Use a hardware wallet

2) Don't be an idiot.

That's it. That's the whole guide. He missed both steps of the guide.

xch• 4 years ago

why nobody listens to bram's clawback suggestion?

timdaub2• 4 years ago

more details please

knorker7• 4 years ago

This is a core developer.

Even core developers are not competent to run their own bank.

Can we now stop hearing about how the unbanked should start running their own banks?

throwaway677433• 4 years ago

Haha!

Evidently a complete lack of security or worth judgement.

"$300/mo for a rack is expensive" (no, no it isn't) "Someone booted an unknown OS from external media" (no FDE)

Machine compromised on the "17th of november* and instead of considering everything compromised, the guy continued using it evidently.

Zero sympathy whatsoever, if you can't manage the basics you certainly shouldn't be running it yourself, and definitely shouldn't be "core" developer on projects that require at least some security clue

(Also religious nutjob, as referenced in another thread)

bartimus• 4 years ago

I still don't entirely get what has happened. So he runs a bitcoin node on a compromised machine. But why would he store (or use) his 200+ BTC private keys there? He also mentions:

No, they got my cold wallet too somehow

How can that happen?

throwaway677433• 4 years ago

After reading some of the (many many) replies to tweets, it seems the story is pretty much what I summed it up as: he got compromised and failed security 101

They likely used the access they had to further infect or snaffle credentials etc - a very simple and obvious one is reverse SSH tunnels for example

imperialdrive• 4 years ago

He's actually pretty clever for claiming to 'lose' the BTC... does that mean no taxes to pay?

throwaway677433• 4 years ago

Hadn't considered that as I still don't believe anyone bothers declaring and paying tax on it - not always deliberately but because most people are uninformed stupids about pretty much everything

TravelTechGuy• 4 years ago

Self custody is hard. And even professionals can make mistakes.

Most people don't think about it: they have a bank holding their "balance", a broker "holding" their stocks, an employer "holding" their salary, and maybe even a crypto exchange "holding" their tokens - until they don't.

Only when you get into the nitty-gritty of self custody, you understand it's a security hassle: you need to save a seed for crypto, or boxes of gold ingots, or precious art in special climate-controlled packaging etc.

People traded this insecurity, this chance of losing it all in one unfortunate event, for the warm comforts of having someone else custody your assets. But ask Greek people in 2008 (or Lebanese people now) how does it feel to come to a bank where you've had an account until yesterday, and find out there's no money to go around.

We're starting to see some strides being made into simplifying and securing crypto custody (MPD, Multi-sig etc.). But at its core, if you want to truly hold your asset, you will need to keep ahold of something (safe key, seed phrase, physical item etc.).

itsthejb• 4 years ago

Well this sure is a pretty fascinating case, if it proves to be true, which it _seems_ to be?

One thing I'm not seeing mentioned here is discussion of the password for that wallet.dat. This reminds me of back during the 2017 bull run, when I tried to help a friend recover a forgotten password for a bottom 6-figures Dash coin wallet. We went even so far as spinning up some EC2 GPU instances to run Hashcat. In the end, considering the modest value of the wallet, it wasn't cost effective to brute-force. I think we got up to the threshold of 7-9 characters where the time/cost becomes prohibitive.

So I'm wondering, assuming the guy even HAD a password on the database file, or that we didn't have a password.txt on this server, I wonder about the sequence of events where:

1. Server is hacked a few months ago, either knowingly (target a core dev), or farmed (searching for vulnerable servers, grabbing high value assets such as wallet.dats) 2. wallet.dat is copied. IIRC gives free access to the public key, therefore revealing a high value wallet 3. In the meantime, attacker employs compute resources to crack the private key 4. After some months of doing this, finds the passwords, empties the wallet

This would seem to match my quick reading of the events. I'm now intrigued to do some sums to work out the feasibility of doing this when a 7-figure wallet is found. This is assuming compute prices are that much cheaper than 5 years ago, and that this might be a independent attacker, not some NK-style state actor.

I may come back to this and do the calculations...

“My PGP key is compromised, and at least many of my bitcoins stolen”

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