Coinbase (YC S12), First Crowd Funded Bitcoin Company, Raises Over $600K

https://www.privateinternetaccess.com/blog/2012/09/coinbase-first-crowd-funded-bitcoin-company-raises-over-600k/

by rasengan • 14 years ago

72 34 14 years ago

jboggan2• 14 years ago

I think the first and most expensive hire should be a top-notch security expert. There have been too many screw-ups in the Bitcoin space and a hack at this level of prominence would be disastrous for the community.

rmc4• 14 years ago

Agreed. Aside from the obvious "companies dealing with money need much better security", bitcoin itself has a bad rep, being security amateur hour. They need to fight this head on, and show they aren't idiots.

waterlesscloud• 14 years ago

Their Security page offers some hope in that direction.

http://support.coinbase.com/customer/portal/articles/628970-...

Greynum2• 14 years ago

I don't think bitcoin related sites have less security than other sites that claim to be secure, it just that they are such a high value target and attract the attention of nearly all criminal hackers.

Also nearly all of the thefts that occurred where a result of a compromised email account which eventually led to root level access of the server through a virtual server console. Not as a result of bad programming that led to an exploit.

hnolable• 14 years ago

All the incidents to date except the first Bitcoinica heist were due to bad security practices one way or another. Even that one could be considered bad security practices by trusting that Linode was secure.

That said, I expect we will see some really hardcore Bitcoin security incidents in the future that rival state sponsored hacking.

Stealing Bitcoin requires no additional effort to profit. Since Bitcoin is money and easily made anonymous, stealing Bitcoin == profit. Therefore there exists an arbitrage opportunity between the cost of buying 0-day exploits and the Bitcoins that can be stolen by use of those exploits. I expect as Bitcoin goes up in value so will the cost of a certain class of exploit.

What kind of software stack would you run if you were operating a Bitcoin bank that held a large amount of funds?

taligent2• 14 years ago

There are plenty of high value targets e.g. Amazon, Apple Store, eBay, banks just to name a few. So to claim that Bitcoin services are unique in any way is just ridiculous.

And just because you get root access to a server does not mean that it should be trivial to gain access to the bitcoins. And why are they being hosted on VPS in the first place ?

The point is still valid that a true PROFESSIONAL is desperately needed.

rmc4• 14 years ago

"security" is not just programming, but the whole methods & procedures. They might have good 'programming', but they had bad policies and bad security. If there's an email account of a founder, that when compromised, leads to the entire contents of your bank vaults being robbed clean, then you have bad security.

It should not be possible for there to be a virtual machine console, or for one compromised email account to give you that much power. That's how you do security.

TallboyOne• 14 years ago

That and get a better site design that doesn't use bootstrap. It looks like I'm staring at some early, somewhat-thought out prototype.

h2s• 14 years ago

It is really getting quite silly at this point. People keep building Bitcoin infrastructure in regular data centres as if that's perfectly sufficient.

Check out this article about security at a Visa data centre: http://www.usatoday.com/tech/news/story/2012-03-25/visa-data...

It even has a moat!

Here's an article that illustrates the kind of scrutiny faced by banks when it comes to their data protection practices: http://www.finextra.com/news/fullstory.aspx?newsitemid=22595

It's incredibly stringent stuff and banks get fined hard when they fuck it up.

By contrast, one of the recent Bitcoin heists was made possible because the hackers requested a password reset for the exchange's Rackspace account. Seriously.

andrewljohnson2• 14 years ago

I just bought 20 bit coins yesterday, in a wallet at CoinBase.

I saw YC funding for CoinBase as a fairly strong signal, and I feel buy and hold might be a good investment. The more liquid bitcoins become, the more they will be worth, and they aren't even remotely liquid yet.

sgornick• 14 years ago

You bought them and sent them to your CoinBase wallet, or did you actually buy them from CoinBase? (I didn't think that had started selling coins themselves yet.)

andrewljohnson2• 14 years ago

Bought them elsewhere - a friend of mine who started a local BitCoin drink-up did the buying for me.

http://www.meetup.com/BitCoin-Drinkup/

alexbosworth• 14 years ago

They should use that money to buy blockchain.info - i've used both and blockchain.info really knows their stuff

dreamdu5t• 14 years ago

The problem to solve isn't a nice UI for managing bitcoins... it's how to buy bitcoin with my VISA without it being treated as a trade on an exchange.

Paul_S• 14 years ago

The best thing about bitcoin is that it's decentralised and under your control. And what all these companies are trying to do is make it centralised and externalised from the users. Despite such wallets being stolen repeatedly people don't seem to get deterred.

Bitcoin is safe because it's distributed. Safe from manipulation because no single entity has control over it, and safe from thieves because they'd have to go after each person individually. By centralising it you are making it more vulnerable.

Apparently convenience is more important than anything else.

npguy• 14 years ago

Was the 600K deposited as bitcoins? :-)

adrianwaj• 14 years ago

Other positive news, Gavin Andresen, Lead Core Bitcoin Developer - "I'm pleased to announce the launch of the Bitcoin Foundation: standardizes, protects and promotes the use of Bitcoin cryptographic money for the benefit of users worldwide. The Bitcoin Foundation is modeled on the Linux Foundation."

https://bitcointalk.org/index.php?topic=113400.0 https://www.bitcoinfoundation.org/

opendomain• 14 years ago

Coinbase bent the rules to do this - they had a fundraising, but failed to achieve their target before their deadline. So they just added a few weeks. And failed to reach their target again. I guess the third time is the charm. IANAL so changing the dates for crowdfunding may not be illegal but is not a company I want to trust my money to. See http://nosql.com/2012/08/23/crowdfunding-cheating/ for the full story

Coinbase (YC S12), First Crowd Funded Bitcoin Company, Raises Over $600K

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