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of crypto exchange insurance. No one has ever lost a single... Oh never mind

When you think about it, banks are robbed on an almost daily basis, compared to the days when a bank robber had to get dressed, nick one of his wife's stockings then go outside the house and either blow a safe or bang on the windscreen of a rolling piggy bank to get his hard won loot.

Now all they need is an internet connection and a pc.

I am no fan of the notion of digital currency, for a number of reasons.

Aside from security, privacy is likely to go right down the drain, unless there will be guaranteed methods to provide anonymity, I'll be trading veg, almonds and figs for my shopping as I grow them anyway.

Having worked in banks, including actually inside some vaults, breaking into one if you have the tools is not difficult but doing it rapidly and getting away with it is not trivial, whereas cracking a digital system requires no personal presence and can be carried out at leisure.

The difference here is if Lloyds had a £130m heist there would be public screaming going on, coppers and the FSC running everywhere and the potential of some prison sentences for the purpotrators, those who were responsible for letting them in and (usually) the management who will take a hit (or promotion!) When it happens to a BC repository/exchange/moneypit there are a few very people rich people wimpering in the corner whilst having their bods looking for some recently rich people's testicles to nail to a wall. At best an IT geek may design some kind of sticking-plaster patch to not let the naughty boys and girls do it again and otherwise things will continue as normal ... until next time.

That's the main selling point though isn't it? Free from regulation, free from oversight, free from any sort of control.

Free from regulations and free from oversight?

Seriously, how long fo you think that will last as digital currency supercedes cash.

Most of the central banks and many mainstream commercial banks are looking at their own bit coins.

My previous post was in reference to governments and world banks all considering going digital, something many of them see as the future for two main reasons, cash costs money to make and maintain and it gives almost total control with all digital payment.

Andy the Hat,

It can still be done. I don't think the people who stole that money from the Bangladeshi central bank last year have been caught, or even identified. But there are massive differences.

If Lloyds lost $130m they'd simply make smaller profits in most years. They also have a capital reserve, of assets owned by the bank itself, which could be deployed to cover the losses. They're also regulated - so there would be independent investigation of the screw-up.

And they operate in a financial system that has controls designed to help facilitate tracing money that's gone astray. Even if there are also people within that system designing systems to make things opaque again, for the purposes of avoiding scrutiny/tax/whatever.

Whereas many fans of Bitcoin seem to see regulation as a bad thing.

Actually this does have one unique feature. We're all used to the initial statement from the hacked exchange to tell us it's all under control, only the hot wallets were stolen ($130m is a stupidly high amount for a hot wallet - I bet that's hundreds of times more than their total daily transactions) - and they've got the reserves to cover it. Only for them to shut down all services for a week to "investigate" (Lloyds would probably be up-and-running the same day) - and then shamefacedly admit in a month or so that all/more of their money is lost and they promise to pay everyone back. And then cease to exist a month after that...

But the unusual thing is that they claim they had cooperation from other exchanges to try to trace transactions and freeze them. If true, that's an interesting change. And suggests that maybe regulation will come to crypto currency. The problem is that while the self-interest of the criminal users outweighs that of the legitimate users - crytocoin will always be a jungle. If the legit users outweigh the crims, then eventually they'll get tired of having their stuff stolen, and will do something about it. Assuming they don't all vote with their feet first.

Citation please ?

When is the last time somebody digitally broke into a client account and siphoned off the money ?

That doesn't happen, pure and simple.

Oh, ATM's can get pilfered, for sure. And there's that one transfer that got cracked, indeed. But that was not access to client accounts, that was the hijacking of money in movement between banks and it happened because it was an inside job and the security was lacking.

I have never read that a true bank's customer's account got hacked, and I doubt very much that I ever will.

You misunderstand, banks are robbed digitally on a daily basis just based on reading reports here. Keyboard criminals attempting to steal money from banks digitally are far more prevalent than criminals attempting to stick up banks and armoured cars or break in to blow safes in previous times. I said zero about anyone hacking personal accounts.

Chris G,

It's true. But not really the banks being robbed, it's the users. And tends to be in small amounts - because they can only take what the users have in their accounts. Or at least it's a mix of the users being tricked into giving away their credentials and/or security failures on the part of the banks.

Although saying that, someone above asked for an example of an actually significant sized digital bank raid - well they do happen.

About a billion dollars from the Bangladeshi Central Bank's US account. I'd thought it was last year, but a quick search tells me it was 2016. Doesn't time fly once you've got old...

[1]Lazy link to Wiki

[1] https://en.wikipedia.org/wiki/Bangladesh_Bank_robbery

Don't most, if not all, traditional retail banking operations block substantial transfers these days and request confirmation from the account holder before proceeding? Whilst perhaps not entirely fool proof, at least it applies a pause where some due consideration and oversight can be applied. One would imagine that a similar system might be in use where craptocurrencies are involved! - just a thought.

But who's going to ask for that authorisation?

The whole point of blockchain technologies is that only *you* as the resource owner (doesn't have to be currency it can be anything with value - real or imaginary) have the key required to authorise those transfers. If your key is stolen (through lax security or insecure systems, such as in this case) then the only two parties involved are you and the hacker. There is nobody else to act as an intermediary (and take their cut).

A suitable analogy would be: If you had a suitcase full of cash in your garden shed and that's stolen, why didn't your shed ask for authorisation before allowing the suitcase to be removed?

@Def - Thank you for that, I'm not really up to speed on digital currency / wallets etc. Think I'll Dodge it all for now - see comment below. (Bring back Postal Orders I say!)

Yes, like there would be someone at the end of a phone when thousands of millions of dollars of hot money are involved every day ... The exchange *may* be as dodgy as the money ...

That is a wise decision. Crypto exchanges are not banks and are not run by banking professionals. Anyone can set one up and, by the rich history of exchanges having been hacked, anybody does.

Even if I did want to give funny money a try, I would be at a loss to choose someone who is worth trusting because there aren't any. It would be like walking into a den of thieves and handing my money over to the guy who did not have an eye patch yet.

But if you did want to start using a digital currency you wouldn't need to trust anyone but yourself. As with "real" money, exchanges are only needed for exchanging currencies. If you created a Bitcoin wallet for yourself, you and only you would be responsible for the security of that wallet (by keeping the software you use to manage it secure and the passkey associated with the wallet and software backed up in a secure location - which could be anything from storing it on another computer to having it engraved on a granite block and buried in your garden).

Def,

And how would you know which wallet software to trust?

But even assuming that the world of crypto wallets isn't as riddled with insecurities and fraud as the world of crypto currency exchanges - how would you get any Crapto-Coins to put in your wallet? You either need to earn some money in them - or you need to go to an exchange to buy them with your credit card/bank account/cash.

At which point you're at risk of being defrauded by the exchange.

The alternative being you earn some crapto-coins - then how do you turn them into actual cash with which you can pay your rent/mortage or buy beer. You need an exchange...

I'm not pro-bitcoin, but you're missing the primary use case here

You get paid by other people in Bitcoin for services / products you provide

You pay others in Bitcoin for services / products you require

There could even be a physical shop somewhere that would take cash from you in person and send you the equivalent amount of Bitcoin (so they could do it right in front of you).

No exchange use needed.

As a side note, the problem with these hacking episodes isn't the transfer of money in/out of the bitcoin world, it's that people are "storing" their Bitcoin in these exchanges like bank accounts.

There are Bitcoin ATMs available that perform the transaction almost immediately too.

How do you trust any software? Or if given the choice, how do you choose which particular software application and/or vendor to trust? If you take this argument to its logical conclusion you would never step near a computer or smartphone ever again. And yet here you are... wasting my time.

A wallet could be riddled with insecurities, sure. As could any other piece of software. Most (if not all) wallets are open source. And they're not running 24/7, in the same way you're not logged on to your bank account 24/7. You open your wallet to check your balance or make a payment. That's all.

"The company also promised that any losses would be covered by insurance"

which should read

"We need some time to clear up and get out, please believe there's a chance you'll get your money back for a few more days/weeks"

Barclays internet banking is failing today.

Two different accounts and two different browsers.

Login screwed.

AC for obvious reasons.