Bitcoin bank Bitcoinica still titsup after cyberheist Bitcoin exchange Bitcoinica remains offline following a hack against its systems last week that resulted in the theft of digital currency valued at approximately $90,000 (£56k). The digital currency exchange took its servers offline on Friday following the discovery of a breach on Friday, as a statement on Bitcoinica's website …
You do realise that people buying guff based on hype about it's value is pretty much the same system as the stockmarket. You think Facebook has $100 billion in assets or potential earnings?
This is why our economy is in such a state at the moment because bankers are playing a game with virtual items that don't have the tangible worth to back up their value.
" Yes, but government backed currencies are just that, the promise means something. (I accept it doesn't mean you're getting gold, as most countries don't operate gold standard, but you will get your money back if a bank crashes or is robbed.)"
A promise from government means something? Thats news to me.
If money is stolen from your wallet, you aren't getting it back unless you catch the thief. Having the bank or FDIC insure money you keep in the bank is a service issue, not a currency issue. Here, bitcoinica will absorb the loss, and the customers won't lose anything, as long as it isn't bad enough that they go out of business. And its not a good idea to keep all of your coins on an exchange, it is for trading, not a bank.
Pretty much. Basically they stole the digital keys that prove they own the Bitcoins. At which point, they would have no doubt used those keys to send them to another account. So it's kind of like if someone hacked into a bank and made an unauthorized wire transfer. Except with Bitcoin, being peer-to-peer, no central authority has the power to say "Whoa! Stop that put 'em back."
It has the same purpose as any other form of money - to buy things with it. And it's usefulness depends on how easy that is and the range of things you can buy with it. It's still in beta though, the latest version of the bitcoin software is at version 0.62 I think. Unless you like playing with new software, you might want to wait a bit till they get the bugs worked out.
They're only 'retarded' if you treat them like a stable government backed currency. If you treat it like a peer to peer paypal service it makes a lot more sense. Only convert cash to bitcoins when you need to pay for a service and if you receive them for a service you provided, cash them out straight away. Don't store your life savings in bitcoins and don't try to make cash by playing the exchange rate game.
Want anonymity? Well... you're not the only one getting it. The bad guys get it too. Now go find them. Oh, that's right: you can't. You could camp at all the exchanges and see how converts your stolen bitcoin to cash, but that's not enough to declare the seller as being the thief. And you can't even get 4chan ( http://gawker.com/5626105/4chan-on-the-hunt-for-puppy+throwing-girl ) to hunt them, nevermind the authorities.
...for buying things that you would prefer nobody could ever find out that you had bought. Simply, like bit torrent, it is a perfectly good system that can be sued for anything but one that is best used for less than legal transactions.
If your in favour of anonyminity then bit coins are for you.
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