back to article Parity's $280m Ethereum wallet freeze was no accident: It was a HACK, claims angry upstart

A crypto-currency collector who was locked out of his $1m Ethereum multi-signature wallet this week by a catastrophic bug in Parity's software has claimed the blunder was not an accident – it was "deliberate and fraudulent." On Tuesday, Parity confessed all of its multi-signature Ethereum wallets – which each require multiple …

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Yep ,

I had a dig about the transactions, once you see the trigger transaction you can start to trace the attempts to extract or corrupt the wallets.

you can see multiple attempts all within a small amount of time.

the story about it being an accident

" oh i just created a bad transaction and then deleted it"

just do not appear to wash.

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Anonymous Coward

All your e-Tulips

are belong to us.

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You had a "dig" about the transactions? If some new hipster lingo you're trying to confuse the rest of us who speak English with?

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Oh - So all my WoW-gold got ripped by them Evil Horde Scammers frontrunning the auction house!?

Sure, The Police will want to know All About It. especially the part explaining how these unregulated markets in virtual wealth are their problem to regulate, somehow.

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Anonymous Coward

Whilst I have sympathy..

Perhaps I'm looking at this naively and with a lack of understanding, but to me cryptocurrency is nothing more than fools gold.

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Re: Whilst I have sympathy..

"Perhaps I'm looking at this naively and with a lack of understanding, but to me cryptocurrency is nothing more than fools gold."

Indeed, IMHO you have to be pretty dumb to keep large amounts of "money" tied up as virtual cash.

As we have seen in this case, it can just disappear.

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Anonymous Coward

Re: Whilst I have sympathy..

Fiat currency is no different, really. If a country ceases to exist, so does its currency, essentially.

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Anonymous Coward

Re: Whilst I have sympathy..

A country doesn't have to cease to exist for it's currency to very quickly become worthless.

Well known examples include Weimar Germany and Zimbabwe.

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Re: Whilst I have sympathy..

"A country doesn't have to cease to exist for it's currency to very quickly become worthless.

Well known examples include Weimar Germany and Zimbabwe."

Tell me one country in the last 50 years, that ceased to exist , overnight and that had their currency made worthless ? There is none

And both weimar germany and zimbabwe didnt have their currency turn worthless overnight, it took years and years. .

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Coat

Re: Whilst I have sympathy..

Actually, fools gold has more use than a long numerical chain on a hdd/ssd does. Depending on the utility of said chain of numbers.

(PS, mine is the one with a disk containing loooooong digit that decrypts into Star Wars on bluray. ;) )

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Re: Whilst I have sympathy..

Not exactly what you are looking for but you could take a peek at Yugoslavia over 93/94 and Venezuela 2013 to present...

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Anonymous Coward

Re: Whilst I have sympathy..

...also Poland in the early 90's.

Hyperinflation has occurred multiple times within the last 50 years. Your money may not become technically worthless, but when it's not enough to pay for food, much less rent, the difference is academic.

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Windows

Re: Whilst I have sympathy..

"Tell me one country in the last 50 years, that ceased to exist , overnight and that had their currency made worthless ? There is none"

Apart from the Yugoslavian Dinar. And Soviet Roubles. And Czechoslovak koruna. And that's just in Europe.

2 minutes on wikipedia would stop you looking like a fool.

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Re: Whilst I have sympathy..

Maybe I'm bucking the trend here, but my small amount of fiat currency I originally converted to Bitcoin is paying for my monthly VPN bill, based on increase in value alone. I'm happy with that and actually can't afford to buy Bitcoin any more.

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Re: Whilst I have sympathy..

"Tell me one country in the last 50 years, that ceased to exist , overnight and that had their currency made worthless"

Even with the examples quoted by @scrubber, nation-state Fiat currency is an order of magnitude more stable. Sure it can become worthless quickly, but nowhere near as quickly as someone can fettle with your e-tulips.

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Re: Whilst I have sympathy..

Yup, you most certainly are education is key. Streaming money is an inescapable reality , I'm astounded by level of ignorance (not by you personally) in the comments of a technical publication.

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Re: Whilst I have sympathy..

https://www.ted.com/talks/don_tapscott_how_the_blockchain_is_changing_money_and_business

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Re: Whilst I have sympathy..

"Even with the examples quoted by @scrubber, nation-state Fiat currency is an order of magnitude more stable. Sure it can become worthless quickly, but nowhere near as quickly as someone can fettle with your e-tulips."

How? Look at what happened with the UK Brexit referendum, overnight the Sterling lost 30/40p against the dollar. If investors are spooked by anything, they sell their currency which in turn brings the prices down. It's quite different to the "gold standard" set out after WW2, as currencies were backed by a physical asset. But no currency has been backed by gold since the 1970's and has been backed by nothing more than pure faith since then. Quite a lot like the cryptocurrencies today.

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Re: Whilst I have sympathy..

Fiat currency is no different, really.

Except if someone nicks my wallet full of Fiat, I can go to the police about it and someone might go to the slammer if the police finds my wallet on the thief. I can also expect that the 50 quid Fiat in my wallet will still be there when I reach the pub and also that it will buy me plenty of beer.

With cryptocurrencies, you are entirely on your own and nobody cares about your self-made problems.

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Anonymous Coward

Re: Whilst I have sympathy..

"Except if someone nicks my wallet full of Fiat, I can go to the police about it and someone might go to the slammer if the police finds my wallet on the thief."

Except, of course, the thief would've been savvy enough to fence it off. Once that degree of separation has taken place, is it no different? Pretty sure the cops would turn around and say they have bigger fish to fry.

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Anonymous Coward

Re: Whilst I have sympathy..

I put about 1% of my net assets into various cryptocurrencies about a year ago. They are distributed across various exchanges and private wallets. The diversity has buffered volatility. The custodial distribution has buffered other risks. For example, when there was a period when I could not withdraw ZEC from Poloniex, I was still able to convert to other crypto for withdrawal, and it only comprised 10% of my crypto portfolio at the time so I would not have been too disturbed if it was completely lost. When XBT dropped in value this past week, the appreciation of my BCH holdings more than compensated. All told, having made no further fiat contributions, the portfolio now comprises closer to 4% of my net assets. Is it time to rebalance, cut and run, or let it ride?

Fool's gold? Maybe. I'm feeling bullish.

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Anonymous Coward

Re: Whilst I have sympathy..

Tulip investment and other speculative futures contracts based on commodities or other promises associated tenuously with tangible property interests offer the same illusion of underlying value. Cryptocurrency offers no such illusion. It's value is underpinned essentially by faith and this is more transparent than just about any other type of asset including such things as mortgage-backed securities.

If you can't eat your money, it might as well be cryptocurrency.

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Anonymous Coward

Re: Whilst I have sympathy..

If someone nicks your wallet, nobody cares about that either.

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Big Brother

Re: Whilst I have sympathy..

Pretty sure the cops would turn around and say they have bigger fish to fry "What are you talking about? Have you been drinking or taking any psychoactive substances?".

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Re: Whilst I have sympathy..

"I can also expect that the 50 quid Fiat in my wallet will still be there when I reach the pub and also that it will buy me plenty of beer."

Not in Yugoslavia, Zimbabwe, Weimar Germany or other examples quoted above, at appropriate times. They were adding an extra digit to price tags of groceries in stores several times per day.

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Re: Whilst I have sympathy..

If I wanted to experience the no doubt rich experience of daly life in Yugoslavia, Zimbabwe, Weimar Germany and so on, I would move there.

I live "here" and I don't buy crypto currencies because I don't need all that extra excitement so much that I want to deliberately seek it out.

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Why if you have made $1 million in crypto currencies would you leave it in the trust of a 3rd party like Parity?

I would be reluctant to leave $1000 in with a third party such as this. Heck I am annoyed if I loose a tenner never mind a million.

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Why if you have made $1 million

My exact thought. There are banks for that.

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"Why if you have made $1 million in crypto currencies would you leave it in the trust of a 3rd party like Parity?"

Because it's not really worth $1m. The same way as if I invented a secret gold-making procedure, and made a million tonnes of gold, if wouldn't be worth quadrillions. It's worth $1m because the trading volumes are low. Try to sell those Ethereum and you'll find the market is nowhere deep enough to handle it and you will get almost nothing back.

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Its the many investors money, not the companies

Investors place coins into multi-sig to then have a control over when funds are taken from the wallet by the project.

If the company had full control over the 1 million there would be nothing stopping the company just taking the money and disappearing.

The function of multi-sig --- when working -- is you can hold your investment money escrow and release on progress of a project. Typically this may be 80% of signatures are required to release funds to progress.

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This post has been deleted by its author

Anonymous Coward

My exact thought. There are banks for that.

Ah, but they were hoping to make $2m, and then $4m, and so on. Plus, as already commented elsewhere, there's no chance that the market could tolerate the sale of that digital currency.

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Try to sell those Ethereum and you'll find the market is nowhere deep enough to handle it and you will get almost nothing back.

Interesting. Is there anywhere you can observe liquidity and market depth on any of these "currencies"?

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LOL - you are not up to date with ETH trading volumes.

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Anonymous Coward

"Why if you have made $1 million in crypto currencies would you leave it in the trust of a 3rd party like Parity?"

So you don't have to pay taxes...?

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Anonymous Coward

Show me the bank that has turned...

anybody's 1000 into one million.

If you don't have a stomach for risk, that's fine. Yeah, we know what banks are for.

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Anonymous Coward

You can observe the order books

and trading volumes on multiple exchanges.

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Cold Wallet

Its crazy. Put it in a cold wallet, one that YOU control, and isn't connected to the internet. If you're going to do crypto currencies, at least do them properly.

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Anything financial based on the coding skills of humans is likely to end in tears.

Anything that involve loss in the US is likely to end in a court.

Any recompense for a misdemeanor for anything complicated in the technology sector will take around 10 years to sort out as the law catches up with things and works out who owns what and how dissed who.

The South Sea Bubble for the 21st century any one?

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Anonymous Coward

from a legal perspective.....

It'll be tough to take this to court in the US.

Bitcoins and all their derivitives are not recognised legally as financial instruments and therefore have no value that the court could legally recognise.

You may well think this is bollocks, but you'd still lose in court.

https://en.wikipedia.org/wiki/Financial_instrument

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Re: from a legal perspective.....

Then how does Coinbase operate? It's US-based, legal, and all above-board. The US doesn't recognize Bitcoin as a currency, but there's nothing to stop trading it as something like a commodity.

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Anonymous Coward

Re: from a legal perspective.....

That's licencing for the exchange.

That doesn't recognise the Bitcoins as a Financial Instrument, it's a very subtle but incredibly important legal difference.

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"Anything financial based on the coding skills of humans is likely to end in tears"

You've just summed up pretty much every stock exchange going these days.

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Re: from a legal perspective.....

Why would it need to be recognized as a financial instrument? What's so important about this distinction, and is anything that is not pegged to the home currency allowed to be such?

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Facepalm

contacting law enforcement agencies may be the right next step

Almost the definition of irony.

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WTF?

Hmm I thought 'smart' contracts meant no laywers

It was my impression that a smart contract was code that defined what was supposed to happen. Since the code is the contract, it is always the 'law', thus eliminating messy lawyer paper shuffling and court disputes.

Interesting that those messy things might still be necessary...

See smart contract as lawyer/court replacement:

https://blockgeeks.com/guides/smart-contracts/

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Re: Hmm I thought 'smart' contracts meant no laywers

"It was my impression that a smart contract was code that defined what was supposed to happen. Since the code is the contract, it is always the 'law', thus eliminating messy lawyer paper shuffling and court disputes."

Code can shuffle electrons about. The electrons can represent Bitcoin, dollars, pounds, euros or any other currency and, providing it's bug-free it might well be 'law'. As soon as you want to swap those electrons for something else, such as food, it ceases to have any real effect.

Yes, you can have the code operate a vending machine but you still require someone to have filled the machine with what it's supposed to contain. As soon as someone didn't you've stepped outside the realm of code into real law to get it resolved.

In this case we're told it wasn't even bug-free so it wasn't even effective 'law'.

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Just like real law

"In this case we're told it wasn't even bug-free so it wasn't even effective 'law'."

The law is frequently ineffectual and often full of bugs. We call the latter loopholes. In this case, the code appears to be looping forever without a break condition.

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OK, let"s run with this. But then what was devops199's motive, I mean apart from just breaking the wallets?

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Anonymous Coward

--->"OK, let"s run with this. But then what was devops199's motive, I mean apart from just breaking the wallets?"

Seriously?

Trying to find a flaw that would allow you to steal multi millions of dollars would be a pretty good motive.

The Japanese Bitcoin souk hack a few years back lost over $500m and no-one is quite sure if it vanished or got knicked.

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