Thursday, March 06, 2014

Bitcoin is #fail and how RBI was right about it

Bitcoin bank closes down after $600,000 hacker theft

Bitcoin Singapore CEO suicide

MtGox continues to crumble, Flexcoin and Poloniex hacked, ZeroBlock gets RTBTC

And here is RBI's advisory released on 24th Dec, 2013 and I quote:

  • VCs being in digital form are stored in digital/electronic media that are called electronic wallets. Therefore, they are prone to losses arising out of hacking, loss of password, compromise of access credentials, malware attack etc. Since they are not created by or traded through any authorised central registry or agency, the loss of the e-wallet could result in the permanent loss of the VCs held in them.
  • It is reported that VCs, such as Bitcoins, are being traded on exchange platforms set up in various jurisdictions whose legal status is also unclear. Hence, the traders of VCs on such platforms are exposed to legal as well as financial risks
The second point came into play as Mt.Gox the biggest bitcoin exchange was hosted in Japan and users in USA etc have no direct legal overreach to it.

At today's value of bitcoin of $668, the value of stolen 800K bitcoins is more than 500 million dollars!

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