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Comment by QuasiAlon | Hacker News Reader

I've read a handful of reports here in the past week about several site that got hacked and millions of dollars in bitcoins stolen. For the life of me I can't understand why someone would pay so much for something that can be taken away from him/her. Perhaps someone here can explain and enlighten me. Please.

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Bitcoins can be stored offline, making them as safe as any other possession. How many millions in cash have been stolen in the last week? Jewel theft totals $100 million each year[1]. That doesn't stop people from using cash or buying jewels.

A better question would by why would anyone store anything of value with a website they do not trust?

[1]:http://www.npr.org/blogs/parallels/2013/10/28/234587002/for-...

Those reports that you've read are basically the same as you would read that some small, obscure bank with anonymous owners was robbed and people lost their money. That doesn't tell you anything about the currency that was stored in this bank, but it tells you something about people that decided to put currency into it.

Bitcoin as a protocol and technology proved itself to be rock-solid. People are already using it all around the worlds for many different purposes, from storing their wealth to buying subs in Subway. On the other hand, there are some Bitcoin services that are can be used to store your Bitcoin that are not exactly very secure or trustworthy. Most people advise against storing your Bitcoins in such services, as it has risks of either service operator or hackers to take your coins from their servers. Still, some people decide against these advices and still use these online wallets. You can't blame Bitcoin itself for that.

There are more secure ways to store your Bitcoins, from printing your private keys on as a paper wallet and store it in a safe place where no one can reach it, to storing it on your computer, protected with a long, unique pass phase, to storing it in a web wallet like blockchain.info which doesn't store your coins directly, but encrypts the private key with your password before storing it on their servers.

> Those reports that you've read are basically the same as you would read that some small, obscure bank with anonymous owners was robbed and people lost their money.

Except there's no such thing, so there are no such reports.

news reports...

Bitcoins itself are not unsafe. It's just a keypair (public/private key). You can create a so called paper wallet on your machine and use the public key to transfer money to that address. Nobody can steal it from you in that case.

The problem is: In order to for transactions to work fine you'd need to run the bitcoind client on your machine. So you have to secure your machine and need to run the client.

This is quite difficult for some people so a lot of web services offer you an online wallet. There the private and public key is on their server. These services get hacked quite often. You basically trusting a stranger with all your money.

The exchanges also provide you with a wallet. A lot of people are lazy and keep their Bitcoins and their money in the exchange. But some exchanges store the money they don't actively use in so called "cold storage" i.e. on a computer that is not connected to the network and webserver of the exchange. In that case you can hope that your money get's refunded.

If you store your Bitcoins in an offline wallet and only use exchanges for buying or selling the Bitcoins and withdraw your coins or money after the transaction you can minimize the risk.

About a million dollars were stolen from a tiny Australian bank run by some teenager, and 4 million from a small Chinese exchange. There are much safer places to store your coins. Meanwhile, individuals have taken profits upwards of those figures. Maybe that explains why those incidents had absolutely no effect on the market.

Those stolen bitcoins were not holded by their owners with care, but by shady third parties.

If you take the proper measures bitcoins are very hard to steal. You can create wallets and transactions even from an offline computer and never expose your savings to the internet. You can even print to a paper your wallet info and never again use it within a computer. You just need to trust the wallet generator enviroment.

Still, keeping BTC safe for the average user is really hard, even tech savy people made costly mistakes. Hardware solutions will be needed to solve this problem, but the tech is in itself safe(tm).

Someone stole my car a few months back. I still bought a new one. People who park their cars in high crime areas are inviting trouble. Likewise people who deposit their coins with random Internet sites are asking for them to be taken. If you store your coins properly the chances of them being stolen are very very small.

Losing your btc because a site was hacked is only a risk if you leave your btc laying about on some third-party site.

You can store BTC on your own computer, or even offline on a sheet of paper.

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