That technical explanation sounds almost like word salad. How did a DDoS hit your SAN in the first place and how did your SAN blowing up allow a compromise?
The thing is, if you want to use bitcoin, you cannot trust third parties to hold your coins for you. If you want to support bitcoin in your business, you cannot trust other sites to handle the payment for you. Yes, it is not convenient. But you have everything available to handle this yourself and, yes, you will need someone competent to do that for you if you are not into it. Bitcoin is not meant for the average user or the unaware merchant and it might never be, people need to start accepting this fact.
This is almost an exact copy from the other thread here https://news.ycombinator.com/item?id=6793984. I assume it is fine as it is ok to post duplicates like this topic.
> BIPS was built by passionate bitcoiners and talented developers. BIPS is hosted in our private server facilities. Passwords are stored with a double salted SHA-512 hashing algorithm. Our entire website is protected with AES RIJNDAEL 256 encryption and we have encryption of data traffic with 2048-bit, highest assurance Extended Validation SSL certificate, with 99.9% Browser Recognition.
> BIPS protects your payment information with industry-leading security and fraud protection. On top of this, our server/database is regularly stored on tape backups. For added security you can also enable Secure Card and Google Authenticator at any time for up to 3 levels of authentication.
Is it possible to launder stolen bitcoins on Chinese exchange?
"Our private server facilities" sounds like they were trying to run their own facility for some misbegotten reason.
"A double salted SHA-512 hashing algorithm" sounds like a weak homegrown password hash. I'm guessing it was something along the lines of SHA512(salt1 + SHA512(salt2 + password)), which is pitifully weak compared to any sort of iterated hash (bcrypt, scrypt, PBKDF2, etc). It could also mean SHA512(salt1 + password + salt2), which would be even worse in a kind of sad, hilarious way.
"AES RIJNDAEL 256 encryption" is a perfectly normal SSL cipher. Referring to it as "RIJNDAEL" is a bit of a tipoff, though: Rijndael is not an acronym, so it shouldn't be capitalized, and it's simply an older name for AES, so it's entirely redundant in this phrase.
"2048-bit, highest assurance Extended Validation SSL certificate" is something you can get from any number of vendors. It isn't actually any more secure than any other SSL certificate.
"Industry-leading security and fraud protection" probably means nothing. Or, at most, possibly that they're using an off-the-shelf fraud detection service like Maxmind - which would have done little to nothing to protect them from a determined fraudster, let alone an attacker.
"Tape backups" just make it sound like they're using equipment from the 90s.
"Secure Card and Google Authenticator" are both decent features to implement, but suggesting that they result in "up to 3 levels of authentication" is amusing. Multiple possession factors ("something you have", like a security token or a cell phone with Authenticator) don't add together; to have three factors, you'd need a knowledge factor (a password), a possession factor, and a biometric factor. And they definitely don't have the last one.
And the inputs.io guy is not even close to paying half to what was "stolen". The inputs.io guy was also running coinlender and other services, which are all gone -- including himself.
[0] http://massively.joystiq.com/2011/08/12/biggest-eve-online-s...
I agree with my sibling comment that this seems an odd way to install a SAN.