back to article Bitcoin outfit 'Tether' reveals US$31m BitBuck BitHeist

Bitcoin outfit “Tether” has reported a US$31m BitBuck BitHeist. Tether offers the chance to “to store, send and receive digital tokens pegged to dollars, euros, and yen person-to-person, globally, instantly, and securely for a fraction of the cost of any alternative.” Those tokens are exchangeable 1:1 with the boring old pre- …

  1. Bronek Kozicki

    I almost like what they did, but for one thing: how are they going to enforce that the owner of bitcoins will not be able to convert to fiat currency? It is literally out of their hand now.

    1. MonkeyCee

      As noted

      "how are they going to enforce that the owner of bitcoins will not be able to convert to fiat currency? "

      Because no bitcoins have been stolen?

      Since the Tether tokens that where stolen have now been flagged, it should be possible to stop them being used. Well, so long as exchanges comply, but they are highly likely to. Won't be able to stop them being sold directly, but I'd expect people to be cautious of buying Tether outside of exchanges until this is sorted.

      Rather than it being like a theft of cash, it's more like a theft of a chequebook. The issuing bank has contacted the other banks to flag those cheques as being invalid. So it shouldn't be possible for anyone to convert the cheques to cash at a bank.

      Of course, writing a crypto story without including bitcoin in the headline will only get a fraction of the hits, so even the reg can't/won't be bothered explaining the details. Or perhaps the assumption (quickly disproved by a squiz BTL) that tech types actually understand the difference between the assorted currencies.

      1. Anonymous Coward
        Anonymous Coward

        Re: As noted

        I must admit, I don't understand the differences between all the currencies, and I am a "tech type" I haven't even heard of many of them until they get mentioned in this glorious repository of current tech affairs.

        In fact they all seem similar in that they get hacked, and massive amounts of notional currency is stolen and moved to another notional currency for laundering...

        And I didn't think I was old enough to be a fogey yet either...

        1. MonkeyCee

          Re: As noted

          Oh, you're not a fogey by any means. I get to explain crypto stuff to various interested parties (detectives, fraud investigators and financial advisers), so a lot of the similes I use tend to reflect that. Also tech covers a pretty massive area, so it's unreasonable for me to expect others to have detailed knowledge about something that I'm (apparently) well versed in.

          There are, relatively speaking, a huge amount of stories about dodgy stuff going on with crypto as compared to the much more common dodgy stuff going on within the "normal" banking system. You can also get in real trouble if you point out security holes in say SWIFT, and if you go further and point out a theoretical exploit then you pretty much guarantee you will get sued. There where a slew of stories about SWIFT exploits about a year ago and then it went very quiet. Ask a journalist why they aren't reporting on the more recent exploits, and they will either not know, or give you a pained expression and ask you to talk to legal.

          "In fact they all seem similar in that they get hacked"

          Only in the same way that "all computers" get hacked, since there are stories about that all the time. Or that all companies fail to protect our personal data, since there are constant stories about them being hacked (and covering it up) every week.

          As a tech type, I believe there is a significant difference between technology that has implicit flaws, technology that implemented poorly results in flaws, and technology that itself fine but flawed due to some external (meatsack) issue.

          So very few "mainstream" crypto currancies have had their blockchain "hacked". If they do, they either hard fork it (effectively making the hack worthless), or fold it. I think Etherium was the last big name one to have that happen. There's also disagreements about changes to technology, which is the cause of the Bitcoin/Bitcoin Classic split. These are issues with the technology underpinning it all.

          Some of the other "hacks" involve unauthorised access to wallets. These are almost always third party applications or sites, I can't recall any locally stored and encrypted wallets produced by the original dev team being broken in to. The multi-sig wallet created by Parity for Etherium being borked by what appears to be malicious actions is the most recent case here. Various "heists" also fall into this category.

          Now exactly who should be responsible for fixing Parity's programming blunder is a valid question, perhaps caveat emporer, perhaps suing them in to the ground for loss of property, whatever. It's not actually any fault with the underlying blockchain or currency.

          The final group are things that are IMHO scams or things that appear to be, that just use crypto as a way to cash out. Obviously ransomware is here, but ICOs* are clearly taking the piss. IPOs are (lightly) regulated to try to ensure that what is being sold to the general public (as compared to specialist investors, who can make their own judgement) has some basis in reality. ICOs sidestep even this, and appear about as reliable as an IndieGoGo campaign for a retro gaming console. Or even something as simple as changing an address on a website so that funds get sent to the wrong place.

          "massive amounts of notional currency is stolen and moved to another notional currency for laundering..."

          For better or worse, the dollar, euro and pound are the currencies most used for criminal activity. Even the illegal goods themselves function as a form of barter. So cocaine, weapons or slaves are probably more utilised as a notional currency than Bitcoin. As for laundering, crypto is actually pretty terrible (too many public transaction records, no warrant needed) compared to real estate, gambling, loans or really any cash heavy business.

          * Initial Coin Offering, like an IPO but for crypto instead of cash

    2. MyffyW Silver badge

      I feel like blockchain has become the default answer to any finance problem in the same way that dark matter is to matters of cosmology. However, dark matter is better understood.

  2. rmason

    Load of nonsense

    How exactly will this stop the "perp" spending those bitcoins on any website that accepts them (Hint: it won't). Similarly I believe there are ATM style machines in many cities in many countries.

    Sounds lovely, but it's all absolute nonsense. It's gone, they aren't getting it back or preventing it from being used.

    1. Jason Bloomberg Silver badge

      Re: Load of nonsense

      They did not steal bitcoin, only tokens, and AIUI those have now been declared as worthless; the token's source and its value can be checked before any exchange for something else proceeds.

      1. G Mac
        Paris Hilton

        Re: Load of nonsense

        "They did not steal bitcoin, only tokens, and AIUI those have now been declared as worthless; the token's source and its value can be checked before any exchange for something else proceeds."

        Ok fair enough.

        But if they are declared 'worthless', then in fact the money is gone? Asking a fair question here.

        Somebody used the check book analogy above, which isn't then same thing as the cash itself - it is a means for transferring an account's cash. Declaring the 'check book' as worthless is not the same thing as declaring the cash in the account as worthless.

        I am trying to understand here - so stay with me. I think what you are saying is that the transfer is in fact 'worthless' - really voided - and due to the hard fork the transfer will be unwound to restore the funds. And hopefully everybody (exchanges only required?) will be on board to void the transfer?

        1. MonkeyCee

          Re: Load of nonsense

          "Somebody used the check book analogy above, which isn't then same thing as the cash itself - it is a means for transferring an account's cash. Declaring the 'check book' as worthless is not the same thing as declaring the cash in the account as worthless."

          I'll try and explain it in a more detailed metaphor, using real world currency (notes and coins) instead of crypto. Note currency is the notes and coins, which are a subset of the total money supply, which inculdes all the paper accounts. It will obviously fall over because of the difference, but the principle is the same, the convenience and speed of the fork is what is different.

          So the government of Nowhere issues notes than can be exchanged for a dollar, euro, sterling etc. They then sell them for a small fee on top of the notional value. They have sold 1000 of each, and have lets say 1001 of each under their mattress.

          Now some fiend sneaks in to the printing press storage area, or central bank of Nowhere, and steals off with 500 of the dollar tokens.

          Nowhere immediately issues an edict saying the following:

          - we're not going to redeem any of the current issued dollar tokens

          - we will exchange all your current dollar-tokens for new dollar tokens that you can redeem

          - do not continue to accept old dollar tokens

          - dollar tokens of this number, from this address, supplied by this person etc are stolen and will not be exchanged

          The new fork is the re-issued currency. Hence both the heist/fraud and the rapid re-issue are possible in a way that real world currency would be problematic. The actual money was also never under threat, since the 1001 bucks where still under the mattress, at least until the exchange happened, then somewhere between 1 and many where left :)

  3. Valeyard

    Wording

    they're not "stolen", they're "stranded" in someone else's wallet

    you know, like the great train "stranding"

    1. Paul Herber Silver badge

      Re: Wording

      Do you think they are just resting in someone else's wallet?

      1. Anonymous Coward
        Anonymous Coward

        Re: Wording

        +1, as I suddenly picture a "Norwegian Blue" in my mind...

      2. MyffyW Silver badge

        Re: Wording

        Whilst I've always got time for an ex-Norwegian Blue (or any Python that doesn't involve coding), I think the "merely resting in my account" belongs to a certain Father Edward "Ted" Crilly of Craggy Island. But I accept the judgement on that might be an ecumenical matter ....

  4. GordonD

    Tether is not Bitcoin

    There is a lot of confusion here. Tether is not Bitcoin. Lots of journalists are putting 'Bitcoin' into their headlines to get ratings, but they are not the same, or even strongly linked.

    Tether is a crypto-currency, using similar technology to Bitcoin, but they are not the same, and this is obvious since one tether is worth 1/8000 the value of a bitcoin at the time of writing.

    There are Bitcoin ATMs around the world, but last time I checked, most exchanges need a validated account before they will even let you trade Tether. Not very anonymous at all.

    1. MonkeyCee

      Re: Tether is not Bitcoin

      " most exchanges need a validated account before they will even let you trade Tether."

      My understanding is that since Tether is tied directly to fiat, the rules for depositing and withdrawing it from exchanges are the same as for fiat. Which typically requires "proper" authentication, on the same lines as opening a bank account. If you push more than a certain volume through, you also have to do the various "know your customer" stuff for anti-money laundering.

      1. Sorry that handle is already taken. Silver badge

        Re: Tether is not Bitcoin

        Tether claims that "USDT" is pegged to the USD, except there's no guarantee that they'll redeem USDTs for USDs.

        It's going to be fun watching this one crash to the ground.

  5. Anonymous Coward
    Anonymous Coward

    the other thing is this, even though they've got the current address, what's to stop said person immediately transferring them to another one the moment they got them. Having this address is completely pointless since if they are worth their salt they would have moved them to another unknown address from that one.

    1. DavCrav

      "Having this address is completely pointless since if they are worth their salt they would have moved them to another unknown address from that one."

      I thought the blockchain was meant to record all transactions?

    2. I ain't Spartacus Gold badge

      It sounds like the company also control the blockchain, given that it's their digital currency. So they've simply forked the blockchain so that this transaction gets stopped. Assuming they can get their other users to also join that fork, then they can try and reverse the transaction.

      Which is obviously both good and bad. It means that miscreants can't get away with blatant theft. Or it means that the people controlling the sytem can just reverse any transaction you make at any time, and take your digital money back off you again.

  6. RGE_Master

    Why not transfer them?

    What's going to stop him from immediately transferring them to another bitcoin account prior to them finding out about the theft? That way he'd be able to spend all he wants.

  7. drazziweht

    It does, you can track the coins step by step.

    Start at http://omniexplorer.info/lookupadd.aspx?address=16tg2RJuEPtZooy18Wxn2me2RhUdC94N7r

  8. Anonymous Coward
    Anonymous Coward

    Ah yes, Banks, the only LEGAL way to steal ...

    Sounds so familiar! Many a person has done it over the years: Start a bank, fill it with deposited cash, then something goes wrong and the bank folds. The money mysteriously disappears, the founder disappears, and the depositors lose every cent. Good old American tradition. Now there's a digital way to do it! The more things change, the more things stay the same. [Posting anonymously because of the Mormons and Joseph Smith.]

  9. Paul Kinsler

    hah - all these classical bitcoins are now obsolete... :-)

    http://arXiv.org/abs/1708.04955

    qBitcoin: A Peer-to-Peer Quantum Cash System

    Kazuki Ikeda

    A decentralized online quantum cash system, called qBitcoin, is given. We design the system which has great benefits of quantization in the following sense. Firstly, quantum teleportation technology is used for coin transaction, which prevents from the owner of the coin keeping the original coin data even after sending the coin to another. This was a main problem in a classical circuit and a blockchain was introduced to solve this issue. In qBitcoin, the double-spending problem never happens and its security is guaranteed theoretically by virtue of quantum information theory. Making a block is time consuming and the system of qBitcoin is based on a quantum chain, instead of blocks. Therefore a payment can be completed much faster than Bitcoin. Moreover we employ quantum digital signature so that it naturally inherits properties of peer-to-peer (P2P) cash system as originally proposed in Bitcoin.

  10. Anonymous Coward
    Anonymous Coward

    I prefer money 1.0

    I've got ninety thousand pounds in my pyjamas,

    I've got forty thousand french francs in my fridge.

    I've got lots of lovely lire,

    Now the Deutschemark's getting dearer,

    And my dollar bills would buy the Brooklyn Bridge.

    Chorus:

    There is nothing quite as wonderful as money,

    There is nothing quite as beautiful as cash.

    Some people say it's folly,

    But I'd rather have the lolly,

    With money you can ma-ake a splash.

    Finale:

    There is nothing quite wonderful as money, (money, money, money, money)

    There is nothing like a newly minted pound, (money, money, money, money)

    All: Everyone must hanker for the butchness of a banker,

    It's accountancy that makes the world go round. (round, round, round)You can keep your Marxist ways

    For it's only just a phase.

    For it's money money money makes the world go round. (money, money, money, money money, money, money, money moneeeeeeeeeeeyyyy)

    - Monty Python - The Money Song

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon

Other stories you might like