Cryptocurrency hackers stole $2.2 billion from platforms in 2024

And people still claim that cryptocurrency is the future!

 

Think SELF CUSTODY.

 

Can you explain this a bit more. Are you talking about tools like Ledger? But my view is that this crypto stuff is way too complicated for most people. The current banking system works just fine.

https://www.ledger.com/academy/topics/security/what-is-self-custody-in-crypto

 

I will fully respond to this when I get back home in a day or two. Don't have time now but I will make sure to give you a FULL explanation because I am a coder and know the blockchain well.

 

This will be a lengthy post.

So what is self custody and is it for me?

You will have to answer that for yourself and be HONEST because if you aren’t you can lose a great deal/all your coins in a blink. Make no mistake because there is a learning curve involved, but not too steep.

What are the advantages to having self custody over your coins?

1. YOU are in control holding the private keys necessary to move the coins around in the blockchain. You don’t have coins on your computer, in your drawer, etc….. All coins (for this post I will limit to Bitcoin since that is the one you asked about) exist ONLY on the blockchain. If all coins are on the blockchain how then can I lose them? Simple; each and EVERY blockchain address/coin can ONLY be moved by knowing the private key the BTC address is encrypted to. If you screw up and lose the private key there is no known force on the planet Earth that is able to move the address on the blockchain ---- NEVER EVER. Its permanently lost! Self custody means you have CUSTODY of your private keys and NOT a coin exchange or some other third party. A USA example might be Coinbase or similar.

2. Since you are the only individual that knows the private key and since miners around the world all have the exact same blockchain on their servers you therefore can access, move, spend, etc… your personally controlled coins from absolutely any place on Earth. The upside is that IF you have the private key it takes a few seconds to move the BTC on the blockchain when making a purchase, selling, etc… The DOWNSIDE is that if you screw up and somehow leak your private key --- ANYONE with the key can move the coins. Nobody owns coins they only control the keys to access them in the blockchain. Understand?

Disadvantages of not having self custody?

1. You don’t know or have the keys to coins held in an exchange. This means you are relying upon someone else to hold and care for private key security. There have been numerous exchanges with weak security, or inside jobs, that have lost millions of dollars worth of coins at a time. Several of these exchanges simply go out of business and you lose.

2. A Gov or other player could mandate that a coin exchange freeze your account and since you don’t know the private keys to the coins you would have no recourse except to wait until the decision to unfreeze your assets came down. No thanks is my feeling about that scenario.

3. Simply put – if you don’t have custody then somebody else does.

I will try and make this clear but I sometimes forget I have been doing this since only a few blocks after the genesis block. There are several ways to securely hold your private keys making sure not to lose them.

1. Paper wallets

2. Software wallets such as the leading one – Electrum

3. Hardware wallets where the private keys are stored and NEVER shown to a phone or computer by hardware design.

So are the Bitcoins stored in the blockchain in a way that I have anonymity? Truthfully not fully at all, but you can easily mitigate that when you learn how. For the purposes of this post I will not address how to go from very minimal privacy to almost complete privacy using technical know how.

BITCOIN MISSION:

We old timers know the original mission, which was to have a currency that is fully in the user’s hands where making purchases and sales are peer to peer. We still do that and easily can - having self custody and the know how to remain off radar (not being illegal). Buying, selling, etc…. was much easier back in the day since KYC and AML were not a thing on Bitcoin. I have no issues trading and buying stuff outside of the normal banking systems. This was and is the original design making the coins a currency and not a stock market collector’s item. Now enters the Gov’s and they all hate loss of control over their people in this way. They want to KNOW what you have and how you use it from start to finish. I also exist in this perversion of the BTC game. If I need to buy something for say $10K I can and have moved BTC to an exchange (they hold only that amount of coin for minutes or maybe an hour) and then convert the coins to my country’s money and wire transfer the funds directly to my bank. Happens very quickly with a 1-1.5% conversion fee. It also becomes a taxable event for me anyway. This is not the original intent for how to use BTC but I learned to play in the ecosystem that exists. The coins I use in this fashion do not share identity with something I would do peer to peer.

So there are two distinct ecosystems for Bitcoin. I use both but you have to know how to make sure there is NO overlap. Another thread’s subject.

All the mayhem and dust stirred up about these coins comes from the disparity of use as compared to the original intent and design. Lazy and careless folks refusing to learn self custody and handing their trust to someone else.

All above my .02

ps – I don’t answer PM’s about this stuff. Recommend going to the largest BTC forums player sites and reading around. I will be there but NOT under this user name. Enjoy the hobby or lifestyle. It has blessed me!

 

Could you mention them?
TiA

 

Thought I would come back here and place an example of what a private key actually is since most wouldn't know their structure, length, etc...

I created a "test" BTC address to demonstrate what a normal bc1 address looks like below. Next I pasted out the private key used to move any bitcoins from that address to another address in the blockchain. Obviously this is a test address with no amount or value added. Anyone can send coins to this address without needing a key BUT moving any coins out requires the private key.

Please do not send anything to this account because the key is listed right below it, LOL

Below is a Bitcoin address that is not currently located in the blockchain BUT would be added if someone sent coins to it. They would need to pay the small miners fee to process the transaction thereby moving it into the blockchain "forever" even if it is emptied in the future. The blockchain holds ALL transactions of all time starting at the genesis block up until now and beyond.

Example Address:

bc1qjwrdrrjd5cnrk600kez6ld9930ueyq6t92jtwn

Below is a private key that is specifically used for the above address ONLY!
p2wpkh:L1KJgfUgEPbSU45apJgttJfUDGXoe9k4Nsjhvrqrr6DKNuN1cz19

As you can see there is almost ZERO chance someone will come up with the private key through brute force due to complexity and length. The key is total power for this address, but lose it and you are "toast"!! Nobody knows for sure but there are estimates that almost a million coins are FROZEN in the blockchain due to private key loss.

Another FYI. There are currently around 19,800,XXX Bitcoins that have been mined and are in the blockchain (more added every minute of the day). Without going into the hard math the bitcoin design will NOT go past 21 million coins and cannot by design.

 

Thought I would post a couple of links where you could start reading if interested. Bitcointalk is the largest publicly available forum and is mentioned in these links I think. As you would expect there are private clearnet and onion forum sites but those would be invite only. At this point you would have no need for anything like that. Have fun reading through stuff if it interests you.

I don't want to go too far here or LOWWATERMARK is going to kick my ***, LOL. Done now!!


https://forums.feedspot.com/bitcoin_forums/

https://www.brokerxplorer.com/article/7-best-forums-to-chat-about-bitcoin-2406

 

Thanks for the info. And yes, I believe that's the problem, none of the crypto currencies are actually being used as currencies, they are basically acting more like securities.

What I don't like about this crypto stuff, is that it's too complex for most people (which makes fraud more easy) and that it's being used a lot for criminal activities. But anyway, I believe that no country will allow crypto to become a threat for the official currencies like the dollar, euro or pound.

 

I indirectly stated above in this thread -- I do use my crypto as a currency for buying things, along with the "acting like securities" side of the house too. Its two worlds and if a person is careful they will not overlap. The concern about crypto crime is no different than the same argument about cash. Cash is almost always used for good, but in the wrong hands it can and is used for bad. Does that mean we get rid of cash. Some Gov's would say yes but most would say no. This coin premise is exactly the same. Cars get us to places we want to go safely and comfortably, but if a mad man gets behind the wheel he can kill dozens on a crowded street. Do we get rid of cars? No of course.

Control is what is at stake. Should you be in charge of your personal assets where only YOU can have access? Should control be decentralized and spread around the globe so no single entity can block or control it? Each will answer for themselves on this. Crypto allows it to happen if you are "schooled" on the methods.

 

What's wrong with buying things with the current payment systems? And if Bitcoin is a currency, why do people need to trade in it? Why is a Bitcoin worth $100.000 at this moment? And crypto has now become yet another tool for criminals to use. Supposedly all of this crypto stuff should be trackable, but apparently it's not completely trackable, think of Bitcoin Mixers.

Yes, I guess it's this blockchain stuff what makes people so excited about crypto, I get that. But is it worth all of the damage done to the environment? I would say no, the current banking system works just fine.

https://www.theguardian.com/technol...n-mining-electricity-use-environmental-impact

 

I think you are missing the point. Depending upon where you live on Earth crypto users do NOT want their transactions out in public view!! It can be dangerous politically and even for your personal security if a "bad actor" knows you have substantial wealth in Crypto. They simply grab you and force you to give them your crypto and likely still kill you. Bitcoin use in a novice's hand is VERY public and all transactions are traceable and observable ----- BAD. Its like you are doing your banking out in public view where observers using simple methods see all activities being conducted. Who would want that? Answer: Gov's love to control their sheep. Make no mistake I also am a sheep to a point. Another bad point of public transaction viewing is that acquiring the wrong Bitcoin can leave you with "tainted" coins and lots of merchants don't accept them for things. Investors also steer away except at a steep discount because they know how to scrub them (subject outside of discussion in this forum). This is referred to as fungibility, which Bitcoin suffers from. In contrast while using a privacy coin like Monero, which has a learning curve but not that tough, we conduct our transactions cryptographically and outside of any observers ability to see anything. This means all XMR are totally fungible and each and every one is the same. Very nice and how it should be, my .02.

**Why is a Bitcoin worth $100.000 at this moment ? ----- > Gov's are now starting to use BTC to store in their Treasury for monetary backup. The new Admin in the USA now wants to do that. So math time: Currently 19,800,000 approx coins exist and there will NEVER be more than 21 million. Its math and the way the paradigm was created. With 8 Billion people on the planet and even at its end 21 million items that can be had at most, the scarcity coupled with the demand will blow the current 100K into oblivion fairly soon. I strongly suspect BTC will outpace XMR for an investment strategy. I like the privacy of XMR much better. You/I get to use both so we don't have to be limited. Invest in BTC and buy/use XMR. Atomic Swaps using HTLCs make acquiring XMR from BTC a 2 minute process. This is my .02

 

Yes, but wasn't that the point of the blockchain that this crypto stuff should be tracable? This is something different than knowing who owns a wallet, if I'm correct.

Yes, I know that Bitcoin is going to $500.000 eventually as long as people, companies and governments keep buying. But that's not what I meant. If it's supposed to be a currency, then why does it needs to go to the moon? I mean 1 dollar will never be worth 80.000 euro, know what I mean? Because this would ruin the whole financial system. In other words, Bitcoin is not suitable as a currency or payment system. It seems an awful lot that the creator's plan was to get filthy rich.

 

Oh and BTW, this is an article explaining why Bitcoin is not like digital gold, like some people seem to suggest.

https://finance.yahoo.com/news/cryp...o-fed-president-mary-daly-says-175529348.html

 

Everyone will have and are entitled to their opinion on the matter.

 

To clarify, I'm not saying that you're wrong, I can understand why certain people are fascinated by crypto and blockchain.

And it's clear to me that you know a lot about this stuff, so I appreciate your input, I'm trying to learn stuff eventhough I don't believe that crypto is the future. I do think more regulation is needed, not less. I thought these articles were interesting and related to what we discussed about, see links and let me know if you have anything to add.

https://prestmit.io/blog/are-bitcoin-transactions-anonymous-and-traceable
https://thenextweb.com/news/crypto-payments-can-now-be-traced-like-bank-transfers-under-new-eu-law
https://www.chainalysis.com/blog/is-bitcoin-traceable/

 

So let's not confuse a Bitcoin with a $1 dollar bill. A Bitcoin consists of 100 million Satoshi's. Back when this all started a user wouldn't spend more than a few seconds trying to recover a Bitcoin because they were worth pennies at most. Even though we all knew that satoshi's existed who would have dreamed about chasing 1/100millionth of a Bitcoin worth pennies even as a whole one? Nobody. That has all changed now. I firmly believe that even now trading for a full Bitcoin is becoming scarce. Within the next few years you will start to hear the term Satoshi as the amount bought and sold. There is lots of room for Satoshi use. e.g. - even if Bitcoin went to $1,000,000 per full coin a Satoshi would be worth 0.01. Bitcoin may become a term of "lore" for old timers, because now reality will be trading in Satoshi's. Could happen. If you check exchanges the VAST majority of transactions are for a mere fraction of a coin and rarely for a full or more then a full coin.

 

I can summarize that your links are exactly and fully NOT what true users of crypto-currency want. Design was for the user to hold crypto money "unchecked" and out of the control of centralized systems. Decentralized global systems would help assure freedom and autonomy to the holder of private keys. You cite illegal activities as the formulation of your thought process and I get that but its an incomplete analysis. There is so much danger around the world to anybody conducting their "business" in the public's view.

I am not a major player of any kind in this area at all. I love researching and understanding how it all works. If I could go back in time knowing what I now know I might be a super major player. Regrets!!!!!!!!!!!!

 

I guess what you mean is that I shouldn't see crypto/Bitcoin as a replacement for the dollar? The thing is, why does the price of crypto need to go up and down if it's meant to be a currency that you can use to pay for stuff. It doesn't make any sense.

 

I get that, but why would anyone want to hide all of their transactions and won't trust centralized systems, like our current banks? I see this as great tool especially for criminals, that's what I don't like about it.

Although I'm interested in stuff like stablecoins and blockchain, which might help to solve certain problems with the current payment and brokerage systems. But stablecoins present other problems too, see article. So in my view, the benefits of crypto don't outweigh the drawbacks.

https://www.wired.com/story/stablecoin-sanctions-violations-crypto-crime/

 

So much to say but so little space and time in this forum. Firstly, I know how you feel from reading through the other very long BTC thread elsewhere on this forum site. That said; there is no doubt in my mind where you stand and I am OK with that. However; we are not standing in the same place and I hope you can accept that difference from my end. The open transactions that you seem to applaud from "the banking system" works for many in this world, but for people in other places the openness could and has been a wrecking ball. Freedom is not a universal/global thing enjoyed by vast numbers of folks. Corruption, politics, monarchies, etc.... present disaster scenarios for open transactions for much of our world. Properly conducted crypto transactions can fully mediate that shortcoming. Of course it takes an educated user but it is fully possible and its not that difficult. Just a fact here.

Next the "crime" assertion never stops with non-crypto users. Untold Billions $$$$$ in crimes using cash never seem to arise ire. Crypto is a tool and ANY tool can be used for good or evil. It is not the tool's fault when a user does something evil/bad with that tool. My cars, firearms, power tools can all take a life with me intentionally making a split second bad decision. There is nothing wrong with any of those tools, just as I feel the same about my Crypto. I just don't know how to say it any more clearly.

Also you cite the vast fluctuation of BTC pricing. Some of your confusion makes sense to me. You are looking at a Crypto coin that is being misused as an investment holding instead of a usage coin. Coins that are being used everyday for stuff tend to be much more stable. I will mention XMR which is a great coin because its not too expensive (~$220.00-235.00 today). That coin trades well for stuff and the transaction fees are very low, and of course the entire transaction is private by design. So much so that the Gov has a very large bounty for anyone that can break the encryption and thereby open the transaction ledger. Not happening so far and the XMR dev's are on it!!

 

Yes exactly, I see more downside than upside when it comes to this crypto stuff. I believe it's actually dangerous to the current financial system. And without open transactions, how would we combat fraud and crime?

Just take a look at memecoins, it's clear that this stuff is a scam, but there is no way to prove that there is insider trading, because this stuff is not regulated like the stock market, but luckily we can still see activities of crypto wallets. But that's why these crypto crooks want less regulation.

The point that I'm trying to make is that without crypto, criminals would not have yet another method to commit crimes.

 

Oh and BTW, I'm sure you have read about the $1.5 billion hack on Bybit. When was the last time that a non-crypto bank was robbed from so much money? Even the whole security system of many crypto companies are complete jokes! It took only one infected macOS laptop, to perform this hack LOL.

 

Again, no self custody "in play" for the individual investors. Hardware wallets and OFFLINE signing prevent all of this foolishness. As long as people rely upon a "company" to handle their custody then they choose to be wide open to such things. Metaphor: when you hand a loaded gun (Crypto private keys) to someone else to hold, well surprise sometimes that very gun will shoot you. Admire you my friend but we just don't share the "same page" on this stuff. Likely because you have never used or understand the basics of self custody. In my gang of friends none of us would dream of anything other than self custody. All of us are 10 yr plus participants and that was normal back in the day. Easy stuff, but few of the newbies get it until its too late.