A $US500,000 Geek Cyberheist

Yesterday, a guy woke up to find that nearly $US500,000-worth of virtual cash had been plucked from his computer by a thief. The first of the big Bitcoin heists is upon us!

If you've spent any time in the nerdier parts of the internet in recent months, you know that Bitcoin is the hyper-trendy, virtual currency championed by geek libertarians, hackers and drug dealers. Completely decentralised, open-source and nearly anonymous, Bitcoin functions essentially as digital cash. Unfortunately, like cash, it's gone forever if it's stolen.

A high-rolling geek who goes by the handle Allinvain claims that on Monday afternoon, someone pilfered 25,000 Bitcoins from his electronic wallet on his computer and deposited it into another anonymous account. At the current exchange rate of $US18.72 per Bitcoin, that's about $US467,500. (Though the exchange rate has reached as high as ~$US29 in recent days.)

"I feel like killing myself now," an anguished Allinvain wrote on the Bitcoin forums after discovering the theft. He was an early adopter of Bitcoin back in 2010 and had held onto his currency from when it was worth just pennies. "I remember watching the price like a hawk," he writes. His plan was to cash out eventually and use his earnings to open up a Bitcoin business. "Needless to say, I feel like I have lost faith in Bitcion," he wrote.

Allinvillan says that he had noticed some strange activity with his computer that suggested it had been hacked. Although he can't rule out that someone had physically stolen his Bitcoin wallet file from his computer.

Geeks everywhere are in an uproar over the theft, debating whether it was made possible by a Bitcoin security flaw or stupidity on the part of Allinvain. Another forum user said he had been hit by a hacker who had transferred his Bitcoins to the same address, which has led to speculation that a serial Bitcoin robber is on the loose.

"That's one thing about bitcoins. There's no FDIC or SIPC watching your back," wrote a commenter on Hacker News. "It's the wild west with train robberies and stage coach heists in all."

What's made the theft more dramatic is that, because Bitcoin records all transactions in a public log, anyone can trace the stolen stash in real-time as it's sloshed around to various anonymous Bitcoin accounts, presumably in an attempt to launder it.

This could all be an elaborate hoax by Allinvain. Bitcoin developer Jeff Garzik says that "It is literally impossible to know whether that post is B.S." - because of Bitcoin's anonymous nature, anyone can claim to own any account and there's no real way to prove it. But, he adds, "It is true that, just like a real wallet in your pocket, a bitcoin wallet can be stolen."

Although a hacker can't infect your wallet with a trojan. Also, your wallet doesn't hold nearly $US500,000. If, for some reason, you do own $US500,000 worth of Bitcoins, we'd recommend you keep them stored on a computer locked behind a big vault, twenty feet underground, unplugged from the internet, safe from the shadowy Bitcoin cat-burgler. Maybe in a bank?

Image via Shutterstock Republished from Defamer

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