Instawallet for Bitcoins shutdown

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Pigeon
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Joined: Thu Mar 31, 2011 3:00 pm

Instawallet for Bitcoins shutdown

Post by Pigeon » Thu Apr 04, 2013 1:43 pm

Two days after Bitcoin blasted through its all-time price—shooting past $100 per BTC—Instawallet, one of the digital currency's easiest-to-use wallet sites, has shut down indefinitely. Bitcoin’s price peaked at around $140 late Tuesday but has since fallen back down. It’s hovering around $128 at present.

Meanwhile, Mt. Gox, the world’s largest bitcoin-trading site, wrote on Twitter Wednesday afternoon that it’s been experiencing a distributed denial of service (DDoS) attack. “Can confirm we are eating ddos right now, and for some reason Prolexic didn't block it,” the company noted.

Instawallet had branded itself as an “anonymous” Bitcoin wallet site. It created a randomly-generated account number every time the site was updated. That made it very easy for Bitcoin users to store their online cash, but it also apparently made it easy for hackers to disrupt the system. The problem was first brought to light on Monday.

“The Instawallet service is suspended indefinitely until we are able to develop an alternative architecture,” the service wrote on its site. “Our database was fraudulently accessed, due to the very nature of Instawallet it is impossible to reopen the service as-is.”

Instawallet did not immediately respond to Ars’ request for comment.

The website, which appears to be run from France, said that it will “accept claims for individual Instawallets” and will refund balances under 50 BTC (around $6,400 at current exchange rates).

“Claims for wallets that hold a balance greater than 50 BTC will be processed on a case by case and best efforts basis,” it said.

While there has been some discussion about Bitcoin-based insurance, at present, it does not seem to exist. Perhaps this incident will further the movement for better BTC consumer protection.

Link

Boom and bust, repeat.

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Royal
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Re: Instawallet for Bitcoins shutdown

Post by Royal » Fri Apr 05, 2013 7:45 pm

They are opening up shop in Los Angeles and Cyprus

In the wake of the Cypriot financial crisis that emerged in mid-March, it was noted (by Wired.co.uk and others) that an apparent spike in interest in Bitcoins among Europeans in other Eurozone countries might be evidence that the currency was becoming seen as a viable alternative to the Euro. Apparently, Jeff Berwick of The Dollar Vigilante thought the same, and wants to give Cypriots the chance to keep their money safe from government seizure.
http://www.wired.co.uk/news/archive/201 ... itcoin-atm

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Pigeon
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Re: Instawallet for Bitcoins shutdown

Post by Pigeon » Fri Apr 05, 2013 8:03 pm

I bet the crooks just love that idea. Seems too unstable and unsafe.

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