Wall Street Tech Firms Open Bitcoin Exchange

[Karloff]

Wall Street Tech Firms Open Bitcoin Exchange

Perseus Telecom and Atlas have joined forces for a Digital Currency Initiative.

MtGox may be gone, Flexcoin may have been stripped bare, but that doesn't mean Bitcoin is dead and gone. Wall Street tech firms Perseus Telecom and Atlas have joined forces to create a new exchange for Bitcoin traders in New York, Hong Kong and Singapore. Perseus will provide the network, while Atlas runs the platform itself. They call it the Digital Currency Initiative, and say they will offer "the only 100% cold storage (offline) omnibus account" as well as "hack-proof multi-tiered architecture."

Atlas [http://perseustelecom.com/about-us/], established 2013, is a digital currency trading platform provider. The two have been working in concert for some time; this announcement is its formal declararion.

The Digital Currency Initiative knows what it doesn't want to be. "The Perseus Digital Currency Initiative is providing governance strictly supporting KYC (Know Your Customer) and AML (Anti-Money Laundering) principles," says Perseus' Flexcoin [http://perseustelecom.com/news/perseus-telecom-launches-digital-currency-initiative/] went up in smoke, only the cold storage wallet remained; and the new Atlas exchange intends to keep most of its reserve in cold storage, only keeping the bare minimum necessary for anticipated withdrawals in a hot wallet.

But possibly the most significant takeaway from this announcement is that Bitcoin may be about to change its character. Up till now, the Bitcoin exchanges of the world have been rough-and-ready start-ups run by perhaps a dozen people or so; very free-wheeling and pioneering, but unstable, vulnerable to attacks from within and without. If someone like Karpales [http://www.escapistmagazine.com/news/view/132788-MtGox-Customers-Hack-Karpales-Account-Post-Fraud-Evidence-Update], justly or unjustly, is accused of fraud, it's because the Bitcoin community has become used to fraud. It's part of the price of doing business, but an established Wall Street firm is a different animal from a former Magic the Gathering trading site. Moreover if Atlas takes off, more established businesses will want to move in on the Bitcoin market. Bitcoin's Deadwood days may be over and done.

Source: Ars Technica [http://arstechnica.com/business/2014/03/move-over-small-time-bitcoin-exchange-startups-wall-street-has-arrived/]


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[GothmogII]

Why do all these companies always sound like they were named by supervillains? x)

Still, I suppose this could be good, maybe they'll publish a guide explaining how it all works for idiots like me. My friend trying unsuccessfully to do so...but all I really got was something to do with mining and graphics cards. :/

 

[Remus]

Atlas hmm? Well, now we know what the next hacker's user profile will be . "Wouldyoukindly@AndrewRyan2014". Also, no such thing as hackproof. Saying you are just puts a giant target on your forehead. Good luck.

 

[medv4380]

There is no such thing as hacker proof in regards to bitcoin. "Cold" storage is just a buzzword to get people to invest. Private keys are easily hacked via a couple of methods. As Gamers we should all be fully aware of Sony's mistake that resulted in the Level 0 Private Key being reversed. No one stole the private key, and that's the only thing the so called "Cold" storage protects against. Heck this is Wall Street and Wall Street loves to use Java Enterprise Edition. Lets see if these fools actually use the SecureRandom function that has a known vulnerability that allows private keys to be reversed. Even the most secure encryption, One Time Pads, have known methods for breaking them. They might not be guaranteed to be broken, but they aren't guaranteed to never be broken.

 

[FalloutJack]

Oh, here it goes. Carrot and stick time again. Would you like a juicey bitcoin carrot for all your hopes and dreams to make your money-making dreams come true? Well, no problem senor, but I think you know where I'm going to STICK it, and the less said about that, the better.

That's all we need, some wiseguy from Wall Street who didn't read about the Great Depression trying to fool around with this stuff. I'm sure that ABSOLUTELY NOTHING will go wrong too! (So frigging glad I never got into stocks either.)

 

[lacktheknack]

Yeah, it's not going to be "hackproof" until you literally have people walking back and forth between terminals in-house manually filling out orders.

Alternatively, take a cue from Splinter Cell and use punchcards.

 

[EHKOS]

Atlas hmm? Well, now we know what the next hacker's user profile will be . "Wouldyoukindly@AndrewRyan2014". Also, no such thing as hackproof. Saying you are just puts a giant target on your forehead. Good luck.

"Sure, the boys in Ryan's lab can make it hack-proof. But that don't mean we ain't gonna hack it."

OT: I do not feel safe having any stock in digital currency. I'll take paper bills over Bitcoins any day.

 

[dynath]

Right wallstreet has no history of fraud or major collapses...

 

[FalloutJack]

Right wallstreet has no history of fraud or major collapses...

"Pattern recognition? What's that? Nevermind. Let's go start up a company based on an unproven attempt at E-currency in our wild world of stocks and bonds! I'm sure that nothing will go wrong during our current recession economy! DAMN THE TORPEDOES AND FULL SPEED AHEAD!"

It's funny. They teach you to do things for business and economics in college and nobody ever listens.

 

[Strazdas]

Why do all these companies always sound like they were named by supervillains? x)

thats because they were. modern supervillians dont live in volcanos and have armies of henchment. they live in wallstreat and buy laws so the lawyers would automate the hemchmannery.

 

[DjinnFor]

There is no such thing as hacker proof in regards to bitcoin. "Cold" storage is just a buzzword to get people to invest. Private keys are easily hacked via a couple of methods. As Gamers we should all be fully aware of Sony's mistake that resulted in the Level 0 Private Key being reversed. No one stole the private key, and that's the only thing the so called "Cold" storage protects against. Heck this is Wall Street and Wall Street loves to use Java Enterprise Edition. Lets see if these fools actually use the SecureRandom function that has a known vulnerability that allows private keys to be reversed. Even the most secure encryption, One Time Pads, have known methods for breaking them. They might not be guaranteed to be broken, but they aren't guaranteed to never be broken.

It's not hard to shuffle cold storage keys each time you use them.

You can't exploit SecureRandom to reverse-engineer a cold storage-generated private key that only ever signs one transaction, which empties its balance into a new cold storage-generated address and the hot wallet. You need at least two instances to exploit ECDSA. Hell, even if you only needed one, a hacker would need to perform a 51% attack on the network to spend your coins faster than you.

Unless the cold storage is physically compromised or the encryption algorithm is completely compromised, cold storage remains perfectly safe when executed properly.

 

[medv4380]

There is no such thing as hacker proof in regards to bitcoin. "Cold" storage is just a buzzword to get people to invest. Private keys are easily hacked via a couple of methods. As Gamers we should all be fully aware of Sony's mistake that resulted in the Level 0 Private Key being reversed. No one stole the private key, and that's the only thing the so called "Cold" storage protects against. Heck this is Wall Street and Wall Street loves to use Java Enterprise Edition. Lets see if these fools actually use the SecureRandom function that has a known vulnerability that allows private keys to be reversed. Even the most secure encryption, One Time Pads, have known methods for breaking them. They might not be guaranteed to be broken, but they aren't guaranteed to never be broken.

It's not hard to shuffle cold storage keys each time you use them.

You can't exploit SecureRandom to reverse-engineer a cold storage-generated private key that only ever signs one transaction, which empties its balance into a new cold storage-generated address and the hot wallet. You need at least two instances to exploit ECDSA. Hell, even if you only needed one, a hacker would need to perform a 51% attack on the network to spend your coins faster than you.

Unless the cold storage is physically compromised or the encryption algorithm is completely compromised, cold storage remains perfectly safe when executed properly.

There are a lot more ways than that to break a private key. iOS7's PRNG was just shown to be deterministic and trivial to brute force. Fortunately Apple forbid bitcoin apps so it should be isolated, but God only knows how many of these RNG's are actually broken, or worse, deliberately back doored.

It's also not necessary to have 51%. Just enough to DoS the network with more transaction then it can actually process 1 Megabyte per block or 7 transactions per second. If your transaction fails because the block fills up it becomes a race to see who gets written to the next block.