Bitcoins are not sequences of bits. There is a global blockchain that keeps track of transactions in the network. Each block contains transactions. Since a transaction is the fundamental unit, if you want to know the balance of a particular address, you have to look at every transaction since the beginning of time and add up all the ones that involve that address. You can't just edit the books to say that an address has more or less money. And to add a new transaction to the chain, whoever has the private key for the originating address has to sign the transaction, then the transaction is checked by a miner and added to the global chain.

So to get the money back, you would have to get the private key for the address where it all ended up. Our have the owners of the majority of mining power commit fraud on your behalf, that could work too.

So what was stolen, exactly?

Somebody managed to trick the exchange into signing a message saying "move this amount of money from this address to this other address" (signed by the private key associated with the first address, with the second address being owned by the attacker) and submitting it to be added to the blockchain by a miner.

The blockchain is the only record of who owns what money, and transactions on it can't be reverted. Therefore, the attacker stole money by causing a transaction that shouldn't have happened.

Bitcoins were stolen, not a sequence of bits. It's not much different than if you steal USD from my electronic bank account. Bits are obviously involved in the process, but the USD in a bank account is not "just a sequence of bits." No physical property was stolen, but most of us can agree that this qualifies as theft.

This is more a case of fraud than burglary. The attackers tricked the exchange into sending then tons of money.

Burglary traditional implies physical entry of a perpetrator into physical building or space. I assume it would not apply to "breaking into" a computer or network in most modern legal systems. Regardless, this would almost certainly be considered larceny, as well as computer fraud.

   > Bitcoins are just sequences of ones and zeros. 

Not exactly, and that is what makes them interesting. The ones and zeros are part of what is essentially a digital 'tally stick' [1] where the account has a set of them and there is this globally shared data structure which has a matching set of them.

There is some secret data the user has which allows them to "unlock" their ones and zeros and rewrite them so that they can rewrite them to say "these are not my ones and zeros". And that transaction is combined with another one of the form "these ARE my ones and zeros", and after a minimum number of copies of the global list has that information the transaction can be said to be complete.

If the user were to attempt to reassert their ownership of the ones and zeros (they have all of the original data still) the global list which everyone else can see shows that have given up those ones and zeros in the past. And there is nothing the user can do to change the global list at that point. Its like the master tally stick was swapped out in the vault and their half no longer matches any part of it.

[1] http://en.wikipedia.org/wiki/Tally_stick

I think he's parodying the arguments that people generally make for digital piracy.

Bank money is also just a sequence of ones and zeroes when it is stored on the computers.

"Stealing" happens when the ownership of the money gets transferred to a third party without consent of the lawful owner.

This is what happens when bitcoins get stolen. They get transferred to somebody else and the global blockchain takes note of this. Yes you still have "your bits" but they are now worthless because nobody will accept them anymore.

Bitcoin and copyrighted digital media may initially seem like an apt comparison, but not when you note that bitcoins are scarce while digital media is not. The argument against copyright protection for digital media isn't literally that they are just sequences of ones and zeroes. Scarcity is the crux of that argument.

Bitcoin aren't any more scarce than digital works. Mining bitcoins is work, but so is making movies. Once found, they can be copied cost-free, and the only thing that prevents you from doing so is external rules.

(I didn't downvote. There's far too much of that on HN.)

Bitcoin is an agreement by the worldwide blockchain that you personally control the fate of anywhere from 0 to 21 million bitcoins. You can hoard them, send them to someone else, or throw away your access to them. But you can control no more than 21 million coins, because there will never be more than 21 million bitcoins. See http://bitcoin.stackexchange.com/questions/161/how-many-bitc...

I'm trying to figure out what you're saying. It seems like if your arguments apply to Bitcoin, then they would also apply to any other kind of good with limited supply, such as gold. Why would anyone be outraged when gold is stolen? Because people believe gold has value. The reason gold is valuable is due to its scarcity, not because gold is inherently valuable. People rarely use gold for its unique conductivity properties, whereas they usually use it for its scarcity. Same with Bitcoin.

So if your arguments apply to Bitcoin and gold, then what is being said? I'm curious to know your position on this. Not because I'm trying to defend or prove anything, but because your ideas tend to be interesting.

I think maybe people here are just talking past each other, so maybe it would help to articulate in detail?

If I copy your movie, you still have the movie. If I take your bitcoin (adding a transaction to the global block chain moving it to my wallet), you no longer have that bitcoin (the world does not accept your authority to spend it).

Perhaps you're confusing the private key of a wallet for an actual bitcoin. The private key of a wallet is just a sequence of bits which can be copied essentially cost-free, but the bitcoins the wallet contains are scarce, and cannot be copied at all (assuming the soundness of the crypto Bitcoin uses). Apart from new coins created from mining, each Bitcoin transaction is a zero-sum transaction.

Anyone with a copy of the private key of a wallet can transfer all the bitcoins from that wallet to a different wallet, i.e. a wallet that only they control.

The block chain is a sequence of bits, yes? And it's immutable, yes? So nobody is "stealing" any bits. The bits are all still there. What they're doing is co-opting a potential commercial transaction involving those bits.

The analogy is imperfect sure. Copying a movie doesn't keep you from selling that movie to someone else. But the only thing that keeps you from double-speding a bitcoin is the external confirmation process. Bitcoins aren't inherently scarce--the protocol makes them that way, just like copyright makes digital works artificially scarce.

The block chain is a sequence of bits, of course. It's roughly immutable, other than (obviously) appending to it.

I have never claimed that anyone can steal bits. I said that people can steal bitcoins. Bitcoins are not just bits, any more than the USD in my bank account is just bits. If you take money from my bank account without my permission, I hope we can agree that you have stolen money from me. The same applies to bitcoins for precisely the same reasons.

> The analogy is imperfect sure. Copying a movie doesn't keep you from selling that movie to someone else.

But that's exactly the problem. Larceny (and theft, more generally) is traditionally defined as the taking of someone's property with the intention of depriving them of that property.

> But the only thing that keeps you from double-speding a bitcoin is the external confirmation process. Bitcoins aren't inherently scarce--the protocol makes them that way, just like copyright makes digital works artificially scarce.

I'm not sure what your point is here. Bitcoins are not inherently scarce, because they don't inherently exist. Someone had to invent and implement the Bitcoin network, obviously. We are (hopefully) agreeing on the definition of the word "bitcoin," and thus we would agree for instance that 10 years ago no bitcoins existed. You can't have a bitcoin unless the Bitcoin network exists, and thus in that sense bitcoins are inherently scarce. The same can be said of USD, or financial assets like stocks and bonds, but I would guess that we agree those can be stolen.

After seeing two of your posts I genuinely can't tell if you are joking or don't understand crypto-currencies.

I think you may have been too subtle. :)

The same can be said for the database entries for your bank account.

You guys are missing the joke. Rainer is just being smug.

Computers can verify, instantly and exactly, the monetary damage of "stolen" bitcoins.

Nobody has veified (or posssibly can verify) the damage of a "stolen' movie. For all we know piracy promotes purchase.

Either way, you can't "steal" information by copying it, but therein lies the difference in how the word might apply here but not in copyright discussions.

Nobody stole any information here; they misused a server (which is in fact owned by someone else).

What do you think money is?

Intellectual property is a non-rivalrous good, unlike cryptocurrency.