Quote from: serenitys on April 04, 2014, 07:05:42 AM

Bravo to the OP, though I've heard the MtGox story only in a superficial way and not any real details...but I'm sorry for everyone who got ripped off or lost money.

That said, how did you lose it? I had a similar question about the FBI seizing someone's btc and asked how, exactly, it was seized.

I've got 0btc but am on the verge (got a help a girl out thread in the help and support section for anyone who likes 20 questions and loves espousing advice even more)...but all I hear about btc is how secure it is and the only way someone can get your money is if they have your private key...and I'd imagine if someone is smart enough to know the code tech version of bitcoin and run a big popular site, they'd also know the risk factor and wouldn't have lost anything.

So what's the real story on this before I put any money in it - is the private key the only possible way that someone can take your money out from under you? I know if you lose it, it's gone...but are we talking "don't give someone your password to anything" level of common sense or private key = precious gold that is easily swiped regardless of a key or password?

I've read in various places the warning to "never store your btc on the exchange" or in the wallet on a site, or only put it there when you do a transaction...but where is it otherwise? If you keep it stored offline is it still subject to valuation? If you have it stored online and the value drops to 0 is the btc GONE - like it shrinks til it's history, or is the value itself just bottomed out? Why is it different if it's offline?

Clearly I'm missing something...hope you can clarify this blank spot and how, exactly, you can lose btc or how it's offline as opposed to on.

ETA - like this example in the ad spot on another thread:

"Your bitcoin is secured in a way that is physically impossible for others to access, no matter for what reason, no matter how good the excuse, no matter a majority of miners, no matter what." -- gmaxwell

If this is true, how would the feds seize any of it or and how could they "liquidate" it anyway unless it's via an exchange or via the network? Or how would someone lose other peoples money? What was the exception that invalidates that quote and claim?

Exchanges usually use their own wallet, so once you give it to them it is like handing them your cash, the "balance" displayed on their site is what they owe you, a voucher slip, not your coins

the feds probably seized DPR's stash because they found a copy of his wallet/key or something, so they have control over the coins and can use them as they please, they will probably liquidate them over several exchanges and a period of time

if you store them "offline" and the value drops to 0 USD, you still have x amount of bitcoins, just like if the value drops from 100$ to 90$ you dont lose 1 out of every 10 coins you own, valuation does NOT depend on exchanges, 1 bitcoin is 1 bitcoin and it is worth whatever somebody will take it for when you offer it for trade

it is better to store offline because a hacker getting past a websites security is a weak link in the chain, like when Target was hacked a few months ago for credit card info, the hacker stole the cards "private keys" off of a central location of storage with overcomable security