Winklevoss Twins Bitcoin Exchange, Hacker News

Winklevoss Twins Bitcoin Exchange, Hacker News

Related movie: Did this morning’s Bitcoin stir verrassing you? It didn’t if you joined us yesterday.

I’m a little disappointed that they only have level Two[1] HSMs ter the cloud, spil I would be awkward protecting my hot wallet keys with only tamper overduidelijk protections, rather than level Three+ that actually attempt to detect intrusion and delete keys. Bitcoin makes for very quick stealing merienda you have keys, so reactive defenses against key loss don’t help much spil you’re literally te a wedstrijd condition with the attacker to empty the wallet (you into a non-compromised one, the attacker into their own). But I would assume they weighed cost/risk and I’ve never heard of a security compromise of Amazon’s HSMs so it wasgoed most likely a reasonable choice.

edit: I should also applaud their use of PGP and (explicit) respect for responsible disclosure.

HSM for the hot wallet very likely provides greater security than no HSM for the hot wallet but I don’t think it gives you that much reserve security.

&gt, Amazon says they don’t have access to your HSM but presumably they do if they wished to.

I wouldn’t be so sure. Spil far spil I can tell, merienda you’ve provisioned an HSM from Amazon you have total administrator access. That includes control overheen all trusted SSH certs, users, etc. Of course Amazon has physical access, but that doesn’t give them access to the HSM’s crypto functions or the key material.

If Amazon is a bad actor they trivially have access to the HSM because they could just write some software that pretends to be the HSM. However, this is very likely not ter the threat prototype because the amount Amazon loses by fucking a client like this is much more than the amount they would build up by fucking a client. The auténtico thread is rogue Amazon employees and I guess it would be be hard for them to MITM the HSM from the embark.

Your only protection for the hot wallet is to obscure the credentials you use to connect to HSM. Good luck with that against and a determined adversary that has a lotsbestemming to build up from dumping the HSM key. (if it is not clear this ‘only protection’ thing is when the adversary has root access to your machine)

Oh.. and if you are a gemini dev. Obscure your code encrypt your HSM credentials ter memory. 🙂 Security through obscurity is actually a useful thing against attackers.

&gt, If Amazon is a bad actor they trivially have access to the HSM because they could just write some software that pretends to be the HSM.

I believe SafeNet HSMs protect against attacks of this nature.

&gt, This manufacturer-validated devicee identification mechanism enables a strong trust proefje whereby customers can be assured that they are communicating with specific SafeNet hardware units ter a way that cannot be spoofed.

Also, there wasgoed a good postbode on /r/bitcoinmarkets by the CTO of another exchange, picking bijzonder Gemini’s technical setup. Worth a read if you’re into modern frontend web development.

Gemini is a spot exchange (plain buy/sell) while wij’re a derivatives exchange with much more complicated requirements, so you’d expect a different set of decisions and tradeoffs, which is what I found. Gemini’s vivo value (at this point) is ter its capability to navigate regulatory capture, not necessarily te its technology. But their technology is a cut above what you usually see te Bitcoin exchanges. The exchange landscape has bot plagued with unreliable/buggy exchanges, like the late Mt.Gox and the still-limping Bitfinex (which is much more ingewikkeld).

On the entire, basic spot exchanges without leverage are relatively effortless to create. I would love to do a more accomplish analysis but of course I don’t have any inwards information. I would be very interested te their backend, which emerges to (possibly) be Scala. No clues spil to whether they’re using a SQL database or something more specialized like KDB+, which wij use and love.

Not running a bitcoin cafe out of customer funds.

According to Coinbase, the total value of all Bitcoin is presently about $Three.Five billion. This is a lil’, lil’ market for &quot,Fortune 500s and Wall Street&quot, and is omschrijving to the value of a single (smaller) mid-cap company. Even at its peak, the total value of all Bitcoin wasgoed only around $14 billion.

Daily Bitcoin transaction volume hasn’t exceeded $100 million since July and has bot spil low spil $33 million recently[1]. For comparison, daily volume te the FX markets exceeds $Five trillion.

Blockchain technology might be significant but Bitcoin itself is about spil interesting spil the Burmese kyat or Gambian dalasi.

EDIT: those currencies you mention are under prolonged inflation and are tied to the economic output of some puny countries. bitcoin isn’t either of those

The problem with Bitcoin is liquidity and market depth. Even if you’re a small-time trader, there are better trading markets to concentrate your time and energy on.

Regarding the random currencies I mentioned te jest: I wasgoed making the point that any obscure currency or security is just about spil interesting spil Bitcoin.

No, it doesn’t. Major financial institutions invest significantly te technology and many are already actively exploring the blockchain[1].

I wouldn’t go so far spil to say that the Winklevii can’t stake out a position ter the broader blockchain market, but a Bitcoin exchange isn’t likely to help them establish a meaningful position.

&gt, Major financial institutions invest significantly ter technology.

That they may be, but that’s no ensure of success or supremacy. That’s the entire point of the risk of startup. Also the reason for the explosion of rente. I’m not suggesting that Gemini will win, but they are te the space, at the beginning, unencumbered by old tech (spil the larger institutions are) and are making overtures to the established order. Wij don’t know where that will lead.

That’s not to say that some of the technology they develop can’t be repurposed for resale to other institutions, but a loterijlot of others are already playing ter the blockchain technology space and they don’t have the burdens of attempting to create and manage exchanges, ETFs, etc. for an &quot,asset class&quot, that is miniscule and heading te the wrong direction.

* The malleability attack: a transaction relayer is able to switch the hash of the transactions, thus confusing senders or receivers who rely on this hash to check if the transaction has confirmed. This creates a nuisance, but all money arrive where they are supposed to. This attack does not affect memory usage on knots, and it’s an old and well-known punt.

* A transaction spam attack (misleadingly called a &quot,stress test&quot,) where a shady group called creates a large amount of big transactions. Thesis mostly have appopriate fees so that regular users who want their transactions to confirm te a timely manner has to out-bid the spammer. All the unconfirmed transactions are stored te the memory of knots, so this severely affects memory usage (presently about 1 GB on some knots).

Related movie: Speedline Camalot Gemini II – adhesive dispenser

I’m still holding out for a BTC ETF. 🙂

Instead of requiring a scan of your driver’s license or other identifying document, they ask you for questions about your history. I’ve seen a similar process used at etrade.

Is this just for the specie cómputo with the exchange or the bitcoin movimiento spil well? I can’t imagine it does, but it would be a strong selling point if it did. If its not, its pretty misleading spil written.

&gt, FDIC insurance covers all types of deposits received at an insured bankgebouw, including deposits te a checking account, negotiable order of withdrawal (NOW) account, savings account, money market deposit account (MMDA), time deposit such spil a certificate of deposit (CD), or an official voorwerp issued by a handelsbank, such spil a cashier’s check or money order.

&gt, FDIC insurance covers depositors’ accounts at each insured bankgebouw, dollar-for-dollar, including principal and any accrued rente through the date of the insured canap’s closing, up to the insurance limit.The FDIC does not insure money invested te stocks, bonds, mutual funds, life insurance policies, annuities or municipal securities, even if thesis investments are purchased at an insured handelsbank.

Nothing wrong with wanting to invest te bitcoins without fully understanding them.

Related movie: Setup 2Factor Authentication

Yes and no. They originally desired to open up the bitcoin market to institutional investors who want exposure without having to switch anything te the trading software they use, the accounting structures etc. This meant: provide a bitcoin security that can be traded by wall street typically, such spil an ETF on the NYSE or NASDAQ or something to that effect.

Barry Silbert’s 2nd Market (certainly a wall street player) got there very first te terms of accounting structures. They created a bitcoin security that anyone can buy and waterput on the books just like any other security (like some oil or wheat derivatives or whatever). But that wasgoed still sort of an old-fashion security that you buy on the phone rather than on an automated exchange. Not something that pension funds, university endowment funds etc can lightly get into and scale up, but it opened up the bitcoin market to say petite family wealth funds that dreamed some exposure to the bitcoin price. Bitcoin is one of those things that is likely to either go to $0 or become Three orders of magnitude more valuable. So if you believe there’s a 10% chance that’ll toebijten, investing $100k has an expected value of $9.9m, of course thesis are just made up numbers but this is often the rationale for investing even modest amounts of money. Silbert’s GBTC (marketed under Grayscale) did fairly well but ter wall street terms it’s a truly lil’ fund (iirc about $50m or so).

The ‘holy grail’ for bitcoin investment right now would very likely be an ETF. Basically the above security, but then traded on an exchange, a derivative of bitcoins trading on mainstream exchanges (i.e. exposure to bitcoin’s price potential traded on exchanges where anyone can lightly and automatically buy te without having to know anything about bitcoin or switch accounting/audit practices). The Winklevoss’s pitch wasgoed always to set up that ETF, which they’re still working on, and the fact they just launched a corriente exchange tells mij they’re either 1) building up the orderbooks, building relations with investors and building up liquidity etc a bit for a potential ETF launch straks down the line or Two) the ETF is facing major, perhaps insurmountable roadblocks so they’re pivoting to something less ambitious which is launch their own exchange. (which generally gargles because 1) there are major established players, like Coinbase, which are true software companies with half a billion dollar valuations, solid engineering teams and a big headstart, and Two) because none of the big players, like an investment fund, will be likely to register for your lil’ exchange just to trade some bitcoin. They did get a lotsbestemming of the permitido frameworks right tho’, so it may be an interesting playmate for investors nonetheless.)

Spil for security. well bitcoins are obviously not FDIC insured, but their security looks indeed taut, I’d feel very convenient trading with them. [0][1] They still suggest the ‘you don’t need to know anything about bitcoin or worry about security’ pitch, but you still need to register with them rather than just select their security on the NYSE and click ‘buy’, and that doesn’t fly for most big investment funds with stringent auditing and accounting practices and automated trading teams. Wij’ll see how it works out.

3 thoughts on “Winklevoss Twins Bitcoin Exchange, Hacker News”

  1. Gemini is dealing exclusively with US banks. I think members outside US cannot use it to buy and sell bitcoin. The surplus of the world still need more large legit exchanges like Gemini to reduce friction.

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