How the First Bitcoin Hedge Fund Approaches Security 124
An anonymous reader writes with a link to a story at Forbes about what's said to the first Bitcoin hedge fund; the article goes into some of the details of how the (literally) valuable data is kept. A selection: "The private key itself is AES-256 encrypted. After exporting Bitcoin private keys from wallet.dat file, data is stored in a TrueCrypt container on three separate flash drives. Using Shamir's Secret Sharing algorithm, the container password is then split into three parts utilizing a 2-of-3 secret sharing model. Incorporating physical security with electronic security, each flash drive from various manufacturers is duplicated several times and, together with a CD-ROM, those items are vaulted in a bank safety deposit box in three different legal jurisdictions. To leverage geographic distribution as well, each bank stores only part of a key, so if a single deposit box is compromised, no funds are lost."
Re:What is this "bitcoin" you speak of? (Score:4, Informative)
I wish people would stop saying that. Yes, they are fiat currencies, but that does not mean they aren't real money or that all fiat currencies are equally arbitrary in valuation.
The value of the USD is measured against other currencies and against the things which one would like to buy. In most cases it doesn't really matter to me what it's doing versus the RMB or the CAD as I don't convert my money to pay for things brought in from those countries, I pay a price denominated in USD. Now, in practice shifts in those currency exchange rates will affect how much I pay, but so do all sorts of things that could affect domestically created things as well.
Bottom line, the folks claiming that fiat currencies aren't real don't have any idea what they're talking about. Currency is just for convenience so that you don't have to buy an entire cow just because you want a T-bone, don't want to take delivery immediately or want to do a 3 or 4 way trade.