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News Link • Bitcoin

A Hack That Makes Bitcoins a Whole Lot Harder to Steal

•, By Robert McMillan
  Just ask Gavin Andresen. Two years ago, someone stole five of his bitcoins when they hacked his internet service provider and stole a private key from a computer server he was using.

But Andresen isn’t your typical bitcoin user. He’s the chief scientist at the Bitcoin Foundation and one of the primary authors of the software that runs bitcoin’s peer-to-peer network, and even before his bitcoins were stolen, he had an idea about how to make this kind of theft more difficult. He calls it P2SH — short for “pay-to-script hash” — and it’s basically a hack of the protocol that drives the digital currency. It lets you keep your bitcoins safe even if your primary private key is stolen. You see, bitcoin’s other great strength is that it’s open source software. It can be hacked and extended. And that’s what Andresen has done.

With this addition to the bitcoin protocol, you can protect your bitcoins with more than one private key, much like you protect your email or online banking account with multiple login credentials. And you can do this today. A Silicon Valley startup called BitGo has now taken this multiple signature technology and built a new kind of online wallet, one that it believes will make bitcoin a lot more business-friendly — and more secure too.

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