[I wasn't following the bitcoin stuff as it happened, and then later read about bitcoinica (we actually use the difficulties with hosting providers you faced as an example with our unlaunched product...). I didn't know you were on HN -- awesome. (you are probably one of the world's experts on problems with service provider internal security, now, although it was expensive education). And handling things by paying everyone out was a much better decision than most startups after a breach.]

[The first line of the comment was intended to keep this on-topic. I didn't really have any financial interest in Bitcoinica at the time of the hack. A major management handover took place three weeks before that and the 100% of company was sold in 2011. The community assumed that I was still the owner but it's simply not true. The hacked mail server (the "root cause") didn't belong to me either. But yes, I learned a lot by being both an insider and an outsider, and these are fortunately free lessons. I still follow some of the valuable experience in dealing with Bitcoinica's infrastructure in my new project, which doesn't deal with money. Startup infrastructure has a big market. Now I use KVM to build a small private cloud for my new project on top of dedicated server(s) simply because I love the flexibility of cloud deployments. If someone brings that to developers who are not sysadmins, it'll be cool.]