Heartbleed is a catastrophic bug in OpenSSL:

“The Heartbleed bug allows anyone on the Internet to read the memory of the systems protected by the vulnerable versions of the OpenSSL software. This compromises the secret keys used to identify the service providers and to encrypt the traffic, the names and passwords of the users and the actual content. This allows attackers to eavesdrop communications, steal data directly from the services and users and to impersonate services and users.

Basically, an attacker can grab 64K of memory from a server. The attack leaves no trace, and can be done multiple times to grab a different random 64K of memory. This means that anything in memory — SSL private keys, user keys, anything — is vulnerable. And you have to assume that it is all compromised. All of it.

“Catastrophic” is the right word. On the scale of 1 to 10, this is an 11.

Half a million sites are vulnerable, including my own. Test your vulnerability here.

The bug has been patched. After you patch your systems, you have to get a new public/private key pair, update your SSL certificate, and then change every password that could potentially be affected.

At this point, the probability is close to one that every target has had its private keys extracted by multiple intelligence agencies. The real question is whether or not someone deliberately inserted this bug into OpenSSL, and has had two years of unfettered access to everything. My guess is accident, but I have no proof.