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  1. It’s been an interesting day for crypto-currency Bitcoin after its valuation passed $600 on a trading platform for the first time, while another major trading company (the world’s largest for Bitcoin) landed a $5 million investment. Bitcoin seemed in trouble back in October when its valuation tumbled as low as $119 following the FBI seizure of illicit goods marketplace Silk Road, but today BTC China, which recently overtook Japan-based Mt. Gox as the trading system processing the largest volume of Bitcoin, announced a $5 million Series A round of investment — as Technode reports. Also today, the currency’s valuation passed a record high of $618.94 on Mt.Gox, known for being one of the most reputable indicators of Bitcoin, before dropping down to a steadier number in the $560-$580 range, as charts from Clark Moody show — though the average price remained under $550, according to CoinDesk. The investment in BTC China comes at an interesting time. Markets and users situated outside of the US — and China in particularly — are waking up to the potential of the virtual currency. Bitcoin isn’t banned in the US, but the FBI has seized virtual funds held by a number of companies — including Dwolla, which recently ended its support Bitcoin – while lawmakers and financial institutions have adopted a cautious approach and refused to engage with Bitcoin and affiliated companies. That’s led to a growth in overseas companies handling the currency. Coindesk notes that the top four trading platforms are all non-US: (1) BTC China traded $298.4m in XBT/CNY (based in China) (2) Mt. Gox traded $232.8m in XBT/USD (based in Japan) (3) BitStamp traded $200m in XBT/USD (based in Slovenia) (4) btc-e traded $119.8m in XBT/USD (based in Bulgaria) BTC China handles 80,000 in transactions per day, that’s over $50 million worth of the currency. Demand in China and among investors continues to be high despite another Chinese platform disappearing with $4.1 million in customer money just weeks ago. Earlier this month, Bitcoin had doubled its value in a little over four weeks as it hit a record high of $267. Even today, the average price is considerably higher, and it will be fascinating to watch the dynamic and long-time future of the currency play out now it has significant mass in the US, China and other places. Source
  2. Turk

    Bitcoin Bet

    By John Biggs 9 hours ago Today in bitcoin ephemera I present this interesting bet between VC Ben Horowitz of Andreessen Horowitz and Felix Salmon, noted bitcoin curmudgeon. Ben has invested in multiple bitcoin startups while Felix has a really cool name and is a well-known economics writer. The bet is simple: in January, 2019 the folks at Planet Money on NPR will poll a sample of Americans. “If 10 percent or more say they have used bitcoin to buy something in the past month, Ben wins. If it’s fewer than 10 percent, Felix wins,” Planet Money host Jacob Goldstein wrote. The idea came to the pair when Horowitz annotated Salmon’s writing on RapGenius. The winner gets a pair of alpaca socks, the first item ever paid for in bitcoins. Salmon believes that Bitcoin’s volatility and rise to prominence makes users think they’ll make more money by sitting on the currency rather than spending it. He brings up the example of the original pair of Alpaca socks bought for bitcoin – that person is probably upset he sold all those bitcoins for some socks. While the original sock purchase is lost in the veil of time, it should be noted that someone paid 10,000 BTC for a pizza in 2009. That pizza would be worth $7,280,000 today. The potential for profit from sitting on the currency, then, will discourage growth argues Salmon. Horowitz is far more bullish, expecting bitcoin to become the de facto payment mechanism for the Internet by 2019. “There’s no way that bitcoin is going to be a common payment mechanism in five years’ time. It probably will not even exist. It’s just going to be a vague memory,” grumbled Salmon. How would I bet? I think Salmon is right, to a degree. I think what we know as bitcoin will be subsumed by the general Internet, and recreated a way to trade value that has little to do with bitcoin as it exists today. Bitcoin is too wasteful, too slow, and still in its beta stag. Just as Windows 3.1 is distant memory in this era of Windows 8.1 so will this early bitcoin be immensely different from bitcoin in half a decade. I’m not BTC bull but I’m not a bear, either. The world needs bitcoin, just not in its current form. http://techcrunch.com/2014/02/07/ben-horowitzs-bitcoin-bet
  3. Mt. Gox said it found 200,000 "forgotten" bitcoins, a week after the Tokyo-based digital currency exchange filed for bankruptcy protection. The company applied for bankrupty protection at the beginning of March, claiming it had lost almost all of the 850,000 bitcoins it held. The rediscovered bitcoins are worth $500 million at today's prices. Online sleuths had noticed around 200,000 bitcoins moving through the crypto-currency exchange after the bankruptcy filing. The exchange, headed by 28-year-old Frenchman Mark Karpeles, said the bitcoins were found in an old-format online wallet which it had thought no longer held any bitcoins, but which it checked again after its bankruptcy filing. "On March 7, 2014, MtGox Co., Ltd. confirmed that an old format wallet which was used prior to June 2011 held a balance of approximately 200,000 BTC," the statement said. It added that it moved the 200,000 bitcoins from online to offline wallets on 14-15 March "for security reasons". "These bitcoin movements, including the change in the manner in which these coins were stored, had been reported to the court and the supervisor by counsels," it noted. Many of Mt. Gox's 127,000 creditors, who feared they had lost their investments when the exchange filed for bankruptcy, are sceptical about what the exchange has said happened to the bitcoins. In its bankruptcy filing, Mt. Gox also said $28 million was "missing" from its Japanese bank accounts. Tracking movements On Thursday, a US judge in Chicago overseeing a class action against Mt. Gox revised a previous order, allowing some of the exchange's bitcoin movements to be tracked. "Today in court we got relief... specifically to track the 180,000 bitcoins, which we've been monitoring. Hours later, Mt. Gox claimed it 'found' these bitcoins... it appears Mt. Gox realized we were close and decided to acknowledge that it owned these 180,000-200,000 bitcoins," Steven L Woodrow, a partner at law firm Edelson, told Reuters in emailed comments. Edelson is representing Illinois resident Gregory Greene, who proposed the class action over what he claims is a massive fraud. Mt. Gox blamed the loss of 750,000 bitcoins belonging to its customers and 100,000 of its own on hackers who attacked its software. Bitcoin is bought and sold on a peer-to-peer network independent of central control. Its value soared last year, and the total worth of bitcoins is now about $7 billion. Source
  4. The so-called transaction malleability software issue blamed for the dissolution of Bitcoin exchange Mt. Gox has been patched. Also, the Bitcoin-QT reference client was also rebranded to Bitcoin Core, in order to clear confusion users might have had between the Bitcoin network and software. Bitcoin Core 0.9.0 was made available yesterday that included new features as well as security updates. Transaction malleability is technically not a flaw in the software, according to a number of experts, including those inside Mt Gox. Users had the ability to change the transaction identifier accompanying any Bitcoin transaction under certain conditions. Mt. Gox’s demise was a perfect storm of software issues and policy failures that caused the Japanese company to lose hundreds of millions of dollars worth of the digital currency. The problems began when users complained to Mt. Gox that transactions and funds were being conducted under altered identifiers. A report in the Guardian said hackers had managed to edit the identifiers and then lodge a complaint with Mt. Gox, which would then initiate the transaction a second time, sending more currency to the thief. According to release notes posted on Github, the transaction malleability issue was addressed by tightening transaction rules preventing “mutated transactions” from being relayed or mined. Bug fixes also addressed incorrect balances being reported for mutated transactions, among other fixes. The hack and subsequent demise of Mt. Gox negatively affected the value of the electronic currency, which hovered not too long ago at more than $1,000 per Bitcoin; as of today, Bitcoin Exchange lists one Bitcoin at $591.99. According to sources quoted by the Guardian, the transaction malleability issue was compounded by lax accounting at Mt. Gox, forcing the exchange to go under. The Guardian said a document released by entrepreneur Ryan Selkis also hurried Mt. Gox to the end. “MtGox has allegedly never conducted a single audit of its customer deposits,” Selkis is quoted, “and it is believed that [Gox CEO Mark] Karpeles may have been the only one within the company to have knowledge of how to actually tap the exchange’s cold storage. It remains unclear exactly how this type of storage leak could have happened over a multi-year period without any knowledge on the part of the executives at MtGox.” As Bitcoin became a full-fledged phenomenon, hackers took notice too. Malware attacks surfaced targeting Bitcoin wallets credentials on a number of platforms including Mac OS X. The OS X CoinThief Trojan, for example, masqueraded as a phony Bitcoin ticker app on a number of popular download sites. Another attack involved a phony Bitcoin utility called Bitcoin Alarm which was purportedly a tool for alerting Bitcoin owners of shifts in the currency’s value. And prior to Mt. Gox, the Sheep Market suffered a $106 million loss when hackers walked off with 96,000 Bitcoins. Attackers hijacked the marketplace’s domain name system (DNS) servers and routed incoming traffic through a set of servers under their control. This allowed them to spoof member accounts and steal the currency. Source
  5. 1. Get A Wallet Before you can begin to get bitcoins, you first need a wallet. A Bitcoin wallet is a digital wallet which stores your Bitcoin balance and allows you to transact with other users online and offline. All wallets can communicate with each other similar to emails, so you can send and recieve bitcoins to anyone regardless of the type of wallet they use. You can get one free here. There are several ways to get bitcoins:•As payment for goods or services. •Purchase bitcoins at a Bitcoin exchange. •Exchange bitcoins with someone. •Earn bitcoins through competitive mining. 2. Shop TigerDirect.com Once you have your wallet setup and ready to go, you can begin shopping over 200,000 products available from TigerDirect.com! Not sure where to start? See our latest deals or start shopping AMD Bitcoin miner parts. 3. Checkout After selecting your products, simply hit checkout and select Bitcoin as your payment method! For a complete guide on purchasing with Bitcoin on TigerDirect.com, visit our Bitcoin help page. What Is Bitcoin Mining? Bitcoin miners run specific software on their computers to help collectively solve very large and complex problems. Much like "SETI at Home" or "Folding at Home". Every transaction that takes place using bitcoins is recorded in a public ledger called the blockchain. Basically, the block chain is a history of all confirmed transactions and a record of how much each bitcoin wallet has. Think of it like an army of accountants constantly writing who has how much and who paid whom in a huge piece of paper for all to verify (the blockchain). The process called bitcoin mining confirms each of these transactions before it is saved into the blockchain. On a few occasions, a transaction is really a reward of several bitcoins. This reward is what gives bitcoin miners the incentive to mine. Because the process of searching for bitcoin takes a lot of effort for computers, it is has come to be called "mining". So, how do I get started on this mining gig? Like many things, mining for bitcoins can be quite easy or very hard. Today, we have custom solutions for your needs. Hardware: AMD Radeon R9 AMD offers the ability to build your own custom mining PC. Optimize your machine to run the way you want on the budget you want. Start here for AMD hardware. ButterflyLabs Butterfly labs provides a complete solution to get started easily. They provide the hardware and software you need to get started mining! Software: You'll need a wallet to begin collecting and storing your Bitcoins. For info regarding a wallet, read our Get Started section or sign up now for a free wallet. Once you have your wallet and hardware ready to go, all that's left is getting your own mining application and you're ready to start mining! http://www.tigerdirect.com/bitcoin
  6. Summary: After using cold storage funds to compensate users who lost Bitcoin to cyberattacks, Vircurex has bowed to the inevitable and is freezing user accounts. Vircurex has chosen to freeze all user accounts as it teeters towards financial ruin caused by cyberattacks. The Beijing-based cryptocurrency trading post, a victim of two cyberattacks last year, began dipping into its own cold wallet to release currency -- stored offline -- in order to compensate users affected by the security breaches, in which "significant" losses were suffered by the company. By using its own funds, the company hoped that users would be kept happy and positive cashflow would eventually boost the firm's financial resources, bringing its monetary health back up over time. However, following in the footsteps of Mt. Gox, recent "large fund withdrawals in the last weeks" have left Vircurex with two options -- close down the site entirely or freeze all user deposits and withdrawals while a solution is found. Having chosen the latter, Bitcoin, Litecoin and all other cryptocurrencies are frozen, and users are not permitted to withdraw funds from their accounts. In a statement, the Bitcoin exchange said: We are now facing the option of either closing the site with significant unrecoverable losses for all or to work out a solution that allows the exchange to continue to operate and gradually pay back the losses. .We will introduce an additional balance type called "Frozen Funds." Funds in this balance type cannot be used to trade or withdraw. Those are the balances that the exchange will gradually pay back and hence transfer back to the available balance over time. .We will move all current balances for BTC, LTC, TRC and FTC to the "Frozen Balance", i.e. your balance will be set to 0. .We'll take the current available cold storage balance and distribute it based on the below described distribution logic. .Monthly we will take the net profit of the exchange and credit back that amount distributed to the users based on the described distribution logic. Current user accounts will be labeled "frozen balance," so deposits and withdrawals will not be permitted for the time being. Using top-down logic, every month, users will receive funds based on the amount of cryptocurrency they have in their wallets. Half of the proceeds will be distributed top-down, and half bottom-up, based on these values. The funds to pay back users stem from any profit the exchange makes. "Funds in this balance type cannot be used to trade or withdraw,” Vircurex said. "Those are the balances that the exchange will gradually pay back and hence transfer back to the available balance over time. The freezing of the balances is a one-time action, it does not affect future deposits in any ways." While a small Bitcoin exchange, Vircurex is the latest in a long list of trading posts that have either closed their doors or are facing financial problems due to cyberattacks. After filing for bankruptcy several weeks ago, the once-dominant Bitcoin exchange Mt. Gox admitted that poor accounting and security failures resulted in the loss of Bitcoin worth at least $450 million in today's rates. Smaller trading posts Flexcoin and Poloniex have also been the victims of cyberattacks, losing thousands in the virtual currency. The former was forced to close down with immediate effect, whereas the later has promised to pay investors back -- although it will take some time. Source
  7. Drop whatever you’re doing and go read Maciej Cegłowski’s absolutely magnificent essay Our Comrade The Electron, an astonishing history of the amazing Russian engineer Lev Sergeyevich Termen. Make sure you read right down to its punchline, “the most badass answer imaginable.” But if time is short, or you struggle to read English, please at least read its angry rant, from which I quote: Technology concentrates power. In the 90′s, it looked like the Internet might be an exception, that it could be a decentralizing, democratizing force … but those days are gone … What upsets me, what really gets my goat, is that we did it because it was the easiest thing to do … Making things ephemeral is hard. Making things distributed is hard. Making things anonymous is hard. Coming up with a sane business model is really hard—I get tired just thinking about it. We put so much care into making the Internet resilient from technical failures, but make no effort to make it resilient to political failure. We treat freedom and the rule of law like inexhaustible natural resources, rather than the fragile and precious treasures that they are. And now, of course, it’s time to make the Internet of Things, where we will connect everything to everything else, and build cool apps on top, and nothing can possibly go wrong. He’s right. And so the Internet has, for most intents and purposes, evolved into a landscape dominated by centralized systems, epitomized by what Bruce Sterling calls the Stacks — Amazon, Apple, Facebook, Google, Microsoft. To quote, er, myself: They don’t want much, those Stacks. Just your identity, your allegiance, and all of your data. Just to be your sole provider of messaging, media, merchandise, and metadata. Just to take part in as much of your online existence as they possibly can, and maybe to one day mediate your every interaction with the world around you, online or off. The Stacks exist in part because less centralized systems are extremely difficult to build. Consider, for instance, Google+ architect Yonatan Zunger’s explanation of “distributed consensus,” i.e. the means by which data can be safely preserved in distributed systems with multiple editors. It’s absolutely brilliant — but none of its 8,000 words are wasted. The gold-standard “Paxos” algorithm is sufficiently complex that a pair of Stanford engineers recently published a paper entitled “In Search Of An Understandable Consensus Algorithm” (PDF) — the title of which sums up the state of the art nicely — in which they present a new alternative, “Raft.” Distributed algorithms, distributed data, distributed systems, distributed security: messy, tricky, complicated, a maze of vibrating tightropes stretched across an N-dimensional pit full of hungry failure modes with sharp teeth. Hard stuff. But not impossible. Just ask Satoshi Nakamoto. Beyond the hype and the greed, Bitcoin is powered by a genuine technical breakthrough(1), to a degree I did not properly appreciate when I first started writing about it. The “blockchain” — the engine on which Bitcoin is built — is a new kind of distributed consensus system that allows transactions, or other data, to be securely stored and verified without any centralized authority at all, because (to grossly oversimplify) they are validated by the entire network. Those transactions don’t have to be financial; that data doesn’t have to be money. The engine that powers Bitcoin can be used for a whole array of other applications… Antonis Polemitis @polemitis Follow Currently at 89 categories of things that can be placed on blockchain. Not bad BTC-Twitter for 3 hours work. :) http://ledracapital.com/blog/2014/3/11/bitcoin-series-24-the-mega-master-blockchain-list … 4:33 AM - 12 Mar 2014 …with one huge caveat. As Michael Nielsen puts it, in his excellent, detailed explanation of how Bitcoin actually works: For [the blockchain] to have any chance of succeeding, network users need an incentive to help validate transactions. Without such an incentive, they have no reason to expend valuable computational power, merely to help validate other people’s transactions. And if network users are not willing to expend that power, then the whole system won’t work. The solution to this problem is to reward people who help validate transactions. Satoshi Nakamoto’s genius was twofold; technically, he built the world’s first(1) blockchain; socially, he lured people into powering it, using good old filthy lucre as an incentive. Which was very effective, but is now also a little awkward, as Bitcoin-as-a-currency has attracted a large number of … er … let’s diplomatically call them “colorful personalities,” and also, money-as-a-store-of-value is one field where in fact you probably do want some centralized authority, or at least insurance. I agree with the mordant observations on Twitter that it’s highly amusing watching the extremist fringes of the Bitcoin community slowly rediscover from first principles exactly why financial regulation exists in the first place. Meanwhile, though, the noise and smoke of the ongoing endless (and endlessly entertaining) Bitcoin sturm und drang has — ironically — obscured its real breakthrough; the blockchain. You see, it’s not that hard to imagine other blockchain-based systems which aren’t currencies and don’t attract as many “colorful personalities.” Suppose you replaced the Internet’s centralized Domain Name System with a blockchain for Internet names (like Namecoin) such that every DNS request included some proof-of-work effort. Or you used any blockchain (including Bitcoin’s) as a notary service. Or you built a new blockchain for crowdfunding. Or you replaced a centralized system which absolutely does need to be scrapped — that horrific barrel of worms known as TLS/SSL Certificate Authorities — with a blockchain-based solution powered at the browser level. Or you built a new distributed email service, with a blockchain for email addresses, and every time you checked your email you contributed to the network. Or a new distributed social network, with a blockchain verifying identities, powered by code that ran every time its users launched its app or visited its web page. (Technical note: this would obviously be a far more diffuse and granular system than Bitcoin’s, which runs on machines generally devoted 24/7 to mining. I don’t think that would require substantive changes to the algorithm, but while I’m a pretty good engineer I’m not an expert. That said, there’s no reason why a large number of relatively ephemeral clients would be fundamentally incompatible with a Hashcash-esque proof-of-work system, though I guess you might need a smaller subnet of persistent “supernodes” to maintain the blockchain.) To be clear, I’m not suggesting that some smart startup might turn around tomorrow and replace Gmail or Facebook with a blockchain-powered solution. But I am saying that some indeterminate number of years hence, as bandwidth improves, and processors grow ever more powerful, and storage gets ever cheaper, it’s not inconceivable that those massive server farms could be replaced, not with a “personal cloud” — a bad idea for many reasons — but by massive distributed peer-to-peer networks: open-source, encrypted end-to-end, and orchestrated in part by blockchains. I’m saying that I can at least envision, albeit vaguely, the decline of the Stacks. Which if you look at the Internet today seems like a pretty striking and revolutionary thing to say. For what it’s worth, I’m by no means alone in left field shouting that the blockchain is a big deal; heck, just look at Andreessen Horowitz over the last few months. And it seems likely that the blockchain, and Raft, and Spanner, and that great granddaddy of distributed peer-to-peer data called BitTorrent, are only the beginning; I expect more and more distributed-computing breakthroughs of comparable magnitude over the next decade, as the world’s searchlight minds turn to the forthcoming Internet Of Things. Last year I argued that “The Internet: we’re doing it wrong.” Now, though, only six months later, I see traces and hints that we’re finally making the first faltering motions towards doing it right. BitTorrent is thirteen years old, but it has only just now been done right (at least for pirates) in the form of Popcorn Time. Raft might be, in a sense, Paxos done right. Threadable looks like group communications done right (and, again, distributed, at least to the extent that email is distributed.) Keybase.io seems like a step towards PGP done right. TextSecure is cross-platform end-to-end-encrypted messaging done right. Maybe, just maybe, our online future is actually bright, and peer-to-peer, and encrypted end-to-end, and maybe even open-source and far less overtly commercial than today — and built, in part, on blockchains. Source
  8. By Ryan Whitwam on January 24, 2014 at 7:40 am The first thing to know about Bitcoin has nothing to do with how it works or what the current value of one is — of primary importance is the fanatical devotion Bitcoin users have to the mother of all cryptocurrencies. Many fans of Bitcoin promote the anonymous internet money at every turn, encouraging others to use it as a way to combat everything from government overreach to unethical banking practices. This is why cryptocurrencies are still a thing. Bitcoin enthusiasts scored a major victory when Overstock and Zynga started accepting Bitcoins recently, and that prompted one fan to start asking other internet companies what their plans were. Surprisingly, the one organization he got anywhere with was Google. Updated: Google has since issued a statement that it isn’t looking to incorporate Bitcoin — but as far as we can tell, the email conversation isn’t being contested. Basically, Google probably is investigating Bitcoin, but isn’t quite ready to publicly jump on the train. It was an email to Google+ head honcho Vic Gundotra that got a response. Gundotra forwarded the message to the Google’s commerce team, and a manager there confirmed that the company is indeed investigating how Bitcoin could be incorporated. Mountain View has been careful to say that there are no immediate plans to accept Bitcoin, but Ariel Bardin, VP of Google Payments did request the original emailer start a Google Moderator discussion to see what users wanted Google to do with Bitcoin. The entire exchange was detailed on the Bitcoin section of Reddit. Bitcoin has been on a steady rise over the last year, more than doubling in value over a few months. Even recent law enforcement actions against Tor network sites (where Bitcoin is very popular) and China’s crackdown on the currency haven’t dampened enthusiasm much — a single Bitcoin is still worth over $900. A year ago one Bitcoin could be exchanged for a mere $20. The question remains, what would Google do with Bitcoins? The overwhelming majority of Google’s business comes from Adsense, so clearly taking payments for ads in Bitcoin would have the largest impact and would make Bitcoin fans extremely happy. However, Google has to police its Adsense content very well to keep scams and illegal goods out. Having a paper trail aids in accountability, but Bitcoin is anonymous by design. As such, Google’s involvement with Bitcoin, if any, is likely to be more modest. Now that the word is out, though, I expect Google to do something if only to get brownie points from privacy advocates. Google sells various consumer digital goods like apps, music, and books through Google Play, and many of the suggestions pouring into the Google Moderator page are asking the company to enable Bitcoin and other cryptocurrencies in Google Wallet, and thus its entire content ecosystem. However, the act of paying 0.000012 BTC for an app lacks elegance, which is important in a consumer-facing venue like Google Play. Don’t expect a Bitcoin logo will be popping up in the Play Store any time soon. A solution that satisfies all parties might be to allow Bitcoin transfers directly into Google Wallet. It would be a quick way for users to make Bitcoins “real” and only requires that Google change one of its systems to accommodate virtual money. The Google Wallet debit card might finally get some traction as the fastest way to spend Bitcoins in the real world. http://www.extremetech.com/internet/175335-google-looks-into-accepting-bitcoin-but-realistically-its-options-are-very-limited
  9. At a $400 exchange rate and a $4.6 billion market cap, Bitcoin is booming. More skeptics, cheerleaders, and curious potential investors are talking about it than ever before. As the world wonders why it's doing so well, the peer-to-peer currency is on pace to hit two major milestones in the near future. Bitcoin’s market cap, which is more than double what it was just three weeks ago, is on pace to hit $5 billion around the time bitcoins hit $417, based on the current bitcoin count. As time passes and more bitcoins are mined, that magic number will go down. Earlier this month, the cryptocurrency sprinted past its previous all-time high exchange rate of $266. Referred to lovingly and derisively as "magic Internet money," it's now sitting at a $400 average across all major exchanges. The price of bitcoins has doubled in the past month. Will it be able to climb all the way to $500? Many investors believe so. If that sounds like delirious optimism, consider that at Bitcoin's current pace, it will hit $500 across all major exchanges by the end of November. That will mean a $6 billion market value, a full $1 billion gain in about two weeks’ time. No one but the most Pollyanna-ish Bitcoiner denies that the famously volatile currency will see its down days just as it has seen many ups lately. Even Bitcoin Magazine calls the latest boom a bubble in a sober and insightful look at the numbers behind the climb. But all previous Bitcoin crashes led to recoveries. Moreover, this market has more mature investors who know how to ride out turbulence better than ever before. They've been through crashes. With confidence in the currency rising, it's common to hear investors doling out advice on staying steady even when things inevitably get tough. Original Article
  10. E-commerce platform Shopify is already tackling the world’s newest form of currency. Today, the company announced that it now supports Bitcoin payment through Bitpay on checkout for stores using the platform. The feature isn’t quite ready to be rolled out for all yet; it was pulled briefly after launch for further testing, but the company says it should be back in “a few days.” Those interested in accepting Bitcoin on their Shopify stores can email [email protected] with their Shopify URL to get the new service added to their account once it’s back. Source
  11. Johannes Ullrich of the SANS Institute claims to have found malware infecting digital video recorders (DVR) predominately used to record footage captured by surveillance camera systems. Oddly enough, Ullrich claims that one of the two binaries of malware implicated in this attack scheme appears to be a Bitcoin miner. The other, he says, looks like a HTTP agent that likely makes it easier to download further tools or malware. However, at the present time, the malware seems to only be scanning for other vulnerable devices. “D72BNr, the bitcoin miner (according to the usage info based on strings) and mzkk8g, which looks like a simplar(sp.) http agent, maybe to download additional tools easily (similar to curl/wget which isn’t installed on this DVR by default),” Ullrich wrote on SANS diary. The researcher first became aware of the malware last week after he observed Hiksvision DVR (again, commonly used to record video surveillance footage) scanning for port 5000. Yesterday, Ullrich was able to recover the malware samples referenced above. You can find a link to the samples for yourself included in the SANS Diary posting. Ullrich noted that sample analysis is ongoing with the malware, but that it appears to be an ARM binary, which is an indication that the malware is targeting devices rather than your typical x86 Linux server. Beyond that, the malware is also scanning for Synology (network attached storage) devices exposed on port 5000. “Using our DShield Sensors, we initially found a spike in scans for port 5000 a while ago,” Ullrich told Threatpost via email. “We associated this with a vulnerability in Synology Diskstation devices which became public around the same time. To further investigate this, we set up some honeypots that simulated Synology’s web admin interface which listens on port 500o.” Upon analyzing the results from the honeypot, Ullrich says he found a number of scans: some originating from Shodan but many other still originating from these DVRs. “At first, we were not sure if that was the actual device scanning,” Ullrich admitted. “In NAT (network address translation) scenarios, it is possible that the DVR is visible from the outside, while a different device behind the same IP address originated the scans.” Further examination revealed that the DVRs in question were indeed originating the scans. These particular DVRs, Ullrich noted, are used in conjunction with security cameras, and so they’re often exposed to the internet to give employees the ability to monitor the security cameras remotely. Unlike normal “TiVo” style DVRs, these run on a stripped down version of Linux. In this case, the malware was specifically compiled to run in this environment and would not run on a normal Intel based Linux machine, he explained. This is the Malware sample’s HTTP request: DVR Malware HTTP Request The malware is also extracting the firmware version details of the devices it is scanning for. Those requests look like this: Firmware Scan Request While Ullrich notes that the malware is merely scanning now, he believes that future exploits are likely. Source
  12. Some believe that bitcoin’s anonymous properties are a bug, not a feature. This past January, New York financial regulator Benjamin Lawsky called for a crackdown on software that anonymizes transactions in the online digital currency, saying it will merely help criminals evade law enforcement. And one of the currency’s biggest supporters, venture capitalist Marc Andreessen, believes bitcoin will truly thrive only after it shrugs off anonymity protections. But some parts of the bitcoin community have other plans in mind. Even as regulators work to tie new identity restrictions to bitcoin businesses, a collection of projects is moving in the opposite direction, trying to preserve or even upgrade bitcoin’s properties as an ultra-private, untraceable payment system as anonymous as handing off a briefcase of unmarked bills. Last week saw the launch of Dark Wallet, a piece of bitcoin software that represents perhaps the most radical move yet to evade tracking of who spends and receives bitcoin. When it comes to describing the project’s intentions, Dark Wallet’s 26-year-old organizer Cody Wilson doesn’t mince words. “It’s just money laundering software,” he says. But despite the controversy that surrounds the idea of untraceable digital cash, efforts to make bitcoin anonymous serve a real need. Bitcoin transactions are public by default, visible to anyone who searches the blockchain, the distributed public ledger of all bitcoin payments that keeps it safe from forgery and fraud. Deny bitcoiners the ability to hide their identity, and they’re left with a serious privacy problem. “The problem is not just about how to buy drugs online,” says Ian Miers, a graduate researcher at Johns Hopkins focused on cryptocurrency privacy. “As bitcoin becomes more mainstream, it becomes an issue of how to fix consumer privacy.” The problem may be even bigger for companies. Legitimate businesses, for instance, may want to hide their transactions so that competitors can’t track their sales growth. Here are a few of the projects seeking a more private way to bitcoin: Dark Wallet Cody Wilson’s project with Amir Taaki and the anarchist group unSystem launched last Thursday with two particular methods for protecting its users’ identities. One is what it calls “CoinJoin.” Every time a user makes a payment with Dark Wallet, the program is set by default to combine the transaction with that of another Dark Wallet user attempting to make a payment around the same time. The communications to set up that multiparty transaction are encrypted, so that detecting who paid whom becomes far more difficult. Eventually, Dark Wallet plans to expand CoinJoin to combine payments of three or more users, creating an even more tangled web of money flows. On top of protections for senders, Dark Wallet adds another one for receivers that it calls “stealth addresses.” When a user publishes a stealth address instead of a normal bitcoin address as his or her public P.O. box for receiving funds, any money sent by another Dark Wallet user to that address goes through an extra obfuscating process. Instead of appearing in the blockchain as being sent to that stealth address, Dark Wallet encrypts the address in such a way that only the recipient can recognize it and sends the money to that encrypted address. The receiver’s Dark Wallet app scans the blockchain for payments encrypted to his or her stealth address and decrypts them to claim the funds. Crucially, no evidence remains in the blockchain that ties the sender and recipient. Shared Coin Dark Wallet isn’t the only wallet that offers to mix up its users’ coins to foil surveillance. So does one of the most popular bitcoin wallets already in use: Blockchain.info. An initiative from the company called Shared Coin implements CoinJoin to protect transactions as large as 50 bitcoins. But users have to choose to turn Shared Coin on. Unlike with Dark Wallet, it’s not enabled by default. And Blockchain gives users a warning that, although it doesn’t log their transactions, it’s subject to laws that might compel it to track their transactions in some situations. “The server does not need to keep any logs and transactions are only kept in memory for a short time,” reads a disclaimer on Blockchain’s site. “However, if the server was compromised or under subpoena it could be forced to keep logs.” Darkcoin The most technically solid method for protecting the anonymity of bitcoin transactions may be to create a new bitcoin altogether, starting with privacy as a first principle. That’s the approach taken byDarkcoin, an alternative cryptocurrency launched in January. Darkcoin has already put 4.1 million digital coins into circulation, which have already gained a value around $1.40 each, one of the fastest ever appreciations of cryptocurrency among the flock of “altcoins” that have chased bitcoin’s success. Like Dark Wallet and Shared Coin, Darkcoin implements CoinJoin, though it calls the feature DarkSend. It take a different approach to that transaction combination trick, though, using a distributed collection of servers around its network that negotiate CoinJoin’s multiparty payments. Anyone can pay a thousand Darkcoins to set up one of those DarkSend servers and, as compensation, will be entered into a random lottery that periodically pays out 10 percent of all new Darkcoins as they’re mined and put into circulation That incentive function hasn’t been set up yet, but already, 42 Darkcoin users are hosting DarkSend servers, according to Evan Duffield, the 32-year-old programmer in Phoenix, Arizona who serves as Darkcoin’s main developer. And as with Dark Wallet, every Darkcoin payment will be anonymized unless users choose to disable its CoinJoin protection. “The whole blockchain will be a fog,” says Duffield. Zerocoin Mixing up transactions makes tracing cryptocurrency payments difficult. One team of cryptography researchers at Johns Hopkins wants to make it mathematically impossible. Later this year, they plan to release Zerocoin, another alternative to bitcoin that uses a technique to anonymize its coins that’s much stronger than Dark Wallet’s or DarkCoin’s, and that’s impossible with bitcoin as it currently functions. Zerocoin uses what cryptographers call “zero knowledge proofs,” a seemingly magical but decades-old trick that can prove a mathematical statement is true without revealing the contents of what’s being computed. That feat allows Zerocoin transactions to be recorded in its blockchain and checked for fraud and forgery without revealing any other information about which coins are being spent or who is spending them. “The only information that ever makes it into the blockchain is the fact that the transaction occurred,” Matthew Green told the audience at the Real World Crypto conference in New York earlier this year. “That’s actually very beautiful.” Zerocoin was originally conceived as an add-on to bitcoin, but it didn’t find enough supporters among the bitcoin developer community to convince them to adopt its code. But that earlier version of its code is also being integrated into Anoncoin, an independent cryptocurrency project. Anoncoin, Zerocoin, and Darkcoin are all unlikely to ever achieve the same acceptance for goods and services as bitcoin has. But it’s worth nothing that if exchanges allow the trade of bitcoins for these more private currencies without requiring identification, they could serve as giant laundry services, anonymizing any funds that are traded into and then out of their networks. Tor Integration The blockchain isn’t the only way to identify bitcoin users. So is old-fashioned tracing of their IP address. John Hopkins’ Miers uses the analogy of an old-fashioned briefcase full of cash: Even if the bills inside are unmarked, the bagman still needs to wear a ski mask and a hoodie to stay anonymous. That’s where the anonymity software Tor comes in, triple-encrypting users’ internet traffic and bouncing it through servers around the world to obscure its origin. Some bitcoin wallets already integrate Tor, such as Blockchain.info. Dark Wallet plans to add Tor to future versions of its software. Soon, that Tor integration will be the norm for bitcoin programs. Mike Hearn, a core bitcoin developer and head of the Bitcoin Foundation’s law and policy committee, says he built a prototype of a Tor-integrated version of bitcoinj, the software that powers popular bitcoin wallets like Hive, Multibit, and Android Wallet. That change is now being built into the public version of bitcoinj by another well-known bitcoin developer known as devrandom. While Hearn says that adding Tor to bitcoinj will represent a significant upgrade to bitcoin’s privacy, he admit it’s not clear whether Tor or any other known protective measure can foil the sophisticated traffic analysis tools of agencies like the NSA, were they to turn their powerful surveillance mechanisms toward tracing bitcoin transactions. “There are no silver bullets in this space,” he says. “But this will make it much harder.” Source
  13. With the imminent release of any high profile video game, there inevitably are a number of pirate copies made available through torrents on peer-to-peer networks. Choosing to download one of these illegal copies of a game comes with a lot of risk on the part of the downloader. If you’re lucky, you get a clean version of the game, but more often than not there’s malware attached. In the case of Watch Dogs, which is officially released tomorrow, one pirate has decided to use the game for a get rich quick scheme. Their torrent version, known as the Skidrow release, bundles with it a hidden Bitcoin miner virus. Anyone attempting to run the game from this torrent will also activate the Bitcoin miner on their PC, and in turn start generating Bitcoin for whoever added the miner to this release. The side effect for the user is a big chunk of CPU time dedicated to mining Bitcoin for someone else and no actual guarantee the game will work. That means more heat and power use, and an unstable PC in some cases. Your PC is also running a virus, so who knows what else it will be susceptible to running in the future. There are apparently two versions of the Skidrow releases ofWatch Dogs–the real one and a fake one which includes theBitcoin miner virus. Source
  14. Someone out there likes anonymous money. In only a month, the little-known bitcoin alternative known as Darkcoin has rocketed nearly tenfold in value–from around 75 cents a coin to almost seven dollars. Its selling point: Darkcoin offers far greater anonymity than bitcoin, mixing up users’ transactions so that it’s incredibly difficult to trace a payment to a person. And though few have yet to accept that more-anonymous coin for actual goods and services, the promise of Darkcoin’s privacy features seems to have sparked a miniature boom. It’s one of the fastest growing among the wave of cryptocurrencies that’s followed bitcoin’s success, with the total value of its combined coins topping out at nearly $30 million. Darkcoin, supporters argue, serves a real privacy need. Despite its reputation for being more anonymous than traditional money, the bitcoin network actually allows anyone to see every transaction on a public accounting ledger known as the blockchain. Users often have to take extra steps, like mixing their coins in a “laundry” service, to prevent those addresses from being tied to their identity by any government or corporation that wants to snoop. Darkcoin adds an extra layer of privacy by automatically combining any transaction its users make with those of two other users–a feature it calls Darksend–so that anyone analyzing the blockchain has a harder time figuring out where a particular user’s money ended up. “A large community believes that the way bitcoin’s blockchain is designed is a problem,” says Evan Duffield, the 32-year old Arizona-based software developer who launched Darkcoin in January. “Darkcoin has this anonymity aspect to it, which is attractive to a lot of people.” Darkcoin’s exchange rate with the dollar and market cap over the last month. Darkcoin’s uncanny growth, of course, may also be fueled by speculators who see an opportunity to jump on a hot commodity. And given how wildly it’s appreciated in its short life, there’s no guarantee it won’t crash just as fast. But Darkcoin’s price increases may also be linked to real changes in its features, says Kristov Atlas, a bitcoin consultant and Darkcoin fan. He argues that its value comes in part from its unique properties as a payment system, not just as an investment vehicle. The currency’s first big price jump occurred in late April, for instance, when its Darksend privacy trick was initially switched on for real transactions. “It’s not purely a speculative bubble,” Atlas says. “There’s some solid indications the market price is currently based on the fundamental value of the coin.” Darkcoin’s price may in fact be “manipulated” by investors, says Allen Price, a trader in the bitcoin alternatives known as “altcoins.” But he says it’s already outlasted his expectation that its price growth was caused by a pump-and-dump scam. “I had sort of smugly stood to the side waiting for the big, inevitable crash with an ‘I told you so’ ready,” says Price. “But no crash ever really came, and it’s been kind of an ongoing success for investors.” Much of the currency’s more recent price increase, says Duffield, may stem from its system of financially rewarding users whose machines serve as the coordinators of its Darksend transactions. Anyone can become make their computer into one of those coordinators, which Duffield calls “master nodes,” by proving that they’ve paid a thousand darkcoins. In exchange, they reap ten percent of all new coins added to the Darkcoin network, which are distributed among the master nodes as an incentive for their work. Duffield says Darkcoiners seeking those rewards created 170 master nodes in the last month, tying up 170,000 darkcoins, a number that significantly decreased the currency’s supply and has likely helped raise its price. Darkcoin’s creator also offers another, even stranger explanation for the currency’s value increase. Like bitcoin, Darkcoin can be “mined” by anyone who repeatedly computes a certain hash function. Darkcoin’s unique hashing algorithm means it’s almost as easy to mine it with a normal CPU as it is with the hotter-running GPU chips that are better suited to mining bitcoins. As the weather gets warmer, more miners may be turning to Darkcoin to exploit cheaper chips that don’t require as much cooling, Duffield says. “You get almost as much bang for your buck with a CPU as a GPU,” he says. “That’s drawing people over because the summer’s coming.” Of course, the simplest theory explaining Darkcoin’s growth is, well, darker: It may be becoming a convenient tool for the black market. Bitcoin, after all, has become the currency of choice for more than a dozen websites that model themselves on the now-defunct Silk Road marketplace, running on the Tor anonymity network and selling drugs, forgeries and other contraband. Only a couple of online stores currently accept Darkcoin for their products, like a wine shop and a UK-based seller of cannabis seeds. But some users may be trading bitcoins for darkcoins and back again, using the Darkcoin network as a giant bitcoin-laundering service. Those laundry transactions may be part of what’s driven Darkcoin’s massive trade volume, which has recently reached millions of dollars a day. “It’s sort of a private on-ramp and off-ramp into bitcoin,” says Atlas. Duffield insists–and those who see financial privacy as a fundamental value may even believe him–that the black market isn’t the main driver of his cryptocurrency’s growth. “I don’t see much chatter about using it for illegal things,” he says. “It’s a neat technology and people want to invest in it because it’s useful.” Darkcoin is just one of the growing number of projects attempting to make cryptocurrency payments more private and untraceable, some of which have no illusions about how they’re enabling illicit commerce. Earlier this month the crypto-anarchist group unSystem launched Dark Wallet, which it explicitly describes as “money laundering software.” A group of researchers at Johns Hopkins plans to launch Zerocoin later this year, a bitcoin alternative that uses a new mathematical trick called a “zero knowledge proof” to give its users a coin that’s theoretically completely untraceable. If Darkcoin does catch on among real sellers of goods and services–legal or not-so-legal–expect its price explosion to continue. “We’re just waiting for that,” says Duffield. “When it happens, it’ll drive a whole other level of appreciation.” Source
  15. By Shona Ghosh Posted on 9 Jan 2014 at 15:21 Millions of PCs may have been infected by malware inserted into ads on Yahoo websites - and then used to mine bitcoins. Yahoo confirmed this week that hackers had managed to insert malware into ads displayed on some of its European sites, but hasn't said how many users have been affected. Security company Light Cyber estimates that several million PCs have been infected, and found the malware had been used to install Bitcoin-mining software on some machines. Separate estimates this week from security firm Fox-IT suggest the UK has one of the highest numbers of affected users. Light Cyber founder and vice president for product and strategy, Giora Engel, said the hackers were potentially building a huge network of Bitcoin-mining PCs, since the task is too labour intensive for one machine. He added that the malware had delivered other tools that gave hackers control over infected PCs. "This campaign downloaded a variety of different tools - some were malware to enable attackers to control each infected PC and steal passwords," he told PC Pro. "Other tools were more specific – the Bitcoin mining tool is not malware itself, it's something anyone can download and generate Bitcoin." Engel estimated that, with several million machines at their disposal, the hackers could be making $10,000 (approximately £6,000) a day. Security companies have said the number of Bitcoin-related attacks will rise this year, after the virtual currency shot up in value. One Bitcoin is currently worth around £500, though its value fluctuates. http://www.pcpro.co.uk/news/security/386452/yahoo-malware-turns-millions-of-pcs-into-bitcoin-network
  16. Zynga said it would allow users to make purchases in some games using Bitcoins The value of Bitcoin has topped $1,000 (£610) again after social gaming firm Zynga said it would start accepting the virtual currency as a payment option. Zynga is perhaps the most significant video games firm to accept bitcoins to date. The virtual currency has been gaining in popularity but its value has been highly volatile in recent weeks. It peaked at $1,250 in November last year, but fell sharply in December after China restricted trade. According to the South China Morning Post, the value of a single Bitcoin fell to as low as 2,560 yuan ($421, £258) in December, after China's move. On Monday, a single Bitcoin was trading close to $1,030 on MTGox, one of the virtual currency's major exchanges. Zynga follows Ouya, the Android-based video games console-maker, which began accepting payments for its hardware in bitcoins last month. The Humble Bundle - an organisation selling a changing selection of indie games - also began accepting bitcoins in 2013. 'Expanded payment options' Supporters of Bitcoin, which is not backed by a central bank, have been pushing for its increased usage. Its popularity and value surged last year after a US Senate committee described virtual currencies as a "legitimate financial service". Zynga said it had tied up with BitPay, a Bitcoin payment service, to allow users to purchase virtual goods in some of its games using the facility. "In response to Bitcoin's rise in popularity around the world, Zynga, with help from BitPay, is testing expanded payment options for players to make in-game purchases using Bitcoin," the firm said in a post on Reddit Concerns Concerns over the use and risks associated the virtual currency have also grown. Bitcoin became popular, in part, due to it being difficult to trace transactions that use it. The currency has been linked to illegal activity online. Last month, the European Banking Authority (EBA) warned the public about the potential risks of using bitcoins. "Currently, no specific regulatory protections exist in the European Union that would protect consumers from financial losses if a platform that exchanges or holds virtual currencies fails or goes out of business," the EBA said. China, the world's second largest economy, has also banned its banks from handling Bitcoin transactions, saying they had no legal status and should not be used as a currency. At the same time, there have been concerns that the rise in Bitcoin's value has been triggered by speculators looking to cash in on its popularity. Alan Greenspan, former US Federal Reserve chairman, has called the rapid rise a "bubble". How Bitcoin works Bitcoin is often referred to as a new kind of currency. But it may be best to think of its units being virtual tokens rather than physical coins or notes. Like many assets its value is determined by how much people are willing to exchange it for. To process Bitcoin transactions, a procedure called "mining" must take place, which involves a computer solving a difficult mathematical problem with a 64-digit solution. For each problem solved, one block of bitcoins is processed. In addition the miner is rewarded with new bitcoins. This provides an incentive for people to provide computer processing power to solve the problems. To compensate for the growing power of computer chips, the difficulty of the puzzles is adjusted to ensure a steady stream of about 3,600 new bitcoins a day. There are currently about 11 million bitcoins in existence. To receive a bitcoin a user must have a Bitcoin address - a string of 27-34 letters and numbers - which acts as a kind of virtual postbox to and from which the bitcoins are sent. Since there is no registry of these addresses, people can use them to protect their anonymity when making a transaction. These addresses are in turn stored in Bitcoin wallets which are used to manage savings. They operate like privately run bank accounts - with the proviso that if the data is lost, so are the bitcoins owned. http://www.bbc.co.uk/news/technology-25617931
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