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  1. I tried to pay with bitcoin at a Mexico City bar—it didn’t go well After 10 years, Bitcoin is still searching for practical applications. Enlarge / Me at Bitcoin Embassy Bar in Mexico City. Amanda Rohn I traveled to Mexico City last week to have a relaxing vacation with my wife—not to find stories for Ars Technica. But our Airbnb apartment happened to be around the corner from a bar called Bitcoin Embassy. How could I not check it out? The bar included a bitcoin ATM that lets users trade physical cash for bitcoins, and vice versa (there are more than 5,000 bitcoin ATMs like this around the world). Bitcoin Embassy offered a 10% discount if I paid for my tab in bitcoin. So I inserted a 500 peso note—about $25—into the machine. I downloaded a bitcoin wallet app from Google's Play Store to my Pixel smartphone. It generated an address for receiving the funds and displayed it as a QR code the ATM could scan. A few second later, the ATM spit out a receipt stating "Bitcoin purchased: 0.00245589." There was just one problem: my wallet app didn't show any bitcoins being received. We sat down at the bar and ordered drinks and a pizza while we waited for the bitcoins to arrive. By the time we'd finished our food, my app still showed a bitcoin balance of 0. The receipt showed the bitcoin address where the funds were supposed to be sent—bc1q7ayu350m8rntrw2uvewudrhqe5gj7d8d9ndggv—and I double-checked to make sure this address matched the one in my wallet. It did. But no bitcoins. So we gave up and paid with a conventional credit card. After leaving the bar, I sent off an email to the support address listed on my receipt. The next morning, I got a response: "Transactions under [1,000 pesos] are taking a day to two, in the course of today they will reach the wallet." I finally got my bitcoins around 6pm. I feel a little bad for leading with this anecdote. Everything else about the bar was great. It had good food, friendly service, and a classy—if nerdy—aesthetic. I'd probably visit regularly if it were in my neighborhood. But ultimately this is a "you had one job" situation. The point of a bitcoin bar is to showcase the advantages of bitcoin—and that was the one part of the experience that didn't go well. My experience at Bitcoin Embassy epitomizes the state of the larger bitcoin world. The fact that people continue to start businesses like Mexico City's Bitcoin Embassy demonstrates that there's still plenty of enthusiasm for the virtual currency, even after last year's crash in bitcoin's price. Yet the experience of using bitcoins to actually pay for things—supposedly its main application—remains rather rocky. The story of Bitcoin Embassy Enlarge / Lorena Ortiz, co-founder and manager of Bitcoin Embassy. Lorena Ortiz Before leaving the bar, I got contact information for General Manager Lorena Ortiz. She responded almost instantly on WhatsApp and agreed to meet me at the bar at 5pm the next day. She's charming, with accented but excellent English. "I'm kind of a punk and metal fan, so the ideology behind bitcoin was really appealing to me," Ortiz told me as we sat at Bitcoin Embassy Bar. Ortiz is the co-owner of the bar along with her boyfriend, David Noriega, an entrepreneur who owns a chain of comic book shops. Ortiz is a relative newcomer to the technology, dating back to 2017. But she told me that Noriega has been involved in bitcoin since around 2011. He operates a network of bitcoin ATMs inside his comic book shops—and now Bitcoin Embassy Bar—and hopes to add ATMs to other businesses in the near future. Noriega had long dreamed of opening a bitcoin-themed coffee shop—something that has become fairly common around the world. "I told him we can do it together if you want to," Ortiz said. But she suggested changing the concept from a coffee shop to a bar. The couple signed a lease in December 2018 and spent about four months renovating the space. The results are gorgeous. A monitor mounted over the bar shows the price of bitcoin and other cryptocurrencies in real time. A large glass case behind the bar offers bitcoin merchandise for sale. I bought a Bitcoin Embassy T-shirt. And, of course, there was a bitcoin ATM along one wall. Ortiz told me that my delayed bitcoin payout was unusual. Customers trying to cash in their bitcoins for pesos typically have to wait for 10 or 15 minutes for the transaction to be accepted by the bitcoin blockchain. She said she hadn't heard of customers suffering long delays buying bitcoins. And she insisted that, once I had my bitcoins, the purchasing process would have been simple. She demonstrated how the payment would have worked with her own smartphone. The bar's point-of-sale system generated an electronic invoice and displayed a QR code on its screen. Ortiz pointed her smartphone at it and the transaction cleared in a few seconds. The bitcoin world is still searching for its killer app On the one hand, there's no denying the continued vitality of the bitcoin community. There are a number of other establishments called "bitcoin embassy," from Poland to Australia. Most are co-working facilities rather than bars, but clearly Ortiz and Noriega are just two of many people around the world who are inspired by the bitcoin vision. At the same time, practical applications remain elusive 10 years after bitcoin's creation. The bar regularly hosts meet-up events for the bitcoin community, so I asked Ortiz how people were using bitcoin in Mexico and across Latin America. She quickly rattled off examples of people creating new blockchains for various purposes—from storing medical data to uniquely signing art. But when I asked for examples of people making practical uses of bitcoins specifically, she had a tougher time coming up with examples. A lot of people have talked about using bitcoin for remittances as an alternative to companies MoneyGram and Western Union. But Ortiz said she hadn't heard of many people doing this. She told me the chef who designed Bitcoin Embassy's menus asked Ortiz about using bitcoin to send money from overseas back to his family in Mexico. She explained the technology and walked him through the process. However, she said, "He couldn't understand very well, so he hasn't done it yet." One of the bar's Mezcal suppliers has asked Ortiz about using bitcoin to accept payments when exporting its product. However, she said, "I haven't heard of anyone that uses it that way." She said she had heard of an Indian bitcoin payments company that was using bitcoin to pay its employees in Mexico. Does Bitcoin Embassy pay its employees in bitcoin? "I always tell them I can pay you in bitcoin if you want to, but they don't want to," Ortiz says. Of course, it's not uncommon for new technologies to start out as toys for elite nerds before they mature into mass-market appeal. The first PCs in the 1970s seemed useless to the average consumer, and the Internet of the 1980s was hardly user-friendly. But visiting this Mexico City bar, I was struck by how little things have changed since I started covering the technology in 2011. Over the last eight years, the bitcoin community—and bitcoin's price—has grown by orders of magnitude. The bitcoin economy has much more sophisticated infrastructure for storing and trading bitcoins. But practical applications for bitcoin—beyond trading it, holding it, and hoping to get rich—seem almost as elusive today as they were eight years ago. Source: I tried to pay with bitcoin at a Mexico City bar—it didn’t go well (Ars Technica) (To view the article's image gallery, please visit the above link)
  2. Hugh Haney was identified when he tried to cash out on an exchange. A man was arrested on July 18 for trying to launder $19 million of bitcoin earned on the darknet drug marketplace Silk Road, according to Homeland Security. Hugh Haney faces one charge of money laundering and one count of engaging in a financial transaction using illegally-gotten gains. If guilty, he could face up to 30 years behind bars. Homeland Security identified Haney after he allegedly moved stolen funds to an unidentified crypto exchange. Haney claimed the large amounts of bitcoin were proceeds from bitcoin mining, but Homeland Security says it has evidence which can trace transactions on the Bitcoin blockchain back to the Silk Road. Once the bitcoin—which was earned between 2012 and 2013—was transferred into cash, Homeland Security officers say that’s when they seized the money. Silk Road was one of the original and most popular darknet marketplaces for buying and selling drugs, and other illegal (and legal) items. It was shut down by the FBI in 2013 and its founder Ross Ulbricht was later sentenced to life in prison without parole. In its two and a half year lifespan, it was reported to have more than 100,000 customers. Source
  3. 10 bitcoin kidnapping and theft cases from around the world By Jai Pratap There have also been cases of stealing millions of dollars worth of bitcoins. Here's the list of 10 infamous bitcoin theft and kidnapping. Since the bitcoin has become mainstream, crime related to cryptocurrency has also risen around the world. There have been multiple cases when a kidnapper asks for ransom in cryptocurrency so that he can take advantage of the transaction’s nature. Some kidnappers managed to escape the police while others got caught. The unregulated and anonymous nature of cryptocurrency has attracted the attention of many organized criminal groups, and crimes related to it are continuously increasing around the world. There have also been cases where hackers have managed to steal millions of dollars worth of bitcoins. According to cybersecurity company carbon black, around 1.1 billion dollars worth of cryptocurrency was stolen alone last year. And apparently, it was easy for hackers to commit this crime, most of the hackers used malware that is readily available on the dark web, and it only cost around 1 dollar. Here’s the list of 10 infamous bitcoin theft and kidnapping that took place around the world. 1. American Businessman kidnapped for one million dollars in bitcoin In one of the most recent high profile kidnapping where kidnapper asked for a ransom in bitcoin took place in Costa Rica. According to reports, a local gang in San Jose kidnapped the American businessman William Sean Creighton Kopko on September 24 of last year and asked for one million dollars in bitcoin from the family. Kopko owns a gambling business “5Dimes’. After a few months of kidnapping, the family paid the kidnappers what they asked for, but Kopko never returned home. In January, police arrested 12 people as suspects, and 3 of them had already flown to Spain, but police managed to capture them too. As of now, there is no trace of the businessman, and the police are still investigating. 2. Kidnappers asked for 10 million dollars in the cryptocurrency in Norway. Anne-Elisabeth Falkevik Hagen, 68, disappeared from her home on 3st1 October, the wife of Norweigan business tycoon Tom Hagen, one of the wealthiest man of the country. This time kidnappers asked for 10 million dollars in cryptocurrency Monero. According to police, Mrs. Hagen was in her house in Oslo when she was kidnapped, and a note saying that” if the ransom is not paid, she will be killed” was found. Her husband was the first person to see the note. The police are still investigating the case and have told the family not to give in to the demands of the kidnapper. According to many reports, the chances of Mrs. Hagen being alive are very slim. As the case has become a high profile, police are also looking at the situation with different angles. Tom Hagen has a net worth of 200 million dollars and owns 70% of the electricity company Elkraft. The police went public with the case to generate tips, and they also mentioned that international authorities are co-ordinating to catch the kidnappers. 3. The kidnapping of a Teenage boy in South Africa. In May of last year, a teenage boy was kidnapped in Mpumalanga, South Africa. Kidnappers asked for a hundred thousand dollars in bitcoin for the safe return of the boy. After a few months of hard work by police, they managed to grab the kidnappers. In November one kidnapper was arrested from Germiston in Gauteng, while the second was arrested in Ladysmith, KwaZulu-Natal, on December 30. 13-year boy safely returned home to his family, and it was not disclosed whether the ransom was paid or not. This was the first kidnapping in the country where the payment was asked for to be paid in bitcoin. 4. Blockchain expert kidnapped in Ukraine On December 26, Pavel Lerner, a leading analyst and blockchain expert, was abducted by masked people. According to a local news website, Lerner encountered six people in masks, and they pushed him into a minibus on gunpoint. Lerner worked in EXMO, a Uk based crypto exchange firm. Kidnappers asked for one million dollars in bitcoins. Just a few weeks later Lerner was released by the kidnappers when they got the ransom amount. Police never found out who the kidnappers were and it also remained disclosed who paid the ransom money. 5. $840,000 Bitcoin ransom plot foiled in India A gang of 7 members in Rajasthan, India kidnapped two crypto traders Shaikh and Shazad and asked for 80 bitcoins worth of 850,000 dollars. But the plan did not succeed, and police arrested al the members of gangs in operation that went for 13 hours. Locals reported police about a man with a gun on a road, and police grabbed the man after 20 minutes of chase, and then he told the police about his partners that were near in building. After long search police on July 15, late-night arrested all members. Police said media that this gang had previously been involved in extortion and other crimes as well. 6. Kidnapping for bitcoin in NewYork Earlier last year, a businessman was kidnapped from a cab when he was heading home. The kidnapper on gunpoint asked the businessman to give his apartment keys and 24 digit password to his hardware wallet that stored his cryptocurrency. The businessman was able to escape from the cab, but he had given his keys and password to the kidnapper. Meza (kidnapper) went to his home and transferred half-million dollars worth of Ethereum to his account. Later he was captured by the police as he was caught on the apartment building’s surveillance camera. 7. Ransomware crypto locker In 2013, Crypto Locker gave its victims three days to pay the ransom via bitcoin or else their private key would be deleted permanently. As many as 40% of people gave bitcoin in ransom, and around 27 million dollars worth of transactions happened because of that malware. Some users got their money with the help of authorities. Scammer’s total ransom that he got away with is estimated to be around 3 million dollars and it was never found out who was behind the scam. 8. HC7 Planetary ransomware HC7 Planetary is ransomware increasingly affecting machines across the globe. The software infiltrates a computer and goes on to infect other devices on a given network. This ransomware asks up to 5,000 dollars in Ethereum to restore access to the affected system. This malware has affected many systems so far, but as security technology is getting better most of the ransomware is easy to detect. 9. Ryuk ransomware collected 3.75 million dollars in bitcoin Ryuk in just five months of this year has collected 705 bitcoin in ransom, which is worth of 3.75 million dollars. This ransomware encrypts all data of the host and locks it until the victim contacts the hacker and pays the ransom in Bitcoin. The highest ransom has been up to 99 Bitcoin. 10. Israelian hacker stole 1.7 million dollars from Europeans Gigi, a 31-year old from Israel, reportedly stole Bitcoin, Ethereum, and Dash from various foreigners, including Belgians, Dutch, and Germans. So far, this cybercriminal has stolen 1.7 million dollars in multiple cryptocurrencies. Gigi used malware that would attack the victims’ computers and allow him to take cryptocurrencies. Gigi is currently under arrest and is yet to be convicted of his crimes. Source
  4. LONDON (Reuters) - Bitcoin fell 8% on Tuesday, breaching $10,000 for the first time in two weeks after U.S. lawmakers grilled Facebook on its cryptocurrency plans, as political and regulatory scrutiny of digital coins intensifies. The biggest cryptocurrency fell to $9828.89 by around 1630 GMT after David Marcus, the company’s top executive overseeing the planned Libra project, answered questions from the Senate Banking Committee. Earlier in the day, bitcoin had lost around 3%. Traders said the trigger for the selling was not immediately clear. During the testimony, a U.S. senator said Facebook was “delusional” to believe people will trust it with their money as the social media giant fights to get Washington onside for its planned Libra project, aimed for launch in 2020. Source
  5. LONDON (Reuters) - Bitcoin slumped more than 10% over the weekend to a two-week low as fears of a crackdown of cryptocurrencies grew on mounting scrutiny of Facebook’s planned Libra digital coin. Bitcoin fell 11.1% from Friday to $9,855 early on Monday, its lowest since July 2. The original cryptocurrency slumped 10.4% on Sunday alone, its second-biggest daily drop this year. It was last up 1.3% at $10,319. Politicians and financial regulators across the world have called for close scrutiny of Facebook’s Libra coin, with concerns ranging from consumer protection and privacy to its potential systemic risks given the social media giant’s global reach. In a sign of widening U.S. attention, a proposal to prevent big technology companies from functioning as financial institutions or issuing digital currencies has been circulated for discussion by Democratic lawmakers, according to a copy of the draft legislation seen by Reuters. U.S. President Donald Trump had last week criticized bitcoin, Libra and other cryptocurrencies, demanding that firms seek a banking charter and subject themselves to U.S. and global regulations if they wanted to “become a bank”. Bitcoin, which initially shrugged off Trump’s Tweet, fell sharply after U.S. Federal Reserve Chairman Jerome Powell called for a halt to Facebook’s project until concerns from privacy to money-laundering were addressed. “Together they have increased the tail risk that the U.S. will look to crack down on it in some way,” said Jamie Farquhar, portfolio manager at crypto firm NKB Group in London. Underscoring the growing attention on Facebook’s plans, Japanese authorities have also set up a working group to look at Libra’s possible impact on monetary policy and financial regulation, government sources told Reuters. European Central Bank policymaker Benoit Coeure is due to deliver a preliminary report on the matter at a meeting of G7 finance ministers this week in Chantilly, north of Paris. Bitcoin climbed nearly 55% in nine days after Facebook unveiled its plans for Libra on June 18, touching an 18-month high of nearly $14,000. The project has boosted hopes among some investors that cryptocurrencies could gain wider acceptance. Source
  6. Founder and operator of defunct bitcoin exchange Bitfunder gets 14 months jail time for lying to regulators about the loss of more than 6,000 bitcoins. A crypto criminal case that dates back to 2013 has finally come to an end. The founder and operator of the now-defunct Bitcoin exchange Bitfunder, Jon Montroll, was sentenced yesterday to 14 months in jail for lying to federal regulators about a hack that cost his customers more than 6,000 bitcoins—worth nearly $70 million at today’s prices. Montroll allegedly defrauded his customers by failing to disclose a hack of the exchange in July 2013. The Bitfunder operator then attempted to cover it up by misappropriating their funds to hide the lost bitcoins, according to federal prosecutors. The ordeal initially caught the eye of the U.S. Securities and Exchange Commission in the fall of 2013. When questioned about his bitcoin exchange’s operations and the breach of its systems by the SEC in November 2013, Montroll allegedly misled regulators, assuring them that his exchange’s funds were safe through a phony screenshot of balance statements. Montroll pleaded guilty to federal charges of securities fraud and obstruction of justice and was sentenced to 14 months in prison and three years probation by a federal judge in the Southern District of New York. But the trouble doesn’t end there for Bitfunder’s founder, who also faces civil charges stemming from the case. In February 2018, the SEC charged Montroll with “operating an unregistered securities exchange and defrauding users of that exchange” in a civil-enforcement action. The Commission also alleged that Montroll sold “unregistered securities” that were supposedly “investments” in his business, and absconded with those funds as well. Source
  7. The Presidential manure is causing Bitcoin’s price to come up roses. Please sir, may we have another? Crypto Twitter had a field day yesterday President Trump delivered his tuppence-worth about Bitcoin and Facebook’s Libra project. “I am not a fan of Bitcoin and other cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air,” said the President, in his first-ever tweet on the subject. “If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations, just like other Banks, both National and International,” he added. But for cryptocurrency, as a whole, his tweets were nothing except good news. Here’s why. 1. As Trump knows, there’s no such thing as bad publicity. For cryptocurrency, it’s all about adoption. But how can you adopt something if you don’t even know what it is? Trump’s tweet to his 62 million followers presumably reaches some millions of people who are, shall we say, not super sophisticated about crypto. Indeed, Google searches for Bitcoin spiked post-Trump tweet. Coinbase CEO, Brian Armstrong tweeted that the POTUS tweets mark the third stage in the four stages that will lead to adoption: “getting ignored, getting laughed at, getting fought, and then winning.” And Jeremy Allaire, the chief executive of Goldman Sachs-backed Circle, tweeted that Trump’s tweets could be the “largest bull signal” for Bitcoin of all time. Within half an hour of Trump’s tweet, Bitcoin had risen by 2%. 2. The enemy of my enemy is my friend. If Trump is for something, automatically, much of the U.S. and the rest of the world will take the other side. Presidential hopeful Democrat Andrew Yang is already on the side of ethical crypto. Trump being opposed to it will only make the issue political, and force the rest of the pack to declare themselves. Indeed, Trump’s ignorant rant might even force Rep. Maxine Waters to soften her hardline, anti-Facebook position. She sure doesn’t want to be Trump’s comrade in arms. 3. Trump will focus his attacks on Facebook History will not remember Donald Trump as a great intellect. It will be far easier for him to rail against Facebook—which he’s already targeted as being biased against the Right. That will only increase the onus of the social network to spend gazillions of dollars appeasing regulators—which will benefit bitcoin and the rest of the crypto industry. Pull up your lawn chair and grab some popcorn, kids while we watch this play out. Source
  8. LONDON (Reuters) - Bitcoin dipped almost 8% on Thursday, extending losses the day after U.S. Federal Reserve Chairman Jerome Powell called for a halt to Facebook’s Libra cryptocurrency project until concerns ranging from privacy to money-laundering were addressed. The original cryptocurrency initially fell 7.7% to $11,164 in early morning trade, following a 3.8% slide on Wednesday after Powell's testimony on monetary policy before the U.S. House of Representatives Financial Services Committee. It was last down 4.5%. Other major cryptocurrencies including Ethereum and XRP's Ripple fell by similar levels. “This is a direct response to the Powell testimony and comments on Facebook’s Libra and the implications that could have for the entire cryptocurrency space,” said Craig Erlam, senior market analyst at FX trading platform OANDA. “Libra raises many serious concerns regarding privacy, money laundering, consumer protection and financial stability,” Powell told the committee, adding that he did not think the project could proceed unless those concerns were addressed. The proposed cryptocurrency has drawn close scrutiny from policymakers and financial regulators globally. Powell said existing rules do not fit cryptocurrencies. Other traders said the moves fitted within the pattern of bitcoin’s recent volatility, where double-digit intra-day price moves have been common. The biggest coin climbed nearly 55% in nine days after Facebook unveiled its plans for Libra on June 18, touching an 18-month high of nearly $14,000. The project has boosted hopes that cryptocurrencies could gain wider acceptance. Source
  9. Computer from NASA’s Apollo program reprogrammed to mine bitcoin It takes the Apollo Guidance Computer 10 seconds to compute a single hash value. Enlarge / DSKY unit of the Apollo Guidance Computer in the National Air and Space Museum. Shirriff used a different unit that belongs to a private collector. Tamorlan Among the many technological breakthroughs of NASA's Apollo project to land a man on the Moon was the Apollo Guidance Computer that flew onboard Apollo spacecraft. In an era when most computers were refrigerator-sized—if not room-sized—the AGC weighed only about 70 pounds. It was one of the first computers to use integrated circuits. A team of computer historians got its hands on one of the original AGCs and got it working. A member of the team, Ken Shirriff, then decided to see if the computer could be used for bitcoin mining. Mining is a key part of the process for maintaining bitcoin's shared transaction ledger, or blockchain. To win the right to add a block to the blockchain, you have to solve a difficult problem: finding a block whose SHA-256 hash starts with a minimum number of zeros. The only known way to accomplish this is by brute force: miners create a block with a random nonce and compute its hash value. If the hash value doesn't have enough leading zeros, the miner changes the nonce and tries again. The required number of zeros is automatically adjusted so that the network produces a new block once every 10 minutes, on average. Currently, a block's hash needs at least around 18 zeros (in its hexadecimal representation) to be accepted by the network—which translates to around 1022 trials to find a valid block. Today, most bitcoin mining is done using specialized hardware capable of computing trillions of hashes per second. Shirriff's software for the Apollo Guidance Computer was quite a bit slower than that: each bitcoin hash calculation takes about 10 seconds. The Apollo Guidance Computer isn’t a very good bitcoin miner "The computer is so slow that it would take about a billion times the age of the universe to successfully mine a bitcoin block," Shirriff wrote. This mostly reflects 50 years of progress in computing hardware. Thanks to Moore's law, modern chips have vastly more transistors and can operate at much higher clock rates. Custom mining ASICs can compute a huge number of hashes in parallel. But Shirriff also had to struggle with idiosyncrasies of the AGC that made it a poor fit for bitcoin mining. For example, the AGC used a 15-bit word, in contrast to modern computers that generally use 32- or 64-bit words. The SHA-256 algorithm performs a lot of 32-bit operations, so Shiriff had to split each 32-bit integer into three pieces—a 4-bit piece and two 14-bit pieces—and perform calculations on them separately. The AGC also lacked the shift and rotate instructions that are standard on modern computers—and heavily used in a SHA-256 calculation—forcing Shirriff to write subroutines to perform these operations. The AGC's limited memory was also a handicap: The AGC, like most computers of the 1960s, used magnetic core memory, storing each bit in a tiny magnetized ferrite ring. Since core memory was fairly bulky, the AGC had just 2K words (approximately 4K bytes) of RAM. The AGC's addressing scheme made things more complicated since you could only access 256 words unless you used an inconvenient bank-switching mechanism. The problem is that the SHA-256 algorithm uses eight (32-bit) hash values, a 64-word message table, and 8 words of intermediate values. These three arrays alone used up 240 AGC words, leaving about 16 words for everything else (temporary values, subroutine return addresses, loop counters, pointers, etc.) I managed to get everything to fit in one bank by reusing these 16 words for multiple purposes, but I spent a lot of time debugging problems when a variable clobbered a location still in use. This is not the first time Shirriff has implemented bitcoin mining on ancient hardware. A few years back he implemented bitcoin mining on an old IBM 1401 computer from the mid-1960s. This machine was even slower than the AGC, taking 80 seconds to compute a single hash. He also programmed a 1970s Xerox Alto to mine bitcoin—it could compute 1.5 hashes per second. Source: Computer from NASA’s Apollo program reprogrammed to mine bitcoin (Ars Technica)
  10. Bitcoin near two-week highs, fueled by hopes for Facebook's Libra FILE PHOTO: A small toy figure is seen on representations of the Bitcoin virtual currency in this illustration picture, December 26, 2017. REUTERS/Dado Ruvic/Illustration LONDON (Reuters) - Bitcoin held on Tuesday near its highest for two weeks after surging as much as 9% overnight, a move analysts said was probably driven by hopes that cryptocurrencies are gaining wider acceptance after Facebook disclosed plans for a digital coin. Bitcoin touched $12,833 overnight on the Bitstamp exchange BTC=BTSP, its highest since June 27, before pulling back. It was last up 2.2% at $12,560. The biggest cryptocurrency has gained over 45% since Facebook laid out plans last month for its Libra coin, sparking renewed optimism that cryptocurrencies will gain mainstream acceptance among companies and individual users. “What we have seen in bitcoin over the last couple of weeks is still very linked to Libra,” said Craig Erlam, senior market analyst at OANDA. “People allude to the idea that bitcoin is a more mature industry than previously.” Bitcoin remains highly volatile. It has gained nearly 240% this year after slumping by three-quarters last year. Analysts pointed to other data points that suggested usage of bitcoin is growing. Peer-to-peer exchange of bitcoin - a proxy for non-speculative usage - is at its highest for nearly eight months, said Mati Greenspan of eToro. Source: Bitcoin near two-week highs, fueled by hopes for Facebook's Libra
  11. LONDON (Reuters) - Bitcoin’s price skidded 12% lower on Thursday to around $11,383 after hitting an 18-month high of nearly $14,000 earlier this week. FILE PHOTO: A bitcoin sign is seen during Riga Comm 2017 The world’s biggest cryptocurrency has surged in value since April and has risen more than 260%, although it remains below its all-time high of nearly $20,000 hit in December 2017. Analysts say Facebook’s announcement that it would offer its own cryptocurrency Libra has revived interest in digital currencies, while investors seeking safety have also pushed up bitcoin’s price. Source
  12. LONDON (Reuters) - Bitcoin tested 15-month highs on Monday after jumping more than 10% over the weekend, with analysts ascribing the spike to growing optimism over the adoption of cryptocurrencies after Facebook unveiled its Libra digital coin. The biggest cryptocurrency hit $11,247.62 on the Bitstamp exchange late on Sunday, its highest since March last year. It later pulled back, and was last up 0.7% at $10,917. Facebook said last week it planned to launch a new cryptocurrency called Libra, though the announcement immediately led to questions from regulators and politicians across the world. Mati Greenspan, an analyst at eToro, said bitcoin’s gains underscored growing optimism among retail investors that Facebook’s plans were part of a wider trend of major companies adopting cryptocurrencies. “Traders are speculating on future involvement of large players like Facebook,” he said. “They believe that Libra will create mass awareness of cryptocurrencies and act as a gateway to adoption.” Other traders cited geopolitical factors from tensions in the Gulf region to the U.S.-China trade war as fuelling interest in bitcoin, which has more than doubled in price since March. Some investors have looked to bitcoin and other cryptocurrencies as a hedge against possible declines in domestic currencies, traders said. Cryptocurrency markets are opaque, and it is difficult to pinpoint exact catalysts for price moves. Between 2200 GMT Friday and 0300 GMT Saturday alone, bitcoin rose more than 10%. Thomas Puech of Enigma Securities, a London-based firm that specializes in larger size over-the-counter cryptocurrency deals, said growing tensions between the United States and Iran were “gas” for bitcoin and other cryptocurrencies. In late March, bitcoin broke out of a spell of limited price moves. It has since risen more than 160%, an ascent peppered by double-digit price swings that have reminded some of its retail investor-fueled 2017 bubble. Bitcoin’s volatility has been a boon to larger investors such as hedge funds, and other investors searching for returns as central banks across the world lean towards lower interest rates, said Puech. Gold prices hovered near a six-year high on Monday, with demand for the safe-haven metal boosted by dovish signals from major central banks. Bitcoin, which accounts for over half of the cryptocurrency market, has more than trebled in price since touching its lowest this year in January. Source
  13. Bitcoin rises above $10,000 for the first time in a year Bitcoin's value has risen three-fold since December. Enlarge Peter KovalevTASS via Getty Images Bitcoin's price has soared above $10,000 for the first time since early 2018, a new milestone in the virtual currency's latest comeback. The price has more than tripled since hitting rock-bottom last December around $3,200. That was after crashing from an all-time high around $19,500 in December 2017. As always, it's difficult to be sure what drives changes in bitcoin's price. But one obvious candidate is Facebook's announcement of its own cryptocurrency, called Libra, earlier this week. Libra is a potential bitcoin competitor, but the announcement also brings added legitimacy to the overall cryptocurrency market. Also, as the world's most valuable cryptocurrency, bitcoin frequently serves as a medium of exchange among other cryptocurrencies—much as the US dollar acts as the default medium of exchange for global trade. So the introduction of Facebook's new cryptocurrency next year—and perhaps copycat efforts down the road—could bolster bitcoin's value. Bitcoin's rise is part of a broader cryptocurrency boom. Ether, the currency of the Ethereum network, is now worth more than $290, a 2019 record. Bitcoin Cash, Litecoin, Monero, and Dash are all at or near 2019 highs. Source: Bitcoin rises above $10,000 for the first time in a year (Ars Technica)
  14. 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
  15. Some of the brightest minds in America are pooling their brain power to create a cryptocurrency that’s designed to do what Bitcoin has proved incapable of: processing thousands of transactions a second. Professors from seven U.S. colleges including the Massachusetts Institute of Technology, Stanford University and University of California, Berkeley have teamed up to create a digital currency that they hope can achieve speeds Bitcoin users can only dream of without compromising on its core tenant of decentralization. The Unit-e, as the virtual currency is called, is the first initiative of Distributed Technology Research, a non-profit foundation formed by the academics with backing from hedge fund Pantera Capital Management LP to develop decentralized technologies. Bitcoin is the original cryptocurrency and the first payment network to allow parties to transact directly without needing to trust each another or to rely on a central authority. Yet, while it has built a following among developers, anarchists and speculators, mainstream adoption remains elusive. That’s in no small part the product of its design, where inbuilt restrictions have constrained its performance and scalability and, as a result, reduced its usefulness as an everyday unit of payment, DTR said in a research paper. The academics are designing a virtual coin they expect will be able to process transactions faster than even Visa. “The mainstream public is aware that these networks don’t scale,’’ Joey Krug, co-chief investment officer at Pantera Capital in San Francisco, who is also a member of the DTR council, said in an interview. “We are on the cusp of something where if this doesn’t scale relatively soon, it may be relegated to ideas that were nice but didn’t work in practice: more like 3D printing than the internet.’’ DTR plans to launch Unit-e in the second half of the year and aims to process as many as 10,000 transactions per second. That’s worlds away from the current average of between 3.3 and 7 transactions per second for Bitcoin and 10 to 30 transactions for Ethereum. It’s also multiples quicker than Visa, a centralized network, which processes around 1,700 transactions per second on average. Bitcoin’s scalability challenge is a function of its design: the frequency within which new blocks, as records of transactions are known, can be created and their maximum size are capped. To achieve greater speed and scalability, DTR deconstructed the blockchain technology that supports most cryptocurrencies and sought to improve almost every element of it, said Pramod Viswanath, a researcher on the project and a professor of electrical and computer engineering at the University of Illinois Urbana-Champaign. The group first sought to understand the blockchain’s performance limits so as to design technologies that operate as close to these limits as possible, said Viswanath. The academics have published research on all aspects of blockchain technology and are relying on new mechanisms they designed for reaching consensus, as well as new ways of sharding — a process whereby each node maintains only part of the blockchain, thus increasing speed — and new payment channel networks, to reach their targeted transaction speed. The cryptocurrency industry is also very aware of the issue and a number of initiatives are underway to increase transaction speeds. Key efforts include the Lightning Network, which is to supposed to make crypto payments faster and cheaper by removing the need to record every transaction on the blockchain, while another, Segregated Witness, or SegWit, also aims to make transactions faster. David Chaum, a pioneer of virtual currencies, is also working on a new platform that would allow digital money to be traded more quickly. Success for Unit-e is far from guaranteed. While in the long-term the best technology should win out, in the short-term there is a risk that the new currency fails to gain traction, said Andrew Miller, head of the Unit-e independent technical steering committee and assistant professor of electrical and computer engineering at University of Illinois Urbana-Champaign. The Swiss-based foundation brings together professionals from the fields of economics to computer science and cryptography, and its members also include academics from Carnegie Mellon University and the Universities of Southern California and Washington. It is funded by Pantera and some private individuals, said foundation council Chairman Babak Dastmaltschi, while declining to elaborate further. Unit-e is the group’s first initiative and future work could cover so-called smart contracts, said Viswanath. “Bitcoin has shown us that distributed trust is possible but its just not scaling at a dimension that could make it a truly global everyday money,” said Viswanath. “It was a breakthrough that has the capacity to change human lives but that won’t happen unless the technology can be scaled up.” Source
  16. Ether tumbles below $100 as altcoins log double-digit losses Cryptocurrency prices fell sharply on Friday, as another bout of selling took digital currencies to fresh lows. Bitcoin, BTCUSD, -3.48% the world’s No. 1 digital currency, crashed through support at $3,500, falling more than 10% to a 15-month low at $3,230 on the Kraken exchange. A minor bounce has a single bitc,oin currently fetching $3265.00, down 9.3% since 5 p.m. Thursday. “The price of bitcoin has crippled on the back of this and I think it is likely that the price may not only drop below the $2K mark, but with this kind of momentum behind it, the price can test the 1500 level,” said Naeem Aslam, chief market analysts at Think Markets U.K. in a research note. “Simply put, the bad news keeps coming just like cockroaches coming out of a hole.” But Aslam said the rout has to stop somewhere, which presents a golden opportunity for crypto believers. “This is a crypto market which has the ability to blow your mind and the downside is limited and the price at its current level represents an opportunity of a lifetime,” he said. Bitcoin has now fallen 84% from its all-time high above $19,000. Altcoin collapse sees Ether trade below $100 Altcoins, or digital coins other than bitcoin, haven't fared any better. Ether, ETHUSD, -10.08% tumbled to a 19-month low at $82.44, down 13.2%, Litecoin LTCUSD, -8.14% was off 16.8% at $23.25, XRP, XRPUSD, -3.94% was down 10% at 29 cents and Bitcoin Cash BCHUSD, -9.16% made another record low, trading under $100 to $97,70, down 12.7%. The crypto-wide selloff shed a further $10 billion off the market value of all cryptocurrencies, which is at a 15-month low of $106 billion, according to data from CoinMarketCap. Bitcoin futures traded spot prices lower on Friday. The Cboe Global Markets December contract XBTZ8, -7.74% ended down 8.5% at $3,282.50 and the CME Group December contract BTCZ8, -7.78% finished Friday down 8.3% at $3,300. Source
  17. Bitcoin just ended its worst-performing month in seven years in terms of month-over-month price declines. The world’s largest cryptocurrency began November at an average price across exchanges of $6,341, but as of 0:00 UTC on December 1 is trading at just $3,964, according to CoinDesk’s Bitcoin Price Index. As it stands, the near $2,400 drop in bitcoin’s price has created a -37.4 percent monthly performance, which is its worst on record since August 2011, when it fell from roughly $8 to $4.80 to print a -40 percent monthly loss, according to data from the CoinDesk Bitcoin Price Index (BPI). Since bitcoin is the largest cryptocurrency in terms of market capitalization by a considerable margin, now comprising 53.5 percent of the total market, all other cryptocurrencies tend to follow its lead when it comes to price performance. As a result, the broader market suffered substantial losses in November, with just one of the world’s largest 25 cryptocurrencies able to post a monthly gain. The outlier was bitcoin SV, a fork off of the original bitcoin cash blockchain, yet it has only existed long enough to accrue 22 days of pricing data on CoinMarketCap. As can be seen in the above graph, double-digits losses were common among the world’s largest cryptocurrencies in November. Tezos (XTZ) was the worst performer of the month, reflecting a 61.5 percent loss with bitcoin cash (BCH) just 3 percent behind. What’s more, the average performance of the top 10 cryptocurrencies by market capitalization was -30 percent, while the average performance of all 25 was -37 percent. Market Cap Monthly Chart Since market capitalization is a function of the price of a cryptocurrency multiplied by its circulating supply, the capitalization of the total market takes a hit whenever prices experience a steep drop. At the beginning of November, the total market capitalization recorded a value of $203 billion, yet today that figure records $130 billion, a 35 percent loss. The total capitalization of the cryptocurrency market has now lost over $690 billion and 83 percent of its value since reaching its all time high north of $820 billion this past January, according to CoinMarketCap. Source
  18. Richard Stallman, the fervently committed founder of the free software movement, is discussing the term “libertarian,” when he stops talking abruptly and says, “Hello?” I tell him I’m still listening, but he explains that the confused greeting wasn’t intended for me. Instead, he says a man’s voice – neither mine nor an echo of his – had just cut in with one word: “liberty.” “Does that sort of thing happen a lot?” I ask. I hadn’t heard anything. “Yes,” he says. “It wasn’t a voice I recognize.” He added, “It could be … ” Then a quick burst of static made his next words inaudible. It was a strange incident, but apparently not a new experience for Stallman, whose emails urge any NSA or FBI agents reading to “follow Snowden’s example” and blow the whistle. Stallman seems to check all of the old school cypherpunk boxes: in addition to being an Edward Snowden admirer, he’s a hacker of the original ’70s and ’80s generation, a privacy activist, and a frequent invoker of liberty. As a result, cryptocurrency enthusiasts could be forgiven for thinking Stallman was also head-over-heels for bitcoin. He’s not. Before his oration on libertarianism was interrupted, he said that the right-wingers who made up a significant portion of bitcoin’s early adopters don’t really deserve the label. His own pro-freedom views are more “libertarian” than bitcoiners’ “anti-socialism,” he argued. As we spoke, it became clear that Stallman doesn’t find the decade-old technology all that appealing, for more reasons than just politics. “I have never used it myself,” he told CoinDesk. If that’s surprising, keep in mind that fine distinctions matter a great deal to Stallman. For example, he wrote a 9,000-word explainer on the difference between the terms GNU and Linux. In 40-ish words: GNU, which Stallman proposed in 1983, is an operating system using exclusively free software. Linux, created years later by Linus Torvalds, is a kernel. Many refer to packages combining the two as “Linux,” but Stallman insists that the proper term is GNU/Linux or just GNU. He also wrote 3,000 words on the differences between free software and open source software. Advocates of both push for the freedom to use, study, change and redistribute software, but Stallman said that those similarities conceal “a deeply important moral disagreement” centered on freedom and human rights, which the free software movement stresses. The GNU Project, which Stallman founded, is working on an alternative digital payments system called Taler, which is based on cryptography but is not – forgive the hair-splitting – a cryptocurrency. The Taler project’s maintainer Christian Grothoff told CoinDesk that the system is, rather, designed for a “post-blockchain” world. Concerned with privacy… It doesn’t even seem like the technology has been around long enough to already be thinking of a world after it, but to Stallman, bitcoin isn’t suitable as a digital payment system. His biggest complaint: bitcoin’s poor privacy protections. He told CoinDesk, “What I’d really like is a way to make purchases anonymously from various kinds of stores, and unfortunately it wouldn’t be feasible for me with bitcoin.” Using a crypto exchange would allow that company and ultimately the government to identify him, he said. And as for mining the bitcoin himself, it’s a big investment and besides, he continued, “I’ve got other things I’d rather do.” Asked what he thought about so-called privacy coins, Stallman said he’d gotten an expert to assess their potential, and “for each one he would point out some serious problems, perhaps in its security or its scalability.” And speaking broadly, Stallman continued: …But not ‘perfect’ privacy That pessimism aside, the GNU Project’s Taler does share some aspects with cryptocurrency projects – most notably it aims to fill the same niche. Start with Taler’s intellectual lineage. It’s based on blind signatures, a cryptographic technique invented by David Chaum, whose DigiCash was among the first attempts at creating secure electronic money. Plus, Taler’s attempt to create a digital money that resists surveillance by governments and payments companies aligns it with many cryptocurrency projects. Yet, Taler does not attempt to bypass centralized authority. Payments are processed by openly centralized “exchanges” rather than peer-to-peer networks of miners because, Grothoff said, such a system “would again enable dangerous, money laundering kind of practice.” Indeed, in a break with the anti-government ethos that has tended to characterize bitcoin and some of its peers, Taler’s design explicitly tries to block opportunities for tax evasion. Speaking to this, Stallman told CoinDesk, “We need a state to do many vital jobs, including fund research, fund education, provide people with medical care – provide everyone with medical care – build roads, maintain order, provide justice, including to those who are not rich and powerful, and so the state’s got to bring in a lot of money.” What a break from the political leanings of many of bitcoin’s first adherents. Stallman continued: Privacy in the Taler system, then, is limited to users spending their digital cash. They are shielded from surveillance because, Grothoff said, “the exchange, when coins are being redeemed, cannot tell if it was customer A or customer B or customer C who received the coin, because they all look identical from the exchange.” “Nobody,” he added, “exactly knows who has how many tokens.” Merchants (or anyone) receiving payments, on the other hand, do so visibly and in the open, making it possible for governments to assess taxes on their income – not to mention harder for the recipients to participate in money laundering. A place for crypto? While Taler is not a cryptocurrency and doesn’t have a native asset (there are no talers or TalerCoins), as a new payment rail for existing assets, the system could support cryptocurrency at some point. Just as euros (the first currency that will be supported by the system), dollars and yen could all be sent using Taler, so could bitcoin. Similarly, while Taler is not a blockchain, a blockchain-based system could take the place of a bank within the system. For users to be able to move euros into the Taler wallet, though, Taler exchanges will need to interact with the traditional banking system to withdraw that money. In this same way, a blockchain-based system could work with Taler exchanges to allow users to get access to their cryptocurrency. Grothoff compared the act of moving bank deposits to a Taler digital wallet to taking cash out of an ATM. Coins in the wallet are stored locally on a user’s device, and if a user loses the key to their wallet, there’s nothing that can be done to recover it, much like the crypto space’s use of private/public key pairs. Currently, Taler is in talks with European banks to allow withdrawal into the Taler wallet and also re-deposit from the Taler system back into the traditional banking system. While the launch date on the project’s website still lists 2018, Grothoff said, it’s dependent of how quickly discussions with banks can be wrapped up. And he said, “The banks are not necessarily easy or cheap to deal with.” Although, nothing about the traditional banking system per se is essential to Taler’s functioning (except perhaps for regulatory compliance). In principle, the “register-based system” that Taler plugs into could be a bank account or, in theory, a blockchain, said Grothoff. If Taler gains traction, developers can experiment with different implementations and integrations – using banks or blockchains or whatever other register system they prefer. After all, Grothoff said: Source
  19. This probably isn’t the best way to get the FBI’s attention. Multiple outlets in India reported over the weekend that an unnamed 18-year-old boy from the Jalaun district is being charged with multiple crimes after he called the FBI about 50 times with bomb threats against the Miami International Airport. Local authorities were contacted by the American law enforcement agency and said an investigation revealed the boy was upset that the FBI was unresponsive to his claims that a fraudster had conned him out of around $1,000 worth of Bitcoin. A representative for the Anti-Terrorist Squad (ATS) told reporters that investigators tracked down the accused through his IP address. They said that he’d photoshopped a fraudulent Aadhaar identity card which he then used to set up an email account under a false name. Using Voice over Internet Protocol (VoIP), he reportedly proceeded to make about 50 calls to the FBI through the phony email account between October 2 and 31, and also called the Miami airport directly on five occasions. According to the Times of India, officials quoted the boy’s confession. He reportedly admitted: The Hindustan Times reports that the boy was given $1,000 by his father to invest in Bitcoin and he’d been doing well with the investment before meeting a stranger online promising to increase his returns. The person allegedly made off with all of his Bitcoin and the boy attempted to get the FBI to track the conman down, to no avail. But officials from the ATS claimed that the FBI had taken the case and was in the midst of its investigation when the threats started. The charges he faces do not require arrest and authorities pointed out that he’s known to be “a bright student.” As prices of cryptocurrencies have taken a dive over the last year, we’ve seen horror stories of people going into debt and losing their life savings in the failing market. Theft also continues to be rampant. In June, Carbon Black, a cybersecurity research firm, estimated that $1.1 billion worth of cryptocurrencies had been stolen in 2018. The boy in India’s reaction was obviously over the top, ridiculous, and counterproductive. But it’s an example of the ways in which the chaos of cryptocurrencies can have ripple effects across so many peoples’ lives. More at: [Times of India, Hindustan Times via The Next Web] Source
  20. MPs in UK say ‘wild west’ cryptocurrency industry is leaving investors vulnerable Bitcoin and other cryptocurrencies are “wild west” assets that expose investors to a litany of risks and are in urgent need of regulation, MPs on the Treasury select committee have said. The committee said in a report that consumers were left unprotected from an unregulated industry that aided money laundering, while the government and regulators “bumble along” and fail to take action. The Conservative MP Nicky Morgan, the chair of the committee, said the current situation was unsustainable. “Bitcoin and other crypto-assets exist in the wild west industry of crypto-assets. This unregulated industry leaves investors facing numerous risks,” Morgan said. “Given the high price volatility, the hacking vulnerability of exchanges and the potential role in money laundering, the Treasury committee strongly believes that regulation should be introduced.” Crypto-assets are not covered by the City regulator, the Financial Conduct Authority (FCA), and there are no formal mechanisms for consumer redress or investor compensation. The committee argues in the report that at a minimum, regulation should be introduced to add consumer protection and counter money laundering. It said that as things stood, the price of crypto-assets was so volatile that while potential gains were large, so too were potential losses. “Accordingly, investors should be prepared to lose all their money,” the committee said. The FCA said: “The FCA agrees with the committee’s conclusion that bitcoin and similar crypto-assets are ill-suited to retail investors, and as we have warned in the past, investors in this type of crypto-asset should be prepared to lose all their money.” A Treasury spokesman said: “We set up the joint Cryptoassets Taskforce earlier this year because we want to better understand the potential risks and benefits of crypto-assets to people, businesses, and the economy.” In 2017, the price of a bitcoin soared by more than 900%, hitting a peak of almost $20,000 in December. Its popularity has since waned, with one bitcoin now priced at around $6,270. The digital currency emerged after the financial crisis. It allows people to bypass banks and usual payment processes to pay for goods and services. Last year Jamie Dimon, the chief executive of JP Morgan, said bitcoin was a fraud and only fit for use by drug dealers, murderers and people living in places such as North Korea. He said: “The currency isn’t going to work. You can’t have a business where people can invent a currency out of thin air and think that people who are buying it are really smart.” The Treasury committee said cryptocurrency exchanges were at increased risk of cyber-attacks, and some retail investors who lost their passwords had found themselves locked out of their accounts permanently. However, it said that if regulated and dealt with properly, the industry could be an opportunity for Britain. CryptoUK, which represents some cryptocurrency companies with operations in Britain, said it welcomed the report. “As an industry we have been calling for the introduction of proportionate regulation to improve standards and encourage growth,” said Iqbal Gandham, the chair of CryptoUK. “Self-regulation by the industry was always intended to be a starting point – this must now be matched by government action.” Source
  21. Cyptocurrency is a prized tool for many cybercriminals, allowing them to profit anonymously from the sale of illegal goods and services, or from ransoms, as well as make purchases necessary to further their illicit schemes. But as anonymous as it may be, with users identified only by an indecipherable string of numbers and letters, cryptocurrency, such as bitcoin, is not untraceable. With all bitcoin transactions published in a public blockchain, investigators can still glean clues from patterns of exchanges, and home in on minute details that can tie a suspicious transaction to an unwitting suspect. “It’s follow the money. That statement from Watergate still applies,” said John Michener, chief scientist at Casaba Security, in an interview with Forensic Magazine along with Casaba co-founder Jason Glassberg. “It’s about collecting all these little bread crumbs and following the trail to make a more complete picture,” said Glassberg. “By collecting these various pieces of evidence, these little crumbs, you can follow the trail and make a pretty convincing case.” Links on the Blockchain A few of these “crumbs” left behind along the bitcoin trail were seen in the recent indictment of 12 Russian agents accused of hacking the Clinton Campaign, the Democratic Congressional Campaign Committee and the Democratic National Committee using spearphishing tactics as well as malware to steal sensitive information and emails. The agents allegedly funneled much of this stolen information through rented servers—which they paid for, according to authorities, with bitcoin. It is unclear exactly how U.S. authorities first managed to identify who was behind each bitcoin address involved in the scheme, but the links become clear in the indictment—the same bitcoin address was used both to buy spearphishing domains, including qooqle.com and account-gooogle.com, and the dcleaks.com domain later used to leak the stolen emails. Another bitcoin address was used to purchase a VPN account used to log into the Twitter handle @Guccifer_2, a persona used to leak more DNC documents, and then the same address was used to lease a server that hosted dcleaks.com. This link is important, as Guccifer 2.0 and DCLeaks claimed to be separate entities. It is details like these that show how bitcoin transactions on the public blockchain can be an important investigative tool, revealing connections that may not have been detected otherwise. “The digital wallet is going to have a specific identifier, and if you see the same wallet being accessed or deposited into from a number of disparate or illegal sources, that gives you just another piece of tracing ability,” noted Glassberg. The ability to plainly see these transactions—where they came from, who they’re going to and in what precise amount—makes bitcoin even more traceable than another type of non-“crypto” currency. “Bitcoin is not cash (…) Cash is true anonymous and moves around,” explained Michener. “(Bitcoin is) a(n) observation-resistant, but not observation-proof, transfer mechanism.” Exposure Through Exchanges As mentioned, the Russia indictment does not reveal exactly how investigators managed to track specific bitcoin transactions back to the 12 agents, but there are ways of doing this, as Michener and Glassberg explain. “Under normal conditions, you’re going to buy and sell bitcoin through exchanges. The legal exchanges are registered, because the banking laws around the world have KYC requirements—know your customer. The problem there is that the exchanges, certainly the legal ones, are going to want to know name, identity, credit card numbers, stuff that you’d use for tracing individuals’ accountability,” Michener said. “If I buy cryptocurrency, bitcoin, and then go use it, or I receive bitcoin for some criminal operation, I typically want to exchange this for services, or cash. And that transition to cash exposes them to the most risk, because at some point, they have to identify themselves to some degree.” The application of anti-laundering laws to virtual currencies by the U.S. Financial Crimes Enforcement Network (FinCEN) in 2013 made it harder for those with criminal intentions to hide their identity, should they ever want to turn in their bitcoin for something more practical. And due to the fluctuating value of bitcoin, and the fact that bitcoin isn’t an accepted as a form of payment by many mainstream businesses, it makes sense that one would want to make use of one of these exchanges at some point. It was the use of a legal, legitimate bitcoin exchange service, Bitstamp, that tripped up disgraced Drug Enforcement Administration agent Carl Force in late 2013 when his suspicious actions and unusually enormous transactions caught the attention of Bitstamp general counsel George Frost, as reported by Ars Technica. While Force—who first tried and failed to use an undercover identity to register for the exchange—was illegally taking huge sums of money for his own personal gain from operators of the darknet marketplace Silk Road, Frost was monitoring his transaction activity, taking note of red flags and ultimately cooperating with authorities in investigating and prosecuting Force. For cybercriminals who don’t want to take the risk of using a legal bitcoin exchange, which may record their identity and cooperate with law enforcement, they can use an illegal bitcoin exchange, which, as Glassberg and Michener explain, has pitfalls of its own. “The mere fact that they’re illegal means (…) before you put your money into them, you have to take a leap of faith that these guys aren’t just going to take your money and run, because what are your alternatives? If I go deposit this cryptocurrency into this illegal exchange and the exchange, it shuts down and takes my money, who am I supposed to complain to?” Glassberg pointed out. “There’s a huge, huge risk.” “Black market exchanges are illegal. Operating one is criminal. The authorities crack down, find somebody—they may well continue running it as a front for a while, trying to track people down, so you don’t know you’re working with a compromised black market,” Michener added. This scenario has played out in the past, such as with the takeover of dark web marketplace Hansa, which law enforcement operated following the takedown of AlphaBay in order to collect information about users purchasing illegal drugs, weapons, stolen credit card information and more. Ultimately, bitcoin may only be as anonymous as the risk criminals will take to keep it that way. Source
  22. Back in 2013, when you could still mine bitcoins at home, WIRED was sent a small, sleek mining device manufactured by the now-defunct Butterfly Labs. We turned on the Roku-looking machine in our San Francisco offices and allowed it to do its job. A small fortune was soon amassed, now worth around $100,000. Then, we lost the money. Forever. Here's what happened to WIRED's 13 Bitcoins—and to the millions of others that have faced the same fate. Stefan Antonowicz, WIRED's then-head of engineering, set up the miner. Robert McMillan, a former senior writer for WIRED (who now works at The Wall Street Journal), then wrote about it. "When we received that Butterfly miner, we had a new ethical question: What do you do with the proceeds of a review device that essentially prints money?" says McMillan. First, it's probably worth explaining how WIRED accrued its six-figure Bitcoin fortune. While fiat currencies, like the dollar, rely on banks and government regulators, Bitcoin runs on a peer-to-peer network monitored by an army of volunteer miners that run specialized software. Every 10 minutes, all the miners in the network race to solve a series of complex cryptographic math problems. The computers that win are awarded a slice of 12.5 new bitcoins. (That number halves every four years; it was 25 when we got our miner.) Usually, the fastest computers in the network solve the problems first. Over time, the puzzles have gotten harder, leading to a kind of computing-power arms race. Back when Bitcoin first launched, it was possible to mine coins using an everyday computer. These days, you'll need specialized hardware significantly more powerful than the Butterfly Labs miner WIRED had. Currently, there are about 17 million bitcoins in existence; by the year 2140, all 21 million planned Bitcoins will have been mined. You can learn more about the process in our Guide to Bitcoin.) WIRED's miner essentially won the Bitcoin math lottery a couple of times, allowing it to generate a little over 13 coins into the network. Then, the staff had to figure out what to do with them. "We had a very long conversation, over several weeks, about what to do with the money," says Michael Calore, a senior editor at WIRED who has been at the magazine since 2006. Some staff members argued the Bitcoin should be donated, or set aside for a charitable purpose in the future. Others said it had to be destroyed permanently. What was agreed upon was that the money shouldn't just sit there, because it could influence how the magazine reported on cryptocurrencies. "I said we had to dump it and donate the money to charity soonest or we wouldn't be able to cover Bitcoin," says Adam Rogers, a deputy editor at WIRED. "We had to disclose it in every story." Eventually, it was decided that the private key, which unlocks the Bitcoin wallet and allows the funds to be spent, should be destroyed. "We talked about donating it to a journalism institution, or setting it aside as a scholarship. But we decided that if we gained any benefit from it at all, it would color our future coverage of bitcoin," says Calore. "So we just destroyed the key, knowing full well that it could eventually be worth six or seven figures." McMillan then posted a story announcing the key had been ripped to pieces. Throwing Away the Key To deal in bitcoin, you need at least two different keys, one public and one private (newer security protocols allow you to add more private keys). Together, the combination of codes lets you trade Bitcoin without an intermediary like a bank. You can look up WIRED's public key to send us money, and then in theory, we could use our private key to access those funds—had we not destroyed it. It's extremely unlikely we could successfully guess the code: it's 64 digits long and no one remembers what it was. No additional copies of the private key exist, at least according to the people who were there. "I didn't make a copy of the paper, or commit the 64 characters on it to memory," says Antonowicz, the technologist who set up the miner. The good news is that if someone did move the coins, the transaction would be public, allowing WIRED to see where they traveled to. In fact, you too can check out WIRED's lost Bitcoins right here. In theory, we might be able to recover the Bitcoin wallet from the hard drive where it was stored, but even that wouldn't be much help. "There might have been a way to forensically recover the wallet—with the encrypted key—from my hard drive, but I shredded that particular drive years ago," says Antonowicz. Plus, even if the wallet was resurrected, it's encrypted. Breaking that protection via brute force would take an unimaginable amount of time. There are three times more possible combinations than there are atoms in the observable universe, by Antonowicz's count. "Originally I was going to say that the closest metaphor I have is that we dropped a car key somewhere in the Atlantic, but I think it's closer for me to say we dropped the key somewhere between here and the Alpha Centauri," says Antonowicz. Recovering our bitcoins is essentially like trying to recover a photo album on a lost computer. Except not only did you get rid of the hard drive, you also protected the album in an encrypted folder with a 64-digit passcode that you threw away. Still, we wanted to make sure there was absolutely no way to get the bitcoins back. WIRED's editor-in-chief, Nicholas Thompson, suggested that if we were able to recover the funds, they might go toward hiring a full-time cryptocurrency reporter. I reached out to the founder of Butterfly Labs, who didn't respond. I also contacted Mark Frauenfelder, a writer and the author of a WIRED article about how he recovered $30,000 worth of Bitcoin. He agrees we're screwed. "If you lost your private keys I think it’s game over," he says. I also looked into a service that tries to crack cryptocurrency wallets via sheer brute force. But their services would be no help, since we don't have access to the hard drive itself. It looks like WIRED really did lose the money forever. The good news is we're far from alone. Source
  23. Justice Department opens investigation into illicit trading Agency is working with CFTC, which oversees crypto futures The Justice Department has opened a criminal probe into whether traders are manipulating the price of Bitcoin and other digital currencies, dramatically ratcheting up U.S. scrutiny of red-hot markets that critics say are rife with misconduct, according to four people familiar with the matter. The investigation is focused on illegal practices that can influence prices -- such as spoofing, or flooding the market with fake orders to trick other traders into buying or selling, said the people, who asked not to be identified because the review is private. Federal prosecutors are working with the Commodity Futures Trading Commission, a financial regulator that oversees derivatives tied to Bitcoin, the people said. Authorities worry that virtual currencies are susceptible to fraud for multiple reasons: skepticism that all exchanges are actively pursuing cheaters, wild price swings that could make it easy to push valuations around and a lack of regulations like the ones that govern stocks and other assets. Bitcoin extended its Thursday declines after Bloomberg News reported the investigation, and was down 3 percent to $7,409 as of 9:32 a.m. London time. It’s down more than 20 percent since a May 4 peak. Such concerns have prompted China to ban cryptocurrency exchanges and nations including Japan and the Philippines to regulate them, contributing to a slump that has sent Bitcoin below $8,000 this year. Still, digital coins continue to be a global investment craze, drawing legions of loyalists to industry conferences, generating celebrity endorsements and increasingly attracting the attention of Wall Street. Traders Colluding? The illicit tactics that the Justice Department is looking into include spoofing and wash trading -- forms of cheating that regulators have spent years trying to root out of futures and equities markets, the people said. In spoofing, a trader submits a spate of orders and then cancels them once prices move in a desired direction. Wash trades involve a cheater trading with herself to give a false impression of market demand that lures other to dive in too. Coins prosecutors are examining include Bitcoin and Ether, the people said. A Justice Department spokesman declined to comment and CFTC officials didn’t respond to requests for comment. The investigation, which the people said is in its early stages, is the U.S.’s latest effort to crack down on an industry that was initially embraced by those who were distrustful of banks and government control over monetary policy. But Bitcoin’s meteoric rise -- it surged to almost $20,000 in 2017 after starting the year below $1,000 -- has been a lure for mom-and-pop investors. That’s prompted regulators to grow concerned that people are jumping into cryptocurrencies without knowing the risks. For instance, the Securities and Exchange Commission has opened dozens of investigations into initial coin offerings, in which companies sell digital tokens that can be redeemed for goods and services, due to suspicions that many are scams. Cryptocurrency trading is fragmented on dozens of platforms across the globe, and many aren’t registered with the CFTC or SEC. As a derivatives watchdog, the CFTC doesn’t regulate what’s known as the spot market for digital tokens -- which is the trading of actual coins rather than futures linked to them. But if the agency finds fraud in spot markets, it does have authority to impose sanctions. Fraud Target The limited oversight of crypto trading makes it a target for crooks, said John Griffin, a University of Texas finance professor who has studied manipulation, including in digital-coin markets. “There’s very little monitoring of manipulative trading, spoofing and wash trading,” Griffin said. “It would be easy to spoof this market.” Signs are emerging that some crypto exchanges realize the industry’s growth could be constrained if large swaths of investors conclude that trading platforms have a “buyer beware” approach to oversight. The Winklevoss twins, who are known for getting rich off Facebook Inc., hired Nasdaq Inc. last month to conduct surveillance of digital coins trading on their exchange, Gemini Trust Co. Cameron and Tyler Winklevoss have also urged trading platforms to band together to form a group that would serve as a self regulator for the industry. Some market participants have alleged that crypto manipulation is rampant. Last year, a blogger flagged the actions of “Spoofy,” a nickname for a trader or group of traders that have allegedly placed $1 million orders without executing them. Source
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