In March of 2013, Bitcoin entered into a third phase of its evolution. Whereas the first two represent creation (2009) and popular acceptance, the third began as FinCen published a guide on how virtual currencies such as Bitcoin would be managed by the US government (and thus, by extension, all governments under the thumb of anglo-americanism worldwide). In the wake, government agencies began cracking down on exchanges and wallets such as Mt. Gox and Dwolla.
What this movement meant was that phase 3 would merely be a stepping stone along Bitcoin’s development. This interim phase will see many of the main Bitcoin exchanges come under pressure from global authorities. The following phase? Well, that will see larger players entering into the Bitcoin space, in particular companies with money transmission licenses.
Just as we anticipated in our previous analysis of a commercially available Bitcoin miner, cybercriminals continue “innovating” on this front by releasing more advanced and customizable invisible Bitcoin miners for fellow cybercriminals to take advantage of.
In this post, we’ll profile yet another invisible Bitcoin miner, once again available for purchase on the international cybercrime-friendly marketplace, emphasize on its key differentiation features, as well as provide MD5s of known miner variants.
Sample screenshot of the advertisement for the invisible Bitcoin miner:
coindesk.com / By Shirley Siluk / May 23, 2013 at 08:11 BST
Lamassu’s Bitcoin Machine isn’t exactly a Bitcoin ATM — instead, it’s designed to enable one-way exchanges only: cash to bitcoins.
But, for now, that’s good enough in a world where changing fiat currency into the digital stuff is still a complicated, circuitous process that’s not easily available to everyone.
“(T)he core intention is to simplify obtaining bitcoins,” says Zach Harvey, one of the three people behind Lamassu Bitcoin Ventures, which plans to roll out the machines starting this summer.
The other two founders are Zach’s brother, Josh Harvey, and Matt Whitlock, a network security expert and software/hardware engineer. It might seem like a bit of an unlikely trio — prior to Lamassu, the Harvey brothers owned guitar stores — but Josh Harvey has a background in software engineering, and the brothers have been Bitcoin enthusiasts for longer than many people … since 2010.
Zach says Bitcoin’s a great solution to the troubles of doing business with cash (messy, needs physical counting and storage, easy to steal) and credit cards (high fees, “major fraud issues,” chargebacks and risk of theft) … if people can easily access the digital currency.
Its not worth the security risk, make your own paperwallet and use local bitcoins if you don’t want to use exchanges.
Even if you are buying a paper wallet with 0 BTC on it and just paying for some cool design I would warn against it, there is no way to prove that the seller has the private key copied down or … If they offer a paper wallet program where you print your own, there is no way to prove (in a closed source system) the keys being generated are infact random and not predictable
What is okay? IMHO, giving a company your public key (with you being the only person having the private key) and they can make those cool designed paper wallets / “credit” cards we’ve been seening on this subreddit is fine (though some many disagree)
bitcoinmagazine.com / By Vitalik Buterin / 21, May 2013
If anyone had any doubts that Bitcoin and cryptocurrencies would ever amount to anything in this world, after the events at Bitcoin 2013 it is safe to say that most of these doubts are now gone. Roughly a thousand people were present, dozens of booths featured businesses with products of such high quality that they may be indistinguishable with something from a mainstream corporation, and the organization of the congerence itself was nearly flawless. Presentations and panel discussions featured dozens of speakers who are experts in matters of technology, business and regulation, and the topics were equally interesting; among the discussions were subjects involving cryptocurrency-based stocks, using Bitcoin for digital charity, two implementations of decentralized mixers, regulatory and security challenges and creating whole new nations. For every conceivable application to which cryptocurrencies can be put, there are at least two projects implementing it, and for every problem with Bitcoin that still remains to be solved there are at least three projects working hard on a solution. Altogether, the conference has been almost universally applauded as a huge success. As Sean’s Outpost founder Jason King described it after the fact, the halls of Bitcoin 2013 were filled with a “hopeful energy” and excitement that he had not seen since the first conference of the World Wide Web itself.
socaltech.com / By Michael Terpin / Wednesday, May 22, 2013
It’s not often that you run across something that Bill Gates calls “a techno tour de force” and Warren Buffet’s partner Charley Munger calls “rat poison” — in the same interview. Imagine a financial service that blows away Paypal for speed and efficiency in transferring funds (at a third of the fees if exchanged into dollars — and generally no fees if purchasing goods or services directly). Imagine a technology that solves the long-standing ecommerce problem of micro-transactions by being divisible down to eight decimal points, and that has no problems with chargebacks or fraud (like cash, it can be stolen, but unlike cash it’s then rendered worthless). Imagine an asset that’s at once currency and commodity, that even though it’s digital can be mined like gold, and that has risen in value more than 10x since January and is up more than two million percent (this is not a typo — it went from half a penny to today’s valuation of $122.93) in the past three years. To say these early numbers are reminiscent of the early growth of the Internet, Napster, YouTube and Facebook is not hyperbole. Of course, only three of those became successes in the end, but they were among the biggest successes in business history.
coindesk.com / By Danny Bradbury / May 23, 2013 at 14:13 BST
A new ‘roll-your-own’ bitcoin wallet project showcased at the Bitcoin 2013 conference last weekend. Coinpunk is a web application that allows anyone to run their own self-hosted Bitcoin wallet service, accessible from their browser.
Until now, online bitcoin wallet services have been hosted by third parties, meaning that users have to trust them with their bitcoins. If the third party is hacked or experiences some other technical problem, users could lose their bitcoins. The alternative is a mobile application, but iPhone and iPad users are out of luck – Apple won’t allow them in its app store.
This software would put the control – and the risk – into the users’ own hands.
bitcointalk.org / By Rampion / Today at 03:19:39 PM
I’m surprised that there is no thread dedicated to the Twilio email published by Piuk (blockchain.info operator), regarding China Telecom blocking all Bitcoin related traffic to China:
We got further information from our carrier confirming that business such as bitcoin is not a proper financial tool in China and the Authority may treat bitcoin as an illegal business. Unfortunately the China Telecom Authority has requested that all bit-coin traffic to China be blocked.
As the provider of the phone number, Twilio is responsible for assuring the carriers that no more traffic related to bitcoin will be sent to China. Therefore, I have removed your international SMS permission to China. Please do not turn this on or try sending SMS messages to mobile numbers in China. Doing so will very likely lead to immediate account suspension.
Again I’m sorry for the convenience. Please let me know if you have any additional questions.
Twilio Customer Support
grahamdunn.com / by Daniel S. Friedberg / May 2013
Virtual currencies are not new and are ingrained in our modern culture. For example, airline frequent-flier miles are accepted (in fact expected) both as a means of exchange and a way to store value. According to The Economist (2005), these airline programmes reached the outstanding aggregate value of $700bn back in 2005!
Frequent flyer miles are an example of a centralised virtual currency, as these programmes are controlled by a central administrator (the airline), who may change the terms (and value) of such currency from time to time. We all have witnessed devaluations when airlines arbitrarily impose blackout dates or increase the number of miles needed for travel.
Bitcoin is different. Bitcoin is a decentralised virtual currency because it has no administrator or central repository. Instead, the rules of Bitcoin are fixed by open source software. There are currently about 11 million outstanding Bitcoins, and this number will increase to no more than 21 million outstanding Bitcoins. All Bitcoin transactions are logged on a public ledger without the use of any personal information. Transactions are verified by third parties (called miners) who provide services and computer power to the network.
Continuing our discussion on what are bitcoins, in today’s post we take a look at security, and bitcoin’s creator Satoshi Nakamoto. In Part One we focused on the foundation behind the currency and its universal ledger, the ‘blockchain’.
What about security?
You’ve probably heard the word bitcoin and hacks in the same sentence quite often. Yes, as a digital currency, bitcoins reside within digital wallets. To no surprise, in the same way that thieves are attracted to physical banks and wallets, the same exists for digital currencies. But theft isn’t the only security issue, there are also hacks on exchanges and services that have been common. We’ll focus on wallet hacks, DDoS, and the ‘51% Attack’.
When it comes to bitcoin wallets, there are two types, individual housed wallets and cloud based. With individual wallets, users download a wallet app client on their computers or mobile device. The software creates unique addresses to receive and send bitcoins. (In part one we explained that the unique addresses are used by the blockchain to identify bitcoin ownership) There are also cloud based offerings where users can have their bitcoins stored with third-parties. Users register accounts with these firms and are provided unique addresses.
coindesk.com / By Danny Bradbury / May 23, 2013 at 10:07 BST
We’ve seen bitcoin gaining traction among companies ranging from porn merchants through to car dealerships. But this may be the first time we’ve seen a country adopting it as a currency – well, a country of sorts. The Principality of Sealand has expressed an interest in adopting bitcoin.
bitcoinmagazine.com / By Vitalik Buterin / 21, May 2013
Regulation has been a hot topic in the Bitcoin community since the FINCEN guidance in March, and in the Bitcoin conference that took place this past weekend an entire quarter of the conference was dedicated to economic and regulatory issues. The guidance evoked strong feelings of both relief and uncertainty throughout the Bitcoin community; although ordinary Bitcoin users are now almost certainly clear of regulation, a fact that has allowed the Humble Bundle and the Electronic Frontier Foundation to feel comfortable accepting the currency, Bitcoin exchanges will now likely be required to have money transmitter licenses in all 48 states to operate across the country – an extremely onerous procedure that has repeatedly stymied even businesses outside the Bitcoin space. Many figures have been thrown around as to just how much that process costs; a common understanding was that it takes millions of dollars of legal effort and surety bonds, and Jeff Berwick said in his resignation from the Robocoin Bitcoin ATM project that the main obstacle too US participation was “a $25 million “insurance bond” necessary as being deemed a “money transmitter” in the US.”
coindesk.com / By John Oates / May 23, 2013 at 10:54 BST
A Welsh teenager has been found guilty of computer misuse offences relating to the theft of virtual currency from a RuneScape account.
Nineteen year old Kieron Belmont of no fixed abode was staying on a friend’s sofa at the time of the offence.
The two fell out and after his host had gone to bed Belmont logged onto her computer and got into her partner’s RuneScape account. He then traded away the credits which had taken six years to accumulate.
He left early the next morning, taking two bottles of booze with him.
I’m not going debate nor justify the volatility of Bitcoin and how it may or may not stabilize. I’m not going to discuss whether it will survive or whether it will be the defacto global currency. I’m not going to go into depth about how secure (or unsecure) Bitcoin is and whether or not it should be regulated.
What I am going to talk about is what I like to call the Napster Effect. Today, Napster isn’t the default for sharing, distributing or even purchasing music. However, what it did was far more powerful. It changed the psychology of consumers (early adopters) and the business of the music industry as a result.
economicpolicyjournal.com / by Robert Wenzel / THURSDAY, MAY 23, 2013
Two bartenders over the last two days at bars in SF said they had never heard of Bitcoin, when I asked them. A third bartender has a friend of a friend that mines bitcoins.
I asked two gals at a bar in SF. One of the gals wasn’t familiar with bitcoins, but the other had done some work for a Bitcoin company, a name that most in the industry would recognize. She said she had a hard time getting paid from the company, for PR work she did, and was only paid after threatening to go public.
She doesn’t think Bitcoin will succeed. Her view is that money that goes into BTC is a black hole and the government will stop it.
The Bitcoin2013 conference attracted a mix of businesspeople in suits and entrepreneurs in jeans and untucked shirts. All were excited about the technology’s potential to disrupt the payments business – specifically micropayments, international remittances and charitable giving. For merchants, Bitcoin offers faster and cheaper payments than incumbent systems. The U.S. government’s recent crackdown on Mt. Gox, the world’s largest Bitcoin exchange, failed to cast a pall over the event.
If our experts can’t agree on the value of bitcoin, why should consumers? Mia Mabanta/QuartZ
qz.com / By Simone Foxman / 2 hours ago
Bitcoin backers have big dreams—dreams of reinventing the financial system based around a currency not issued by governments and not subject to the whims of central banks. But the cryptocurrency’s volatility over the last few months has raised questions about whether most people would want to depend upon it to pay for goods and services.
Despite the wealth of bitcoin-related startups entering the market, even bitcoin’s most avid supporters admit that its volatility might not subside anytime soon. But that might not matter. After all, bitcoin isn’t really a tool for normal consumers; while it may be used by companies to exchange money and avoid transaction costs, there’s little reason for small-time consumers ever to use bitcoins directly.
economicpolicyjournal.com / By Robert Wenzel / THURSDAY, MAY 23, 2013
The Attractiveness of Bitcoin
The charts below show one important point of Bitcoin beauty.The supply of bitcoins are capped, unlike government fiat money. That’s one of the reasons governments hate it so. If Bitcoin becomes adopted on a broad scale, it will increase in value near globally against fiat currencies whose supplies are regularly inflated.
bitcoinprbuzz.com / By Bitcoin PR Buzz Feed / 2013-05-23
In 2011 Bitcoin sports betting service AnoniBet.com was launched. AnoniBet is an online sports betting operator dedicated to offering an anonymous betting experience to punters worldwide. AnoniBet is an established company and has been accepting bets with Bitcoins since December 2011 – serving thousands of customers over the last two years. The platform offers an anonymous betting experience, which rivals and in many cases exceeds the best online sportsbooks in the world, through accepting Bitcoin, the ever popular cryptocurrency that doesn’t need a central authority or government to operate. The company prides itself in offering one of the largest selection of sporting events, and the best odds to be found online. To register with AnoniBet, all customers need to do is provide an email address and password. AnoniBet never requires any identification information from their customers. The minimum deposit amount is just 0.001 BTC or 1 mBTC and the maximum amount you can withdraw from your Anonibet account is 500 BTC during any 24 hour period.
evoorhees.blogspot.com / By Erik Voorhees / FRIDAY, APRIL 13, 2012
What it is, how it’s used, and why you should care.
Erik Voorhees – April 11, 2012
“When a state currency is challenged, the state itself is challenged,
and market forces move swiftly around sickly, depreciating inhibitors.”
What is Bitcoin?
How does it work?
Why is Bitcoin valuable?
No really, WHY is Bitcoin valuable?
How does one obtain it?
Being careful with money
What can one do with it?
Bitcoin vs. The State
Bitcoin and Disruption
There has been much talk about Bitcoin within libertarian and economic circles. It’s becoming a buzzword, but like all new systems that break onto the public stage quickly, Bitcoin brings with it excitement, speculation, rumor, and downright confusion. To be sure, Bitcoin is complicated. After all, it’s an entirely new global monetary system – both a currency and a payment network for that currency.
Like all powerful tools, it’s important for those interested in using Bitcoin to spend some time engaging in the due diligence of education. Similar to a bicycle, once you know how to use Bitcoin, it will feel very easy and comfortable. But also like a bicycle, one could spend years learning the physics that enable it to operate. Such deep knowledge is not necessary to the actual rider, and in the same way one can enjoy the world of Bitcoin with little more than a healthy curiosity and a bit of practice.
This article is a primer on Bitcoin: an overview of the fascinating new phenomenon from the perspective of a humble libertarian who cares more about the ramifications for human liberty than about the technical protocol and brilliant science underlying the network.
The basics of Bitcoin are all covered here, ranging from a light technical overview to due diligence to monetary economics and theory. You’ll also find an extensive list of resources to bring you up to speed on this most fascinating thing to happen in the realm of anarcho-capitalist technology since the internet itself.
evoorhees.blogspot.com / By Erik Voorhees / THURSDAY, MAY 23, 2013
Presented by Erik Voorhees May 18 at Bitcoin 2013 Convention in San Jose
This talk is about the Role of Bitcoin as Money
This talk is intended to give people a better understanding of money itself.
Because to understand Bitcoin, you must understand money.
For this talk, Forget the tech. Forget the mining. Forget the cryptography and the peer to peer networks and the open source code. All of these things are secondary to an understanding of money itself. The core of the Bitcoin experiment is not about tech at all, it’s about money.
Unfortunately, most people do not spend enough time pondering the nature of money.
This is strange and somewhat tragic, because we spend our lives chasing it. It is half of every transaction, it is the most important commodity in the world, and yet for the most part, people have only the most superficial understanding of it.
But from an early age, we understand that money is good. We want it. We’re happy when we have it, and sad when we don’t. We learn that to obtain money, we must work for it, and as we leave childhood we go to school for many years, and work very hard, so that we may obtain money.
And so, much of our lives is spent searching and grasping for something we don’t understand.
On the surface, the reason we seek money is simple: money lets us buy things. The utility of a new car, or the entertainment of an Xbox, or the taste of a nice steak dinner is apparent, and since we want those things, we seek money.
But what people don’t spend enough time considering is why the money we use actually enables us to obtain the car, the xbox, and the dinner. Why is the shoemaker willing to give us his shoes for our money?
You cannot answer this by saying that the shoemaker can in turn trade the money to someone else, for that begs the question, why does that person want the money?
If nobody actually wants the money, and they only want what the money can buy, how did this whole crazy system get started? Who was the first person tricked into accepting something so silly as money in return for something real?
spectrum.ieee.org / By Morgen Peck / 22 May 2013 | 17:08 GMT
If the Bitcoin convention held this weekend in San Jose, CA proved one thing, it’s that the community is surprisingly diverse. Putting aside the appalling gender gap, you simply had no idea who you would bump into. A fashion photographer from Milan. A curious kid from Edmonton, Canada. An Australian anarchist recently transplanted to New York City.
The one person that no one expected to see in all this flurry was the head of a bank or credit union, and you certainly didn’t expect to find him trying to make friends. So all in all, Jordan Modell might have been the most peculiar of all the peculiar people I met at the conference. There was, it turns out, an explanation for his crypto-tech-friendly stance.
He had arrived together with Brewster Kahle, the founder of the Internet Archive, to find out whether there was anything they could do to support Bitcoin entrepreneurs during this rather crazy time.
In March, the market value of all bitcoins in circulation reached one billion dollars, attracting new investors, but also closer scrutiny from regulators. Last week, Dwolla shut down an account which funds MT Gox, the most popular online bitcoin exchange, after the Department of Homeland Security served the payment processor with a warrant. (It was hardly the first problem exchanges have seen. Back in 2011, PayPal didn’t wait for the regulators to act when it proactively closed the account of Coinpal, an individual who used to accept PayPal for bitcoins. In the early days, this service was one of the best ways for people to get their hands on bitcoins.)
technologyreview.com / By Tom Simonite / May 22, 2013
This past Sunday, Doug Scribner took out five $100 bills and began feeding them into what looked like a small, white ATM in San Jose Conference Center in California. The machine swallowed the bills smartly and credited him with an equivalent value in bitcoins, an intangible, digital currency that is backed by not gold or any government, but by math.
Scribner was one of an estimated 1,100 people who attended Bitcoin 2013, a weekend-long event in the heart of Silicon Valley and the first large conference dedicated to Bitcoin. Unsurprisingly, all those present seemed certain that the cryptocurrency was set to upend the world of finance, perhaps more. But the event also offered something new: evidence that Bitcoin is gaining traction outside its existing community of enthusiastic early adopters.
Bitcoin’s origins are mysterious. It was created by an unknown individual or individuals who used the pseudonym Satoshi Nakamoto. Cryptographic operations and oversight from a peer-to-peer network of people running Bitcoin software process transactions and protect against counterfeiting without the need for a central authority (see “What Bitcoin Is and Why It Matters”).
The Robocoin is an ATM for Bitcoins, and for a few glorious days this past weekend, on a conference center floor in San Jose, California, it dished out thousands of dollars in exchange for Bitcoins, the world’s most popular digital currency.
The two brothers who built the Robocoin — Mark and John Russell, of Las Vegas — are still trying to figure out what to do with their contraption. But one thing’s certain: they don’t want to operate it on their own. Mark Russell isn’t even sure if that’s legal.
It’s the kind of problem that’s emblematic of the ever-growing world of Bitcoins. Entrepreneurs sense big opportunity. Regulators aren’t sure what to make of it. And all that makes the future of Bitcoin ATMs as cloudy as it is interesting.
Russell is an over-the-counter Bitcoin trader. He’s the kind of guy you can call up whenever you’re in Las Vegas and flush with Bitcoins. For a percentage of the transaction, he’ll meet you and swap Bitcoins for cash, or vice versa.
There have been lots of stories about Bitcoin in the past few months thanks to its rapid price rise — from $5 a year ago for 1 bitcoin to a record high of $266 in April, before falling back to around $122 today.
Bitcoin’s price moves attract the most interest, but the system’s infrastructure is its most fascinating aspect. The crypto currency dreamed up in 2009 by a still-anonymous hacker is now one of the world’s most expansive large-scale computing pioneers.
At any given moment, Bitcoin’s peer-to-peer network contains thousands of computers linked together to generate more than 1,000 petaflops of raw computing power. To put that in perspective, the world’s fastest supercomputer, Titan, runs at less than 18 petaflops. The Bitcoin network is sucking down nearly $200,000 a day in electricity costs, according to one tracking site’s estimate.
That’s stunning for an “economy” that sprang into being just four years ago, when an inventor using the pseudonym “Satoshi Nakamoto” released the system’s source code on a cryptography mailing list.
theregister.co.uk / By Ken Tindell / 23rd May 2013 09:03 GMT
Analysis Why does Bitcoin work? Fraudsters should have left it in cinders years ago, and might have done, if it wasn’t for two things: spam and the Byzantine Empire.
A Bitcoin is basically an entry in a ledger that is distributed across a network of computers. Bitcoins are transferred between parties by noting the transaction in the ledger. This might sound just like any other banking system except there’s a crucial difference: no one is in charge of the ledger.
It’s held across a network of computers and anyone can add their computer to the network when they wish – or leave when they wish. This may seem crazy, and an easy way for fraudsters to join the network and get their computer to update the ledger to give themselves new Bitcoins.
In 1997, a British cryptographer called Adam Back proposed an anti-spam approach called Hashcash. The basic idea was to make an email message contain proof that a computationally difficult problem, specific to the contents of the message, had been solved. Any email that didn’t contain this proof would be discarded by the recipient’s email server.
Ordinary users of email wouldn’t be inconvenienced because the amount of work for one email message would be tolerable, but spammers would be deterred because it would add up to a huge amount of money, in the form of the huge electricity bill run up by all the computers they’d need to buy to solve the mathematical problems.
In the end it didn’t work out as an anti-spam technique partly because spammers today use botnets, which are vast armies of hijacked computers. But the idea behind Hashcash was picked up and used for Bitcoin.
"At any rate, the spook spoke the truth: cryptology represents the future of privacy, and more. By implication cryptology also represents the future of money, and the future of banking and finance. (By "money" I mean the medium of exchange, the institutional mechanisms for making transactions, whether by cash, check, debit card or other electronic transfer.) Given the choice between intersecting with a monetary system that leaves a detailed electronic trail of all one's financial activities, and a parallel system that ensures anonymity and privacy, people will opt for the latter. Moreover, they will demand the latter, because the current monetary system is being turned into the principal instrument of surveillance and control by tyrannical elements in Western governments." - J. Orlin Grabbe