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Bye Banks, Hi Bitcoin

David Seaman, Published on Oct 7, 2015

The Who, What, Why and How of the Ongoing Transaction Malleability Attack /  Aaron van Wirdum / 5:34 AM October 8th, 2015

For the past several days*, the Bitcoin network has been plagued by a so-called “transaction malleability attack.” Bitcoin users have experienced a number of annoyances, causing confusion and frustration. And while the transaction malleability issue is well-known and has plagued the Bitcoin network before, to many it is still unclear what it is, why it is a problem, who is causing the attack right now, and what can be done about it.

*According to the claimed attacker (see below), the attack is currently paused at the time of writing, but could and probably will be continued at any time.

What is transaction malleability?

In order to understand the transaction malleability attack, it helps to first understand the basics of how Bitcoin transactions work. In simplified form, each transaction over the Bitcoin network consists of different types of data. This includes transaction inputs (refering to the addresses bitcoin come from), transaction outputs (refering to the addresses bitcoin are sent to), the amount of bitcoin sent, and more. All of this data is cryptographically signed, combined, and scrambled (“hashed”) into a unique and smaller piece of data: a hash. This hash is essentially the transaction ID. If a miner confirms the transaction, the transaction ID is included in a block and stored in the blockchain.

The problem that enables transaction malleability, however, is that effectively identical signatures can result in completely different hashes. The specifics of this are deeply cryptographic, and are very hard – if not impossible – to explain in plain English. But as one extremely simplified example to get an idea of the problem, a comparison would be that the numbers “145” and “0145” are effectively the same number in many cases. But when hashed, “145” and “0145” might actually produce completely different results.


Buying gold with bitcoin: Brilliant or blasphemous? / Chris Matthews / OCTOBER 8, 2015, 10:51 AM EDT

Blockchain technology is getting coopted by the establishment.

Bitcoin’s invention back in 2008 couldn’t have been timed better. The financial crisis was just coming to a boil, leading people to question the competence of central banks and major financial institutions.

When bitcoin began to enter the mainstream consciousness in 2011, such skepticism was still very much alive. The European debt crisis was just getting underway. And Wikileaks’ publication of U.S. state department cables followed by the blacklisting of the group by payments companies at the urging of the federal government showed the world just how much power the government could wield over an individual’s ability to spend his own money.

The idea that bitcoin is an unstoppable force that would ultimately be used to wrest power from the establishment was championed by the media, which loves a good David vs. Goliath story. And a small group of dedicated users are still clinging to that notion. But as countless economists, financiers, and other naysayers have pointed out, revolutionizing the global financial system requires more than just the earnest intentions of a couple hundred thousand believers. In the real world, Goliath almost always wins.


Bitcoin Price Changeup; Range Trade On / Samuel Rae / 

So today we are going to do something a little different. Normally, our standard intraday strategy dictates that we enter on any volatility in the bitcoin price at a breakout of our predefined key levels. We place a stop just the other side of our entry, and set and forget the trade. Recent action has been a bit flat, however, and so for today’s session we are going to widen out the range and play on the movement we see between support and resistance. So, with this said, here are the levels we are watching for today’s session, alongside a note about our predefined risk strategy going forward. First up, take a quick look at the chart.


Lightning, Duplex and the Search for Scalable Bitcoin Micropayments / Pete Rizzo / October 7, 2015 at 23:59 BST

Like most emerging technologies, bitcoin exists in a gap between what could be possible should the technology mature and its abilities today.

For instance, there may be no older and bigger ‘buried treasure’ use case for bitcoin than its ability to serve as a protocol for micropayments. Compared to credit cards and PayPal, the latter of which defines a micropayment as less than roughly $5, bitcoin is divisible into 100 million smaller units called Satoshis, valued at $0.000002 at today’s price levels.

Proponents have long theorized that this divisibility, coupled with a wider adoption of bitcoin, could create conditions under which all manner of digital media, now largely subsidized by advertising and events, might be paid for through bitcoin micropayments.

Estimates seeking to quantify the size of this untapped market are so far scarce, though Wedbush Securities has forecasted bitcoin micropayments could be a $925bn market by 2025. “Previously impractical, electronic payments of <$1 could broadly change content monetization on the web, possibly supplanting ads,” a July report theorized.

However, despite this promise, the network today can’t send satoshis at an affordable price.

“The first day you read the [Bitcoin white] paper, you’re like ‘Oh amazing micropayments,’ then you realize it doesn’t work at all,” developer Thaddeus Dryja told CoinDesk.


The Crypto Show: Bitcoin Bounty Hunter, Dollar Vigilante, and Factoid Man

Published on October 8th, 2015 by TheCryptoShow

Tonight is a whirlwind show Jeff Berwick with his take on The Shemitah and updates on Anarchapulco 2016. Roger Ver on the roll out of forums and how you can win $1000 or 4 bitcoins. Rogers role in a Russian Bitcoin Documentary and much more. Paul Snow unveils the addition of Factoms Factoids to the Polinex Exchange.

Bitcoin: New Generation Of ‘Hard’ Wallets Bodes Well For Long Term Value / Martin Tillier / October 07, 2015, 01:06:35 PM EDT

It doesn’t take a genius to see that the future of Bitcoin as a currency depends on its value, or rather people’s perception of its value. In this context, value does not necessarily equate to price. The price of Bitcoin in terms of its relative value to other currencies can and will fluctuate, but in the long term its real value will be determined by how many people perceive it as being useful for exchanging goods and services. That perception of value has been given a couple of huge boosts in the last few months by the launches of several hardware wallets.

When you break it down, there are two things that give a currency, any currency, value. The first is trust. Those using a currency have to have a way of storing and transacting with it that they believe is relatively secure, and they have to believe that others feel the same way and will accept it as payment. In addition they must have faith that the currency will retain its value in terms of the goods and services it will buy.


BitX Smart Wallet Launched for Mobile Bitcoin Users / / Oct 7, 2015 4:14 PM EDT

Every time a new mobile Bitcoin wallet is released, people get excited about its new features. Over the past few months, most mobile Bitcoin wallets have announced new features, but nothing makes them stand out from one another. Just yesterday, the new BitX Smart Wallet was released, which offers some near, albeit not groundbreaking, features.

BitX Smart Wallet – In-App Bitcoin Buying & Selling

One of the most prominent features of the BitX Smart Wallet is the option for users to buy and sell Bitcoin from within the application itself. However, as you would come to expect from a Bitcoin exchange, this functionality only seems to be available to users on their own problem. Furthermore, this feature is limited to supported regions only, making it unavailable for specific countries.

Regardless of its limited availability, it is a positive trend to see wallet developers enable in-app trades of Bitcoin against fiat currency. For novice users, these types of mobile Bitcoin wallets will be very useful, as they can do everything they need and want within one application, rather than opening a browser window to trade Bitcoin.


Bitcoin Price Technical Analysis for 8/10/2015 – The Long Strategy / 

Trading with a slightly negative bias, Bitcoin has slipped to $244.28, down 0.94 percent yesterday. Even though the uptrend is intact, Bitcoin has failed to sustain above a key technical level which has led to severe deteriorations in the technical indicators.

Let us discuss each of the factors in the technical analysis of the daily BTC-USD price chart below.


The Rise of the Internet of Value (IoV) / Philip Farah via Blue Orange Innovations, Inc./ October 7th, 2015

How Blockchains Are About to Disrupt Industries, Governments, and People’s Lives

Most people are familiar with the trajectory of digital evolution to date, from Web 1.0 (a one-way content distribution net) to Web 2.0 (an interactive social net) and possibly Web 3.0 (where smart applications monitor data and make decisions as human’s agents, and in doing so interact with both humans, other apps, or IoT-enabled machines).

What might be less well-understood is the disruptive power of a new wave of digital capabilities enabled by cryptocurrencies (e.g., Bitcoin) and the underlying distributed ledger technology enabling the P2P exchange of digital value (e.g., the blockchain).

They represent a major catalyst to the emergence and the seamless exchange of new forms of digital value.

In fact, the capabilities that cryptocurrencies and nextgen distributed ledgers (enabling smart contracts) bring to the table have the potential to impact business evolution in a way that is likely to dwarf the impact of Web 1.0 and Web 2.0. It will be a key building block in the current digital evolution, i.e., Web 3.0, or constitute in itself the basis for Web 4.0.

Today over 800 cryptocurrency startups (and over a billion dollars in related VC investments) are actively targeting pockets of value waiting to be unlocked, addressing the limitations of the technology and making it more user-friendly, secure, and robust. Early startup blockchain companies focused on Bitcoin with the goal of providing much needed infrastructure and the ability to convert fiat into cryptocurrency. More recent startups are expanding the blockchain space beyond currency and into more complicated financial instruments. Looking forward, a new trend of startups is emerging, aimed at pushing the blockchain outside of financial applications and into other industries.


Winklevoss twins talk about their new Gemini Bitcoin exchange in a Reddit AMA / Duncan Riley / Oct 8, 2015

Twins Cameron and Tyler Winklevoss have celebrated the launch of their new Bitcoin exchange Gemini Trust Company LLC. this week by taking to Reddit to do an AMA (ask me anything).

Despite the way they were perhaps portrayed in the movie The Social Network and perceptions around them since, one thing that stood out from the AMA interaction is just how well spoken and articulate both of the twins are; most AMA’s occur when celebrities or business people are trying to promote something and that’s still the case here, but both of them were fair and decent in their responses, even when asked if they still have a relationship with Facebook’s Mark Zuckerberg.

The result of the AMA is more insight into where they see Gemini going, and the Bitcoin space broadly.

Here’s the best questions and answers.

Q: What have you done with Gemini to ensure I’m not “gox’d” (a reference to the collapse of the Mt Gox Bitcoin exchange) out of my coins if I choose to use your service?

A: So we built from ground one with a security first mentality, our first 3 hires were security experts. Our chief security officer was the head of security for AirBNB, something like a 15 or 20B company so it’s quite large. He also worked on Google Wallet and at Microsoft with the highly touted security group. We’ve used the best practices, multi-signature technology, hardware security modules, geographically distributed vault systems we’ve spent about a year and a half building state of the art both to prevent from external hacks and internal malfeasance and any type of errors. You know this has been the most important thing for us to think about. We take security really seriously and we recognize that security has been pretty much the downfall of Bitcoin companies before and we’ve tried to learn from that and build the best product possible.


Bitcoin experts compare private blockchains to internet’s early ‘walled gardens’ / Ian Allison / 

People often make a comparison between Bitcoin and the growth of the internet: to begin with early technology adopters embraced it; later its renegade reputation led to a vogue for walled gardens and closed networks for corporate use.

This comparison was invoked by Paul Gordon, CEO Quantave, at a recent panel session entitled “The Future of Money” at Linedata Exchange London 2015. He was joined on the panel by Nicolas Cary, co-founder of, and James Smith, CEO Elliptic.

Gordon said: “The early days of the internet was like this scary thing, all gambling and porn and you couldn’t even transact on there. And then nice walled gardens came along and made everyone quite comfortable with it, which may be like banks and financial institutions are doing now. But it kind of misses the point. The idea of the web and the internet is supposed to be open to everyone.”

The analogy concerns the surge of interest banks have now taken in private blockchains. Recently some 22 banks joined the R3 initiative to arrive at common standards for a private distributed system.

Smith said: “There have been some well publicised groups of banks coming together under a company called R3 and what they are looking at is setting up completely private networks. I think it’s unclear – unclear to them – what they going to do exactly.


Uniform Law Commission Seeks Unified Regulation For Virtual Currencies In America / B Holmes / 8 October 2015

The Uniform Law Commission (ULC) recently released the Regulation of Virtual Currencies Act, to serve as a “discussion only” draft for the committee’s upcoming meeting on 9 Oct. The committee will be considering “the need and feasibility of drafting state regulation of virtual currencies.”

The battle to find a balance between regulation and innovation has been ongoing, and became heated when the New York Department of Financial Services (NYDFS) launched an inquiry into the regulatory guidelines of digital currency in 2013. Former NYDFS Superintendent Benjamin Lawsky successfully implemented the BitLicense on June 3, 2015. It was the first comprehensive legal framework for regulating digital currency firms.

“The BitLicense – which is the product of a nearly two-year-long NYDFS inquiry – contains key consumer protection, anti-money laundering compliance, and cyber security rules tailored for digital currency companies.”


Despite a slew of businesses exiting New York due to the regulation, Circle Internet Financial became the first company to have their application approved, in September. “Issuing the first BitLicense is an important milestone in the long-term development of the virtual currency industry. Putting in place rules of the road that help protect consumers from loss or theft and root out illicit activity is vital to building trust in this new financial technology. We will continue to move forward on evaluating and approving additional BitLicenses,” said the Acting Superintendent of Financial Services, Anthony Albanese, in a press release.


Bitcoin Extortion – A Looming Crisis for the Financial Sector / Jay-R Gatdul / 10/08/15 / 2:40

Bitcoin has been making waves in terms of usage– unfortunately, not in a direction that most supporters of its adoption would generally recommend. There is a growing concern that the unique traits of the cryptocurrency make it highly susceptible to extortion, and there is no denying that the finance and banking sectors are viable targets. The attacks have begun, starting with reported cases of Hong Kong and Australian websites suffering unforeseen cyber-attacks fairly recently.

Now, as new studies emerge, finance executives are even more reluctant to associate their businesses with bitcoin. Will this hinder bitcoin advancement for at least a few more quarters, or is this just another hiccup for the cryptocurrency movement?

DDoS Attacks

DDoS (distributed denial of service) attacks have been a prevalent problem for companies that conduct a significant amount of their business online. Once a website goes down, it doesn’t only lose its visitors, but also its potential customers, partners, and most importantly, trust.

Online gaming sites and exchanges have been frequent targets of cryptocurrency-related attacks of this kind. These companies have complied with Bitcoin extortion in order to gain back lost status and reduce the risk of more implications.


Can bitcoin find its niche in Africa? / TOM JACKSON / 

“Bitcoin for remittances” has been a catchphrase of digital currency evangelists on the continent for some time now. But with this particular dream starting to sour, is there still scope for bitcoin to prove its worth and inspire uptake among Africans?

At Disrupt Africa, we might well have counted among those evangelists ourselves, writing earlier this year that “booming bitcoin” may prove the “perfect fit” for Africa. Now, however, both on the continent and globally, the digital currency is in the doldrums and it is unclear how bright the future is.

A perfect fit?

Our contention that bitcoin may find its natural home in Africa was based on a number of factors. Firstly, global interest in bitcoin was on the rise, with the State of Bitcoin Q1 2015 report released by CoinDesk reporting the first quarter of this year saw a record amount of venture capital ploughed into Bitcoin companies globally.

This interest was also evident in Africa, not least given the sizeable round raised in February by African bitcoin remittance startup BitPesa. In July, Kenyan digital currency wallet and development provider Bitsoko was also backed, receiving a US$100,000 grant through the Grand Challenges Explorations (GCE) initiative of the Bill and Melinda Gates Foundation.

Bitcoin appeared to be booming in Africa, with the continent’s first bitcoin conference taking place in Cape Town, followed by the launch of the first Bitcoin Academy in the same city. A number of bitcoin startups started attracting attention, especially in the remittance space.

Remittances appeared the perfect area for bitcoin to prove its worth. PayPal is inactive. Credit card penetration in Africa is below three per cent. Bank charges on international payments are high. Most people aren’t banked at all. And the duopoly of money senders Western Union and MoneyGram was described by Kofi Annan’s Africa Progress Panel as a “super racket”. The more than 30 million diaspora Africans sending home US$40 billion per year were paying an average of 12.3 per cent to send US$200. Bitcoin could change this.


Bitcoin Businesses Meet with US Congressman Jared Polis to Find Common Ground / Jessie Willms / October 8th, 2015 4:18 AM

Congressman Polis Bridges Gap Between Bitcoin Companies and Capitol Hill

U.S. Congressman Jared Polis took time out from his busy campaign schedule recently to meet with representatives, including CEOs, from nine digital currencies companies including itBit and Blockchain.

Organized by the Washington, D.C.-based advocacy and education group Coin Center, the roundtable was an attempt to bridge the gap between the world of Washington and Congress and the world of fintech and digital currencies.

Coin Center Executive Director Jerry Brito, who chaired the meeting, was happy with the outcome and told Bitcoin Magazine:

“We visit policymakers in D.C. often to talk about these issues, but there’s no substitute for having them come out and meet the actual innovators who are building these great companies and technologies. I think Rep. Polis learned a lot about what these companies do and the regulatory issues they’re facing, and they learned a bit more about what it takes to move policy in government.”

Rep. Polis is an acknowledged “thought leader” for the digital currency movement and has made a name for himself in the community with his ongoing support for Bitcoin.


Bitcoin Transactions Were Under Attack for a Week, Prankster Reveals Himself / Catalin Cimpanu / 8 Oct 2015, 09:39 GMT

Transactions were being duplicated in a malleability attack

A Russian man that calls himself “Alister Maclin” has been disrupting the Bitcoin network for over a week, creating duplicate transactions, and annoying users.

The attack was first noticed by Coinkite, a high-tech Bitcoin platform, and was eventually claimed by Maclin on one of the Bitcoin forums.

According to Bitcoin experts, the attack was not dangerous and is the equivalent of “spam” on the Bitcoin blockchain servers, known in the industry as a “malleability attack.”

A malleability attack on the Bitcoin network duplicates transactions

What happens is that when User A sends a transaction to User B, an attacker could intercept the Bitcoin payment and alter its ID (from 0001 to 0002).

When the transaction reaches the Bitcoin blockchain, the technology that registers and logs the payment, it is recorded with both IDs, causing a serious delay in showing the payment as confirmed (usually takes 10 minutes).



There has been a lot of talk about the demographic dominance of men in Bitcoin. Critics of the culture point to numerous posts on popular Bitcoin forums like this one, this one, this one or this one.

While I think it’s important to not give people on forums too much credit as an accurate reflection of humanity, it is of course disturbing that, when a woman makes a post on popular forum BitcoinTalk, she can be greeted with “TITS or GTFO.”

You can look at the speaker lists of most Bitcoin conferences, and there are more men than women. The speaker lists at conferences like the London Bitcoin Expo, Inside Bitcoins Berlin 2014 and many others demonstrate this. Contemporary conferences, like Coin Congress in San Francisco and the Texas Bitcoin Conference seem to be making efforts to change this, while others, like Porcest in New Hampshire, have incorporated Bitcoin panels featuring only women.

This is largely in part due to the increasing number of women entering the Bitcoin Community. Former JP Morgan executive Blythe Masters now works in the Bitcoin world; Elizabeth Ploshay; Connie Gallippi; Victoria Van Eyk; Perianne M. Boring and many others make up a diverse cross-section of women now active in Bitcoin.

Nonetheless, as recently as two years ago, UCL researcher Lui Smyth surveyed the Bitcoin community and found it to be 95% male. In more recent surveys, numbers have been similar. Victoria Turk wrote an article for Vice’s Motherboard called “Bitcoin Needs Women.” Before she wrote it, she tweeted:


U.S. Marshals to auction about 44K Bitcoin seized from Silk Road founder

U.S. Marshals will auction about 44,341 Bitcoins that were seized from Silk Road operator Ross Ulbricht. / Robert Abel / October 07, 2015

U.S. Marshals will auction approximately 44,341 remaining Bitcoins seized during the conviction and civil forfeiture actions against Silk Road operator Ross Ulbricht.

The auction will take place on Nov. 5 from 8 a.m. to 2 p.m. EST and the winner(s) will be notified on Nov. 6, according to the release. Bids only will be accepted from bidders who have preregistered by email between Oct. 19 and noon on Nov. 2. These are the last remaining Bitcoins in custody in connection to the Ulbricht case.

The cryptocurrency will be offered in 21 blocks of 2,000 bitcoins and one block of a little more than 2,341 bitcoins.

Ulbricht was sentenced to life in prison in May in a federal district court in New York and ordered to pay $183,961,921 for his involvement and creation of the Silk Road marketplace.


Bitpay And Ingenico Enabling Global Bitcoin Point Of Sale Payments /  Luke Parker / 8 October 2015

The world’s largest bitcoin merchant payment network, BitPay, and the world’s largest payment systems provider, France-based Ingenico Group, have announced a new collaboration, allowing brick and mortar stores around the world to accept bitcoin payments through Ingenico Point Of Sale (POS) devices.

– Tony Gallippi, BitPay Executive Chairman

 POS terminals enable retailers and firms to accept a wide range of non-cash payment types, traditionally credit and debit cards, at millions of locations worldwide. With Bitpay integration, Ingenico’s customers, namely banks and retail merchants, can now easily accept bitcoin on a global scale, using Ingenico’s POS terminals, in store, online and mobile payments.

As a part of the global shift away from physical money and antiquated banking systems, POS terminals are becoming more and more common in all parts of the world, and their market has witnessed considerable growth in recent years, owing to ease of use and improved return on investment offered by these systems.