Bitcoin

Winklevoss Twins Get Closer To Launching Their Bitcoin Exchange 92 92

An anonymous reader writes: Reuters has an update on the Winklevoss twins plan to launch a regulated Bitcoin exchange called Gemini. The two have filed a New York trust application necessary for them to launch their Gemini bitcoin exchange. If approved, the exchange would be able to accept deposits, and issue loans. The twins say they want to make digital currency mainstream in the United States.
EU

Bitcoin Exempt From VAT Says European Court of Justice 72 72

An anonymous reader writes: The European Court of Justice (ECJ) proposes that Bitcoin should be exempt from Value Added Tax (VAT). This news has been positively received by the Bitcoin community in the EU, as member states are not likely going to apply VAT to purchases and sales of Bitcoin. A clear cut argument brought up by Advocate General Juliane Kokott, was that VAT is commonly applied to goods and services which have an end consumer. Bitcoin is neither a good, nor a service and has no end consumer, as Bitcoins are eternally transferable just like normal currency. Bitcoin exchanges such as Coinbase, Kraken, Bitstamp, and Bitfinex will all benefit from this ruling, which may lead to other countries across the globe to follow a similar approach.
Bitcoin

Bitcoin Snafu Causes Miners To Generate Invalid Blocks 179 179

An anonymous reader writes: A notice at bitcoin.org warns users of the cryptocurrency that many miners are currently generating invalid blocks. The cause seems to be out-of-date software, and software that assumed blocks were valid instead of checking them. They explain further "For several months, an increasing amount of mining hash rate has been signaling its intent to begin enforcing BIP66 strict DER signatures. As part of the BIP66 rules, once 950 of the last 1,000 blocks were version 3 (v3) blocks, all upgraded miners would reject version 2 (v2) blocks. Early morning UTC on 4 July 2015, the 950/1000 (95%) threshold was reached. Shortly thereafter, a small miner (part of the non-upgraded 5%) mined an invalid block--as was an expected occurrence. Unfortunately, it turned out that roughly half the network hash rate was mining without fully validating blocks (called SPV mining), and built new blocks on top of that invalid block. Note that the roughly 50% of the network that was SPV mining had explicitly indicated that they would enforce the BIP66 rules. By not doing so, several large miners have lost over $50,000 dollars worth of mining income so far."
Encryption

MIT's Bitcoin-Inspired 'Enigma' Lets Computers Mine Encrypted Data 46 46

Guy Zyskind, Oz Nathan, and the MIT Media Lab have developed a system to encrypt data in a way that it can still be shared and used without being decrypted. "To keep track of who owns what data—and where any given data’s pieces have been distributed—Enigma stores that metadata in the bitcoin blockchain, the unforgeable record of messages copied to thousands of computers to prevent counterfeit and fraud in the bitcoin economy." Enigma needs a fairly large base of users to operate securely, so its creators have proposed requiring a fee for anyone who wants data processed in this way. That fee would then be split among the users doing the processing. Those with encrypted datasets on the Enigma network could also sell access to datamining operations without letting the miners see the unencrypted data.
Bitcoin

Greek Financial Crisis Is an Opportunity For Bitcoin 359 359

An anonymous reader writes: Greece's economy has been in trouble for several years, now, and a major vote next weekend will shake it up even further. The country can't pay its debts, and the upcoming referendum will decide whether they face increased austerity measures or start the process of exiting the Euro. One side effect of the crisis is that alternative currencies like Bitcoin suddenly look much more attractive as the "normal" currencies become unstable. "Tony Gallippi, the co-founder of bitcoin payment processor Bitpay, tweeted on Sunday night that he expected the price of bitcoin to rise to between $610 and $1,250 if Greece exits the Euro. The currency is currently worth $250. Part of the reason why the crisis is so tempting for proponents of the cryptocurrency is the echoes of a previous crisis in the Eurozone: the banking collapse in Cyprus in 2013, which saw that nation also impose capital controls to prevent massive outflows of currency from the panicking country. That collapse came at the same time as the first major boom in the price of bitcoin, which began the year at less than $20 and peaked at ten times that by early April – before it all came crashing down."
Social Networks

US Teen Pleads Guilty To Teaching ISIS About Bitcoin Via Twitter 312 312

jfruh writes: Ali Shukri Amin, a 17-year-old from Virginia, has pleaded guilty to charges that he aided ISIS by giving the group advice about using bitcoin. An odd and potentially troubling aspect of the charges is that this all took place in public — he Tweeted out links to an article on his blog about how bitcoin and Darknet could help jihadi groups, making it difficult to say whether he was publishing information protected under free speech or was directly advising the terrorist organization. Free speech qua speech isn't the only relevant charge, though: Amin "also admitted facilitating the travel of another teenager, 18-year-old Reza Niknejad, to Syria to join IS. Amin faces a maximum penalty of 15 years in prison if convicted."
Communications

OpenBazaar, Born of an Effort To Build the Next Silk Road, Raises $1 Million 107 107

Patrick O'Neill writes: After the fall of Silk Road, Amir Taaki built DarkMarket in an effort to offer a decentralized and "untouchable" market alternative. That's grown into OpenBazaar, a "censorship-resistant" protocol that just raised $1 million from venture capital firms Union Square Ventures and Andreessen Horowitz, as well as angel investor William Mougayar through the company OB1, which will now do core development on the software.
Security

Ransomware Creator Apologizes For "Sleeper" Attack, Releases Decryption Keys 45 45

colinneagle writes: Last week, a new strain of ransomware called Locker was activated after having been sitting silently on infected PCs. Security firm KnowBe4 called Locker a "sleeper" campaign that, when the malware's creator "woke it up," encrypted the infected devices' files and charged roughly $24 in exchange for the decryption keys. This week, an internet user claiming to be the creator of Locker publicly apologized for the campaign and appears to have released the decryption keys for all the devices that fell victim to it, KnowBe4 reported in an alert issued today. Locker's creator released this message in a PasteBin post, along with a link to a file hosted on Mega.co containing the decryption keys. The malware creator also said that an automatic decryption process for all devices that were affected by Locker will begin June 2nd.

However, the post did not mention anything about providing a refund to victims who paid the 0.1 bitcoin (equal to $22.88 at the time this was posted and about $24 last week) required for the decryption keys since last week. KnowBe4 CEO Stu Sjouwerman says the files released do not appear to be malicious after brief analysis, and that "it does contain a large quantity of RSA keys and Bitcoin addresses." But he warned those interested to only open these files "at your own risk until further analyses are performed." Sjouwerman speculated that the malware creator may have been spooked by attention from law enforcement or Eastern European organized crime syndicates that are behind most ransomware campaigns.
Security

The Underground Hacking Economy 29 29

Fast Company profiles the rise of sites like Hackers List and Hackers For Hire, which provide consolidated markets for people to hire hackers to break passwords, alter databases, learn to operate malware, and more. People with the skills to circumvent security are putting themselves out there as freelancers for specific tasks, and people in need of their services are posting notices asking for help. Law enforcement agencies are warning about this new type of behavior, saying it's often illegal, and facilitated by online anonymity and cryptocurrencies like Bitcoin. The number of deals currently being made through these sites remains small, but it's growing — particularly among business seeking to gain an advantage over competitors in other countries.
Crime

Feds Bust a Dark-Web Counterfeit Coupon Kingpin 90 90

Sparrowvsrevolution writes: The dark web has become the go-to corner of the Internet to buy drugs, stolen financial data, guns...and counterfeit coupons for Clif bars and condoms? The FBI indicted Beauregard Wattigney yesterday for wire fraud and trademark counterfeiting on digital black market sites Silk Road and Silk Road 2. Wattigney allegedly spoofed coupons for dozens of products and sold collections of them online in exchange for Bitcoin. The FBI accused him of doing $1 million worth of collective damage to the companies he made coupons for, but a fraud consultancy believes the total financial cost of his actions was much higher. Wattigney also offered expensive lessons that taught people how to make their own coupons. "In his tutorials, [he] explained the simple breakdown of barcode creation using the increasingly universal GS1 standard: GS1 codes begin with a 'company prefix' that can be copied from any of the company's products. The next six digits are the 'offer code,' which can be any random number for a counterfeit coupon, followed by the savings amount listed in cents and the required number of item purchases necessary to receive the discount."
Communications

Murder Accusations Hang Over Silk Road Boss Ulbricht's Sentencing 82 82

Patrick O'Neill writes: Ross Ulbricht has never been tried for murder. But tomorrow, when the convicted Silk Road creator is sentenced to prison, murder will be on the mind of the judge. Despite never filing murder-for-hire charges, New York federal prosecutors have repeatedly pushed for harsh sentencing because they say Ulbricht solicited multiple murders. The judge herself recently referred to Ulbricht's "commission of murders-for-hire" in a letter about the sentencing, painting an even grimmer picture of Ulbricht's sentencing prospects.
Bitcoin

Bitcoin Arrives At NYSE, Startup Aims To Tackle Micropayments and Easy Mining 85 85

itwbennett writes: A startup company whose backers include Qualcomm, Cisco Systems and a former ARM executive, and which reportedly has raised "well north of $116 million" has just come out of stealth mode. The first thing to know about the company, which calls itself 21, is that it has designed an embedded chip for bitcoin mining. The details aren't entirely clear, but the plan seems to be to get its bitcoin mining chip embedded into millions of smartphones and tablets, and for those devices to work collectively to mine new currency. But the company has larger ambitions: It sees its chip as a way to solve the problem of micro payments and it could also be used to pay for the chips themselves. This was followed by news that the New York Stock Exchange will begin tracking and showing Bitcoin's dollar value. Reader Lashdots adds a link to an article describing how Silicon Valley finally joined the rush to invest in Bitcoin-related businesses.
Bitcoin

Decoding the Enigma of Satoshi Nakamoto 61 61

HughPickens.com writes: For the past year Nathaniel Popper has been working on a book about the history of Bitcoin and writes in the NYT that it is hard to avoid being drawn in by the almost mystical riddle of Satoshi Nakamoto's identity. Popper has his own candidate for founder of Bitcoin, a reclusive American man of Hungarian descent named Nick Szabo. Szabo worked in a loosely organized group of digital privacy activists who over decades laid the foundation for Bitcoin and created many parts that later went into the virtual currency. Bitcoin was not a bolt out of the blue, as is sometimes assumed, but was instead built on the ideas of multiple people over several decades. Several experiments in digital cash circulated on the Cypherpunk lists in the 1990s. Adam Back, a British researcher, created an algorithm called hashcash that later became a central component of Bitcoin. Another, called b money, was designed by an intensely private computer engineer named Wei Dai.

It may be impossible to prove Satoshi's identity until the person or people behind Bitcoin's curtain decide to come forward and prove ownership of Satoshi's old electronic accounts and at this point, the creator's identity is no longer important to Bitcoin's future. Since Satoshi stopped contributing to the project in 2011, most of the open-source code has been rewritten by a group of programmers whose identities are known. According to Popper whoever it is, the real Satoshi Nakamoto has many good reasons for wanting to stay anonymous. Perhaps the most obvious is potential danger. Satoshi Nakamoto most likely collected nearly a million Bitcoins during the system's first year. Given that each Bitcoin is now worth about $240, the stash could be worth more than $200 million. That could make Satoshi a target. "With his modest clothes and unassuming manner, Mr. Szabo could be the kind of person who could have a fortune and not spend any of it," concludes Popper, "or even throw away the keys to the bank."
The Almighty Buck

The Solution To Argentina's Banking Problems Is To Go Cashless 294 294

dkatana writes: There is no way back for Argentinian people to trust their own currency. Several governments have used the "Peso/Dollar" exchange to dig into people's savings, reward their friends and limit the freedom of citizens to use other currencies.

Short of Dollarizing the economy again, the only solution for the country is going cashless. People are desperate, and they're looking for alternatives such as mobile payments, Amazon gift cards and Bitcoin to store their savings away from government control. A digital currency could help curb black market exchanges, fight corruption and restore the country's image.
The Internet

After Over a Year of Police Action, Dark Net Black Markets Still Growing 87 87

When the original Silk Road was shut down in 2013, it provided definitive evidence that federal law enforcement was targeting online black markets. Later, after the fall of Silk Road 2.0 and the Evolution Market's admins running off with their customers' money, you might have expected people to become more wary of dark net markets — but that doesn't seem to be the case. The number of products being bought and sold is up significantly since last year, and it's quadrupled since the original Silk Road fell. "The most enduring institution on the Dark Net is Agora. Founded in December 2014, amid the rubble of Silk Road's fall, Agora now accounts for 37 percent of all Dark Net product listings. It's a drug-heavy market with substantial supplies in marijuana, ecstasy, prescription drugs, and stimulants—and nearly any other drug you can imagine."
Security

Cyberlock Lawyers Threaten Security Researcher Over Vulnerability Disclosure 87 87

qubezz writes: Security researcher Phar (Mike Davis/IOActive) gave his 30 days of disclosure notice to Cyberlock (apparently a company that makes electronic lock cylinders) that he would release a public advisory on vulnerabilities he found with the company's security devices. On day 29, their lawyers responded with a request to refrain, feigning ignorance of the previous notice, and invoking mention of the DMCA (this is not actually a DMCA takedown notice, as the law firm is attempting to suppress initial disclosure through legal wrangling). Mike's blog states: "The previous DMCA threats are from a company called Cyberlock, I had planned to do a fun little blog post (cause i ... hate blog posts) on the fun of how I obtained one, extracted the firmware bypassing the code protection and figured out its "encryption" and did various other fun things a lock shouldn't do for what its marketed as.. But before I could write that post I needed to let them know what issues we have deemed weaknesses in their gear.. the below axe grinderery is the results. (sic)" What should researchers do when companies make baseless legal threats to maintain their security-through-obscurity? Related: Bitcoin exchange company Coinbase has been accused of spying on a dark net researcher.
Bitcoin

Bitcoin Is Disrupting the Argentine Economy 253 253

HughPickens.com writes: Nathaniel Popper writes in the NYT that with its volatile currency and dysfunctional banks, Argentina is the perfect place to experiment with a new digital currency. The number of Bitcoin users in Argentina is relatively small; it barely registers on most charts of global Bitcoin usage. But Argentina has been quietly gaining renown in technology circles as the first, and almost only, place where Bitcoins are being regularly used by ordinary people for real commercial transactions. For example, BitPagos is selling bitcoins in over 8,000 Argentine convenience stores and is helping more than 200 hotels, both cheap and boutique, take credit-card payments from foreign tourists. The money brought to Argentina using Bitcoin circumvents the onerous government restrictions on receiving money from abroad

The Rock Hostel is one of hundreds of hotels in the country using BitPagos to collect credit-card payments from foreign customers. If owner Rodriguez Pons accepted credit-card payments from American customers through the usual financial channels, customers would be billed in dollars, and when those dollars came to Pons's Argentine bank account, they would be converted at the official rate, about 30 percent lower than the black-market rate. It would also take 20 days for Pons to get her pesos. BitPagos helped counter these drawbacks by taking the credit-card payment in the United States and then using the dollars to buy Bitcoins, generally from Coinbase, before sending them to Pons immediately.

Bitcoin proponents like to say that the currency first became popular in the places that needed it least, like Europe and the United States, given how smoothly the currencies and financial services work there. It makes sense that a place like Argentina would be fertile ground for a virtual currency. Inflation is constant: At the end of 2014, for example, the peso was worth 25 percent less than it was at the beginning of the year. And that adversity pales in comparison with past bouts of hyperinflation, defaults on national debts and currency revaluations. "In the long run, Bitcoin will be very disruptive to the developed world," says Dan Morehead, a former Goldman Sachs executive who now runs a hedge fund focused on Bitcoin. Things are happening sooner in Argentina, he says, because its financial system creates hassles for the people there. But, he added, "Argentina is just a more extreme example of the situation in every country."
Security

New Javascript Attack Lets Websites Spy On the CPU's Cache 134 134

An anonymous reader writes: Bruce Upbin at Forbes reports on a new and insidious way for a malicious website to spy on a computer. Any computer running a late-model Intel microprocessor and a Web browser using HTML5 (i.e., 80% of all PCs in the world) is vulnerable to this attack. The exploit, which the researchers are calling "the spy in the sandbox," is a form of side-channel attack. Side channel attacks were previously used to break into cars, steal encryption keys and ride the subway for free, but this is the first time they're targeted at innocent web users. The attack requires little in the way of cost or time on the part of the attacker; there's nothing to install and no need to break into hardened systems. All a hacker has to do is lure a victim to an untrusted web page with content controlled by the attacker.
Crime

New Dark Web Market Is Selling Zero-Day Exploits 30 30

Sparrowvsrevolution writes Over the last month, a marketplace calling itself TheRealDeal Market has emerged on the dark web, with a focus on sales of hackers' zero-day attack methods. Like the Silk Road and its online black market successors like Agora and the recently defunct Evolution, TheRealDeal runs as a Tor hidden service and uses bitcoin to hide the identities of its buyers, sellers, and administrators. But while some other sites have sold only basic, low-level hacking tools and stolen financial details, TheRealDeal's creators say they're looking to broker premium hacker data like zero-days, source code, and hacking services, often offered on an exclusive, one-time sale basis.

Currently an iCloud exploit is being offered for sale on the site with a price tag of $17,000 in bitcoin, claiming to be a new method of hacking Apple iCloud accounts. "Any account can be accessed with a malicious request from a proxy account," reads the description. "Please arrange a demonstration using my service listing to hack an account of your choice." Others include a technique to hack WordPress' multisite configuration, an exploit against Android's Webview stock browser, and an Internet Explorer attack that claims to work on Windows XP, Windows Vista and Windows 7, available for around $8,000 in bitcoin. None of these zero days have yet been proven to be real, but an escrow system on the site using bitcoin's multisignature transaction feature is designed to prevent scammers from selling fake exploits.
Bitcoin

MIT May Help Lead Bitcoin Standards Effort 67 67

gthuang88 writes: With everyone from PayPal merchants to Rand Paul starting to accept Bitcoins as payment, the race is on to develop technical standards for the virtual currency. Now MIT Media Lab director Joi Ito is getting ready to unveil a plan for MIT to become an independent, neutral home for standards development. Ito is enlisting cryptographer Ron Rivest and economist Simon Johnson to help with the effort, which could provide an academic alternative to the Bitcoin Foundation for conversations about the currency's future. Ito says, "I’m not pushing it, but I’m offering MIT as a neutral academic home for some of the conversations and the technical coordination. Which I think will give a lot more stability to Bitcoin, which right now is a little bit fragile."