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Bitcoin

BitTorrent Inventor Bram Cohen Will Start His Own Cryptocurrency (torrentfreak.com) 94

Bram Cohen, the creator of BitTorrent, has showed deep interest in cryptocurrency in the past, and now it looks like he is going to start his own. From a report: Without going into technical details, Cohen believes that Bitcoin is wasteful. He suggests that a cryptocurrency that pins the mining value on storage space rather than processor time will be superior. In an interview with TorrentFreak's Steal This Show, Cohen revealed that his interest in cryptocurrencies is not merely abstract. It will be his core focus in the near future. "My proposal isn't really to do something to BitCoin. It really has to be a new currency," Cohen says. "I'm going to make a cryptocurrency company. That's my plan." By focusing on a storage based solution, BitTorrent's inventor also hopes to address other Bitcoin flaws, such as the 51% attack. "Sometimes people have this misapprehension that Bitcoin is a democracy. No Bitcoin is not a democracy; it's called a 51% attack for a reason. That's not a majority of the vote, that's not how Bitcoin works."
The Almighty Buck

Bitcoin Exchange Sues Wells Fargo Over Massive Wire Transfer Suspension (bitcoin.com) 79

An anonymous reader quotes this report from the cryptocurrency news site Bitcoin.com: Bitfinex, on Wednesday, filed a lawsuit against Wells Fargo for suspending its outgoing U.S. dollars wire transfers. In addition to "a preliminary and permanent injunction against Wells Fargo," the exchange is seeking compensatory damages in excess of $75,000 and any additional relief the court may deem fair as well as a jury trial for the case... The court document states that Bitfinex is a customer of four Taiwan-based banks but is not itself a customer of Wells Fargo. However, its banks in Taiwan use Wells Fargo as a correspondent bank to process U.S. dollar wire transfers, which is a normal practice in cross-border payments.
"So far, close to US$180M in funds is locked up in Wells Fargo accounts," writes The Merkle, "with no clear path to a resolution in sight." But a Bitfinex representative on social media pointed out that "Funds are not frozen," adding that Wells Fargo is just a correspondent bank, and "They have chosen to block wire transfers between us and our customers which we are challenging in court."

Another post from BFX_Brandon states that "If we allow them to simply flip a switch and disrupt business, then there becomes a precedence in the Bitcoin industry beyond just Bitfinex, so we believe it is the appropriate time to take action."
Privacy

Hacker Group Leaks 'NSA's Top Secret Arsenal of Digital Weapons' (vice.com) 69

Hacker group 'The Shadow Brokers', which last year allegedly released top-secret tools that the National Security Agency had used to break into the networks of foreign governments and other espionage targets, today said it is disappointed with President Donald Trump, and released more such alleged tools. From a report on Motherboard: On Saturday, The Shadow Brokers, a hacker or group of hackers that has previously dumped NSA hacking tools, released more alleged exploits. The group published a password for an encrypted cache of files they distributed last year. "Be considering this our form of protest," the group wrote in a rambling, politically loaded rant published on Medium. Back in August, The Shadow Brokers released a number of exploits stolen from the NSA. Many of these affected hardware firewalls, from companies such as Cisco and Juniper. At the time, the group also dumped another cache allegedly containing more hacking tools, and said they would release the corresponding password to the winner of a bitcoin auction. That fund-raising effort was ultimately unsuccessful, and The Shadow Brokers claimed they were calling the whole thing off in January. But now, anyone can unlock the auction data dump. (Motherboard confirmed that the password did indeed decrypt the original auction file). In a series of tweets, Edward Snowden said, "NSA just lost control of its Top Secret arsenal of digital weapons; hackers leaked it. 1) https://github.com/x0rz/EQGRP 2) For those who have never heard of the hacker group behind today's leak of NSA's cyberweapons, last year's story."

He adds, "quick review of the ShadowBrokers leak of Top Secret NSA tools reveals it's nowhere near the full library, but there's still so much here that NSA should be able to instantly identify where this set came from and how they lost it. If they can't, it's a scandal."
Bitcoin

Kim Dotcom Announces New Bitcoin Venture For Content Uploaders To Earn Money (reuters.com) 38

Infamous New Zealand-based internet mogul Kim Dotcom plans to launch a Bitcoin payments system for users to sell files and video streaming as he fights extradition to the United States for criminal copyright charges. From a report on Reuters: The German-born entrepreneur, who is wanted by U.S. law enforcement on copyright and money laundering allegations related to his now-defunct streaming site Megaupload, announced his new venture called 'Bitcontent' in a video posted on YouTube this week. "You can create a payment for any content that you put on the internet... you can share that with your customers, with the interest community and, boom, you are basically in business and can sell your content," Dotcom said in the video. He added that Bitcontent would eventually allow businesses, such as news organizations, to earn money from their entire websites. He did not provide a launch date. Dotcom did not provide details on how Bitcontent would differ from existing Bitcoin operations or how it would help news organizations make money beyond existing subscription payment options.
Bitcoin

Bitcoin Becomes Legal Payment Option In Japan, Prices Spike (investopedia.com) 77

An anonymous reader quotes a report from Investopedia: A bill to amend Japan's Banking Act has finally come to fruition, recognizing Bitcoin and other cryptocurrencies as legal tender. The bill has far-reaching repercussions for the digital currency world as well as the way that cryptocurrencies can be traded and exchanged. The Banking Act was modified after a long process of debate and dialog which saw proponents of digital currencies arguing on their behalf. Now, after months of discussion, the bill has come into effect as of the beginning of April. Section 3 of the bill has been modified to including wording on virtual currency and is being called the Virtual Currency Act, according to reporting by Brave New Coin. Digital currencies like Bitcoin have finally received definition and recognition as a means of payment by the Japanese government. The Banking Act's Payment Services Act has also moved to define a digital currency as "property of value," meaning that it is usable for payment in the broader marketplace and that it may be bought or sold. At the same time, the Japanese bill distinguishes between digital currencies like Bitcoin and "electronic money." Digital currency, in this case, is not issued by a specific entity and may be used by any accepting individual, while electronic money can be linked to a specific issuer and can only be used by that issuer or persons specified by the issuer. Along with the recognition of Bitcoin and other digital currencies is the stipulation that profits from trading of those currencies may be considered as "income from business activities or miscellaneous income." This makes Bitcoin subject to various taxes, including capital gains tax.
Bitcoin

Venezuelan Developers Are Using Bitcoin, Rare Pepe Trading Cards To Fight Against a Dismal Economy (cryptoinsider.com) 93

According to Crypto Insider, Venezuelan developers have been selling "rare pepes" -- trading cards that contain unique illustrations and photoshops of the character Pepe the Frog. While the trading cards started out as nothing more than a joke, many of them have been traded for thousands of dollars on the Counterparty platform, which is built on top of Bitcoin, and have provided a way for many developers to sustain themselves in Venezuela's poor economy. From the report: The basic idea behind the issuance of rare pepes on top of the Counterparty platform is that it enables scarcity in a digital world. Each rare pepe card is linked to a little bit of bitcoin through a practice known as coin coloring. Whoever owns the private keys associated with the address where the bitcoins that represent a specific rare pepe card is located is the one who owns that particular trading card. Now, a group of developers in Venezuela are building games similar to Hearthstone and Pokemon where the rare pepe trading cards will play an integral role. If you go to rarepepe.party right now, you're mainly presented with a video of what the first game based on the Rare Pepe digital trading cards will look like. The concept is similar to Hearthstone or Magic: The Gathering where players essentially do battle with their opponents via characters on trading cards, which have specific stats and features. In this case, the characters are various rare pepes. With many rare pepes already released (you can view them in the official rare pepe directory), the developers behind Rare Pepe Party are attempting to provide a use case for these new trading cards. While some rare pepe cards already have stats on them, the developer who chatted with Crypto Insider says those stats may not mean much when it's time to play the game. While rare pepes are nothing more than fun and games for much of the developed world, they're a matter of survival in Venezuela. "We're based in Venezuela, and our business has been saved by bitcoin many times," said the developer. The developer claims roughly 80 percent of the offices around the area where Rare Pepe Party is being developed have shut down over the past year. The biggest businesses on their street have also dropped as much as 90 percent of their employees.
Privacy

Hackers Claim Access To 300 Million iCloud Accounts, Demand $75,000 From Apple To Delete the Cache of Data (vice.com) 122

A hacker or group of hackers calling themselves the "Turkish Crime Family" claim they have access to at least 300 million iCloud accounts, and will delete the alleged cache of data if Apple pays a ransom by early next month. Motherboard is reporting that the hackers are demanding "$75,000 in Bitcoin or Ethereum, another increasingly popular crypto-currency, or $100,000 worth of iTunes gift cards in exchange for deleting the alleged cache of data." From the report: The hackers provided screenshots of alleged emails between the group and members of Apple's security team. One also gave Motherboard access to an email account allegedly used to communicate with Apple. "Are you willing to share a sample of the data set?" an unnamed member of Apple's security team wrote to the hackers a week ago, according to one of the emails stored in the account. (According to the email headers, the return-path of the email is to an address with the @apple.com domain). The hackers also uploaded a YouTube video of them allegedly logging into some of the stolen accounts. The hacker appears to access an elderly woman's iCloud account, which includes backed-up photos, and the ability to remotely wipe the device. Now, the hackers are threatening to reset a number of the iCloud accounts and remotely wipe victim's Apple devices on April 7, unless Apple pays the requested amount. According to one of the emails in the accessed account, the hackers claim to have access to over 300 million Apple email accounts, including those use @icloud and @me domains. However, the hackers appear to be inconsistent in their story; one of the hackers then claimed they had 559 million accounts in all. The hackers did not provide Motherboard with any of the supposedly stolen iCloud accounts to verify this claim, except those shown in the video.
Bitcoin

Ask Slashdot: How Does One Freely Use Bitcoin In the Land of the Free? 270

New submitter devrtm writes: It appears that Bitcoin, a currency designed with anonymity in mind, can be effectively used almost anywhere in the world, except in a few countries where it is regulated, and in one country where you can only use it if you give up your privacy. That country is the United States. I have accumulated quite a few BTC from the currency's early days where block rewards were still at $50. There was a period of time where one could get a nearly anonymous debit card, or use BTC online with merchants. Nowadays, non-U.S. payment providers no longer issue debit cards to the U.S. residents and the U.S.-based merchants accepting BTC are nearly extinct. The only way to use BTC in the U.S. is to convert it to USD. Unfortunately, that conversion requires giving up your personal information to a U.S.-based BTC payment processor, and there are rumors that signing up for those services raises red flags with certain three letter acronym organizations. I have nothing to hide, but I do value my privacy. Can one freely and anonymously live off of their Bitcoin wallet in the U.S.? I am afraid the answer is no. Does anyone have an experience that proves me wrong? Please share.
Bitcoin

The SEC Just Handed Bitcoin a Huge Setback (theverge.com) 73

The SEC has decided to deny an application for the first exchange-traded product that tracks the price of bitcoin, according to an order posted on the regulator's website. From a report: In an order today, the commission found that the proposed fund was too susceptible to fraud, due to the unregulated nature of Bitcoin. The result is a major setback for the fund, and a frustrating false start for the crypto-currency at large. The ETF is essentially a common stock fund pegged to the price of Bitcoin, allowing investors to purchase Bitcoin without the work of establishing a personal wallet. (In concrete terms, the ETFs investors will be buying shares whose price will always be the same as the price of a single bitcoin, similar to an equivalent investment in gold or cattle.) Without a wallet, investors still won't be able to spend Bitcoin, but they can buy and sell it at market price, adding more liquidity to the Bitcoin system overall.
Bitcoin

One Bitcoin Is Now Worth More Than One Ounce of Gold (techcrunch.com) 208

An anonymous reader quotes a report from TechCrunch: For the first time ever, the price of one bitcoin has surpassed the price of one ounce of gold. While today's swap can be attributed to a good day for bitcoin (up ~3%) and a bad day for gold (down ~1.3%), the big picture is that bitcoin has more than doubled in the last year (up ~185% from a year ago) while gold is essentially trading exactly at the price it was a year ago. Even though bitcoin and gold are both thought of as alternative assets, they don't usually trade in correlation. Still, it's notable that bitcoin has (at least temporally) surpassed the price of gold. Gold is quite literally the "gold standard" of alternative assets, often used by investors to hedge against potential losses in more traditional assets like real estate and the stock market.
Databases

CloudPets IoT Toys Leaked and Ransomed, Exposing Kids' Voice Messages (androidpolice.com) 64

"According to security researcher Troy Hunt, a series of web-connected, app-enabled toys called CloudPets have been hacked," reports Android Police. "The manufacturer's central database was reportedly compromised over several months after stunningly poor security, despite the attempts of many researchers and journalists to inform the manufacturer of the potential danger. Several ransom notes were left, demanding Bitcoin payments for the implied deletion of stolen data." From the report: CloudPets allow parents to record a message for their children on their phones, which then arrives on the Bluetooth connected stuffed toy and is played back. Kids can squeeze the stuffed animal's paw to record a message of their own, which is sent back to the phone app. The Android app has been downloaded over 100,000 times, though user reviews are poor, citing a difficult interface, frequent bugs, and annoying advertising. Hunt and the researchers he collaborated with found that the central database for CloudPets' voice messages and user info was stored on a public-facing MongoDB server, with only basic hashes protecting user addresses and passwords. The same database apparently connected to the stored voice messages that could be retrieved by the apps and toys. Easy access and poor password requirements may have resulted in unauthorized access to a large number of accounts. The database was finally removed from the publicly accessible server in January, but not before demands for ransom were left.
The Almighty Buck

A Source Code Typo Allowed An Attacker To Steal $592,000 In Cryptocurrency (bleepingcomputer.com) 88

An anonymous reader writes: "A typo in the Zerocoin source code allowed an attacker to steal 370,000 Zerocoin, which is about $592,000 at today's price," reports BleepingComputer. According to the Zcoin team, one extra character left inside Zerocoin's source code was the cause of the bug. The hacker exploited the bugs for weeks, by initiating a transaction and receiving the money many times over.

"According to the Zcoin team, the attacker (or attackers) was very sophisticated and took great care to hide his tracks," reports the site. "They say the attacker created numerous accounts at Zerocoin exchanges and spread transactions across several weeks so that traders wouldn't notice the uneven transactions volume... The Zcoin team says they worked with various exchanges to attempt and identify the attacker but to no avail. Out of the 370,000 Zerocoin he stole, the attacker has already sold 350,000. The Zcoin team estimates the attacker made a net profit of 410 Bitcoin ($437,000)."

Bitcoin

Former Fed Employee Fined $5,000 For Installing Bitcoin Software On Server (bloomberg.com) 80

An anonymous reader quotes a report from Bloomberg: A former Federal Reserve employee was sentenced Friday to 12 months probation and a $5,000 fine after pleading guilty in October to installing unauthorized software on a computer server at the U.S. central bank. Nicholas Berthaume, who as a communications analyst had access to computer servers at the Fed's Board of Governors in Washington, installed software that connected to an online bitcoin network in order to earn units of the digital currency, according to a statement Monday from the central bank's Office of Inspector General. Berthaume also "modified certain security safeguards so that he could remotely access the server from home," the statement said. When confronted, he tried to cover up his actions by deleting the software; eventually he was fired and admitted guilt, the office said. His actions didn't result in the loss of any Fed information, and the board has enhanced security since the incident, the internal watchdog said. The story was first reported by The Wall Street Journal (Warning: source may be paywalled).
EU

Ransomware Infects a Hotel's Key System (dailymail.co.uk) 203

An anonymous reader writes: A luxury hotel "paid "thousands" in Bitcoin ransom to cybercriminals who hacked into their electronic key system. The "furious" hotel manager says it's the third time their electronic system has been attacked, though one local news site reports that "on the fourth attempt the hackers had no chance because the computers had been replaced and the latest security standards integrated, and some networks had been decoupled." The 111-year-old hotel is now planning to remove all their electronic locks, and return to old-fashioned door locks with real keys. But they're going public to warn other hotels -- some of which they say have also already been hit by ransomware.
UPDATE: The hotel's managing director has clarified today that despite press reports, "We were hacked, but nobody was locked in or out" of their rooms.
Security

Ransomware Infects All St Louis Public Library Computers (theguardian.com) 163

An anonymous reader quotes a report from The Guardian: Libraries in St Louis have been bought to a standstill after computers in all the city's libraries were infected with ransomware, a particularly virulent form of computer virus used to extort money from victims. Hackers are demanding $35,000 (£28,000) to restore the system after the cyberattack, which affected 700 computers across the Missouri city's 16 public libraries. The hackers demanded the money in electronic currency bitcoin, but, as CNN reports, the authority has refused to pay for a code that would unlock the machines. As a result, the library authority has said it will wipe its entire computer system and rebuild it from scratch, a solution that may take weeks. On Friday, St Louis public library announced it had managed to regain control of its servers, with tech staff continuing to work to restore borrowing services. The 16 libraries have all remained open, but computers continue to be off limits to the public. Spokeswoman Jen Hatton told CNN that the attack had hit the city's schoolchildren and its poor worst, as many do not have access to the internet at home. "For many [...] we're their only access to the internet," she said. "Some of them have a smartphone, but they don't have a data plan. They come in and use the wifi." As well as causing the loans system to seize up, preventing borrowers from checking out or returning books, the attack froze all computers, leaving no one able to access the four million items that should be available through the service. The system is believed to have been infected through a centralized computer server, and staff emails have also been frozen by the virus. The FBI has been called in to investigate.
China

Bitcoin Slides as China's Central Bank Launches Checks On Exchanges (reuters.com) 43

An anonymous reader shares a Reuters report: China's central bank launched spot checks on leading bitcoin exchanges in Beijing and Shanghai, ratcheting up pressure on potential capital outflows and knocking the price of the cryptocurrency down more than 12 percent against the dollar. The People's Bank of China said its probe of bitcoin exchanges BTCC, Huobi and OKCoin was to look into a range of possible rule violations, including market manipulation, money laundering and unauthorized financing. It did not say if any violations had been found. Chinese authorities have stepped up efforts to stem capital outflows and relieve pressure on the yuan. While the yuan lost more than 6.5 percent against the dollar last year, its worst performance since 1994, the bitcoin price has soared to near-record highs.
Bitcoin

Bitcoin Was 2016's Best-Performing Currency (newsweek.com) 104

The co-founder of Blockchain published an opinion piece in Newsweek today mocking predictions about the death of bitcoin, saying "each is more wrong than the last... Bitcoin was again declared the world's best performing currency in 2016 by Bloomberg. In fact, it's held that title every year since 2010, with the notable exception of 2014, when it was the worst." An anonymous reader writes: Bitcoin president Nicolas Cary writes that bitcoin has become more stable than many of the world's top currencies, while the British pound "has dropped by more than 17% in a colossal collapse of confidence... In Africa, the Egyptian pound dropped 59% and the Nigerian naira fell 37%. In South America, the Argentine peso plummeted over 17% and the Venezuelan bolivar tumbled so far off a cliff it's difficult to measure -- even bricks of cash are worthless for everyday purchases there. Perhaps most dramatically of all, India, the world's second most populated country, introduced a stunning policy of demonetization declaring banknotes illegal overnight...

"During this time period, and partially in response to it, the price of bitcoin surged... Bitcoin also trounced the stock market from a performance perspective. Brand names like McDonald's, Home Depot and Disney grew at a paltry 1.6% or less; bitcoin outpaced them by over 70 times."

In 2009 one man in Norway bought $27 worth of bitcoin while writing a thesis on encryption, then forgot about them. Six years later, he discovered they were worth nearly $500,000.
The Almighty Buck

Bitcoin Is Crashing (businessinsider.com) 296

An anonymous reader writes: Bitcoin is getting smashed. The cryptocurrency was down 18% to about $892 per coin as of 8:17 a.m. ET on Thursday. It is the biggest drop in two years. Earlier this week, on its first trading day of the new year, Bitcoin crossed above the $1,000 mark for the first time since 2013, but it has now tumbled below that level.
Bitcoin

Over 1,800 MongoDB Databases Held For Ransom By Mysterious Attacker (bleepingcomputer.com) 115

An anonymous reader writes: "An attacker going by the name of Harak1r1 is hijacking unprotected MongoDB databases, stealing and replacing their content, and asking for a 0.2 Bitcoin ($200) ransom to return the data," reports Bleeping Computer. According to John Matherly, Shodan founder, over 1,800 MongoDB databases have had their content replaced with a table called WARNING that contains the ransom note. Spotted by security researcher Victor Gevers, these databases are MongoDB instances that feature no administrator password and are exposed to external connections from the internet. Database owners in China have been hit, while Bleeping Computer and MacKeeper have confirmed other infections, one which hit a prominent U.S. healthcare organization and blocked access to over 200,000 user records. These attacks are somewhat similar to attacks on Redis servers in 2016, when an unknown attacker had hijacked and installed the Fairware ransomware on hundreds of Linux servers running Redis DB. The two series of attacks don't appear to be related.
The Almighty Buck

Legal Sparring Continues in Bitcoin User's Battle with IRS Tax Sweep (fortune.com) 101

In a strange twist, Coindesk reports that the IRS has, somewhat indirectly, removed one target from its broad request for data about U.S. users of the Bitcoin exchange Coinbase. It no longer wants data about Jeffrey Berns, a lawyer who also happens to be fighting the IRS's "John Doe" request in court. From a report on Fortune: Berns originally filed a motion on December 13th asking the U.S. District Court for Northern California to stop the IRS' subpoena of Coinbase records. The IRS believes that its request, filed in November, is justified because Bitcoin owners "may fail, or may have failed, to comply with one or more provisions of the internal revenue laws." Berns is represented by his own law firm, Berns Weiss, whose motion argues that the IRS data search is "an abuse of process" and "overbroad." Berns has said his motion is intended to defend not only himself, but all targeted users. But according to a December 28th court filing by the IRS, Berns is no longer a target of its records request because he identified himself in his own filing, and the request is only for unidentified users. Therefore, the IRS argues, Berns is not a party to proceedings and his request to block the data grab should be thrown out of court. In response, Berns Weiss had its own spin, telling Coindesk that "The IRS's willingness to withdraw the summons as to Mr. Berns only because it is now aware of his identity," and without the additional information they're seeking about many other Coinbase users, "Makes it clear that the IRS does not have a legitimate purpose in seeking substantial personal and financial information concerning approximately 3 million Americans."

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