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There are all kinds of reasons to think that Bitcoin is a joke, and that the value of the bitcoins themselves will ultimately go to zero. It's inherently unstable as a currency, prone to hyperdeflation, has an artificial scarcity, and is subject to hoarding.

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Original author: 
Cyrus Farivar

On Thursday, the world’s largest Bitcoin exchange, Mt. Gox, announced that it would require all users to “be verified in order to perform any currency deposits and withdrawals. Bitcoin deposits do not need verification, and at this time we are not requiring verification for Bitcoin withdrawals.”

The company did not provide any explanation about why it was imposing this new requirement, but it did say that it would be able to process most verifications within 48 hours.

The move comes two days after federal prosecutors went after Liberty Reserve, another online currency that had notoriously poor verification. (In court documents, a federal investigator in that case included an address of “123 Fake Main Street, Completely Made Up City, New York” to create an account that was accepted.) It also comes two weeks after the Department of Homeland Security started investigating Mt. Gox over the possible crime of money transmitting without a license.

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Original author: 
Jon Brodkin


Prototype of a system for preventing ATM theft.

Reuters

A criminal serving a five-year sentence "for supplying gadgets to an organized crime gang used to conceal ATM skimmers" has invented a device that prevents ATMs from being susceptible to such thefts, Reuters reported today.

Valentin Boanta, who is six months into his sentence in a Romanian prison, developed what he calls the SRS (Secure Revolving System) which changes the way ATM machines read bank cards to prevent the operation of skimming devices that criminals hide inside ATMs.

Boanta's arrest in 2009 spurred him to develop the anti-theft device to make amends. "When I got caught I became happy. This liberation opened the way to working for the good side," Boanta told Reuters. "Crime was like a drug for me. After I was caught, I was happy I escaped from this adrenaline addiction. So that the other part, in which I started to develop security solutions, started to emerge."

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Original author: 
Aaron Souppouris

110315newyork_lg_large

The asset freeze at Mt. Gox was due to the Bitcoin exchange's failure to obey financial regulations as required by US authorities. The news comes via IDG, which obtained a copy of the seizure order from the US Immigration and Customs Enforcement (ICE).

The agency froze the Dwolla (a US-based online payments system) account of Mutum Sigillium (aka Mt. Gox) on the grounds that it had lied in an official form. When asked if his company "[accepts] funds from customers and send[s] the funds based on customers' instructions," Mt. Gox CEO Mark Karpeles answered "no." When asked if Mt. Gox "deal[s] in or exchange[s] currency" for its customers," Karpeles again answered "no." In both cases, it seems likely — and ICE asserts — that these...

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Original author: 
Adrianne Jeffries

Atm_robbers_large

Defendants Elvis Rafael Rodriguez and Emir Yasser Yeje posing with approximately $40,000 with cash. Source: US Attorney, Eastern District of New York

If you’d been waiting for the ATM inside the deli at East 59th and Third in Manhattan on Tuesday, February 19th around 9:24PM, you would have been annoyed. A young man in a black beanie and puffy black jacket made seven withdrawals in a row, stuffing around $5,620 into his blue backpack. The man wasted no time. He exited the deli and headed up five blocks to repeat the process at four more ATMs, finishing his route at a Chase bank at 69th and Third at 9:55PM, where he made four withdrawals totaling $4,000.

While the man in the black beanie was beelining along the Upper East Side, seven...

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Original author: 
Dan Goodin

Wikipedia

Federal authorities have accused eight men of participating in 21st-Century Bank heists that netted a whopping $45 million by hacking into payment systems and eliminating withdrawal limits placed on prepaid debit cards.

The eight men formed the New York-based cell of an international crime ring that organized and executed the hacks and then used fraudulent payment cards in dozens of countries to withdraw the loot from automated teller machines, federal prosecutors alleged in court papers unsealed Thursday. In a matter of hours on two separate occasions, the eight defendants and their confederates withdrew about $2.8 million from New York City ATMs alone. At the same times, "cashing crews" in cities in at least 26 countries withdrew more than $40 million in a similar fashion.

Prosecutors have labeled this type of heist an "unlimited operation" because it systematically removes the withdrawal limits normally placed on debit card accounts. These restrictions work as a safety mechanism that caps the amount of loss that banks normally face when something goes wrong. The operation removed the limits by hacking into two companies that process online payments for prepaid MasterCard debit card accounts issued by two banks—the National Bank of Ras Al-Khaimah PSC in the United Arab Emirates and the Bank of Muscat in Oman—according to an indictment filed in federal court in the Eastern District of New York. Prosecutors didn't identify the payment processors except to say one was in India and the other in the United States.

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Original author: 
Nate Anderson


Bitcoin mining takes a lot of computing power—so naturally someone created a piece of malware to mine on other people's computers.

Kaspersky Lab

Mark Gimein is something of a Bitcoin skeptic, but in addition to his concerns about Bitcoin not being a "real currency," he's now charging that it has created "a real-world environmental disaster."

Writing in Bloomberg News, Gimein notes that mining Bitcoins—performing the computationally expensive calculations needed to define new Bitcoins—uses power. A lot of power. (Read our 2011 Bitcoin primer for more details.) He writes:

About 982 megawatt hours a day, to be exact. That’s enough to power roughly 31,000 US homes, or about half a Large Hadron Collider. If the dreams of Bitcoin proponents are realized, and the currency is adopted for widespread commerce, the power demands of bitcoin mines would rise dramatically.

If that makes you think of the vast efforts devoted to the mining of precious metals in the centuries of gold- and silver-based economies, it should. One of the strangest aspects of the Bitcoin frenzy is that the Bitcoin economy replicates some of the most archaic features of the gold standard. Real-world mining of precious metals for currency was a resource-hungry and value-destroying process. Bitcoin mining is too.

Gimein draws on the stats provided by Bitcoin-focused site Blockchain.info. The numbers fluctuate a bit with each day of calculations being tracked. According to Blockchain's stats this weekend, the last 24 hours of worldwide mining activity burned through 928.24 megawatt hours of power while miners calculated 59,502.6 gigahashes per second. Total power bill: $139,236.07.

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Urbanist

[ By WebUrbanist in Gaming & Computing & Technology. ]

bitcoin digital physical designs

The crypto-currency Bitcoin is all over social media, blogs and news sites. But beyond the volatility, speculation and noise there is a fascinating question being asked and answered: from coins to wallets, how does the world’s first widespread digital currency manifest in visual or physical form(top image by cybrbeast)

bitcoin 3d currency variants

The Bitcoin logo is a rather simple affair, borrowing much from traditional currencies (a partial strike-through) and clearly, most of all, the United States dollar. For some, though, seeing is not enough – for emotional and practical reasons alike, many want a physical analogue to their virtual wealth.

bitcoin physical round design

That baseline design, however, has spawned not only 3D renderings approximating solid coins, but actual physical coins themselves for fans of hand-held collectibles. The Casascius series have solid brass, electroplated gold and pure silver variants that ‘contain’ real Bitcoins (an address with a private key hidden below a removable hologram). Like Gold Eagles, the value of these on the secondary market has consistently stayed above the ‘spot’ price for the currency they contain.

bitcoin paper currency notes

And it does not end there. For security purposes, many people prefer to keep copies (in some cases: their only copies) of their virtual Bitcoin ‘wallet’ in offline form. For better or worse, this translates computer-centric risks (hacking and data corruption) back into more familiar ones (physical theft or loss). Designers on that front  have come up with a number of interesting options, from plasticized and paper ‘notes’ to self-printed wallets. In the decentralized, open-source spirit of Bitcoin, many designers (like Doctor 75R) give these designs out freely as well.

bitcoin printable folding wallet

Canton Becker lists off the advantages of his variant, shown above: “(1)Private key is hidden behind folds, so your wallet content is still safe if left out in the open or photographed. (2) Tamper-proof tape indicates when you (or someone else!) has revealed the private key. (3) Folding design obfuscates private keys so they’re hidden even when holding wallet up to a bright light. (4)Reverse side has basic wallet operation instructions and a register for writing down deposits / balance. (5) Private and public keys are replicated (and rotated) in triplicate to maximize chances of recovering keys if paper is damaged / crumpled.”

bitcoin physical ring designs

There is even a movement toward making Bitcoin secret (de)coder rings – like gold or silver ones, they can be stolen, but they also allow you to wear and keep your wealth (literally) close at hand. By engraving the private key on the inside of the band, there is no way to see it unless you (or someone) takes it off.

bitcoin wallpaper digital designs

And, of course, anything with sufficient fans warrants making wallpapers – here are a series of six available at full size on Flickr.

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