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Original author: 
Cyrus Farivar

Aurich Lawson

This is the first in a two-part series exploring Butterfly Labs and its lineup of dedicated Bitcoin-mining hardware. In part one, we look at the company and the experiences customers have had with it. In part two, to be published on June 29, we share our experiences running a Bitcoin miner for a couple weeks. Spoiler alert: we made money.

The more I dig into Bitcoin, the stranger it gets. There’s gray-market online gambling and Russian-operated futures markets—to say nothing of the virtual currency’s wild ride over the last several months. It’s full of characters with names like “artforz” and “Tycho,” supposedly two of the largest Bitcoin holders out there. Of course, like most things Bitcoin, it’s nearly impossible to know for sure.

While reporting on a Bitcoin-based gambling story earlier this year, I interviewed Bryan Micon, who works with a Bitcoin-based poker site called Seals With Clubs. (To continue the lack of information, Micon won’t say who owns the site.) Micon has taken it upon himself to investigate what he believes are Bitcoin-related scams—such as the ill-fated Bitcoin Savings and Trust online bank—and he makes public pronouncements about them.

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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: 
WIRED UK

Bryan Mills

A study of the Bitcoin exchange industry has found that 45 percent of exchanges fail, taking their users' money with them. Those that survive are the ones that handle the most traffic—but they are also the exchanges that suffer the greatest number of cyber attacks.

Computer scientists Tyler Moore (from the Southern Methodist University, Dallas) and Nicolas Christin (of Carnegie Mellon University) found 40 exchanges on the Web that offered a service changing bitcoins into other fiat currencies or back again. Of those 40, 18 have gone out of business—13 closing without warning, and five closing after suffering security breaches that forced them to close. Four other exchanges have suffered serious attacks but remain open.

One of those is Mt Gox, the largest Bitcoin exchange, with Moore and Christin stating that at its peak it handles more than 40,000 Bitcoin transactions a day, compared to a mean average of 1,716. It has been the victim of a huge number of distributed denial-of-service (DDoS) attacks over the past month during the peak of the Bitcoin bubble (and its subsequent bursting—though the price now appears to be rising again). Its latest statement, dealing with the attack it suffered on April 21, is long and comprehensive, seeking to assuage the fears of Bitcoin users who feel that Mt. Gox is becoming a weak chain in Bitcoin's infrastructure.

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Original author: 
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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Original author: 
Sean Gallagher


The MT.Gox lookalike site that delivered malware to unwitting Bitcoiners.

In another example of the security mantra of "be careful what you click," at least one Bitcoin trader has been robbed in a forum "phishing" attack designed specifically to ride the hype around the digital currency. The attack attempts to use Java exploits or fake Adobe updates to install malware, and it's one of the first targeted attacks aimed at the burgeoning business of Bitcoin exchanges.

The bait for the attack was a post to a Bitcoin traders' forum announcing that MT.Gox was going to start handling exchanges of Litecoins, a Bitcoin alternative. The post advertised a live chat on the topic at a link provided to mtgox-chat.info. That site, which used stolen code and style to masquerade as the legitimate MT.Gox site, then prompted victims to update their Java plugin and offered a forged Adobe updater.

The scam was first reported on reddit earlier this week, when a redditor reported spotting the fake site and its attempt to drop malware. While the attack was originally described by one of its victims as a "Java zero-day" exploit, it actually uses either a Java exploit or a fake Adobe updater to deliver its malware payload. That payload is DarkComet, a fairly common "remote administration tool" and keylogger. The attackers not only stole credentials for the victim's MT.Gox account, but they took other passwords as well.

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Original author: 
timothy

An anonymous reader writes "A new piece of malware propagating across Skype has been discovered that tries to convince the recipient to click on a link. What makes this particular threat different is that it drops a Bitcoin miner application to make the malware author money. While malware has both spread on Skype and mined Bitcoins before, putting the two together could be an effective new strategy."

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New submitter jhantin writes "The Bitcoin blockchain has forked due to a lurking backward-compatibility issue: versions older than 0.8 do not properly handle blocks larger than about 500k, and Slush's pool mined a 974k block today. The problem is that not all mining operations are on 0.8; blocks are being generated by a mix of several different versions of the daemon, each making its own decision as to which of the two forks is preferable to extend, and older versions refuse to honor or extend from a block of this size. The consensus on #bitcoin-dev is damage control: miners need to mine on pre-0.8 code so the backward-compatible fork will outgrow and thus dominate the compatibility-breaking one; merchants need to stop accepting transactions until the network re-converges on the backward-compatible fork of the chain; and average users can ignore the warning that they are out of sync and need to upgrade." Turns out there's an approximately 512K limit to atomic updates in Berkeley DB which were used by versions prior to 0.8. 0.8 uses a new database, allowing blockchains that old versions won't accept to be created.

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An anonymous reader writes with a link to a story at Forbes about what's said to the first Bitcoin hedge fund; the article goes into some of the details of how the (literally) valuable data is kept. A selection: "The private key itself is AES-256 encrypted. After exporting Bitcoin private keys from wallet.dat file, data is stored in a TrueCrypt container on three separate flash drives. Using Shamir's Secret Sharing algorithm, the container password is then split into three parts utilizing a 2-of-3 secret sharing model. Incorporating physical security with electronic security, each flash drive from various manufacturers is duplicated several times and, together with a CD-ROM, those items are vaulted in a bank safety deposit box in three different legal jurisdictions. To leverage geographic distribution as well, each bank stores only part of a key, so if a single deposit box is compromised, no funds are lost."

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another random user writes "Bitcoin-Central, a currency exchange that specialises in virtual cash, has won the right to operate as a bank. They got the go-ahead thanks to a deal with French financial firms Aqoba and Credit Mutuel. The exchange is one of many that swaps bitcoins, computer generated cash, for real world currencies. The change in status makes it easier to use bitcoins and bestows national protections on balances held at the exchange. Under European laws, the deal means Bitcoin-Central becomes a Payment Services Provider (PSP) that has an International Bank ID number. This puts it on an equal footing with other payment networks such as PayPal and WorldPay. As a PSP it will be able to issue debit cards, carry out real-time transfers to other banks and accept transfers into its own coffers."

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