Online Cash Bitcoin Could Challenge Governments, Banks

[lotuseclat79]

A risky currency? Alleged $500,000 Bitcoin heist raises questions.

Discusses benefits of intermediaries - Clearcoin and MyBitcoin.

-- Tomo

[Dermot7]

"Pickpocket Targets Wallets at BitCoin Forum" : http://www.f-secure.com/weblog/archives/00002187.html

[Dermot7]

More on this other Trojan : http://arstechnica.com/security/news...ur-bitcoin.ars

[funkydude]

The main Bitcoin exchange, Mt. Gox, has suffered a major database breach which caused one account in particular to be completely compromised and have its funds stolen.

http://www.neowin.net/news/bitcoin-m...in-due-to-hack

[lotuseclat79]

From what I've read on the incident - at most $1000 worth of bit coins was the maximum value allowed (to be transferred?, lost?, exchanged? - I've since forgotten the exact details). Ar anyrate, the Bitcoin exchange MtGox is resetting everything to before the incident.

Anyway, I thought this article was a good read (not on the point above):
Crypto-currency Security under Scrutiny (2 web pages).

An alleged robbery suggests Bitcoin—an anonymous, decentralized currency—may need bank-like institutions after all.

-- Tom

[x942]

The $1000 limit is easily circumvented as it doesn't count it properly. This means I can only take out a $1000 but I can go back in and take $1000 more and continue this as long as I want. Hopefully fixed soon

[lotuseclat79]

Those 500K Bitcoins that caused the flash crash weren't real dated June 30, 2011.

CLARIFICATION OF MT. GOX COMPROMISED ACCOUNTS AND MAJOR BITCOIN SELL-OFF

by MtGox

-- Tom

[hawki]

Bitcoin Mining Malware in the Wild


Trojans used to mine bitcoins

After Bitcoin-stealing malware, security researchers have identified a trojan that piggybacks on infected systems to mine the virtual currency.

...

Because of its increasing popularity and high value — one bitcoin currently sells for around $17 — the virtual currency has also attracted the interest of cyber thieves.

In one case reported earlier this month, an early adopter was robbed of 25,000 bitcoins worth $500,000, via a trojan. Security researchers from F-Secure and Symantec later reported finding malware particularly designed to steal bitcoin wallets.

However, another way of getting bitcoins, except theft, is to mine them. Bitcoin mining is similar to encryption cracking and the success of the operation is dependent on that hardware used.

Bitcoin miners build special computer systems with multiple video cards to handle the task, but hackers don't need to do that because they already have huge computing power at their disposal in the form of botnets.

"Today our analysts detected a new threat spreading in the Russian sector of the Internet – Trojan.NSIS.Miner.a," Kaspersky Lab's Alexander Gostev reveals.

"This Trojan has two components – the legitimate bcm.exe file BitCoin Miner and a malicious module that installs bcm without the user’s knowledge and adds it to the autorun registry. The infected computer then starts to generate bit-coins for the Trojan’s author," he explains.

In this case, the trojan author was part of a so-called mining pool, a distributed system where miners work together to generate bitcoins and split them depending on the computing power their contributed.

Fortunately, this mining pool used had a policy against using botnets and quickly suspended the attacker's account. However, it's likely that similar malware will appear in the future to take advantage of less sophisticated pool systems.

http://news.softpedia.com/news/Bitco...d-208665.shtml

[cm1971]

The latest DefenseWall has protection for Bitcoin.

[Ilya Rabinovich]

A little correction here- it has out of the box protection for wallet.dat file for its regular client for Windows.

[lotuseclat79]

An Analysis of Anonymity in the Bitcoin System.

Anonymity in Bitcoin, a peer-to-peer electronic currency system, is a complicated issue. Within the system, users are identified by public-keys only. An attacker wishing to de-anonymize its users will attempt to construct the oneto- many mapping between users and public-keys and associate information external to the system with the users. Bitcoin frustrates this attack by storing the mapping of a user to his or her public-keys on that user's node only and by allowing each user to generate as many public-keys as required. In this paper we consider the topological structure of two networks derived from Bitcoin's public transaction history. We show that the two networks have a non-trivial topological structure, provide complementary views of the Bitcoin system and have implications for anonymity. We combine these structures with external information and techniques such as context discovery and flow analysis to investigate an alleged theft of Bitcoins, which, at the time of the theft, had a market value of approximately half a million U.S. dollars.

PDF preprint paper download link.

-- Tom

[lotuseclat79]

Bitcoin befuddles U.S. customs agents, thwarting Seattle visit by digital currency guru.

-- Tom

[lotuseclat79]

Found: Bitcoin mining bot that is controlled via Twitter.

We detect bots generated with this generator as Trojan.Generic.KD.

-- Tom

[Dermot7]

"Malware mints virtual currency using victim's own GPU" : http://www.theregister.co.uk/2011/08...brute_forcing/

edit: Changed "Malware steals" to "Malware mints" as The Register later altered original headline.

[lotuseclat79]

Krugman on Bitcoin: Golden Cyberfetters.

...the Bitcoin economy has in effect experienced massive deflation.

And because of that, there has been an incentive to hoard the virtual currency rather than spending it. The actual value of transactions in Bitcoins has fallen rather than rising. In effect, real gross Bitcoin product has fallen sharply.

So to the extent that the experiment tells us anything about monetary regimes, it reinforces the case against anything like a new gold standard – because it shows just how vulnerable such a standard would be to money-hoarding, deflation, and depression.

-- Tom

[lotuseclat79]

The Bitcoin Crypto-Currency Mystery Reopened.

A New Yorker writer implies he found Bitcoin's mysterious creator. We think he got the wrong man, and offer far more compelling evidence that points to someone else entirely.

-- Tom

[Dermot7]

"Bitcoin Value Drops Under $3 (2euro) After Numerous Hacking Operations" : http://news.softpedia.com/news/Bitco...s-228299.shtml

[lotuseclat79]

Researchers Locate Flaw in Bitcoin Protocol.

-- Tom

[lotuseclat79]

Bitcoin's comeback: should Western Union be afraid?.

-- Tom

[lotuseclat79]

Major Bitcoin Exchange Ceases Operation.

-- Tom

[Dermot7]

Bank robberies of the future may not reveal the traditional security camera shot of the ski-masked gun holder but rather we will watch them evolve slowly in front of our eyes as the money hops around the globe. It’s not so much where is the money but when is the money? The public and transparent nature of the bitcoin transaction ledger ensures that all transactions are known by date, time, amount, and block number although not necessarily by the who or the where. Contrary to conventional opinion, this is not a negative for the protocol because bitcoin liberates cash by putting it online.
On March 1st, a total of 46,703 bitcoin worth $228,845 at the time was stolen from customer accounts at VPS hosting company Linode. As described in a Linode Security Incident Report:

http://www.forbes.com/sites/jonmaton...n-slow-motion/

[PaulyDefran]

I'm no Bitcoin expert (I'm still a little shaky on doing it as pseudo-anonymously as possible) but it seems that a few precautions that even a newb like me could figure out, would prevent some of these thefts. I run the client out of a TrueCrypt container, and after every use, I move wallet.dat from C:\Users\XXX\AppData\Roaming - back to the TC container. I move it back when I use it again. I also keep ZERO dollars in Dwolla and Mt. Gox, and the bank account I use to fund, has a tiny amount in it at all times. Of course, the password to the wallet is a monster, from KeePass.

PD

[noone_particular]

I still have to question if BitCoin really has any chance to be truly useful for real world needs. Unless I've missed it, I can't use BitCoins to buy groceries or fill the gas tank. If I see the map right, there's only one place in the entire state that takes them, a motel.

Maybe I'm getting picky, but I find it contradictory that a currency designed to be secure and private uses so much privacy questionable content on their site. Half of it is unusable without flash.

As much as I'd like to see this work, I really don't think it will. BitCoin acceptance might get more common in exchange for web services and similar items, but I don't see those who sell the physical things we need to live accepting them.

[lotuseclat79]

FBI fears Bitcoin's popularity with criminals.

The FBI sees the anonymous Bitcoin payment network as an alarming haven for money laundering and other criminal activity—including as a tool for hackers to rip off fellow Bitcoin users.

That’s according to a new FBI internal report that leaked to the Internet this week, which expresses concern about the difficulty of tracking the identity of anonymous Bitcoin users, while also unintentionally providing tips for Bitcoin users to remain more anonymous.

The report, titled “Bitcoin Virtual Currency: Unique Features Present Distinct Challenges for Deterring Illicit Activity,” (PDF) was published April 24 and is marked For Official Use Only (not actually classified), but was leaked to the Internet on Wednesday.

Note: The PDF download is 1.8MB.

-- Tom

[PaulyDefran]

FBI Fears Automobile Popularity With Drive By Shooters.

Uh-oh, guess they better be banned

Governments fear what they can not control.

PD