Online Cash Bitcoin Could Challenge Governments, Banks

[lotuseclat79]

Hackers Break Into Bitcoin Exchange Site Bitcoinica, Steal $90,000 in Bitcoins dtd May 14, 2012.

Hackers stole 18,547 bitcoins and the user database from bitcoin exchange site Bitcoinica

-- Tom

[PaulyDefran]

Man!

May 11, 2012, 01:16:37 PM

#1
Today, we have discovered a suspicious Bitcoin transaction that doesn't seem to be initiated by any one of the company owners. Some of them are not online at the moment so this is not conclusive.

Suspicious transaction:

{
"account" : "",
"address" : "182tGyiczhXSSCTciVujNRkkMw1zQxUVhp",
"category" : "send",
"amount" : -18547.66867623,
"fee" : 0.00000000,
"blockhash" : "00000000000003f6bfd3e2fcbf76091853b28be234b5473a67f89b9d5bee019c",
"blockindex" : 1,
"txid" : "7a22917744aa9ed740faf3068a2f895424ed816ed1a04012b47df7a493f056e8",
"time" : 1336738723
},

We have contacted Rackspace to suspend all our servers and lock down our accounts. All your trading and financial data is safe (as far as I know), apart from the Bitcoin loss.

Thank you for your patience and understanding while we investigate this issue in detail.

The thread, pretty interesting read:

https://bitcointalk.org/index.php?topic=81045.0

PD

[hashed]

Originally Posted by PaulyDefran

Man!



The thread, pretty interesting read:

https://bitcointalk.org/index.php?topic=81045.0

PD

Ouch!!! PD I hope you keep your BTC offline and off of these online sites; I frankly just do not trust them.

~h

[PaulyDefran]

I'm a local kind of guy...no cloud, no way, for nothin'

PD

[hashed]

Originally Posted by PaulyDefran

I'm a local kind of guy...no cloud, no way, for nothin'

PD

Neither do I

[lotuseclat79]

Bitcoin: The Cryptoanarchists’ Answer to Cash.

How Bitcoin brought privacy to electronic transactions

Note: This is an IEEE Spectrum article and discusses the origins of an independent digital currency back to 1992 - i.e. good historical perspective.

-- Tom

[lotuseclat79]

...Bitcoin as the 'Net's Wild West.

A year after the bubble popped, we check on the cryptocurrency's progress.

-- Tom

[lotuseclat79]

Understanding Bitcoin.

Bitcoin is at the forefront of 'hacktivism', giving its users a free alternative to contemporary financial mechanisms.

-- Tom

[lotuseclat79]

Why Bitcoin lives in a "legal gray area".

Bitcoins don't fit well into current law; some politicians want to change that.

-- Tom

[lotuseclat79]

Hacker steals $250k in Bitcoins from online exchange Bitfloor.

Irreversible transactions make Bitcoin security a high-stakes business.
...
a new feature called multi-signature transactions that could reduce the vulnerability of Bitcoin wallets to this kind of attack

is under development.

-- Tom

[lotuseclat79]

Bitcoin Exchange Loses $250,0000 After Unencrypted Keys Stolen.

BitFloor's founder wrote that he failed to encrypt a digital wallet containing the secret encryption keys

-- Tom

[lotuseclat79]

Bitcoin - a Means for Redistribution of Wealth.

This is an interesting article about achieving fiancial independence by the author whom is the founder of the first African Bitcoin exchange, Fikisha Africoin, having formerly worked as an IT Consultant in the banking industry in Germany, Switzerland and Singapore. It takes a long view of the topic. Caveat Emptor.

If you are a fan of Lord of the Rings, there is a great image of Gollum holding up a Bitcoin as "My precious".

-- Tom

[lotuseclat79]

Bitcoin Foundation launched.

Bitcoin makes bid for respect with new foundation.

Bitcoin Foundation will support lead Bitcoin developer, organize conferences.

Bitcoin Foundation vows to clean up currency's bad rep

'Bitcoin don't get no respect!'

-- Tom

[lotuseclat79]

Bitcoin exchange Bitfloor attempts comeback after $250,000 heist.

Founder hopes to earn enough profits to repay stolen client funds.

Note: See post #61 above in this thread.

-- Tom

[Noob]

I never understood how Bitcoin works, anyone care to explain?

[mirimir]

Originally Posted by Noob

I never understood how Bitcoin works, anyone care to explain?

New bitcoins are generated by the network through the process of mining. In a process that is similar to a continuous lottery, mining nodes on the network are awarded bitcoins each time they find the solution to a certain mathematical problem (and thereby create a new block). Creating a block is a proof of work with a difficulty that varies with the overall strength of the network. ...

Blocks are mined every 10 minutes, on average and for the first four years (210,000 blocks) each block includes 50 new bitcoins. As the amount of processing power directed at mining changes, the difficulty of creating new bitcoins changes. This difficulty factor is calculated every 2016 blocks and is based upon the time taken to generate the previous 2016 blocks. See Mining.

-https://en.bitcoin.it/wiki/FAQ#What_are_bitcoins.3F-

Also read the links that I've bolded in the above quote.

Basically, it's a peer-to-peer transaction accounting system.

[Snoop3]

would be interesting if BitCoin idea could work but i think once govt's see it as a serious threat to their tax base, they will begin to undermine public confidence in it with various attacks. Maybe its already started with the latest "heist". or maybe they just outlaw it.

[lotuseclat79]

I seriously doubt that govt's will see BitCoin as a threat to their tax base. When salaries are given in a nation's currency, and sales taxes are collected at a register - will there be new registers to contain acutual BitCoins and/or will BitCoin paper money denominations be printed as legal currency for any country in the world?

-- Tom

[Snoop3]

Originally Posted by lotuseclat79

I seriously doubt that govt's will see BitCoin as a threat to their tax base. When salaries are given in a nation's currency, and sales taxes are collected at a register - will there be new registers to contain acutual BitCoins and/or will BitCoin paper money denominations be printed as legal currency for any country in the world?

-- Tom

yeah you might have a point there.

i was going to say this:

the gov't wants a cut of every transaction. what happens when BitCoin starts gaining acceptance and you can pay your lawn company, plumber, electrician, etc in BitCoin?


but i guess you can already pay these folks in cash. You could be right.

EDIT: could be useful to purchase some things on the internet, like software. If you're a software
author getting paid in BitCoin then how would an IRS go after you unless they could trace the transactions?
i guess the problem is the author has to try to buy something useful with the BitCoins or maybe they can be
cashed out anonymously for local currency?

[chronomatic]

Bitcoin is perfectly legal in the U.S. (I can't speak for other countries). Many people think that because the "Liberty Dollar" got shut down by the DOJ that this would apply to bitcoin. It wouldn't. Indeed, the press release from the DOJ after that incident even said that only the government can create currency. That's false.

What happened with the Liberty Dollar is that it was a physical currency that was printed and minted. The problem was that some people were confused thinking it was U.S. government issued legal tender. Therefore, the DOJ charged the owner with counterfeiting, saying that his coins were too similar to U.S. government minted coins. Such a case could not be brought against bitcoin because it is not printed and has no way to "resemble" U.S. currency. Besides, there have been other digital currencies in the past which have had varying levels of success. The main difference is Bitcoin is not centralized (the others were backed by one organization).

So as long as you don't pass your currency off as "U.S. legal tender" and as long as you don't make it resemble physical currency (i.e. make your coins look like U.S. coins or dollars), then you are fine. This could change with new laws in the future, but for now it is legal.

[Snoop3]

Originally Posted by chronomatic

Bitcoin is perfectly legal in the U.S. (I can't speak for other countries). Many people think that because the "Liberty Dollar" got shut down by the DOJ that this would apply to bitcoin. It wouldn't. Indeed, the press release from the DOJ after that incident even said that only the government can create currency. That's false.

What happened with the Liberty Dollar is that it was a physical currency that was printed and minted. The problem was that some people were confused thinking it was U.S. government issued legal tender. Therefore, the DOJ charged the owner with counterfeiting, saying that his coins were too similar to U.S. government minted coins. Such a case could not be brought against bitcoin because it is not printed and has no way to "resemble" U.S. currency. Besides, there have been other digital currencies in the past which have had varying levels of success. The main difference is Bitcoin is not centralized (the others were backed by one organization).

So as long as you don't pass your currency off as "U.S. legal tender" and as long as you don't make it resemble physical currency (i.e. make your coins look like U.S. coins or dollars), then you are fine. This could change with new laws in the future, but for now it is legal.

i don't think you can predict what this gov't or DOJ will or would do and who knows what any courts will rule. They all seem to do whatever they want now and the media just goes along with it.

and if you go back to the 1930's where supposedly Roosevelt confiscated most of the gold or gold coins or whatever, by what authority did the federal govt do that? i can't see how that would be legal. we have a constant erosion of rights.

[mirimir]

Originally Posted by Snoop3

and if you go back to the 1930's where supposedly Roosevelt confiscated most of the gold or gold coins or whatever, by what authority did the federal govt do that? i can't see how that would be legal. we have a constant erosion of rights.

They passed a law, making the possession of gold and silver illegal. It's illegal in the US to possess many things. It may become illegal to possess some crypto software, for example. That's already the case in many nations.

[chronomatic]

Originally Posted by mirimir

It may become illegal to possess some crypto software, for example. That's already the case in many nations.

Doubtful. That would be against the 1st amendment and would never fly. Besides, they tried it already in the 1990's and gave up the idea. And even if they did outlaw crypto software, how in the world would they enforce it? You can download it from anywhere.

[Mman79]

Originally Posted by chronomatic

Doubtful. That would be against the 1st amendment and would never fly. Besides, they tried it already in the 1990's and gave up the idea. And even if they did outlaw crypto software, how in the world would they enforce it? You can download it from anywhere.

How many other things lately has the government shot down that is covered under the 1st Amendment due to "national security" or has some organization sued over because they, well, quite frankly got "butthurt"? You're right about the 1990's, but one could easily argue we had a lot more rights and protections left to turn to. That's all going away, not fast enough to cause mass outrage but not slow enough to not be noticed by those paying attention.

Quite honestly our rights and protections are a court ruling and a presidential executive order away from being gone. I hate to sound like a pessimist bunker-dweller, but we're seeing it all erode away over time like a beach.

[lotuseclat79]

78 percent of Bitcoin currency stashed under digital mattress, study finds.

Significantly fewer digital coins are in circulation than previously presumed.

Related publication download: Quantitative Analysis of the Full Bitcoin Transaction Graph (PDF: 1.8 MB 18 pages)

Abstract: The Bitcoin scheme is a rare example of a large scale global payment system in which all the transactions are publicly accessible (but in an anonymous way). We downloaded the full history of this scheme, and analyzed many statistical properties of its associated transaction graph. In this paper we answer for the first time a variety of interesting questions about the typical behavior of account owners, how they acquire and how they spend their Bitcoins, the balance of Bitcoins they keep in their accounts, and how they move Bitcoins between their various accounts in order to better protect their privacy. In addition, we isolated all the large transactions in the system, and discovered that almost all of them are closely related to a single large transaction that took place in November 2010, even though the associated users apparently tried to hide this fact with many strange looking long chains and fork-merge structures in the transaction graph.

-- Tom