Keep yourself updated #2 - Bitcoins

[Boba Fett]

Bitcoins a major target for hackers, says Chinese report
Staff Reporter 2013-07-20 13:43

Bitcoins are a virtual currency that can be used to buy and sell a broad range of items. (Photo/CFP)

In the first half of 2013, bitcoins, TV talent shows, the QQ instant messaging accounts of students and web cookies were the main targets of hackers and internet fraudsters, with hackers devising viruses to steal bitcoins and controlling users' PCs to form zombie botnets, the Beijing-based Caixin Online reports.

The National Information Center Information Security Research and Service Center and Beijing Rising International Software Co recently jointly published a report about information security in China in the first half of the year, in which it detailed the computer viruses, malicious websites, invasions of individual privacy as well as mobile internet and information security breaches.

Bitcoins, a new type of online currency which has became extraordinarily hot, have reached a peak with one bitcoin changing hands for as much as US$266. However, the Rising report said, in March one bitcoin agency was hit by hackers who stole bitcoins worth an estimated US$12,480. As bitcoins are almost impossible to retrieve once stolen, the agent had to take almost the entire loss.

Bitcoins are a virtual currency where their creation and transfer is based on an open-source cryptographic protocol that is independent of any central authority. Called a peer-to-peer electronic cash system, bitcoins can be transferred through a computer or smartphone without an intermediate financial institution. They are very difficult to track, and therefore are an obvious target for hackers.

In the first half of the year, Rising had received 2,204 virus models related to bitcoins, of which one virus, dubbed Kelihos, can check bitcoin-related information and can steal bitcoins from others. Once a computer is infected by the virus, users' bitcoins will be stolen and the users' accounts are even used to help hackers steal money from others, the report said.

A botnet is a number of internet computers that, although their owners are unaware of it, have been set up to forward transmissions (including spam or viruses) to other computers through the internet.

Regarding mobile internet, smartphone apps have exposed security problems, with many users' personal safety frequently placed in jeopardy. Meanwhile, some criminals have used social networking platforms such as Weibo and WeChat to track users' private information, threatening the security of corporations and individuals.

As new technologies such as visualization, cloud applications, BYOD and wearable smart devices have quickly been take up, they have become the main threats to corporate information security and even national information security in China, the report said. Moreover, the Prism revelations released by former CIA worker Edward Snowden have severe implications for China's information security, exposing the lack of the nation's security awareness, the incompleteness of security infrastructure and overreliance on foreign electronic products.

Last month, Snowden, a former technical worker at the CIA and the US National Security Agency sensationally announced himself as the whistleblower behind leaks that uncovered secret US government surveillance programs. An IT administrator for the defense contractor Booz Allen Hamilton, Snowden said that the UK's eavesdropping agency GCHQ may have connections to the Prism system, which is said to give US agencies easy access to nine of the world's top internet companies, as well as phone records of millions of people.

 

[Boba Fett]

Government warns of risk in dealing with Bitcoin

2013/12/30 23:12:49

Taipei, Dec. 30 (CNA) Taiwan's central bank and Financial Supervisory Commission (FSC) on Monday warned the public of the high risk of Bitcoin, saying that investors will bear full responsibility for any losses themselves.

FSC officials said the Central Bank of the Republic of China (CBC) has established that bitcoins do not constitute a currency and that banks certainly should not accept it.

The officials said Bitcoin is a highly speculative "virtual product" that lacks a mechanism to protect transactions.

Because Bitcoin is highly volatile, investors who invest in or trade bitcoins will have to fully assume the trading risk themselves.

The officials also said that financial institutions should be on the watch for money laundering, noting that other countries have been found to have used Bitcoin as a tool for drug trafficking, money laundering and smuggling.

The central bank said that after China announced its restrictions on the virtual currency, its price has plunged.

The CBC has collected regulations on Bitcoin from other countries, including China, Indonesia, Thailand, Norway, Denmark, and the United States.

In China, where Bitcoin transactions are the highest in the world, the price dropped to US$690 on Dec. 25 after peaking on Nov. 29 at an equivalent of US$1,242.

According to the information collected by the CBC, the price of Bitcoin was only US$13 early this year.

(By Stacy Wu, Kao Chao-fen and Lilian Wu)

 

[Boba Fett]

Agence France-Presse
November 14, 2013 03:04

Bitcoin trading platform defrauds China investors

An online Bitcoin trading platform aimed at Chinese investors has suddenly closed, leaving hundreds with more than 20 million yuan ($3.3 million) in combined losses, a newspaper said Thursday.

Hong Kong-registered Global Bond Limited shut down in late October and disappeared before users could withdraw investments from their accounts, the China Business News said.

Bitcoins -- a form of digitally-created "e-money" -- are stored in a virtual wallet, and can be sent directly to another person, bypassing banks and remaining largely anonymous.

They were created in 2009 in the wake of the global financial crisis by an anonymous programmer who wanted a currency independent of any central bank or financial institution.

Their value has soared in recent months, so much so that Norwegian man who bought $24 worth of them soon after they were invented found his stash valued at $690,000 earlier this year.

The Global Bond platform's design, which operated like a futures trading exchange, led users to believe they could make profits, attracting them to deposit more funds, the China Business News said.

It estimated around 500 people were affected and some of them had informed police in Shanghai and nearby Kunshan.

China's central bank is wary of virtual currencies, raising the alarm in 2007 over their potential use in online gambling and money laundering.

The government has banned the trading of virtual currencies in online games to prevent potential risk to economic and financial order, according to a government notice.

Beijing keeps a tight grip on the domestic yuan currency, worried about potential disruption of the economy by sudden outflows and inflows of funds.

 

[Boba Fett]

December 8th, 2013, 02:34 GMT · By Eduard Kovacs

Security Brief: Bitcoin, Android, Hacks, and Hacktivists

We’re giving you the chance to catch up on some reading in case you haven’t been online much over the past week or in case you might have missed some of the more important infosec stories.

Bitcoin has made a lot of headlines over the past period, particularly after it started pushing towards the $1,000 (€750) mark. Bitcoin has become associated with scams, crime, hacks, and even malware.

Researchers from Trusteer have come across a variant of the Citadel malware that’s designed to take screenshots when victims visit Bitcoin or other payment platform websites. Some cybercriminals are content with using Bitcoin, while others say it’s too volatile.

In Germany, police have arrested a couple of individuals suspected of using a botnet to generate Bitcoins. They’re said to have made over €700,000 ($954,000).

When it comes to Bitcoin-related scams, we have a couple of interesting stories. First, Chinese authorities have arrested the scammers running the GBL trading platform.

Secondly, the underground marketplace known as Sheep, the one that replaced Silk Road, was shut down after someone stole a large amount of Bitcoins. The site’s owners have accused a vendor, but many believe they might have been running a scam right from the start.

Bitcoin Talk has been once again targeted by cybercriminals. They’ve launched a DDOS attack against the website and changed its DNS records by leveraging a vulnerability in the systems of the AnonymousSpeech.com registrar. Users have been advised to change their passwords since the information might have been compromised.

As far as Android is concerned, the most interesting story is the one regarding the Class 0 (Flash SMS) message vulnerability. After security researcher Bogdan Alecu presented his findings at the DefCamp security conference, showing how a remote attacker can reboot Google Nexus devices by sending Flash SMS messages, Google made an interesting move.

The search engine giant decided to remove an app, HushSMS, from Google Play. The application in question was developed by Alecu in collaboration with German developer Michael Mueller. It had been on the Play website for almost two years before Google decided that it violated policies.

In related news, experts have identified a vulnerability in Android 4.3 that can be exploited to remove all device locks. The attack is carried out with the aid of rogue apps.

HushSMS isn’t the only app removed by Google from the Play store. The Balloon Pop 2 game has also been removed, but this time for a good reason. Experts found that the app was actually harvesting WhatsApp private conversations and putting them up for sale on a website.

Meanwhile, the FTC has reached a settlement with the developers of the Brightest Flashlight app. The company has promised to stop misleading customers about what information is collected and how it’s used.

Hacktivist operations have also made a number of headlines over the past week. Operations have been announced in countries such as Tunisia, Angola, Turkey, Honduras, Venezuela, and Ukraine.

A Turkish hacktivist known as Maxney has breached the website of Vodafone Iceland. The details of over 70,000 users have been leaked, and several subdomains have been defaced.

Also in the hacktivism section, Singapore is charging more and more individuals for the recent Anonymous attacks against government websites. Five individuals have been charged for the attacks against the websites of the prime minister, the president, and the Ang Mo Kio Town Council.

In the case against the PayPal 14 group, most of the suspects have pleaded guilty to misdemeanor and felony charges. However, if they don’t misbehave until the sentencing that’s scheduled to take place in a year from now, the felony charges will be dropped and they’ll get probation.

The 38-year-old accused of taking part in the Anonymous cyberattack against the website of Koch Industries got two years probation, and he’ll have to pay $183,000 (€135,000) in restitution. That’s apparently what you get for taking part in a DDOS attack for one minute.

Russian authorities have finally issued a statement regarding the arrest of Paunch, the developer of the BlackHole and Cool exploit kits. Russian IT security firm Group-IB, which contributed to the investigation, even released a couple of pictures of the suspect. Check out Paunch sitting in front of his Porsche Cayenne.

 

[Boba Fett]

Friday, December 6, 2013, 08:34

Banks not allowed to use Bitcoin

By WU YIYAO and GAO CHANGXIN in Shanghai

PBOC’s move follows losses by online investors

China’s central bank barred financial institutions from handling Bitcoin transactions after investors lost money on fraudulent online platforms for the virtual currency.

The move also follows an 89-fold jump in the virtual currency’s value this year, supported in part by demand from Chinese investors.

“Judging from its nature, Bitcoin is a specific virtual commodity. It does not have the same legal status as a currency and can’t, and should not, circulate in the market,” the People’s Bank of China said in a statement posted on Thursday on its website.

The central bank published the statement jointly with the China Securities Regulatory Commission, the China Banking Regulatory Commission, the China Insurance Regulatory Commission and the Ministry of Industry and Information Technology.

The virtual currency does not bring systemic risks to China’s financial system at the current stage, said the central bank, as the number of Bitcoins in circulation and the market scale are both limited.

No financial institutions of any kind should have a direct involvement in Bitcoin deals, it said. Financial institutions are banned from, among other things, trading, settling and market-making deals using Bitcoins, it added.

Websites that provide Bitcoin-related services will be asked to register with the country’s telecommunication authorities.

The central bank said that the virtual currency could be used for reckless speculation, money laundering, drug and gun transactions, gambling and other illegal activities. It could also be used by terrorists to fund attacks, it added.

Investors and holders of Bitcoins in China said that the move may limit demand for the virtual currency in the country, but regulating the coin also means that authorities recognize its impact on financial markets.

“The ban on Bitcoin transactions for financial institutions may make some investors think that the virtual currency will not have the liquidity they expected, and they may withdraw from the market,” said Chen Xiao, a Shanghai-based holder of the currency. “But on the other hand, regulators haven’t banned the use and trading of the coin on Internet platforms, so that means that the currency was not labeled as illegal.”

The Bitcoin was being traded at 5,920.87 yuan ($970) per coin on BTC China, the largest Bitcoin exchange in the country, at 6 pm on Thursday. On Sunday, the price on BTC China hit 7,395 yuan, an all-time high.

BTC China’s CEO Bobby Lee was quoted by Bloomberg News on Thursday as saying that the regulators’ move will protect the interests of consumers.

Lee added that BTC China is seeking recognition from the authorities for the currency so that it can be used to pay for goods and services instead of being used solely for speculation, the Bloomberg report said.

“Bitcoin trading can be considered a high-risk activity. Bitcoin prices are volatile, and can swing wildly, from day to day. Please use extreme caution when making the decision to invest in, or to sell, Bitcoin. BTC China is not asking users to buy or sell Bitcoin as an investment or for profit. All Bitcoin trading decisions should be made independently by the user,” says the risk disclaimer on BTC China’s website.

Fraudulent trading platforms have been raising concerns among Bitcoin investors in China.

“Trading Bitcoin on online platforms may not be as transparent as wiring money online — you don’t see the money arriving in your bank account soon after the transaction; sometimes, it may take days to see where your money went,” said Qian Zheng, a former Bitcoin trader.

“I won’t trade Bitcoin again until there’s a platform that gets legal recognition from regulators,” Qian added.

Chinese police have detained three people who allegedly operated a fraudulent online Bitcoin trading platform, shut it down unexpectedly and then vanished with the investors’ assets, the Xinhua News Agency reported yesterday.

Police said the trading volume of the platform, which claimed to be based in Hong Kong, grew gradually and it eventually ranked fourth in the country.

By the end of September, the platform had attracted 4,493 registered users who traded Bitcoin as if they were buying and selling stocks or futures, the police said.

The platform closed suddenly on Oct 26 and its management team could not be contacted after that, Dongyang police in Zhejiang province said.

An investor surnamed Qiao lost 90,000 yuan and reported the case to the Dongyang police department, which immediately started an investigation.

According to a report in Hong Kong-based newspaper The Standard, investors might have lost up to 25 million yuan.

 

[Boba Fett]

Why I Lost Faith In Bitcoin As A Money Transfer Protocol

Posted 1st January 2014 by Romain Dillet (@romaindillet)

As 2013 came to an end, many reflected on last year’s biggest tech news — and Bitcoin was a serious contender. But the main question remains: why are people interested in Bitcoin?

This whole debate reappeared when Charlie Stross stated that “Bitcoin looks like it was designed as a weapon intended to damage central banking and money issuing banks, with a Libertarian political agenda in mind — to damage states ability to collect tax and monitor their citizens financial transactions.” Paul Krugman then quoted his post, neither denying nor approving this thought.

But Chris Dixon (and Fred Wilson in the comment section) reiterated their strong interest in Bitcoin while sharing that they are both Democrats.

If major Bitcoin enthusiasts don’t have any political agenda in mind, then what is the future of Bitcoin? At its heart, Bitcoin is a cryptocurrency that doesn’t rely on any central bank. Bitcoins are just a chain of characters defined by algorithmic rules, and transactions are handled by the network of miners.

Yet, in a month’s time, the value of a bitcoin went from $200 to more than $1,000 on all the exchanges. In other words, it is as volatile as it can get. Right now, there are only around 12 million of bitcoins in circulation, and many Bitcoin holders are recent converts that buy and sell every day. So how could you think about using bitcoins to pay the rent? You could simply hold your bitcoins and expect to triple your wallet value in a couple of weeks instead.

That’s why I believe Bitcoin isn’t the next world currency. Bitcoin’s true purpose is not what everyone originally expected — you won’t buy a pizza in bitcoins anytime soon. Moreover, Bitcoin won’t be able to remain an unregulated currency for long.

So Bitcoin’s true purpose lies somewhere else. As Bitcoin is a peer-to-peer payment network, you don’t need any banking institution to make large transfers. Bitcoin could become the first meta-currency that sits on top of traditional currencies, the common language between USD and EUR. That’s what Dixon finds interesting, Bitcoin is as much a money transfer protocol as a currency. And it has the potential of disrupting the traditional banking system.

Replacing Forex Transactions With Bitcoin

As I live in France and work for an American company, I thought I would be the perfect candidate for this particular use case. I tried to use Bitcoin to transfer a small amount of money between the U.S. and France. At first, I purchased bitcoins using Coinbase and my U.S. bank account (a couple of dollars in fees). The process was very easy, but because I don’t meet the requirements to make instant purchases, I had to wait about a week before I could actually do anything with my bitcoins. Coinbase had to verify the transaction first.

While I take Coinbase as an example here, there aren’t many trustworthy and easy-to-use services to make Bitcoin transactions yet — and all services have flaws. People ask me all the time how they could buy bitcoins, and I don’t have a simple answer.

In that period of time, bitcoins went from about $850 a bitcoin to more than $1,000, then back to $700 — I only could sit back and enjoy the ride. Then, when I finally got my bitcoins, I transfered them to Bitstamp in a couple of hours (no fee) — it was flawless and a great example of the beauty of Bitcoin. Finally, I transfered my bitcoins to my French account ($1.24 fee to convert into EUR with a very good conversion rate). I had to wait a few days before getting my money because of the traditional banking system.

Overall, it was a painful experience, even more painful than using traditional foreign exchange services. But more importantly, I don’t see how I could trust Bitcoin as a money transfer protocol with such a high volatility. Fees were much lower, but it doesn’t matter if you don’t know how much money you will get on your bank account in the end.

A couple of weeks ago, Bitcoin’s value went from more than $1,100 to around $650 in a few hours, because of a new rule in China. You can’t use Bitcoin for serious amounts of money if there is a chance of losing 40 percent of your money overnight.

As long as Bitcoin remains a young and volatile currency, Bitcoin’s mechanisms will remain beautiful on paper. Using it for real world transactions would be crazy, and I think we are still a couple of years away from getting a stable Bitcoin that can be trusted. Until then, using Bitcoin will remain a wild ride — it’s definitely fun, but don’t take Bitcoin seriously just yet.

 

[Boba Fett]

​

 

[Boba Fett]

Bitcoin Value Continues to Puzzle Economists

By Brian Powell · 1st January 2014 · Posted in the Finance Channel ·

<iframe src="http://embed.newsinc.com/Single/iframe.html?WID=1&VID=25417823&freewheel=69016&sitesection=webpronews&width=616&height=347" marginwidth="0" marginheight="0" scrolling="no" width="616" frameborder="0" height="347"></iframe>

2013 will be a year remembered for many important reasons, with perhaps the most interesting being the rise of the digital currency, the bitcoin.

Bitcoins have been in existence for 4 years now, and over those four years the value of a bitcoin has fluctuated drastically. These intense changes in value make many people wonder what gives a bitcoin value and if they’re worth the investment. Several economists shed some light on the issue.

Nobel Prize winning economist and author of several bestselling books Paul Krugman warns consumers and businesses about the dangers of bitcoins, saying that he is “deeply unconvinced” that the whole bitcoin phenomenon will really work:

“So far almost all of the Bitcoin discussion has been positive economics — can this actually work? And I have to say that I’m still deeply unconvinced. To be successful, money must be both a medium of exchange and a reasonably stable store of value. And it remains completely unclear why BitCoin should be a stable store of value.”

In order to explain why the value of bitcoins are disputed, Krugman points us toward Brad DeLong, who ponders the question himself. DeLong points out that the intrinsic value of gold being used to make pretty things gives it its market value, while the value of the dollar comes from its ability to pay taxes and create transactions here in the US.

Considering bitcoins are a form of digital currency with no intrinsic value, then what gives them a stable, market value?

The answer to that question comes from Business Insider’s Joe Weisenthal, who sees bitcoins as a hybrid of 3 factors: currency, equity, and social network.

Bitcoins are obviously a form of currency due to their ability to complete transactions. While bitcoins were used almost entirely to complete online transactions at their inception, the acceptance of bitcoins as a form of currency in the physical marketplace has drastically increased over the past 4 years. Currently, there are 2,252 locations across the world that accept bitcoins as a form of currency, adding legitimacy to the argument that bitcoins are indeed a form of currency.

Bitcoins are also a form of equity in the fact that the more people who invest in bitcoins and use them as a form of currency, the more the bitcoins are worth. Thus, bitcoins act much like individual stock shares – the more people who invest in a company’s particular stock, the higher stock prices climb due to the increased perception of said company’s value.

However, bitcoins only act as equity as far as its social network exists and continues to grow. This is perhaps the biggest concern to consumers when pondering whether or not to make an investment in bitcoins.

As previously stated, bitcoins have no intrinsic value; they are simply 0′s and 1′s transmitted through the internet. The value of a bitcoin is derived from its use; i.e. bitcoins gain more value as more people use them, much like how Facebook gains value as more people use its service.

But that is where the problem lies. Recent research has shown that Facebook users are declining, especially in the younger generation. If Facebook users continue to decline, it could wind-up facing the same fate that befell MySpace.

Or, as Joe Weisenthal put it, “Without the network effects, the technology is nothing. It’s just a theoretical amusement.”

So, in the end, the value of a bitcoin will be ever-fluctuating as its numbers of users and businesses which accept payment continue to fluctuate. While one bitcoin is worth $750.99 today, its value could easily increase or decrease ten-fold overnight.

If you’re still questioning whether or not you should invest in bitcoins, ask yourself this: Do you have surplus cash that you don’t know what to do with? If that answer is yes, invest in some bitcoins, ride the bubble, and hope the gamble pays off (and if it does, send some of those excess bitcoins this way).