updated 6:50 AM UTC, Apr 12, 2019
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Operator of BTC-e bitcoin exchange arrested

A US jury has indicted the operator of BTC-e Alexander Vinnik on 26 July, following his arrest in a Greek village on the previous day.

BTC-e has been in operation trading bitcoin since 2011, and the US justice department claims that it was used to launder over $4 billion for criminals involved in activities ranging from hacking to drug trafficking.

Authorities are also linking Vinnik to the collapse of Japan-based bitcoin exchange Mt Gox, which failed in 2014 due to being hacked.

Brian Stretch, US attorney for the Nothern District of California, (where Vinnik was indicted) said:

“Just as new computer technologies continue to change the way we engage each other and experience the world, so too will criminals subvert these new technologies to serve their own nefarious purposes.”

SERIES OF OPERATIONS

According to the Guardian, the arrest of Vinnik is part of a series of operations by US authorities to tackle Russian cybercrime in Europe.

The recent takedown of the dark web marketplaces AlphaBay and Hansa are part of these ongoing operations.

The US alleges that Vinnik, through his role of operator of the BTC-e exchange, facilitated crimes ranging from hacking, identity theft, drug trafficking and various types of fraud.

The site was known as having a relaxed standard for checking user identity and had a history of non-compliance with authorities.

The BTC-e site was been out of action for more than 24 hours, due to ‘unplanned maintenance’.

  • Published in Tech

$78 million in Bitcoin stolen in NiceHash hack

Cryptocurrency mining marketplace has confirmed that it has been the victim of a hack that has resulted in the theft of over 4,700 BTC.

This equates to over $70 million worth of bitcoin being emptied from the sites wallet.

In an official statement made on its website, the company said:

“Unfortunately, there has been a security breach involving NiceHash website. We are currently investigating the nature of the incident and, as a result, we are stopping all operations for the next 24 hours. Importantly, our payment system was compromised and the contents of the NiceHash Bitcoin wallet have been stolen.”

NiceHash CEO Marko Kobal later provided an update to this statement on Facebook. The attack apparently began early in the morning of 6 December, with the comprise coming from an employee’s computer. Funds began to be moved out of the company accounts at around 3:34 am CET.

COORDINATED AND SOPHISTICATED

According to Kobal, the attack appeared to “incredibly coordinated and highly sophisticated”. He could not offer up any more details as the company and the authorities are currently conducting their own analysis of what happened.

Kobal and the sites administrators also did not mention whether any funds from user wallets had been taken, but urged users to change their passwords.

The rise in popularity of bitcoin and cryptocurrencies in general has led to an increase in attention from hackers. Anti-malware software company Malwarebytes recently commented that it had stopped almost 250 million attempts to install coin-mining software on PCs in a single month.

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How Bitcoin Works

At a very basic level, Bitcoin is just a digital file or ledger that contains names and balances, and people exchange money by changing this file. When Bob sells Carol a lawn mower for 5.2 Bitcoins, Bob’s balance goes up by 5.2, and Carol’s down by 5.2. There’s no gold or government issued money backing these numbers. Bob is only willing to trade his real-life lawn mower for a higher number in this digital file because he has faith that other people will also trust the system.

So who maintains this ledger and makes sure no one cheats? One goal of Bitcoin is to avoid any centralized control, so every participant maintains their own copy of the ledger. One surprising consequence of this is that everyone can see everyone else’s balances, although the real system only uses account numbers and not names, so there’s some level of anonymity.

If everyone maintains their own ledger, how are all the ledgers kept in sync as money is transferred? At a basic level, when you want to send money, you simply tell everyone else by broadcasting a message with your account number, the receiver’s, and the amount. Everyone across the entire world then updates their ledger. 

As a quick aside,  I’m describing how Bitcoin works for power users--people who help maintain the system. You can also just use the system to send a receive money, however, without maintaining a ledger.

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The real value of bitcoin and crypto currency technology – The Blockchain explained

Blockchain technology will drastically change our lives.

In the coming years, the technology behind crypto currencies such as Bitcoin will inevitably and radically change the role of traditional trusted parties such as banks, accountants, notaries, and governments. The animated video about Bitcoin that was released today on http://bitcoinproperly.org is the first to specifically address the technology behind Bitcoin: the Blockchain. Within five minutes, it is explained how the essential functions of the “trusted third party” can be automatized through the Blockchain as well as what the implications of this are.

From Bitcoin hype to Blockchain revolution: an internet of trust.
With the arrival of crypto currencies such as Bitcoin, everyone around the world can trade with each other without any involvement from traditional third parties such as banks, notaries, accountants, and governments. Trade is a fundamental pillar of our economy and society, and traditional trusted parties play a crucial role in this.

The technology behind Bitcoin making all this possible – the Blockchain – ensures that the essential functions of the “trusted third party’, are fully automatized through the internet. This way, these functions are as freely available, accessible, and programmable as the internet itself.

The animated video, available in both Dutch and English, explains how this works, also mentioning practical applications. The implications are clear: in the coming years, the role of the traditional trusted parties will inevitably and drastically change, strongly impacting our daily lives.

The creators of this animated video invite its viewers to think about and discuss the fundamental and radical innovations made possible by crypto currencies.

Rutger van Zuidam ecommerce entrepreneur and founder of IntoBitcoin.com: “The Netherlands have all the assets to become Europe’s Silicon Valley of financial technology. It is possible for the Netherlands to position itself favourably in comparison to the US and UK, who are currently still ahead. The technology behind crypto currencies like Bitcoin plays an essential role in leveraging these opportunities. We hope that the animated video about the technology behind crypto currencies will positively affect this development.”

Lykle de Vries: ”Bitcoin is not the new money for internet,but it is the new internet for money, value and ownership in all forms. Crypto currencies like Bitcoin are the next step in the emancipation of all world citizens, and can help create a new dynamic for democracy, society and economy.”

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New Development Can Make Bitcoin Transactions Confidential

A new development could have a major impact on Bitcoin, Litecoin, and other similar platforms. A group of researchers at Stanford University, University College London, and Blockstream have announced a method for making transactions truly confidential. Known as Bulletproofs, this technology would not only enable privacy, but it would also aid in scalability, enabling many more transactions on the blockchain than is currently possible.

Bitcoin is the most significant crypto that could benefit from this development. It is often described as confidential, but in reality it is not. Tracing transactions is difficult, but possible. Some competing cryptos, such as Monero, Dash, and Zcash do have this capability. In fact, Monero’s ability to process truly confidential transactions is considered its most significant asset. The extent to which confidentiality will give these cryptos an advantage over Bitcoin in the long run is debatable, but nevertheless Bitcoin advocates have long sought to give BTC this feature.

There are already methods of creating confidentiality in Bitcoin, the two most notable being zkSnarks and ringCT. These methods, however, have shortcomings. For example, they require much larger transactions, which is a serious drawback given the scalability issue. Also, they require a so-called “trusted setup,” which necessitates both parties trusting that the transaction was properly configured. The team behind Bulletproofs claims that their platform eliminates both of these issues.

The development proposed by the Stanford team is one of several upgrades needed by Bitcoin as it faces increased competition from altcoins. Although Bitcoin continues to be dominant in the crypto space, there is no doubt that altcoins often have advanced features that many find desirable. It is for this reason that developers are working on modifications, some of which significantly alter Bitcoin’s original code. Segregated Witness is the best known and most controversial of these modifications. Others include the Lightning Network and the recently cancelled block size increase.

It is worth noting that some crypto advocates argue against adding anonymity to cryptocurrencies, asserting that traceable cryptos are preferable. They believe that transparency is needed for governments and the general public to accept crypto as legitimate. It is well known, after all, that cryptocurrency has a reputation for being used by organized criminals and other nefarious groups. Also, governments are likely to only support cryptos that cannot be used to evade taxes or launder money, making some type of transparency a must.

Bitcoin is not the only major crypto that is working on confidential transactions. The Ethereum team has already successfully tested zkSnarks, which will be added as part of a future upgrade. Litecoin and a number of lesser altcoins are also working on confidentiality. The issue of confidential transactions could also be impacted by atomic swaps, which will enable cross-chain transactions and are currently being tested.

The central issue of confidentiality revolves around the core ideals of blockchain-based currencies. Like decentralization, confidentiality takes control away from governments and central banks, and give it to individuals. It is all but certain that for this reason a truly confidential crypto will go mainstream. Bulletproofs could be part of what makes this happen.

Source: https://www.crypto-news.net/

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