Wednesday, July 6, 2016

Internet Watch Foundation Partners to Stop Illicit Bitcoin Use


Internet Watch Foundation Partners to Stop Illicit Bitcoin Use

Bitcoin News

The Internet Watch Foundation (IWF) has announced a partnership with blockchain industry startup Elliptic aimed at fighting online child sex abuse.

With the news, the UK-based charity has provided a database of bitcoin addresses associated with sexual abuse content to the startup. Elliptic, in turn, will seek to use the information to "alert financial institutions and law enforcement" of any payments made in support of the illicit activity.

In statements, IWF CEO Susie Hargreaves said that the action follows what her organization believes is an increase in the use of bitcoin by criminals looking to disseminate child sexual abuse material online.

Elsewhere, consultant and former head of regional organized crime unit head Mark Birch sought to position the development as a positive for both bitcoin the digital currency, and the technology’s larger community.

Birch said:

"Elliptic and IWF’s partnership represents a major step forward in bitcoin’s evolution. Elliptic has demonstrated to banks, law enforcement and the public at large that they are taking meaningful steps to eliminate the illicit use of bitcoin."
The announcement is the latest for the blockchain startup following a $5m fundraising in March.


source: CoinDesk

Tuesday, May 31, 2016

Australia to sell bitcoins confiscated as proceeds of crime


Australia to sell bitcoins confiscated as proceeds of crime

In this April 7, 2014 file photo, Bitcoin logos are displayed at the Inside Bitcoins conference and trade show in New York. About $13 million in bitcoins will be auctioned in Sydney in June after Australian police confiscated the digital currency as proceeds of crime, an official said Tuesday, May 31, 2016. (AP Photo/Mark Lennihan, File)
In this April 7, 2014 file photo, Bitcoin logos are displayed at the Inside Bitcoins conference and trade show in New York. About $13 million in bitcoins will be auctioned in Sydney in June after Australian police confiscated the digital currency as proceeds of crime, an official said Tuesday, May 31, 2016. (AP Photo/Mark Lennihan, File)

CANBERRA, Australia - About $13 million in bitcoins will be auctioned in Sydney in June after Australian police confiscated the digital currency as proceeds of crime, an official said Tuesday.

Ernst & Young was running the process, which is only the second such bitcoin auction in the world after the U.S. Marshals Service sold 144,000 bitcoins over a two-year period that had been confiscated from Ross Ulbricht, who founded the online drug bazaar Silk Road, the accountancy firm's transaction partner Adam Nikitins said.

Bidders can register until June 7 for the 24,518 bitcoins on offer. The 48-hour sealed auction will take place from June 20.

Based on Tuesday's bitcoin price of $533.80, the cryptocurrency is valued at almost $13.1 million.

Nikitins expects strong interest in the auction since the bitcoin price has become less volatile after the U.S. auctions. Ernst & Young has received expressions of interest from the United States, Europe and Australia, he said.

"Over the last few months, the price of bitcoins has been steadily rising and the volatility has gone out of it," said Nikitins, adding that was expected to lead to greater interest.

Nikitins would not say who the bitcoins were confiscated from, but said registered bidders would be told.

The Victoria state government has confirmed that is had seized about 24,500 bitcoins in late 2013 from a Melbourne drug dealer.

Richard Pollard, 32, was sentenced in the Melbourne County Court in October to 11 years in prison after pleading guilty to drug trafficking on the Silk Road website.

Ulbricht, 32, was sentenced in the U.S. District Court in May last year to life in prison after he was convicted of charges accusing him of operating the website for nearly three years from 2011 until his 2013 arrest.

Like the U.S. auction, the Australian bitcoins will be mostly sold in lots of 2,000. One lot will contain 2,518.

Bitcoin is a digital currency that allows people to buy goods and services and exchange money without involving banks, credit card issuers or other third parties. The coins are created by users who "mine" them by lending computing power to verify other users' transactions, receiving bitcoins in exchange.

Bitcoins also can be bought and sold on exchanges with U.S. dollars and other currencies. Their value has fluctuated over time. At its height in late 2013, a single bitcoin was valued above $1,100.

source: www.winnipegfreepress.com

Sunday, May 29, 2016

Why I’m buying bitcoins


Why I’m buying bitcoins

Bitcoin has already had one boom and bust
Bitcoin has already had one boom and bust – it may be about to have another

If I were to tell you that gold miners or oil producers were about to cut their production in half, would that make you more or less bullish on gold and oil? More bullish of course. That’s exactly what’s about to happen to bitcoin, the digital currency.
Currently, 25 bitcoins are created every ten minutes. On 11 July, this number will drop to 12.5. Then, four years after that, it will half again. Why is this happening? There are roughly 15.5 million bitcoins in existence and the halving process means that the total can never exceed 21 million, expected to occur roughly a century from now. That’s all locked down in the code.

Limited supply is a powerful force, and making bitcoins scarce was a key feature of its design – and a key difference between bitcoin and normal, “fiat” currency, which can be printed in unlimited amounts.

Many people buy bitcoin purely for speculation – betting on the price going up. But they’ll only be proved right if others buy it for its utility. You can almost think of bitcoin as a social media stock. The more people who use it, the more valuable it becomes. But what, for the uninitiated, exactly is bitcoin? Quite simply, it is a digital asset that can be freely transferred across the internet. It doesn’t exist in physical form, there’s just a reference to your holding stored on a public ledger known as the blockchain.

This differs from a traditional database in crucial ways. With a traditional database, you dive inside, open a drawer, change the data, and then close it again. Both the buyer and seller must do this in addition to the exchange, clearers and other intermediaries. With all those different parties involved, there’s plenty of room for error in the settlement system.

With a blockchain, on the other hand, the transaction is recorded onto a new data layer known as a block. That block will never change and a new block is created every ten minutes. The data is stored in a chain of blocks, which is why it’s known as a blockchain – a common mistake is to assume that a bitcoin has a serial number. It doesn’t. Instead, it has provenance.

When you transact, the system checks that your bitcoins haven’t already been spent. It does this by examining the blockchain, which is where a bitcoin’s transaction history is stored. There are more than 5,000 identical copies of the blockchain and anyone can download it and examine the data. It’s truly open source.


bitcoin chart
Bitcoin chart

Although bitcoin is still somewhat experimental, the digital currency has survived without a glitch since 2009. And each new day that it survives, it quashes a few more doubters. It’s growing in popularity – already there are more than 200,000 transactions a day. That’s small compared to Visa, but the bulls are betting it will go mainstream.

As the chart above shows, bitcoin has already had one boom and bust – the price rose from less than $1 to $1,000 in late 2013, then crashed to around $200 by summer 2015. But the bear has now turned and the price is challenging $500. There’s less hype this time, and the capital investment behind the scenes is huge. The network is growing and supply is falling.

So as far as I’m concerned, you should treat this as a cheap growth stock. At $450, the “network value” of bitcoin is around $7bn. If it goes mainstream, it’ll give the FANGs (Facebook, Amazon, Netflix and Google) a run for their money.


source: www.moneyweek.com

Miami money-laundering case may define whether Bitcoin is really money


Miami money-laundering case may define whether Bitcoin is really money.

Michell Espinoza is asking a judge to throw out criminal charges against him


He argues that the virtual currency is not actual money under Florida law


The case, believed to be the first of its kind, is being closely watched

Michell Espinoza is all smiles in Miami-Dade circuit court on Friday
Michell Espinoza is all smiles in Miami-Dade circuit court on Friday as his lawyers sought to persuade a judge to dismiss money laundering charges against him. He is accused of illegal dealings in the virtual currency known as Bitcoin. David Ovalle Miami Herald


In a Miami money-laundering case that is being closely watched around the world, an economics professor took to the witness stand Friday to offer a tutorial on the widely known, if poorly understood, virtual currency known as Bitcoin.

The takeaway: Bitcoin isn’t really money, professor Charles Evans said.

No central government or bank backs Bitcoin, like the United States does the dollar. Government regulation of Bitcoin remains a messy hodgepodge from state to state, country to country. The IRS considers Bitcoin deals no more than bartering, he said.

“Basically, it’s poker chips that people are willing to buy from you,” said Evans, a Barry University economics professor who, yes, was paid $3,000 worth of Bitcoins for his appearance as a defense witness.

Attorney Frank Andrew Prieto held up a 1966 U.S. quarter. “Is Bitcoin an actual coin?”

“In a sense of a physical piece of base metal?” Evans said. “No.”

The hearing unfolded in the case of Michell Espinoza, who is accused of illegally selling and laundering $1,500 worth of Bitcoins to undercover detectives who claimed they wanted to use them to buy stolen credit card numbers.

His lawyers, Prieto and Rene Palomino, are asking a court to dismiss the case against him, arguing that Bitcoin isn’t technically money under Florida law so laundering charges don’t apply. Miami-Dade Circuit Judge Teresa Mary Pooler won’t decide for a few more weeks, but listened intently Friday, peppering Evans with questions and asking for more time to research.

“This is the most fascinating thing I’ve heard in this courtroom in a long time,” Pooler said.

The prosecution of Espinoza is being watched closely, especially in financial and tech circles, because it is believed to be the first money-laundering case against someone for dealing in Bitcoins. As the currency has gained in popularity, law enforcement has struggled to figure out how it fits into illegal activities.

The controversial virtual currency allows some users to spend money anonymously, and can also be bought and sold on exchanges with U.S. dollars and other currencies. The virtual currency has gained popularity with merchants selling legitimate goods and services.

n Miami, there are a few restaurants that accept the virtual currency, and so does a plastic surgeon, which means someone can get a Bitcoin butt lift.

Regulated services such as CoinBank, which operates similar to PayPal, allow people to buy, sell and use the Bitcoins. But authorities have raised concerns about the currency being used in the anonymous black market.

Most notoriously, Bitcoins were used to traffic drugs in the now shuttered Silk Road network. In an unrelated South Florida case, a Miramar man got 10 years in prison after using Bitcoins to buy Chinese-made synthetic heroin from a Canadian prisoner.

In the Miami case, prosecutors said that Espinoza — who used the moniker MichellHack — illegally sold undercover investigators $1,500 in Bitcoins. Espinoza, 32, designs websites for businesses.

The officers found him through a Bitcoin exchange site, LocalBitcoins.com, and told him they were going to use the currency to purchase stolen credit card numbers.

The detectives met with Espinoza three times in person: on Lincoln Road, at an ice-cream shop and at a hotel room.

Espinoza was arrested along with another man, Pascal Reid, who pleaded guilty to acting as an unlicensed money broker and was sentenced to probation. Under his unusual plea deal, he agreed to teach law enforcement about Bitcoin.

Evans was the one doing the teaching in court on Friday.

He said he has been involved in “virtual currencies” since they first began popping up in rudimentary forms in the 1990s, through the dot.com boom to the rise in Bitcoins several years ago. He also runs a nonprofit called Conscious Entrepreneurship Foundation, aimed at helping small businesses in developing countries.

Indeed, Bitcoin use is increasing in places such as Africa, where the “banking system is broken,” Evans said. He also said the market for Bitcoin can vary — on Friday, one Bitcoin was worth $473.

He likened Bitcoin worth to how collectors assign values to baseball cards, or comic books.

Prosecutor Tom Haggerty, trying to show that Bitcoins are essentially the same as cash, pointed out that Bitcoins can now be used at some restaurants.

“You don’t purchase a hamburger with a comic book,” Haggerty said. “You usually purchase it with cash, or in this case, a Bitcoin.”


source: www.miamiherald.com

Saturday, May 28, 2016

Dude bins hard drive containing $67,000 in bitcoins


Dude bins hard drive containing $67,000 in bitcoins.

A blunder has seen a bounty of bitcoins binned
A blunder has seen a bounty of bitcoins binned

HAVING A BAD DAY? Forget it, fool, as some chap in America has accidentally thrown away a hard drive with enough bitcoins on it to buy an extravagant car or a whole load of top-of-the-range Apple watches.

Reddit user 'me_is_idiot' told his sorry tale in a post on the site and elicited a lot of sympathy. It is no wonder. What he did is a blunder that should give anyone a sinking feeling in the tummy department.

"This FU started around six years ago when I was a poor college student. I came across this thing called bitcoin, and people were giving them away for free on some websites," he said.

"Everything I read about them said they were going to be the next big thing. Awesome, I'll get myself some of those. Over the course of one semester I'd got around 150 bitcoins, which at the time was worth around $11. What a waste of fucking time!"

Eventually he forgot about the coins, and presumably stopped reading anything about the value and status of bitcoins. He left himself a note about the existence of the virtual money, but clearly had other things on his mind.

"These bitcoins were stored on my laptop. I upgraded my laptop the following semester with more RAM and a bigger superfast 7200 HDD. I wrote a little sarcastic note to myself about the bitcoins and folded it over my old HDD," he explained.

"That was the last time I paid any attention to bitcoin. It wasn't too long before I graduated and started to earn decent(ish) money.

"Fast forward to last month and I'm moving to a smaller apartment (more expensive area), and had to be picky about what I could take. I had an old box of PC parts. I had a quick look through and marvelled at the 256MB RAM sticks, the 40GB HDDs. I even had a few floppy disks! All of it worthless with today's hardware. So in the trash it all went."

Later he found the old note and realised his mistake. "I chuckled to myself for a split second before realising bitcoins are worth a fair bit today, at which point panic set in," he said.

The poor guy has been scratching his head and searching down the back of the armchair. But short of turning over a landfill site, he does not expect to be reunited with his thousands.

"I've been Googling for several hours but it seems I'm fucked. The bitcoins are gone! At least they weren't worth the millions that my idiotic self thought when I first found the note, but that's not much consolation," he added.

"TL;DR earned $11 worth of bitcoin, five years later threw them out when they were worth $67,000!"

source: www.theinquirer.com

Spanish Police Seize 6 Bitcoin Mines in Crackdown on Stolen TV Content


Spanish Police Seize 6 Bitcoin Mines in Crackdown on Stolen TV Content

An investigation by Spanish authorities into the illegal distribution of paid television content has resulted in the seizure and destruction of six bitcoin mines used to launder proceeds from the alleged scheme.

European law enforcement agency Europol, which took part in the investigation, said today that 30 individuals had been arrested during an operation on 18th May. Thirty-eight homes across seven Spanish cities, including Madrid, were searched during the event, according to the agency.

According to Reuters, those operating the bitcoin mines based in Spain were stealing power to fuel those efforts, citing a statement from Spanish police. Discovery of the bitcoin mines reportedly occurred as Spanish tax authorities investigated the alleged scheme.

Mining is an energy intensive process of confirming transactions on bitcoin’s public ledger, the blockchain. Money is made when the proceeds from selling bitcoins (or other cryptocurrencies) exceeds the cost of the electricity used.

Among the items seized: roughly $35,000 in bitcoin, ten luxury vehicles and a private aircraft. Authorities also seized about 184,000 euros, as well as nearly 50,000 decoders used to access otherwise restricted TV content.

Further, a photo included with Europol’s release shows several of the machines seized from one of the mines.

Europol said that the alleged effort to distribute paid-for TV content stretched across the globe, involving decoder exporters from China as well as a network of servers based throughout Europe.

"This operation shows that these types of crimes are not left unpunished,” Michael Rauschenbach, head of serious and organized crime for Europol, said in a statement.

source: www.coindesk.com

Bitcoin Price: The Last Time This Happened


Bitcoin Price: The Last Time This Happened, Bitcoin Prices Soared 3,950%

Bitcoins price, Last Time This Happened
Bitcoins Price


Something big is about to happen to the bitcoin price, and it could send bitcoin prices through the roof. You see, this digital currency has a unique monetary policy. Bitcoins are created roughly every 10 minutes, but there can only ever be 21 million of them. The rate at which bitcoins are created will drop by half every four years until all 21 million bitcoins are in circulation.

Last time the halving event happened was in November 2012, when the price of a bitcoin was around $12.00.
Since then, the bitcoin price skyrocketed. At $473.80 apiece, the price of a bitcoin has increased by 3,950%!

The next halving event is expected to happen in less than two months. This could spark a new rally in bitcoin prices.
However, there is a major concern about the event. For the Bitcoin system to function, it relies on a group known as miners to keep processing the transactions. What is the incentive for miners? They get the new bitcoins created every 10 minutes.

Now, if the number of newly created bitcoins drops by half, miners would get fewer rewards unless the price of bitcoins doubled immediately.

Should you worry about the miners who are responsible for keeping the network running?

Well, several insiders are saying that the industry will be fine. For instance, Valery Vavilov, chief executive officer of bitcoin infrastructure provider Bitfury, said that “the profit margins will be less temporarily but we are ready for this.” (Source: “Bitcoin Production Will Drop by Half in July, How Will That Affect the Price?,” Forbes, May 24, 2016.)
Also, note that just like farmers who hedge their risk using commodity futures, bitcoin miners can do the same. 

According to Bobby Lee, chief executive officer of Bitcoin mining pool and exchange BTCC, miners “know how many Bitcoins they’re going to make over the next six months, so they pre-sell the Bitcoins at today’s price so they don’t have to worry.” (Source: Ibid.)

Recently, investment bank and asset management firm Needham & Company initiated coverage on Bitcoin Investment Trust with a “Buy” rating and a price target of $62.00. The firm values bitcoins at $655.00 apiece, representing an upside of 38.2%. (Source: “Bitcoin Undervalued by over $200, Investment Bank Reports Finds,” CoinDesk, March 29, 2016.)

source: www.profitconfidential.com