Tag: cryptocurrency

You Could Be Mining This Cryptocurrency Without Knowing It

Zcash is a new virtual currency that claims to be more anonymous than bitcoin, and has garnered interest from academics, investors, and criminals.

Perhaps thanks to the latter group, hackers are allegedly installing malware on unsuspecting users’ computers that forces them to mine Zcash for the hackers’ own profit.

The malware is distributed via links for things like pirated software, according to a blog posted on Monday by Kaspersky Lab security researcher Aleks Gostev.

Once installed, it forces a person’s computer to mine Zcash—basically solving math problems for a reward in the currency—and funnels the funds back to the attacker.




According to Gostev, around 1,000 possibly infected computers have been identified. This many zombie computers mining Zcash could generate as much as $75,000 a year in income, Gostev wrote.

Downloading mining software to a PC doesn’t necessarily have severe consequences for a user’s data,” Gostev wrote me in an email.

However, it does have the effect of increasing the energy consumption level of their machine, which results in more expensive electricity bills.”

Another consequence is a heavy load on the PC’s RAM, because mining software consumes up to 90% of available memory,” he continued, “which leads to a significant performance slowdown.

According to Zooko Wilcox, founder and CEO of Zcash, the most users can do at this point is protect themselves.

Unfortunately, we have no way to prevent this kind of thing, since Zcash is an open source network, like Bitcoin, that nobody (including us) controls,” Wilcox wrote me in an email.

Our recommendation to security companies that detect this kind of activity, like Kaspersky, is that their software should alert users when potentially malicious software is detected, and give the user the option of shutting it down or, if it was deliberately installed by the user, allowing it to run.

This sort of thing isn’t unique in the world of virtual currencies. Bitcoin, for its part, has seen a number of botnet mining pools over the past several years.

Even some bitcoin alternatives, like Dogecoin, have been fertile grounds for similar attacks.

Botnet mining on these currencies has mostly died out because they were designed so that mining difficulty increases over time and the rewards continually diminish.

In this situation, even an army of regular PCs can’t compete with the specialized hardware employed by big-business miners, known as ASICs.

Wilcox contended in an email that it’s incorrect to describe non-consensual Zcash mining as a “botnet,” writing, “A botnet is where you have a controller that can deploy software automatically to a large number of compromised machines.

The potential difference for Zcash, however, is that the currency is touted by its creators as being resistant to the use of ASICs, making mining with plebeian hardware a profitable approach over the long-term.

Zcash could theoretically be mined on a smartphone.

This may make Zcash mining less resource-intensive and thus more decentralized, but, somewhat ironically, it may also have the unintended side effect of making botnet mining with malware a consistently attractive option, despite diminishing returns.

However, according to Marco Krohn, chief financial officer at cryptocurrency mining firm Genesis Mining, the current state of botnet mining on Zcash as described by Kaspersky’s Gostev isn’t of much concern.

Only if a botnet manages to infect 250,000 computers, exceeding 10 percent of the whole network’s mining power, Krohn said, would miners see any effects.

But while bigger electricity bills aren’t a problem for professional miners, the average person might not appreciate the financial strain.

According to Gostev, users should check their security software to make sure blocks legitimate software from being used for malicious purposes, which might be disabled by default.

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Pass it on: New Scientist

The Rise of Cryptocurrency Ponzi Schemes

Last month, the technology developer Gnosis sold $12.5 million worth of “GNO,” its in-house digital currency, in 12 minutes.

The April 24 sale, intended to fund development of an advanced prediction market, got admiring coverage from Forbes and The Wall Street Journal.

On the same day, in an exurb of Mumbai, a company called OneCoin was in the midst of a sales pitch for its own digital currency when financial enforcement officers raided the meeting, jailing 18 OneCoin representatives and ultimately seizing more than $2 million in investor funds.




Multiple national authorities have now described OneCoin, which pitched itself as the next Bitcoin, as a Ponzi scheme; by the time of the Mumbai bust, it had already moved at least $350 million in allegedly scammed funds through a payment processor in Germany.

These two projects—one trumpeted as an innovative success, the other targeted as a criminal conspiracy—claimed to be doing essentially the same thing.

In the last two months alone, more than two dozen companies building on the “blockchain” technology pioneered by Bitcoin have launched what are known as Initial Coin Offerings to raise operating capital.

The hype around blockchain technology is turning ICOs into the next digital gold rush: According to the research firm Smith and Crown, ICOs raised $27.6 million in the first two weeks of May alone.

Unlike IPOs, however, ICOs are catnip for scammers. They are not formally regulated by any financial authority, and exist in an ecosystem with few checks and balances.

OneCoin loudly trumpeted its use of blockchain technology, but holes in that claim were visible long before international law enforcement took notice.

Whereas Gnosis had experienced engineers, endorsements from known experts, and an operational version of their software, OneCoin was led and promoted by known fraudsters waving fake credentials.

According to a respected blockchain engineer who was offered a position as OneCoin’s Chief Technology Officer, OneCoin’s “blockchain” consisted of little more than a glorified Excel spreadsheet and a fugazi portal that displayed demonstrably fake transactions.

And yet, OneCoin attracted hundreds of millions of dollars more than Gnosis.

The company seems to have targeted a global category of aspirational investors who noticed the breathless coverage and booming valuations of cryptocurrencies and blockchain companies, but weren’t savvy enough to understand the difference between the real thing and a sham.

Left unchecked, this growing crypto-mania could be hugely destructive to one of the most promising technologies of the 21st century.

This danger exists in large part because grasping even the basics of blockchain technology remains daunting for non-specialists.

In a nutshell, blockchains link together a global swarm of servers that hosts thousands of copies of the system’s transaction records.

Server operators constantly monitor one another’s records, meaning that to steal money or otherwise alter the ledger, a hacker would have to compromise many machines across a vast network in one fell swoop.

Even as the global banking system faces relentless cyber-attacks, the more than $30 billion in value on Bitcoin’s blockchain has proven essentially immune to hacking.

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Pass it on: New Scientist

Bitcoin: A World-Changer Or Just Another Bubble?

Set up a free Brilliant account at http://www.brilliant.org/answerswithjoe/
And the first 200 to sign up for a premium account get 20% off every month!

Everywhere you look, Bitcoin is in the news.

But for a lot of people, it’s still a total mystery. Let’s take a look and talk about what it is and where it’s going.

BTW, if you want to send me some Bitcoin (some people have asked), here’s my BTC wallet: 15iFWPADUJtQBzKUWjK8qWK757oDPPkx9M

Is It Too Late To Invest In Bitcoin In 2017?

For non-financey types, the concept of Bitcoin can be daunting. Just when we were wrapping our heads around variable interest rates and term deposits, they go and create a whole new digital currency.

But with or without our approval, Bitcoin has become a thing, and for those who jumped on it early, a very profitable one.

To give you an idea of how far it’s come, in 2010 the bitcoin price was about 1.5 US cents.

Let’s all spare a moment for the guy who bought $25 worth, threw away his hard drive and then realised as of this month he essentially threw out $7.6 million. Ouch.




What is Bitcoin?

First of all, let’s start with the basics.

As defined by CoinDesk, “Bitcoin is a form of digital currency, created and held electronically.”

No one controls it. Bitcoins aren’t printed, like dollars or euros, they’re produced by people, and increasingly businesses, running computers all around the world, using software that solves mathematical problems.”

Bitcoin is traded digitally, but that’s not what’s new or exciting about it. Where it stands apart is due to the fact it’s decentralised, meaning it isn’t controlled by any one institution.

Instead, it relies on a peer-to-peer structure, by a community of people that anyone can join.

These peoples are called ‘miners‘ and they use computing power to verify bitcoin transactions. As an incentive, every time they verify a block of transactions, they get bitcoin as well.

Who invented it?

Bitcoin was invented by Satoshi Nakamoto in 2008, but it didn’t go online until 2009. Also, because it’s the internet and anything can happen, Nakamoto’s actual identity has never been able to be confirmed.

Interestingly, Australian Craig Wright has claimed he is the true Bitcoin founder, though he has failed to provide sufficient proof.

Can Bitcoin make me money?

Ah. The million dollar question.

As we’ve covered before, if you bought some bitcoin when it first started and was trading at a measly couple of cents, you probably would be sitting on a yacht right now being fanned with a palm frond and not reading this article.

But millionaire status doesn’t only happen for those who invested at the very beginning. One Idaho teenager invested $1000 in Bitcoin just three years ago and now has over a million dollars.

But what about investing now?

Controlled supply

It’s important to note there is a limit for how many bitcoins can be created, with a maximum amount of 21 million.

However even with this cap, there won’t ever be the full amount in circulation, as some unlucky people have lost their keys along the way.

According to Quora, “As of June 1st, 2017 there were 16,366,275 BTC out of a total 21,000,000 BTC in theoretical supply, which has yet to be mined“.

So, just as there is only so much gold to be mined in the world, there is only so much bitcoin, too. And the important thing to note is there’s still some left.

Buying Bitcoin now is not too late,” CEO of digital currency management company Bron.Tech, Emma Poposka told HuffPost Australia.

If we see full adoption in the future, or mainstream adoption, the price still has to go up in value because we have a limited supply.

If you’re thinking, ‘But can’t they just make more bitcoin?’ that’s the beauty of the currency not being controlled by a single institution.

In order to change the protocol surrounding Bitcoin, every miner needs to vote on the decision.

Now, don’t forget miners are paid in bitcoin for their services, so why would they vote to decrease the value of their own assets?

Other digital currency

With all the hype surrounding Bitcoin, it’s easy to forget it’s not even the only digital currency out there. The reason it’s the most famous is because it’s the first of its kind, but it’s not alone.

Bitcoin is not the only currency today which is valuable to — I wouldn’t say invest, I don’t like the term — but to buy or hold,” Poposka said. “There are other currencies as well.”

So according to your idealistic views of the world or what you personally think is right, you can buy or hold or trade [whichever currency] you think is [promising].”

So now we have Bitcoin, and the biggest rival of Bitcoin is ethereum.”

My company as a company has a native currency The Bron, which is another currency people can buy, hold and trade.”

It’s backed by an asset which we think in the digital world is valuable, which is data.”

“Bitcoin is the most popular because it’s the oldest.”

In conclusion

Digital currency may not be mainstream just yet, but there’s plenty of arguments to say it’s not going anywhere soon. Should you invest in Bitcoin before it maxes out at 21 million?

Maybe. Both Lim and Poposka think there is potentially money still to be made.

But should you take out a second mortgage? Perhaps not.

What I tell to my friends and myself and my colleagues is yes, people should start experimenting and buying small amounts of Bitcoin. You don’t even need to buy an entire bitcoin — you can buy part of one for $10,” Poposka said.

It’s an interesting technology and I think it’s worthwhile to buy small amounts you can play with and learn from”

“But I would never recommending seriously investing in something you don’t understand — and that applies to everything, real estate or stocks or Bitcoin.”

I’d be more inclined to pay $50 for small portfolio of cryptocurrency and play with it. If everything fails you will lose $50 and that’s nothing.”

Then if you learn enough and get excited by the technology, you can decide whether to buy more.

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Pass it on: Popular Science