Bitcoins, other digital currencies stolen in massive 'Pony' botnet attack

Cybercriminals have infected the computers of digital currency holders, using a virus known as “Pony” to make off with account credentials, bitcoins and other digital currencies in one of the largest attacks on the technology, security services firm Trustwave said.

The attack was carried out using the “Pony” botnet, a group of infected computers that take orders from a central command-and-control server to steal private data. A small group of cybercriminals were likely behind the attack, Trustwave said.

Over 700,000 credentials, including website, email and FTP account log-ins, were stolen in the breach. The computers belonging to between 100,000 and 200,000 people were infected with the malware, Trustwave said.

The Pony botnet has been identified as the source of some other recent attacks, including the theft of some 2 million log-ins for sites like Facebook, Google and Twitter. But the latest exploit is unique due to its size and because it also targeted virtual wallets storing bitcoins and other digital currencies like Litecoins and Primecoins.

Eighty-five wallets storing the equivalent of $220,000, as of Monday, were broken into, Trustwave said. That figure is low because of the small number of people using Bitcoin now, the company said, though instances of Pony attacks against Bitcoin are likely to increase as adoption of the technology grows. The attackers behind the Pony botnet were active between last September and mid-January.

“As more people use digital currencies over time, and use digital wallets to store them, it’s likely we’ll see more attacks to capture the wallets,” said Ziv Mador, director of security research at Chicago-based Trustwave.

Most of the wallets that were broken into were unencrypted, he said.

“The motivation for stealing wallets is obviously high—they contain money,” Trustwavesaid in a blog post describing the attack. Stealing bitcoins might be appealing to criminals because exchanging them for another currency is easier than stealing money from a bank, Trustwave said.

There have been numerous cyberattacks directed at Bitcoin over the last year or so as its popularity grew. Last year, a piece of malware circulating over Skype was identified as running a Bitcoin mining application. Bitcoin mining is a process by which computers monitor the Bitcoin network to validate transactions.

“Like with many new technologies, malware can be an issue,” said a spokesman for the Bitcoin Foundation, a trade group that promotes the use of Bitcoin, via email. Wallet security should improve, the spokesman said, as more security features are introduced, like multisignature transactions, he said.

Digital currency users can go to this Trustwave site to see if their wallets and credentials have been stolen.

Post Source: http://www.pcworld.com/article/2101260/bitcoins-other-digital-currencies-stolen-in-massive-pony-botnet-attack.html

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Are cracks beginning to show in bitcoin?

In spite of setbacks, Bitcoin start-up founder Jeremy Allaire remains confident currency has a viable future

Jeremy Allaire: “I have long-term savings in bitcoin, though not a huge amount of my assets. It is important that I have long term belief in the currency. I give my sons their allowance in bitcoin and I’ve bought everything from socks to food to electronics with it.” Photograph: Brenda Fitzsimons

It has been a difficult seven days for bitcoin. Last Friday the world’s largest bitcoin exchange Mt Gox halted withdrawals of the digital currency citing a software bug.

“A bug in the bitcoin software makes it possible for someone to use the bitcoin network to alter transaction details to make it seem like a sending of bitcoins to a bitcoin wallet did not occur when in fact it did occur,” the Tokyo-based exchange said in a statement.

“Since the transaction appears as if it has not proceeded correctly the bitcoins may be resent.”

By Monday, the price of the cryptocurrency had fallen to its lowest level in two months.

On Tuesday, Slovenia-based Bitstamp became the second major bitcoin exchange to halt customer withdrawals, blaming a denial-of-service attack, and Bulgaria-based BTC-E quickly followed suit.

Bitcoin was coming under pressure from hackers launching attacks across the currency’s eco-system, worsened by the fact that the currency is a decentralised digital system of value transfers not governed by any central bank, company or government.

‘Incredibly illiquid’

The currency’s price, which was more than $800 last Friday, plummeted as low as $102.

Even investment bank JP Morgan weighed in on the crisis, saying bitcoin was a “vastly inferior” currency and not a solid investment.

In the report called The Audacity of Bitcoin , John Norman, the company’s head of forex strategy, called the currency “incredibly illiquid” and “extremely volatile”.

“At the risk of sounding like a Luddite, bitcoin looks like an innovation worth limiting exposure to. As a medium of exchange, unit of account and store of value, it is vastly inferior to fiat currencies,” Norman said.

It’s not the first time the cryptocurrency has been the subject of problems.

It was implicated in a huge drug bust last year when the Federal Bureau of Investigation took down the Silk Road electronic exchange.

It experienced regulatory pressure from trading restrictions in China to a recent threat of a complete ban in Russia.

Earlier this month, the Russian authorities issued a warning against using bitcoin, saying Russian law stipulates that the rouble is the sole official currency and that introducing any other monetary units or substitutes was illegal.

The currency also absorbed a decision by Apple to remove all bitcoin-related software from its app store.

However, in the face of all this adversity, bitcoin entrepreneur Jeremy Allaire says he is confident the digital currency will survive.

Allaire, who founded the bitcoin payments company Circle, said the freeze on bitcoin withdrawals imposed by three major exchanges would not cause any long-term damage to the digital currency’s credibility.

“If anything, the recent attacks and response from the bitcoin community, both core developers and ecosystem participants, demonstrate the resiliency and agility of this platform.

“These challenges are driving a greater focus on platform stability, security and scalability, which are important focuses as we move from the early adopter phase into mainstream usage.”

Allaire is one of the people arguing that bitcoin companies should work with governments to establish regulations for the currency.

His bitcoin payments company raised $9 million in venture capital funding and is due to launch later this year, with international operations headquartered in Dublin.

Concerns

“There is no point in dismissing the whole digital currency idea because there are concerns,” he says.

To ensure widespread adoption of bitcoin, he says there needs to be rules around its use.

“There is a strong need to prevent money laundering and criminality with bitcoin. There needs to be rules if bitcoin is going to be big.

Post Source: http://www.irishtimes.com/business/sectors/financial-services/are-cracks-beginning-to-show-in-bitcoin-1.1690576

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Now Pay Cash at UK Stores

You Can Now Pay Cash For Bitcoin at 28,000 UK Stores

Bitcoiners can now pay cash for bitcoins at 28,000 shops across the UK, thanks to a new service set up by ZipZap.

The service enables people to head to their nearest ZipZap payment location, hand over cash and see bitcoins deposited in their wallets almost instantly.

Currently available via Bittylicious, BuyBitcoin.sg and BIPS Market, the service will go live with ANXBTC and ANXPRO next week, followed by Kraken, CoinMKT and BTCX.se.

Customers simply have to log into their accounts with one of these companies and select the cash payment option, they then choose the amount of bitcoins they want to purchase and head to their local ZipZap payment location to complete the transaction.

Thousands of independent local shops are registered as ZipZap locations, as are Spar, Asda, Tesco Express branches and many other stores across the country.

The minimum a user can choose to spend is £10 and the maximum per transaction is £300, but up to four transactions can be completed per customer, per day.

Lasse Birk Olesen, founder and CEO of BuyBitcoin.sg, said: “We are very excited to present the easiest and fastest way to buy bitcoins in United Kingdom! This is a key piece of infrastructure that allows bitcoin to grow further in the UK.”

He went on to say that, after a customer pays in cash, their bitcoins are delivered “within minutes”, adding:

“No more waiting for days for bank transfers – this is as fast as it gets and makes bitcoin more attractive.”

Marc Warne, CEO of Bittylicious, is equally excited by the new service he is able to offer his customers.

“This is a really neat way for people in the UK to get their hands on bitcoins,” he said.

Testing the service

I tested out the service using Bittylicious. I have to admit, I was a bit sceptical at first – why would I bother going through the effort of visiting a shop to buy bitcoins when I could do it all online? However, I found the whole process incredibly simple, and I can see why some people would prefer it and would enjoy the novelty of handing over physical cash for digital currency.

While Bittylicious currently enables unregistered users to buy small amounts of bitcoins via bank transfer and Barclays Pingit, it doesn’t allow them to use the cash payment service. This means you have to register with the company and submit identity documents (to comply with anti-money-laundering and know-your-customer rules).

Warne told me ID verification on Bittylicious currently takes 12 hours, on average, but the company is working on reducing this over the course of the next few days.

I’m already registered and verified with Bittylicious, so I just logged in, then the home page displayed the “Cash Payment” option.

After entering my bitcoin wallet address and selecting the amount in BTC or GBP I wanted to purchase, I was told I had 30 minutes to choose my payment location and confirm the trade.

I entered my postcode to find my nearest ZipZap payment location and found there were 13 shops for me to choose from within a radius of around 0.6 miles (bear in mind the CoinDesk office is in central London).

After selecting my most convenient shop, I hit the “I am ready to pay” button and was provided with a PDF document to print. This features all the order details, the address and a map of my chosen payment centre, plus the barcode required by the shopkeeper.

Bittylicious gives you a leisurely two hours to complete the payment and the PDF payment slip details the time by which the transaction must be finalised.

Once in the shop, I handed over the payment slip to the newsagent, he scanned the barcode, I handed over the cash, he printed a receipt and that was that. (You don’t actually have to print the payment slip – you can just bring the barcode up on your smartphone and have the shopkeeper scan it straight from there.)

Precisely eight minutes later, the BTC arrived in my bitcoin wallet.

The verdict

Being able to pay cash over the counter for bitcoin was pretty cool – experiencing the ultimate transition from old money to new money. But aside from that, I’m not entirely sure what the major benefits are for someone like me, who has a bank account and can use a fast bank transfer to receive their bitcoins quickly and easily, without having to venture into the great outdoors.

It’s also worth bearing in mind you pay a premium to use this service. At the time of writing, the exchange rate displayed on Bittylicious for cash payments was £537.80 per bitcoin, which is quite a bit higher than the £520 per bitcoin if paying via bank transfer, and greater still than the £517.18 displayed on the CoinDesk Bitcoin Price Index at the time.

Some say they are attracted to the service as it allows consumers to remain anonymous, because their bank accounts aren’t involved. However, given that the service can’t be used without first registering with one of the bitcoin companies listed above, customers don’t actually remain completely anonymous.

Warne said that, regardless, the service will appeal to those who want to buy bitcoins without involving their bank in any way.

He said: ”It’s not really about getting bitcoins anonymously. It’s more about getting them without needing to rely on any other institutions.”

He added:

“Some people don’t have bank accounts, have unsuitable bank accounts or simply don’t want to associate their bank account with bitcoins, so this is perfect for them.”

According to research by Social Finance, more than 1.5 million adults in the UK are unbanked (do not have access to a transactional bank account), so I can see that there is a sector of society that would find this service extremely useful.

If/when it becomes available in countries where the majority of the population is unbanked, I can see the service really starting to take off.

Upcoming developments

Currently the barcodes featured on the payment slips are single use only, however, ZipZap is working on creating a system that will produce a reusable barcode. This will enable customers to ‘top up’ their bitcoin wallet with funds without having to go online each time to confirm their payment.

“A lot of people are put off investing in or purchasing bitcoin as they see the process as too complicated. ZipZap aims to change this, making it easier and faster for people to swap their money for bitcoins,” said Eric Benz, VP of business development at ZipZap.

He went on to say his company aims to roll out the cash-for-bitcoins service globally, though ZipZap wouldn’t confirm which territories will be next, or when.

The company is also looking to expand its service so that people can exchange their funds the other way around, swapping their bitcoins for cash over the counter.

As for developments set to take place specifically here in the UK, Warne (of Bittylicious) hinted that the service could soon also be available for altcoins, such as litecoin and peercoin.

“Although not available yet, there’s no reason why the altcoins on Bittylicious shouldn’t be available for cash too in the near future,” he explained.

What do you make of the cash-for-bitcoins service? Would you use it? Let us know in the comments.

Cash image via Flickr.

Post Source: http://www.coindesk.com/can-now-pay-cash-bitcoin-28000-uk-stores/

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BitcoinWallet.com Domain Sold for $250,000

The domain name BitcoinWallet.com has been purchased by Austin, Texas, entrepreneur Alex Charfen for $250,000.

Niko Younts, a media consultant, bitcoin investor and the domain’s previous owner, broke the news via Twitter on 5th February.

Younts, who confirmed the sale to CoinDesk but declined to comment, also noted in the post that he is close to selling the domain BitcoinWallets.com for a similar asking price. The domain asset was a part of the NeverLoseVision.com investment portfolio, a seven-figure incubator portfolio with startup projects and investment domain assets.

A search of the WHOIS domain record-keeping database revealed that Younts is the current owner of BitcoinWallets.com, and that Charfen is the current owner of BitcoinWallet.com.

Who is Alex Charfen?

Founder of the Charfen Institute with his wife Cadey Charfen, Alex Charfen is an established entrepreneur and published author having written books as well as opinion articles for high-profile publications.

Also an accomplished motivational speaker, Charfen has built his career on his personal comeback story. In the 1990s, Charfen worked as at a multinational conglomerate, but lost everything when his investments in real estate were wiped out by the recession and subsequent financial collapse.

Undeterred, Charfen filed for bankruptcy and soon decided he could help the real estate industry learn from the mistakes it made. Charfen launched the Distressed Property Institute as a way to offer REALTORS additional education, and soon started the Charfen Institute, which provides training and educational products.

The company now earns 10.8m annually and placed among the Inc. 5000 in 2013.

Plans for BitcoinWallet.com?

A screenshot of BitcoinWallet.com

At press time, Charfen had not responded to requests for comment about his plans for the website. However, should the entrepreneur decide to launch a bitcoin wallet service, he is likely to find competition from the available desktop, mobile and web wallets.

Existing bitcoin wallet providers such asBlockchain, which recently passed 1 million users, and Coinbase, which raised $25m in its last round of funding, have already established themselves as dominant names in the space.

However, as the bitcoin market continues to grow, it’s not out of the question that the need for more user-friendly wallets, or even specialty types of wallets will emerge, meaning the investment could pay dividends.

What do you think of the purchase? Weigh in with your thoughts below.

Source: http://www.coindesk.com/inc-5000-entrepreneur-buys-bitcoinwallet-com-domain-for-250k/

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Apple Kills Last Bitcoin App

Bitcoin wallets are getting blocked from the App Store

Apple removed the last remaining app used to exchange the digital currency Bitcoin from its App Store on Wednesday.

Blockchain, the bitcoin wallet app, said on its blog that it had no prior warning it would be barred from the store or prompting it to make changes to that app. It said Apple’s only explanation was “unresolved issues.”

Other bitcoin-related apps like Coinbase, Gliph and CoinJar have also been removed from the store. While Bitcoin isn’t illegal, it’s also not recognized as legal currency by governments, TechCrunch notes. This could conflict with section 22.1 of the App Store’s review guidelines, which states that “apps must comply with all legal requirements in any location where they are made available to users. It is the developer’s obligation to understand and conform to all local laws.”

Google’s Android platform still allows developers to create and maintain bitcoin wallet apps.

Source: http://business.time.com/2014/02/06/apple-bitcoin-blockchain-app-store/

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Marc Andreessen Predicts Bitcoin Will Change Chip Design Forever

Silicon Valley venture capitalist Marc Andreessen believes digital currencies could change the way processors are designed.

Andreessen doesn’t exactly need an introduction. An avid bitcoin advocate, he tends to be quite outspoken – putting his money where his mouth is through investment firm Andreessen Horowitz.

Turning data centres into mining rigs

Speaking at the Open Compute Summit last week, Andreessen said that mining is at the heart of bitcoin, as it handles all computation needed to maintain the trust network, reports TechWeek Europe. He added:

“The press reports on mining as a waste of time, but in reality it’s all the proof of work computation that makes a distributed trust network work.”

Andreessen added that cryptocurrency mining is a “very big thing” and that we are still in the very early stages of it. This is where Andreessen sees an opportunity for chipmakers.

Custom mining chips are nothing new, but few people expected the rise of ASICs to transform the mining scene in such a short time. Andreessen believes custom chips will dominate mining for quite a while, but things could take another unexpected turn.

Andreessen told the gathering that his company has already received pitches for bitcoin optimised data centres. However, it is unclear what such pitches would entail in terms of hardware.

Using standardised server racks to add a bit of mining power to existing data centres is one option, as it would essentially add a few ASICs to a huge data centre.

Another farfetched scenario would be the emergence of custom chips that can deal with standard workloads and mining. In theory, this could be done by adding specialized circuits to x86- or ARM-based server parts, but it is simply not practical for the time being, either on-die or in the same chip package.

Opportunities and pitfalls

Although Andreessen is rather optimistic, there are quite a few problems with bitcoin mining hardware that may keep it out of data centres for a while. Economies of scale are the most obvious challenge, the sheer pace of development is another.

Using existing infrastructure for mining is a tantalizing prospect, but with huge performance gains offered by every new generation of ASICs, deploying bitcoin mining hardware in a server setting would be a rather risky investment.

Once the hardware goes out of date, it would practically become a useless drain.Chipmakers go to great lengths to shave off a few watts from their server processors and to increase their life cycle by making them future proof, thus reducing the total cost of ownership. Adding bitcoin mining features to them could have the exact opposite effect.

In addition, the market for bitcoin mining hardware remains limited. Wedbush Securities estimates that the total market for bitcoin mining hardware stood at $200m in 2013.

It isn’t a small market, until you compare it to overall semiconductor sales. To put things into perspective, Gartner puts the revenue generated in the server space in 2013 at more than $12bn a quarter.

Image Credit: Fortune Live Media / Flickr

Post Source: http://www.coindesk.com/marc-andreessen-bitcoin-change-chip-design-forever/

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Hotels Now Accept Bitcoins

200,000 Hotels Now Accept Bitcoin Through Online Travel Agency CheapAir

California-based travel agency CheapAir.com has announced that it is expanding its service to allow bitcoin users to book hotel stays with the cryptocurrency.

CheapAir has been accepting bitcoin for flight bookings since Novemberwhen it partnered with Coinbase, however until today, users have not been able to pay in bitcoin for its extensive hotel inventory.

Speaking to CoinDesk, CEO and founder Jeff Klee voiced his enthusiasm for becoming the “first company in the US” to allow bitcoin users to book hotel stays with the virtual currency:

“Bitcoin gets a bad rap in mainstream media. What I found is that the people who use bitcoin are great, they’re passionate and they’re looking to solve a lot of the problems inherent in the economic system and the world.”

The news garnered a largely positive reaction on reddit and the BitcoinTalk forum, with ambitious bitcoin users even suggesting they would pass the news along to other travel companies that have expressed a cautious interest in bitcoin.

Better-than-expected return

“For it to become a really big part of our business, bitcoin itself needs to grow. We think it will.”

Klee indicates that the decision to expand its program to include hotels was due to a “better than anticipated” response from the community after it began accepting bitcoin payment for flights.

“We had no idea what to expect, however, it generated a nice enthusiasm,” Klee recounts.

Klee did not share specific numbers, but did say that bitcoin customers are more likely to become loyal than traditional customers, and that his company receives “a nice volume of emails from bitcoin customers”. Still, despite these benefits, he won’t call bitcoin a game-changer for CheapAir just yet, though he thinks CheapAir’s position could change as the currency gains more loyal users.

How CheapAir pays hotels

For CheapAir, paying hotels and flight providers is still a challenge, but one they find worthwhile given the currency’s dedicated customers and engaged base. Klee noted that in order to process transactions, CheapAir must accept the bitcoin and exchange it for fiat currency before paying hotels. This means certain hotels, those that require patrons to pay at checkout, will still be off limits to bitcoin customers.

Klee notes that “once in a while you’ll see a hotel on our site that won’t have a bitcoin logo by it”, but that the majority of properties on the site will see the bitcoin logo clearly displayed on its listings.

Source: http://www.coindesk.com/200000-hotels-accept-bitcoin-cheapair/

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Australian Legal Firm to Accept Bitcoin

By IndiaTimes | February 3, 2014, 4:59 pm IST

WASHINGTON: LegalVision, an Australian legal service provider has reportedly become the first legal organization to allow its customers to pay for services with Bitcoin.

A decentralized digital currency, Bitcoin can be used by users to transfer money on the internet sans the involvement of bank, allowing them to transact with each other directly.

Lachlan McKnight, LegalVision chief executive said that he was interested in using the crypto-currency because it fitted with the online firm's emphasis on efficiency and innovation, PCWorld has reported.

McKnight said that it made perfect sense for the fraternity to start using digital currency as it provided online legal advice and documents.

Source: http://www.indiatimes.com/technology/enterprise/australian-legal-firm-to-accept-bitcoin-126529.html

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