Monthly Archives: November 2013

$1.2M Hack Shows Why You Should Never Store Bitcoins on the Internet

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“TradeFortress says that this was a social engineering attack, meaning that the attacker masqueraded as someone he wasn’t in order to get access to the site’s systems on cloud-hosting provider Linode. ‘The attack was done through compromising a chain of email accounts which eventually allowed the attacker to reset the password for the the Linode server,’ he said.  The hacker’s first step was recovering an email address for an account that TradeFortress set up six years ago.  The ‘attacker rented an Australian server to proxy as close to my geographical location so it won’t raise alarms with email recoveries,’ TradeFortress said in a forum post.”

http://www.wired.com/wiredenterprise/2013/11/inputs/

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Australian Bitcoin bank ‘hacked’, $1million+ stolen

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“Tradefortress, a young Sydney man who told ABC News he was over 18 but only just, refused to give his real name to Fairfax Media.  He offered the wallet service through a website called Inputs.io. The site claimed to be ‘’one of the most secure web wallets on the market’’ and charged customers a small fee to store their coins.  As well as utilising two-factor authentication and location-based email confirmation, it claimed it was set-up to prevent ‘the hack of Bitcoins even if the web server was compromised’.  It now seems that claim has been proven untrue, with Tradefortress telling users on the site: ‘I don’t recommend storing any Bitcoins accessible on computers connected to the internet.'”

http://www.canberratimes.com.au/it-pro/security-it/australian-bitcoin-bank-hacked-1million-stolen-20131108-hv2iv.html

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As Silk Road 2.0 Pops Up, The Government Needs To Avoid Moral Panic

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techdirt1

“While some people like to mock concepts like the dark web and Bitcoin, there’s a tremendous amount of important innovation happening.  While they may initially be used, in part, for illegal activity, that’s going to become less and less of the predominant use, and all sorts of powerful new tools and services are likely to develop — if allowed. Bitcoin, in particular, has many powerful uses beyond just being a currency, but overly regulating it based on moral panics might kill that off. I already know a few entrepreneurs and investors who are unwilling to commit to some really interesting Bitcoin projects, just because they know the regulatory situation might destroy the space overnight.”

http://www.techdirt.com/articles/20131107/02364625162/as-silk-road-20-pops-up-government-needs-to-avoid-temptation-moral-panic.shtml

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Silk Road Website Manager Green Pleads Guilty to 1 Drug Charge

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“Curtis Green, the administrator of Silk Road, the online black market for drugs and other contraband, pleaded guilty to a cocaine conspiracy charge, according to federal prosecutors in Maryland.  Green, 47, of Utah, helped an undercover agent for the U.S. Drug Enforcement Administration arrange the purchase of one kilogram (2.2 pounds) of cocaine for about $27,000 in the digital currency Bitcoin from a drug vendor on Silk Road, prosecutors said in papers unsealed yesterday in federal court in Baltimore. ‘People who believe they can commit crimes anonymously using the Internet should reconsider,’ Rod Rosenstein, U.S. attorney for the District of Maryland, said in a statement.”

http://www.businessweek.com/news/2013-11-07/silk-road-website-manager-green-pleads-guilty-to-drug-charge-1

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A Trip To Afghanistan

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“After reading the great trip reports to Afghanistan of MatthewLAX, ironmanjt & hauteboy, I was inspired to go this much maligned country myself.  My apologies if my prose is not as good as these guys, but hopefully the photo’s make up for this.  So without further ado, my first trip report for FT.”

http://www.flyertalk.com/forum/trip-reports/1506808-trip-afghanistan.html

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NSA, Homeland Security issue ‘cease and desist’ to novelty store owner

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“The National Security Agency and the Department of Homeland Security have issued ‘cease and desist’ letters to a novelty store owner who sells products that poke fun at the federal government.  Dan McCall, who lives in Minnesota and operates LibertyManiacs.com, sells T-shirts with the agency’s official seal that read: ‘The NSA: The only part of government that actually listens,’ Judicial Watch first reported.  Other parodies say, ‘Spying on you since 1952,’ and ‘Peeping while you’re sleeping,’ the report said. Federal authorities claimed the parody images violate laws against the misuse, mutilation, alteration or impersonation of government seals, Judicial Watch reported.”

http://www.washingtontimes.com/news/2013/nov/3/nsa-dhs-issue-cease-and-desist-letters-novelty-sto/

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Federal Reserve Economist On Bitcoin: ‘Small Phenomenon But Growing’

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“It’s a big moment for Bitcoin. The digital currency has gotten an official nod from the overseer of U.S. currency in the form of a primer out of the Federal Reserve Bank of Chicago. Senior economist François R. Velde wrote an elegant critique of the four-year-old currency, explaining its mechanics, limitations, and prospects for success, ultimately deeming it a ‘remarkable conceptual and technical achievement, which may well be used by existing financial institutions.’ If this were Economic Mean Girls, this is the part of the movie where Lindsay ‘Bitcoin’ Lohan gets friended by the powerful, popular crowd.”

http://www.forbes.com/sites/kashmirhill/2013/11/07/federal-reserve-economist-on-bitcoin-small-phenomenon-but-growing/

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2014 will see the “Rise of the Short Sale”

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“Many people have come to view loan modifications as a new housing entitlement. It won’t be. The moment borrowers are no longer underwater, the entitlement will be rescinded by the banks. Remember, they would rather foreclose and get their money back so they can loan it to someone who will make payments based on the original contract terms. With house prices rising, many borrowers have equity again, and many others are quickly approaching the surface. As one might expect, banks are getting less accommodating as borrowers approach the surface. Apparently, bank compassion is only extended to those borrowers who might cost the bank money in a foreclosure.”

http://ochousingnews.com/news/2014-will-see-the-rise-of-the-short-sale

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JPMorgan’s $13B Penalty Helps IRS Deal A Huge Blow to Homeowners

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“Here’s an illustrative example. Say an individual Detroit homeowner earning $40,000 a year gets a principal reduction of $100,000, roughly the average principal reduction in the National Mortgage Settlement, a previous deal that offered consumer mortgage relief as part of a penalty for bank misdeeds. In the tax year 2014, that homeowner would record an income of $140,000, and their resulting tax bill, according to this calculator, would be $29,693, or nearly three-quarters of the homeowner’s annual income. Homeowners struggling to stay in their homes typically do not carry large amounts of cash reserves to pay off tax bills; they wouldn’t be desperate for mortgage debt relief if they did.”

http://www.newrepublic.com/node/115382/

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Could Bitcoin (or equivalent) Become a Global Reserve Currency?

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CHS9a1

“Could a non-state issued digital currency like Bitcoin become a global reserve currency? The idea is intriguing on a number of levels. In terms of retaining value though thick and thin, the ultimate reserve currency cannot be printed with abandon by a government. Gold and silver have served as the ultimate reserve currency, as precious metals can be traded for commodities and services, provide collateral for debt and serve as reliable stores of value. While many observers believe gold is still the only reliable reserve currency (or the only reliable backing for government-issued paper money), it’s a worthy thought experiment to ask if a digital currency could also act as a reserve currency.”

http://www.oftwominds.com/blognov13/bitcoin-RC11-13.html

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