Bitcoin is known as the very first decentralized digital currency, they’re basically coins that can send through the Internet. 2009 was the year where bitcoin was born. The creator’s name is unknown, however the alias Satoshi Nakamoto was given to this person. Bitcoin accounts cannot be frozen, prerequisites to open them don’t exist, same for limits on bitcoin mining rig .
Advantages of Bitcoin
Bitcoin transactions are made directly from person to person trough the internet. There’s no need of a bank or clearinghouse to act as the middle man. Thanks to that, the transaction fees are way too much lower, they can be used in all the countries around the world. Every day more merchants are starting to accept them. You can buy anything you want with them. How Bitcoin works. You should explore bitcoin mining. It’s possible to exchange dollars, euros or other currencies to bitcoin. You can buy and sell as it were any other country currency. In order to keep your bitcoins, you have to store them in something called wallets. These wallet are located in your pc, mobile device or in third party websites. Sending bitcoins is very simple. It’s as simple as sending an email. Invest in bitcoin to get great returns.
You can purchase practically anything with bitcoins.Bitcoin Anonymity.When doing a bitcoin transaction, there’s no need to provide the real name of the person. Each one of the bitcoin transactions are recorded is what is known as a public log. This log contains only wallet IDs and not people’s names. so basically each transaction is private. People can buy and sell things without being tracked.
Bitcoin innovation. Bitcoin established a whole new way of innovation. The bitcoin software is all open source, this means anyone can review it. A nowadays fact is that bitcoin is transforming world’s finances similar to how web changed everything about publishing. The concept is brilliant. When everyone has access to the whole bitcoin global market, new ideas appear. Transaction fees reductions is a fact of bitcoin. Accepting bitcoins cost anything, also they’re very easy to setup. Charge backs don’t exist. The bitcoin community will generate additional businesses of all kinds.
What Makes bitcoin mining rig So Interesting?
Bitcoin Cash’s sudden announcement on Saturday that they’ll go ahead with a fork on August 1 caught a lot of people, including myself, by surprise. In this article, I’m going to explain what Bitcoin Cash (aka BCC) is, how it affects you and how you should prepare for August 1.
What is Bitcoin Cash?
- Here is the project announcement on Bitcointalk.
- Here is the project website.
From the project website’s FAQ:What is Bitcoin Cash?
Bitcoin Cash is peer-to-peer electronic cash for the Internet. It is fully decentralized, with no central bank and requires no trusted third parties to operate.
The prominent use of “peer-to-peer electronic cash” is purposeful here. Bitcoin Cash is seeking to be a cryptocurrency that’s focused on transaction capacity.
Why is this fork a surprise?
Many people (including myself) thought that this fork would only trigger if BIP148 were able to split the network. In other words, many people thought Bitcoin Cash (and its client Bitcoin ABC) was just a credible threat to prevent a contentious user-activated soft fork (UASF). Bitmain actually stated that the Segwit2x (aka New York Agreement) would be preferable:
So naturally, when BIP91 (first part of Segwit2x) locked-in and activated ahead of BIP148, which is scheduled for August 1, most assumed this would prevent the so-called user-activated hard fork (UAHF) from triggering.
But, it looks like Bitcoin Cash supporters had other ideas.
Why should I care?
You should care because Bitcoin Cash is a permanent fork of Bitcoin.
Again, from the FAQ:Is Bitcoin Cash different from ‘Bitcoin’?
Yes. Bitcoin Cash is the continuation of the Bitcoin project as peer-to-peer digital cash. It is a fork of the Bitcoin blockchain ledger, with upgraded consensus rules that allow it to grow and scale.
This means that if you own Bitcoin (that is, you control your own private keys) prior to the fork on 2017 August 1 12:20 UTC, you will have the same amount of Bitcoin and Bitcoin Cash after the fork.
Lest you think these BCC isn’t worth anything, BCC futures are currently trading at about $475 on ViaBTC.
What do I need to know?
First, you should know that many exchanges, including Coinbase, are simply not prepared for this event.
Again, from the FAQ:If I own Bitcoin, do I automatically own Bitcoin Cash too?
Yes. Because Bitcoin Cash is a fork of the ledger, that means you own the same amount of Bitcoin Cash as you did Bitcoin at the time of the forking block. However, if your Bitcoins are stored by a third party such as an exchange, then you must inquire with them about your cash.
Note that last sentence. Exchanges or third-party bitcoin storage providers may or may not give you your Bitcoin Cash. It’s likely that third party services will try to do the right thing, but there’s no way to know if they can get everything set up in time to be able to give you the Bitcoin Cash you’re entitled to.
Second, all hard forks present two risks: replay and wipeout attacks. Wipeout is not a as much risk since this is a permanent fork (there are scenarios where one chain’s miners may attack the other, but this isn’t in play yet). Replay protection is provided as part of the Bitcoin Cash release as explained in the FAQ:How is transaction replay being handled between the new and the old blockchain?
Bitcoin Cash transactions use a new flag SIGHASH_FORKID, which is non standard to the legacy blockchain. This prevents Bitcoin Cash transactions from being replayed on the Bitcoin blockchain and vice versa.
Rest assured that as long as you control your own private keys, you should be able to use those keys to create transactions on either chain safely.
I thought Bitcoin solved scaling! Why is this happening?
Good question. After the scaling drama of the past few years, we finally made progress when BIP91 locked in on Thursday. Though Segwit increases transaction capacity, it’s not done so in a way that everyone is happy with.
BCC looks like an appeal to the segment of the Bitcoin users that don’t like Segwit. Since Segwit is getting activated on Bitcoin, this fork gives many of these people a place to go.
From the FAQ:Why was a fork necessary to create Bitcoin Cash?
The legacy Bitcoin code had a maximum limit of 1MB of data per block, or about 3 transactions per second. Although technically simple to raise this limit, the community could not reach a consensus, even after years of debate.
So what features does Bitcoin Cash have?
Bitcoin Cash offers three new features. First, it offers a much larger block size of 8MB.
Second, it offers replay and wipeout protection. The transaction signature is slightly different and the forking block has to be greater than 1MB.
Third, it offers a way to adjust the proof-of-work difficulty quicker than the normal 2016 block difficulty adjustment interval found in Bitcoin.
From the project announcement on Bitcointalk:Forking rule:
“REQ-7 Difficulty adjustement in case of hashrate dropIn case the MTP of the tip of the chain is 12h or more after the MTP 6 block before the tip, the proof of work target is increased by a quarter, or 25%, which corresponds to a difficulty reduction of 20% .RATIONALE: The hashrate supporting the chain is dependent on market price and hard to predict. In order to make sure the chain remains viable no matter what difficulty needs to adjust down in case of abrupt hashrate drop.”
In other words, the difficulty will adjust pretty quickly should there be a low hash rate.
What does this mean for Bitcoin?
This is the hardest thing to answer. It may mean nothing, it may mean a lot. Some obvious things that we’ll now need to think about are:
- Who will mine Bitcoin Cash?
- Who will have the larger hash rate? Both coins will use double-sha256 as the proof-of-work.
- What will the price ratio be?
- What will the volumes on both coins be like?
- How will hash rate react to price? How will price react to hash rate?
- How will this affect the 2x HF part of Segwit2x?
- What chain will coins that operate on top of Bitcoin like Omni and CounterParty choose?
Unfortunately, the Bitcoin Cash announcement brings more questions than answers. One thing is for certain: if you want to maximize your holdings, it’s in your best interest to get your Bitcoin off third-party services and control your own private keys before August 1st.
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Mining for Bitcoins - A Step by Step Guide for Beginners
It begins with a text message from Verizon
Oh boy. Within seconds, I call the number and get this.“Hello, welcome to Verizon. Our offices are now closed. Our hours are between 8 and 11pm on the weekdays...”
I call again and repeatedly tap zero to try and get an operator. No dice. A minute later I get a duplicate text message.
I screenshot and tweet to Verizon Support.
Incredibly anxious minutes go by as I attempt to reach Verizon. I google “Verizon fraud prevention line” searching for a number to call and get nothing.NO PHONE NUMBER ANYWHERE TO BE FOUND
11:41 PM — Gmail signs out.
I’m completely in the dark.
11:42 PM—Coinbase password resets
My session cookie doesn’t kick me out yet so I watch this in real time.
11:34 PM—Coinbase New Device Confirmation
11:44 PM—1.18 BTC sent
11:45 PM—70.96 LTC sent
11:46 PM—16.03 ETH sent
Adios hopes and dreams fund 💸 —$8,000+ is gone in 15 minutes.The hacker deleted these emails but google recovered them
How on earth was I so blindsided?
Before we begin, its worth mentioning that yes, yesssssssssssssssssssss, I did not have enough protection around my Gmail account. I’ve used Google Authenticator before, for my personal account and for various work emails, but I stopped using it at a certain point out of convenience. I deeply regret doing so and you can certainly say, “HA, YOU HAD THIS COMING TO YOU DUDE, MY BITCOIN IS ON AN ENCRYPTED THUMBDRIVE IN A SECRET UNDERGROUND LOCKBOX COLD STORAGE FACILITY.” But there are many coin spectators out there with a similar vulnerability and, as more novices join, this vulnerability will only become more of a problem.
Of all the things that went down in the factors that lead to this hack, Verizon Wireless is what I was massively unprepared for. After talking at length with customer service reps, I learned that the hacker did not need to give them my pin number or my social security number and was able to get approval to takeover my cell phone number with simple billing information. This blew my mind and seemed negligent beyond all possible reason but it’s what they do. The main thing that struck me by the hack was the extraction speed possible in the current cryptocurrency ecosystem. $8,000 in 15 minutes is faster and more lucrative than robbing a suburban bank.
Why I was targeted
The best working theory for why I was targeted was this tweet I made last week about Coinbase.com. A friend of a friend was hacked on Coinbase and he had not heard back from anyone on Coinbases’s support team for multiple days. As a plea for help, he asked people to help get the word out on Twitter. I did, it got RTed a bunch, and to my incredible naiveté, I had no idea I was essentially attaching a “Rob me too” sign to my back.
And now, here I am. I tried to help someone get the attention of Coinbase for fraud, I got screwed, and now I’m trying to get the attention of Coinbase.com for fraud. The official Coinbase Support twitter has responded once, then a bot emailed, with a disclosure that it could be weeks before I get a single response to my question.
I have never lost money at anywhere near this scale before. I grew up in a family that is especially conservative when it comes to money and this hits on an emotional level that is hard to shake. Like many, I know that there are plenty of risks when it comes to cryptocurrency, it’s a gamble, but the one thing you don’t expect to happen is to be robbed in seconds on a site with a cleaner user interface design than Chase Bank.
I have no idea if I’ll be able to recover any of this money but I figure the one thing I can do with this feeling of rage/sadness is try and unpack the vulnerabilities so others get less screwed.
Things Verizon Wireless can do
- Add additional layers of scrutiny to any person calling in and requesting to ‘swap phones’. General billing information was sufficient to transfer my number and I was floored by this. It is insane that Verizon, and other wireless companies, haven’t made real efforts to counter this hack and even more crazy that they haven’t been sued for gross negligence.
- Make urgent text alerts actionable through SMS. If I received the original alert and was able to text a reply stopping it, or even delaying it, this entire hack would have stopped in its tracks. Instead I was told to ‘immediately’ call a number for Verizon that no one was there to answer.
- Make the Verizon Fraud Hotline accessible and visible to your customers. It took 45minutes of irate Twitter DMing before I was able to get the number I needed to contact a real person at Verizon. For anyone searching for this in the future, the number is 1-(888) 483–7200.
- Tell your customer what happened with their account. I spent a few hours with Verizon support being bounced from the Fraud Department to the Legal Department to the Consumer Support department. I got very little from anyone, they would not release details of the call unless I hired a lawyer to represent me.
Things Coinbase.com can do
Dear God Coinbase. Where do we even begin.
- Make enabling Google Authenticator a *requirement* for storing any coins on Coinbase.com. SMS 2FA is broken but deceptively secure, especially to new comers.
- Make a 24–7 fraud hotline available to your customers. Twitter and email are broken mechanisms for response when speed is of the essence.
- Significantly limit the number of new users you accept on your exchange until you have the support resources to cover them. You gained 400,000 users in 30 days, FOUR HUNDRED THOUSAND, and many of these users are extremely new to security.
- Put basic fraud protections in place when someone logs into an account on a new device then attempts to liquidate an account. A one hour delay could have stopped this hack in its tracks.
- Make the default modes for transferring coin significantly more paternalistic for new users.
- Create an insurance policy for personal accounts. Yes, this policy would be extremely vulnerable to fraud but this is your core competency, find a way.
Things you can do to secure your coins
In the wake of the attack, I reached out to friends with lots of experience in cryptocurrency and these are their tips.
- Don’t talk about Bitcoin Club. Don’t talk publicly online, with your real identity, about your trades or the exchanges. I know it’s too late for some (certainly for me!), and it shouldn’t be like this, but this makes you less of a target. Even if your coins are properly secured.
- If you are going to post on reddit, twitter, etc about cryptocurrency, use a far removed pseudonym.
- Use a separate, secret email for your coin accounts and do not forward the alerts to your personal email account.
- Use 2FA — SMS doesn’t count. I had no idea how easy Verizon and others make it for people to swipe your phone with basic information within minutes. Make sure you use GAuth or Authy or something else supporting TOTP tokens; consider a FIDO U2F device as well for your gmail account.
- If you insist on leaving your money on coinbase.com, then store it in their “vault”. This will give you a buffer of a couple days before any of your stuff can be touched, at least it won’t be gone immediately.
- Call your cellphone company and tell them you are likely to be targeted for social engineering. Request more scrutiny for making requests.
- Store your coins on a physical wallet. Technically, any money you have in an exchange isn’t yours — you simply have an IOU from the counter party. Best practice for keeping your coins safe is with a hardware wallet like the Ledger Nano S. This is only $60 or so and means that someone will need to physically enter a pin and confirm a transaction or steal your backup seed to access your funds.
I’m not giving up on crypto
I joined Coinbase.com in 2015, have had various positions of BTC over the years and have seen hype come and go. I think we’re nearing a real inflection point with adoption but we’re in a dangerous place as the cost of BTC/ETH skyrockets and noobs hit the market.
Four-hundred-thousand people have joined Coinbase.com in the last thirty days. This group has vastly different security needs and expectations than the original 400,000 who joined Coinbase in 2012. If this new group isn’t protected in aggregate, lawsuits will fly, financial lives will be ruined, and the dream that bitcoin will eventually hit $50,000 will become a dim fantasy. Check out the Coinbase reddit if you want an additional taste of what’s happening.
Despite this, I’m willing to bet that Coinbase, or someone else, will significantly evolve and eventually figure it out. Many of the problems that lead to my hack on Coinbase are addressable with more paternalistic software, fraud detection and an adept support team reachable 24–7. The beauty of the blockchain is that you can create a consumer offering on top of it that operates much more like a bank and it can exist next to an exchange suited for someone buying and selling huge, risky amounts each day.
It’s hard to understand how brutal it is to start over with this level of rapid financial loss unless you’ve been there yourself. The BTC I had in my Coinbase was collected over years and the ETH and LTC position were more recent. I blame myself for not doing enough security research and I also know that these openings are incredibly common for others. Unless huge changes happen, so many others are likely to get robbed and the reputation of cryptocurrencies, in general, will degrade. The only thing that’s really around to protect these newcomers is the cryptocurrency community itself. Please let my ample misery be a raw warning sign. Inform your friends. Don’t trust Coinbase defaults. Don’t think it won’t happen to you. Stop reading this and secure your coins right now.
Legal. Many have encouraged me to find a lawyer to work through some options in action against Verizon and Coinbase. If you know of a lawer or firm who might be good, please shoot me a DM (my DMs are open). I don’t have many resources to pursue this so any general advice would be helpful.
Class action lawsuit against Verizon and/or CoinBase.com. Apparently there is already a lawsuit in motion (am learning more about it). If you have also been affected by a similar situation at CoinBase, message me, so we can share stories.
Donations. Wow. Some very generous people in the bitcoin community have asked about donating to a tip jar or helping fund a lawsuit. This is awesome of you and massively appreciated.
LTC: LbZnJ8QWc581bm6iu6STpbKVq9RDv1Yqbd (currently at ~$250 USD)
BTC: 188itMZTQx1PcbuCdpjBkdBLUKjJRcdPoj (currently at ~$280 USD)
Hugggge thanks to @BTCXBTDEV.