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 to dollar .
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 to dollar So Interesting?
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.
Today, a look at what’s going on with bitcoin in Singapore, a tiny Southeast Asian island city-state which boasts the world’s fourth-biggest financial centre, third highest per-capita income and (arguably) best regulatory jurisdiction for bitcoin startups. Only 5.5 million people live in Singapore, but its high ranks in education, healthcare, and economic competitiveness make it an interesting case study for how bitcoin might impact developed economies in Asian. Antony Lewis, a Director at itBit Bitcoin Exchange in Singapore breaks down the opportunity.
“Bitcoin in Singapore” | Antony Lewis, Director, itBit Bitcoin Exchange
In 2014 there were major advancements in the use, regulation and development of bitcoin and related technologies worldwide. In Asia, Singapore played a particularly significant role in this progress, and its citizens and businesses continue to be in the vanguard of the digital currency industry. Bitcoin in Singapore has benefited from a combination of community enthusiasm, entrepreneurial innovation, and regulatory restraint.
It all started in December 2013, when the Monetary Authority of Singapore (MAS), the country’s central bank and financial regulator, suggested in an email to Coin of Sale, a brick-and-mortar point of sale software provider, that it would not regulate the acceptance of bitcoin by businesses. MAS called participation in such transactions a commercial decision in which the Authority should not intervene. Then in January, the Inland Revenue Authority of Singapore (IRAS) became one of the first regulatory bodies in the world to make a determination on how digital currencies should be taxed. The IRAS ruled that individuals who made money through bitcoin investments, would be taxed at the current zero percent capital gains tax rate. Digital currency transactions involving real money or services, such as buying and selling bitcoins with dollars or paying for services with bitcoins, would qualify for GST (Goods & Services Tax), but there would be no such tax on “virtual world” transactions (e.g. in-game currencies).
In March, Singapore became one of the first countries to take an official regulatory stance on digital currencies. MAS announced its plans to regulate digital currency intermediaries operating in Singapore in order to ward off money laundering schemes or terrorism financing that leveraged the anonymity of digital currencies, and indicated that intermediaries who bought, sold or facilitated the exchange of digital currencies for other currencies would be required to verify customers’ identities as well as to report any suspicious transactions to the Suspicious Transaction Reporting Office. However, MAS did not consider bitcoin or other digital currencies to be securities or legal tender, and as such bitcoin avoided regulation under Singapore’s Securities and Futures Act or Financial Advisers Act.
Regulatory clarity has propelled Singapore to the forefront of the digital currency industry.Temasek Holdings, a government-owned Singapore investment company, even ran a bitcoin experiment, wherein four hundred employees at the company, “from driver to board member,” learned how to use digital currency for charitable donations. As a result of this commitment to innovation, other venture capitalists from across the globe have taken notice.
Our company itBit raised a total of $5.5m in funding in 2013. In March, GoCoin (incorporated in Singapore), a payments processor that facilitates online businesses to accept bitcoin, litecoin and dogecoin, closed a $1.5 million Series A financing. BitX, which provides bitcoin products and services including wallets, exchanges, merchant integration and APIs to consumers, businesses and developers, announced in August it had raised USD $800,000 in seed funding from investors in New York, Palo Alto and London. That same month, Boost VC, a Silicon Valley bitcoin accelerator company, announced it had selected Singapore-based bitcoin exchange and wallet service CoinHako as its first Asian investment, which also included a six-figure personal investment from venture capitalist Tim Draper. And two months later, Coinpip, a cryptocurrency payment gateway for international contractors and freelancers, was selected to join 500 Startups.
Other ventures might soon join those funded ranks as well. In September, CRXzone became the first Singaporean exchange to offer both bitcoin and litecoin trading in Singapore. Point of sale technology from Coin of Sale converts retail prices into bitcoin for brick and mortar stores and is being used in a number of different countries today. And Singapore now has at least eight operational bitcoin vending machines, the first of which was manufactured, installed and operated by Singapore company Tembusu Terminals. Numoni, a mobile airtime vending machine manufacturer, Bitcoin Exchange which installed the popular Lamassu bitcoin vending machine in shopping malls, and Coin Republic, which launched Singapore’s first bitcoin kiosk capable of “cashing out” or disbursing banknotes in exchange for bitcoins have also entered the bitcoin ATM scene locally.
Trade associations and bitcoin educators are also thriving. In May, a group of Singaporean bitcoin businesses officially formed a trade association, the Association of Cryptocurrency Enterprises and Start-ups, Singapore (ACCESS), which aims to promote Singapore as one of the premiere bitcoin business locales in through education and dialogue with the government. Singapore Management University, as part of its commercial law program, offered a seminar in November on the regulation of digital currencies as well as a seminar series focused on the technical aspects of the cryptocurrency. And in addition to March’s Coin Congress, which featured many global digital currency experts and enthusiasts, Bitcoin also made its debut at Asia’s largest tech conference,Echelon, which featured a panel on Bitcoin as a disruptive technology.
Not a bad start for a country less than 2% as populous as the United States! Here’s to a prosperous 2015 for digital currencies in Singapore and abroad!
The MIT E-Lab is a well established (20+ year) program that helps startups by matching them with MIT & Harvard business school students for a semester. The E-Lab is now looking for cryptocurrency related startups at various stages, so apply if you think this could help your efforts. (You don’t need to be local, but a c-level exec has to be in Cambridge frequently.) To apply, or for more info on E-Lab visit http://elab.mit.edu/.
Inside Bitcoins Conference and Expo — Berlin (Mar. 5–6), and New York (Apr. 27–29)
Inside Bitcoins is the largest bitcoin and blockchain technology focused event series worldwide. At each event you’ll hear about the latest challenges, trends, and opportunities in the industry from experts including Chris Odom, Co-Founder and CTO, Monetas; Marshall Swatt, Chief Technology Officer and Co-Founder, Coinsetter; Dan Morehead, Founder & CEO, Pantera Capital Management; Gil Luria, Managing Director, Wedbush Securities; and more.
Plus, TBI Daily readers get 10% off the Berlin and New York events with code TBIDAILY. See you there!
Jobs, Jobs, Jobs
Bitnet, San Francisco, Belfast, London (VC-backed)
-Leading digital commerce platform & former Visa team.
-Open positions: Engineering (Customer Success, Lead UI, Product, DevOps), Sales Director (EMEA), Sales Engineer (San Francisco)
-Check out Bitnet (https://bitnet.io/careers.html) and email firstname.lastname@example.org
Coinbase, San Francisco (VC-backed)
-Largest “universal services” bitcoin company.
-Open positions: Security Engineer, Software Engineer (2–3 years mobile product development), Regulatory Compliance Investigator, (1 year conducting SAR investigations)
-Check out Coinbase (https://www.coinbase.com/careers/)
BitGo, Palo Alto (VC-backed)
-The leading Bitcoin multi-sig security company
-Open positions: Back-end / Front-End / iOS / Security Engineers, UX Designer
-Check out BitGo (www.bitgoinc.com/jobs) and email email@example.com
Bolt, San Francisco (VC-backed)
-Stealth startup focused on consumer applications of Bitcoin.
-Open positions: Security Engineer, Ruby Engineer, UI/UX Designer, Executive Assistant.
-Check out Bolt (bolt.com) and email firstname.lastname@example.org.
Elliptic, London (VC-backed)
-Vault and enterprise digital currency services.
-Open positions: Data Scientists and Front-end developers.
-Learn more and apply at elliptic.workable.com
Today’s Tid Bits
Hong Kong’s MyCoin Disappears With Up to $387 Million, Reports Claim
MyCoin, a Hong Kong based bitcoin exchange, has shut down, taking with it possibly as much as HK$3bn ($386.9m) in investor funds. If true, this would be an incredible amount, considering bitcoin’s entire market cap today stands at around USD$3bn. Some customers suspect MyCoin was operating a ponzi scheme. The victims of the company’s actions are expected to make a statement to the Hong Kong police on Wednesday.
Inside the Chinese Bitcoin Mine That’s Making $1.5M a Month
Motherboard gained access to a massive Bitcoin mine located in a repurposed factory in the Liaonin Province in rural northeast China. The mine is one of six sites owned by a group of four people, who run a mining operation that cumulatively generated 4,050 bitcoins a month, and grosses around $1.5 million. The mines represent 3% of the entire Bitcoin network. A video of the mine can be found in the link above, but the details of the operation’s ASIC miners or who supply them is not revealed.
New BitLicense Draft Draws Half-Welcome from Bitcoin Reps
The updated BitLicense, released last Wednesday, appears to have lived up to Benjamin Lawsky’s promise. The new draft includes an exemption from having to obtain a license for software developers that aren’t directly engaged in money transmission, and it also offers a softer regulatory touch for small startups. However, most bitcoin leaders believe the draft still has a long way to go.
Andreas Antonopoulous: “Give Bitcoin Two Years”
Andreas Antonopoulous spoke at the Bitcoin & the Blockchain Summit in San Francisco last week, emphasizing it’s underlying technology, praising it’s dumb, transaction-processing network saying that this type of network supports smart devices, pushing all of the intelligence to the edge. Andreas went on to say that if 2014 is the “worst year in bitcoin,” which saw $500 million in investment generating tens of thousands of jobs were going to be all right. Andreas finished with a prediction that in two years, bitcoin will be taking off.
New Jersey State Legislature Holds Hearing on Digital Currencies
The Assembly Financial Institutions and Insurance Committee of the State of New Jersey is holding a public hearing on bitcoin and digital currency today. The committee has invited select guests to testify to the applications, consumer protection risks and concerns, advantages and current US regulatory schemes related to digital currency use. The lineup of speakers includes attorney and Blockchain global policy counsel, Marco Santori, itBit CEO Charles Cascarilla, and Tera Exchange co-founders Christian Martin and Leonard Nuara.
Ex-Credit Suisse CEO: Invest in Gold and Bitcoin Long-Term, Not Fiat
Oswald Gruebel, ex-CEO of UBS and Credit Suisse, has openly criticized the inability of banks to prevent economic crises, while championing gold and Bitcoin as credible long-term investment opportunities. Gruebel believes that bank’s weaknesses would continue to have an increasing detrimental effect on the global economy. No supporting evidence has been released to indicate Gruebel’s openness towards Bitcoin’s propagation domestically or internationally.
Payments Processor ChainPay Launches to Challenge Coinbase, BitPay
ChainPay, an Isle of Man-based bitcoin payment processor, has launched in the hopes of competing with BitPay and Coinbase. ChainPay takes 1% of every transaction and offers bitcoin exchange rates from Kraken of Bitstamp. ChainPay currently has banking relationships set up, according to James Carter, ChainPay’s co-founder, but would not release the name of the bank.
Diamond Circle Suspends Operations Amid Cash Crisis
Diamond Circle, an Australian bitcoin hardware manufacturer, has suspended operations citing a lack of capital. The company, which launched Australia’s first cashless ATM last year, is looking for a buyer for the majority of its services. The wallet service is expected to be permanently suspended in the next few days. The company is currently considering buyers, but specifics could not be revealed at his time.
The Race to Replace Bitcoin: ‘Bad Blood’ Between Ripple and Stellar Aires in Tell-All Report
Yesterday, The New York Observer published a 15,000-word story that takes a detailed look at the “bad blood” between the decentralized payment networks, Ripple Labs and Stellar. The story between the two, penned by Michael Craig, “Has everything: sex, huge money, fraud, genius, betrayal, international intrigue and government raids.” Jed McCaleb, the founder of defunct bitcoin exchange, Mt. Gox, Ripple Labs and Stellar, and Stellar executive director Joyce Kim take the brunt of the article’s burns. The story also reports that Wells Fargo had assembled a task force compromising 20 of its “top executives and advisors” that was aimed at finding a way to be the first bank to embrace cryptocurrency, but it fell apart. Craig also covers the fallout of a deal that involved Stripe purchasing Ripple Labs for $13m in cash.
Irish University to Explore ‘Bitcoin Credit-Checks’
A group of computer science students and professors from Trinity College Dublin are working on Bitcoin related projects that aim to tackle and reduce fraud, by combing the blockchain in search of patterns. The group is looking in to “bitcoin credit-checks,” which would allow businesses to peek at a database to check for credit, or other information. Overall, the group wants to enhance Bitcoin transparency.
bitLanders to be a Sponsor of the 2015 New York Open Judo Team Championship
bitLanders, a digital platform whose user base earns Bitcoin for creating, engaging and sharing visual content, will once again be a sponsor of the New York Open Judo Team Championship on Sunday, March 29, 2015. The New York Athletic Club will host the event and the award for the event will be the bitLanders Bitcoin Judo Cup.
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