NSA = Not So Adept: Hackers Loot Brash Stash Of NSA Exploits & Data

Who watches the watchers?  Apparently, now it’s…well, everybody with a computer.  A massive hack against the NSA has revealed a treasure trove of previously-private exploits and other data, and it doesn’t make our “security agency” look very secure at all…


If the future won't let us have space-war, we'll have cyberspace-war.
(Image courtesy techworm.com.)

According to TechCrunch.com, the hack was perpetuated by a group called the Shadow Brokers, who lifted a stash of NSA-created malware from an internal hacking team called The Equation Group.  Two chunks of data have been published, one that is open to the public for perusal and one that contains “the best files”, which will likely be auctioned off at the starting price of $1 million.

An additional image collection of a file tree containing NSA exploits was released, as well as a page calling out “cyber warriors” and “WealthyElites.”  The full extent of the free file contains staging programs that the NSA could ostensibly use to inject malware into servers for the purposes of espionage.  These hacking tools include “RATS” – remote access Trojans – and exploits that target web and file servers.  Such programs could be used to remotely access a machine, copy or monitor its information, and then be deleted (theoretically) without a trace.


Well, that's...bold.
They couldn't name it "Punk Rock Tracks - The Exploited" or anything less overt?
(Image courtesy techcrunch.com.)

The files are mostly written in Python or shell script, with a few compiled binaries.  The Shadow Brokers have released the following statement regarding the acquisition:
"How much you pay for enemies cyber weapons? Not malware you find in networks. Both sides, RAT + LP, full state sponsor tool set? We find cyber weapons made by creators of stuxnet, duqu, flame. Kaspersky calls Equation Group. We follow Equation Group traffic. We find Equation Group source range. We hack Equation Group. We find many many Equation Group cyber weapons. You see pictures. We give you some Equation Group files free, you see. This is good proof no? You enjoy!!! You break many things. You find many intrusions. You write many words. But not all, we are auction the best files."

The stunted English grammar may imply Russian origin for the group, or may be ruse to throw others off the trail.  Regardless, the second file will be sold to the highest bidder via bitcoin, and the files are promised to be “better than stuxnet” (the computer worm that derailed Iran’s nuclear program several years ago.)


How nice...they even included user instructions.
(Image courtesy techcrunch.com.)

Wikileaks claims that they are already in possession of the “best” files, and will publish them “in due course.”  In the meantime, whistleblowing winner Edward Snowden calls the entire affair “not unprecedented.”  Snowden went on to elucidate, “This leak is likely a warning that someone can prove US responsibility for any attacks that originated from this malware server."


While this is not (yet) thought to be a tremendously devastating hack, it does not look favorably on the much-maligned NSA.  This sort of sloppy spywork is not the sort of thing that inspires confidence in those who repeatedly exhorted that they were keeping us secure by ransacking our privacy.  Loose ‘chips sink ships.

We don't know all of what we don't know,
but we learn more about it every day.
(Image courtesy sdxcentral.com.)

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Pot Automat? Pot-O-Mat? New Cannabis Vending Machine Debuts In Seattle

Yesterday, in a move that helps to further freedom and medicinal options alike, Seattle became the first location in the state of Washington to allow the usage of a vending machine for medical marijuana.  According to trust.org, the ZaZZZ machine that is the first of its kind began operating on Tuesday for the customers of Seattle Caregivers medical dispensary.

The machine as well as its contents were fired up yesterday.
(Image courtesy cannamagazine.com.)

The ZaZZZ, created by American Green Inc, is an updated version of a similar machine that debuted in April 2014 in Colorado.  Those machines, however, only sold cannabis edibles.  The new and improved ZaZZZ sells the cannabis flower (a.k.a. buds), vaporizer pens, hemp-oil energy drinks, and more.  The first purchase made was for a $15 gram of the "Girl Scout Cookies" cannabis strain.

You will probably also want some real Girl Scout cookies to go with that.
(Image courtesy news.yahoo.com.)

The machine operates by using an ID card scanner, which verifies user identity after a shop employee confirms the client's medicinal-user status.  Stephen Shearin, president of American Green Inc., is enthusiastic about the adoption of the machines, saying, "It's a way to take something that has proven itself as a viable business model throughout the last century, and bring it into the 21st century."

Five ZaZZZes are planned for locations throughout Washington state, with others planned for Alaska, California, Colorado, Rhode Island, and Michigan. Wherever you venture to find one, you won't even need to worry about getting robbed for your stash cash along the way - the ZaZZZ accepts bitcoin!  The future just got a little more chill.

Bits for hits!
(Image courtesy maxkeiser.com.)

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Bitcoins And Biohacks: Dermally-Implant Your Dough?

Body modifications have been around as long as humanity.  We are constantly seeking new ways to embellish, improve, and artistically distinguish ourselves by pimping our corporeal rides, and now, technological innovations may be added to that mix.

As reported by the Telegraph UK, Dutchman Martijn Wismeijer has had 12mm NFC (near-field communication) computer chips embedded in his hands as a sort of human upgrade. On these chips, he stores the keys to his bitcoin wallet, as well as a personalized alarm clock where the chips must be held to a sensor to shut off his daily alarm.  

Easier than carrying around a sack of doubloons, for sure...but not as secure.
(Image courtesy techinasia.com.)

The 888-byte chips were installed via a ready-made syringe which delivered them to the fatty subdermal flesh.  While Wismeijer admitted that many doctors were recalcitrant to perform the modification, other body artists such as tattooists or piercers may be more amenable (although regardless of the surgeon, sterile conditions are still a must.)

The founder of Mr. Bitcoin, a company that deals in crypto-currency ATMs, Wismeijer says the chips are not secure enough to permanently carry the codes at the moment, but that his experiment in embedding them was a success.  He eventually would like the technology to include wireless key access for his home.  Wismeijer feels this type of "bio-hacking" is just the fingertip of the bigger body of possible uses for the technology.

In the beginning, there was the byte.
(Image courtesy storiesbywilliams.com.)

Wismeijer explained, “The reason I did take the implants is that I have real-world uses for it today, my phones and tablets are all compatible. I personally feel that by supporting these bio-hacking developments we can learn what works and what doesn't and that some day, in the not so distant future we will be able to implant more functionality like sub dermal glucose sensors or heart rate monitors and other vital health monitoring devices. Imagine a normally invisible tattoo on your arm glowing red when you get a heart attack, swipe your phone and your phone will notify doctor.

“By supporting these bio-hacking initiatives I believe we are paving the way for social acceptance while at the same time we support the bio-hacking technology that drives it.”

Bodymodding biohackers, use your new powers for good.
(Image courtesy hackpittsburgh.com,)

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Different Money For Your Different Life: Paypal Now Accepts Cryptocurrency For Digital Items

Bit by bit, digital currencies are becoming more mainstream.  With a variety of new places to spend your e-loot, it's no surprise to see Paypal is now accepting bitcoin for digital dealings.

As reported by techcrunch.com, this idea has been underway for some time, with Ebay CEO John Donahoe saying that digital currency would play "an important role" for the company.  Wikipedia, Overstock, and other companies have already joined the cryptocurrency club, spurring Paypal's involvement.  They will generate profits from referral fees, which is normal for these type of transactions.

“PayPal is playing the role of the intermediary, but the cost will be left up to the merchant and the payment processor,” said Scott Ellison, a senior director at PayPal.

Paypal will collaborate with the BitPay, Coinbase and GoCoin services to secure the cryptocurrency transactions. Currently this will be available for vendors of digital items only, and exclusively in the United States. However, as this technology grows in popularity, many more items in a wider market could be available thanks to your bit-bank.

It's for digital items only!  Get back in the screen, e-presents!

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Chomping At The Bit(coin): Paypal Now Accepts Popular Cryptocurrency

The bitcoin revolution has ascended rapidly, and the options for using cryptocurrency are expanding just as quickly to meet the demand. Now, the major online payment service PayPal has begun to accept bitcoin as part of its operations.

The internet-only monetary system of bitcoin has grown not only in popularity but in value recently, and according to fastcompany.com, had been considered an option by PayPal in the past. PayPal has now officially adopted the cryptocurrency, which will help to speed along transactions completed via their subsidiary Braintree's mobile app, One Touch PayPal. This expedites e-payments using a program called Coinbase.

Braintree CEO Bill Ready stated, "This will be PayPal's first foray into bitcoin...We think both the One Touch mobile payments that we announced as well as bitcoin will be high interest to merchants."

PayPal customers, including the cab-hailing app Uber and the apartment-letting service Airbnb, will now be open to accepting your bit-loot. With the scope of the company's usage on the internet, many more vendors will likely follow this trend.

Lesser-known e-currency provider Dogecoin are just happy they have a cool racecar.

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Safely Stash Your Bitcash In Virtual Vaults

The popularity of Bitcoin and other crypto-currencies bodes well for promoting a decentralized financial system, but their allure also ups the danger of their theft. Now, virtual vaults have been created to add an extra layer of protection to your Bit-fortune.

According to www.joh.cam.ac.uk, there are currently over 13 million Bitcoins in circulation, with a value of over £311 per unit. Though the price fluctuates, this could rise to over £1000 per unit, and over 80 million people are expected to hold Bitcoin "wallets" (online accounts of their Bit-loot) by the end of 2014. The virtual vault Elliptical, created by students from St. John's University, Cambridge, England, holds virtual "keys" for users so that their Bitcoins may be accessed with additional layers of security, while making reports available on the varying market price of the currency. The heavy security makes Elliptical an attractive option for companies, law firms, and financial service providers, including the new Global Advisors Bitcoin Investment Fund (who collaborate to make Bitcoin viable for pensions and insurance providers.)

Elliptical is fully insured, allowing users not to fret that hackers or viruses will act like modern Bit-bank robbers. Creator James Smith explained Elliptical as, “a secure, insured custodian of Bitcoin and other digital currencies, serving a range of enterprise customers." He claims the site, which recently obtained £1.2 million in funding from the Octopus group, is being placed "at the heart of digital currency infrastructure."

So if your faith in the dollar, Euro, or pound is sinking lower than your hope for humanity, perhaps its time to invest in the realm of e-riches. Other vault options, such as Coinbase and Xapo, offer similar vault services.  The scope is serious, and the security is stronger than what you may think you are currently safe with.

No cracking, no hacking.

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MIT Announces Bitcoin Distribution Project

This fall, Bitcoin is going to get a big boost from a project of the MIT Bitcoin club, which plans to distribute $100 worth of the digital currency to every undergrad at the school.  From MIT:
Two MIT students have raised half a million dollars for a project to distribute $100 in bitcoin to every undergraduate student at MIT this fall. Jeremy Rubin, a sophomore studying computer science at MIT, and Dan Elitzer, founder and President of the MIT Bitcoin Club and a first-year in the MBA program at MIT Sloan, have undertaken an ambitious project aimed at creating an ecosystem for digital currencies at MIT. Plans for the MIT Bitcoin Project involve a range of activities, including working with professors and researchers across the Institute to study how students use the bitcoin they receive, as well as spurring academic and entrepreneurial activity within the university in this burgeoning field.
Through the MIT Bitcoin Project, Rubin and Elitzer aim to help MIT continue its long tradition as the preeminent educational institution at the forefront of emerging technologies, and establish MIT as a global hub where Bitcoin-related research, ideas, and ventures are studied, discussed, and developed. The bulk of funding for the project is being provided by MIT alumni with significant additional support from within the Bitcoin community. The total of over $500,000 already pledged will cover the distribution of bitcoin to all 4,528 undergraduates, as well as infrastructure and informational activities related to the initiative.
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Quick, Everyone Panic! Bitcoin Weathers a Stormy Week

There have been some serious shenanigans in the Bitcoin community and economy in recent days.  The Mt. Gox exchange continues its downward spiral, while people who (inexplicably) provided control of their Bitcoin to Silk Road 2 got taken for a ride.  Here's one of the best rundowns on the Gox flaw that I've found online, from IEEE Spectrum:
Here's what a terrible week looks like in the world of Bitcoin: Two of the most trafficked Bitcoin exchanges, Mt. Gox and Bitstamp, temporarily halt trading and suspend bitcoin withdrawals in the midst of a distributed denial of service attack (DDoS). On exchanges that are still open for business, the value of the currency takes a brutal, sudden hit and then continues to tumble. Bitcoin users notice strange errors in their wallet balances after making routine transactions. Rumor spreads that the Bitcoin protocol is critically flawed. And where rumor is lacking, conspiracy theories abound.  All this, and it's barely Thursday.
Word is that as of this morning, Bitstamp had begun allowing withdrawals once again. 

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NJ: Professional Political Hysteric Demands to Interrogate Students Over Proof-of-Concept Program

New Jersey's Attorney General, John Hoffman, and the rest of his office appear to be nothing more than a technophobic gaggle of professional hysterics.  And they are out to prove it by harassing a group of young student programmers who came up with an interesting new decentralized Bitcoin app.  It appears these students may get a real lesson on the ignorance, arrogance and degeneracy of the ruling political class.  From the EFF:
As the popularity of Bitcoins has increased, government officials are concerned about criminal activity associated with the virtual currency. But a recent issued by the New Jersey Division of Consumer Affairs to 19-year-old Bitcoin developer and MIT student Jeremy Rubin goes too far, and we're fighting back by moving to quash it.
subpoena
Rubin and some other MIT classmates developed a computer code called Tidbit for the Node Knockout Hackathon in November 2013. Tidbit uses a client's computer to mine for Bitcoins as an alternative to website advertising: in exchange for removing ads from a website, a user would give some CPU cycles to mine for Bitcoins instead. Tidbit was clearly presented as a proof of concept, with the developers making clear the code was configured not to mine for Bitcoins. That's because in addition to refining the code, they needed to work out the legal details, like drafting a terms of service, and the ethical details, like making sure there was a way for users to opt-in to the service so their computers weren't being used to mine Bitcoins without their knowledge. Tidbit won the Node Knockout award for innovation and the students thought they were on their way to continuing with their project.
But in December, the New Jersey Division of Consumer Affairs issued a subpoena to Rubin, requesting he turn over Tidbit's past and current source code, as well as other documents and agreements with any third parties. It also issued 27 interrogatories -- formal written questions -- requesting additional documents and ordering Rubin to turn over information like the names and identities of all Bitcoin wallet addresses associated with Tidbit, a list of all websites running Tidbit's code and the name of anybody whose computer mined for Bitcoins through the use of Tidbit, although Tidbit's code was not configured to mine for Bitcoins.
Who exactly are the people who continue to vote for the brain dead politicians in the Democratic and Republican parties?  And what the hell is wrong with them? 
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FinCEN Issues Two Rulings on "Virtual Currency"

A press release from the Treasury's Financial Crimes Enforcement Network:
The Financial Crimes Enforcement Network (FinCEN) today published two administrative rulings, providing additional information on whether a person’s conduct related to convertible virtual currency brings them within the Bank Secrecy Act’s (BSA) definition of a money transmitter. The first ruling states that, to the extent a user creates or “mines” a convertible virtual currency solely for a user’s own purposes, the user is not a money transmitter under the BSA. The second states that a company purchasing and selling convertible virtual currency as an investment exclusively for the company’s benefit is not a money transmitter. The rulings further interpret FinCEN’s March 18, 2013 Guidance to address these business models.
The two rulings will certainly help clear things up for miners and Bitcoin startups. 
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Regulatory Hearings on Bitcoin Begin in NYC

From the NYT:
A hearing on the regulatory future of Bitcoin on Tuesday turned into a forum on the shortcomings of the traditional banking industry.  The hearing, called by New York State’s top financial regulator, Benjamin M. Lawsky, gave five Bitcoin advocates the chance to enumerate what they view as the advantages Bitcoin could provide over current systems of moving money around the world. 

“Solutions don’t really come from the current industry,” said Cameron Winklevoss, who, with his twin brother, Tyler, has invested in Bitcoin companies. They were early players in Facebook.  Even Mr. Lawsky got in some digs when he complained that it takes three days for his bank to transfer money to pay a credit card bill at the same bank.

When Mr. Lawsky asked about efforts by banks to create their own Bitcoin alternatives, Fred Wilson, a leading venture capitalist at Union Square Ventures, said “no one is going to build on top of JPMorgan Chase’s Bitcoin.”
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Bitcoin Company Operator Arrested, Big Bank Money Launderers Continue to Walk Free

From Business Insider:
The CEO of BitInstant, a Bitcoin exchange, has been arrested at JFK airport and charged with money laundering.  Charlie Shrem, along with a co-conspirator, is accused of selling over $1 million in bitcoins to Silk Road users, who would then use them to buy drugs and other illicit items.
Meanwhile, global money laundering operations like those at HSBC skate by with a cost-of-doing-business fine and no arrests.  From Reuters:
U.S. regulators continue to find weaknesses in the way HSBC Holdings tries to prevent money laundering, according to people familiar with the matter, even after the British bank was forced to pay nearly $2 billion in penalties and invested millions in increasing its compliance.
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Google Considering Bitcoin Integration or Not

Some mixed messages from Google regarding Bitcoin.  From Forbes:
Google’s Senior Vice President Vic Gundotra . . . Gundotra wrote [Malik] back. He also forwarded Malik’s query to another Google staffer and started a series of email exchanges that  led to one Googler telling Malik that the company is indeed pondering how it can make use of the world’s first form of decentralized digital cash.

“We are working in the payments team to figure out how to incorporate bitcoin into our plans,” wrote Google Senior VP of Ads and Commerce Sridhar Ramaswamy at one point in the email exchange that Malik forwarded to me. He promised to get back in touch “when we are a little more sure.”
However, the company told a slightly different story to Forbes:
I reached out to Google, and the company responded in a very different tone, but didn’t deny that the comments Malik posted to Reddit were real. “As we continue to work on Google Wallet, we’re grateful for a very wide range of suggestions,” a spokesperson writes. ”While we’re keen to actively engage with Wallet users to help inform and shape the product, there’s no change to our position: we have no current plans regarding Bitcoin.”
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Texas Republican Senate Candidate Accepts Bitcoin Donations

From NPR:
Stockman visits the NYC Bitcoin Center.
When Texas Rep. Steve Stockman announced recently that he'll accept donations in bitcoins, he raised some eyebrows. . . . Stockman appeared in a Dec. 31 expressing support for the virtual currency: "I really think digital money is more about freedom,Business Insider, he said his Senate campaign would show support by accepting Bitcoin donations.
" he said, adding that bitcoin is "a fixed amount of currency at a fixed rate, so very good for the markets." According to

Setting aside the question of Stockman's longshot candidacy, his announcement raised a question that has rarely been asked before: In political campaigns, what are bitcoins worth?
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China Turns Against Bitcoin: Price Drops

From FT:
China has blocked the country’s Bitcoin exchanges from accepting new inflows of cash, a move that imperils the much-hyped virtual currency in its biggest market.  The head of BTCChina, the world’s largest Bitcoin exchange by trading volume, said he had received word at midday on Wednesday that his platform would no longer be able to accept renminbi from would-be Bitcoin buyers.
The price of Bitcoin has since dropped by 50%.  In related news, the price of Bitcoin is still over 100% higher than it was just a month and a half ago.  
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"Don't Go Fishing While Your House is on Fire" and Other Go Proverbs for Bitcoiners

It would be interesting to find out if there are many Go players in the Bitcoin community.  As a casual Go (i.e. Baduk) player, I often find that traditional proverbs on the game's strategy and tactics are applicable to other aspects of life, the world and everything. And that includes Bitcoin.  So I thought I'd share some Go proverbs that may be helpful to other Bitcoiners out there.  Here are nine Go proverbs and some thoughts on their application to Bitcoin.  You can find more Go proverbs over at Sensei's Library.

"If it has a name, know it."

In Go, this of course does not mean that we should just pick up some fancy jargon and start throwing it around. Rather, the idea is that if something is important or common enough to have a name, you should know what that thing is, and study it – whether it is an opening move, a pattern, a trade-off, or a protocol.  One of the more interesting aspects of Bitcoin is that it requires a non-trivial amount of inquiry to gain a basic understanding of what Bitcoin is, how it works and how to use it, let alone how to improve it.  For the average person, there are a lot of new things to learn or understand before you can comfortably and competently navigate the conceptual and practical aspects of Bitcoin, same as on the Go board.  Simply put, this means: do your research and your due diligence!

"Lose your first 50 games as quickly as possible."

There is a significant learning curve to Go, but you can learn all the rules in a few minutes.  You are going to make beginner mistakes (sometimes even the pros make them!).  It is better to make those mistakes quickly, in a low stakes environment, and learn from them.  With respect to Bitcoin, just think of how many people have gotten tripped up by the way in which the original client handles the change from one address when you make a fractional transfer to another!  If only they had tested the waters early on with a small transaction, they wouldn't have been caught off guard when there was more on the line. 

"Play urgent moves before big moves."

In Go, it is a grave error to attack a strong position from a weak base, or to expand to new territory before consolidating your current position.  Build your defenses before you go on the attack.  Planning on buying a bunch of bitcoin? or moving a bunch of currency around? or investing a ton of money in hardware?  Make sure you've got a strong and secure base from which to make your move.  Secure your wallet. 

"Don't go fishing while your house is on fire."

This is a more colorful version of the previous proverb, but the redundancy emphasizes the importance of the lesson.  Make sure your base is covered before taking off on flights of fancy!  Consider also that the study and research advised in the first proverb above are themselves necessary to properly secure your base in practice.

"A rich man should not pick quarrels." 

On the Go board, this means if you find yourself in a strong position with a big lead, don't take needless risks at your opponent's expense or your own.  Others will react violently when their survival is threatened, and you may inadvertently risk your own survival by opening yourself up to attack.

"The greedy do not get success."

This proverb is closely related to the previous one, and again re-enforces the lesson.  The notion of greed is a central concept in the psychology of Go.  Greed can cloud one's judgment and cause an otherwise rational person to make rash decisions or take excessive and needless risk with little forethought.  Don't invest more than you can afford to lose.

"Sacrifice plums for peaches."

In Go, it is not wise to be greedy, but you still have to take profit if you want to come out ahead.  And oftentimes you have to sacrifice something – big or small – to get something more in return, or to get anything at all. 

"Use go to meet friends."

Visit your local go club, meet new people and learn from them, and teach people in your circle of friends.  Check out your local Bitcoin meetup group or start one yourself.

"Don't follow proverbs blindly."


This meta-proverb is one of my favorites.  Don't be rigid in your thinking or in your play.  Always be skeptical and think for yourself!

Any other Go playing Bitcoiners or Bitcoining Go players out there?  What are your favorite Go proverbs?
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Thefts Rise with Price of Bitcoin

How secure are your bitcoins?  From Information Week:
That rise in value has driven hackers to attack online wallet services that store bitcoins. "Each of these companies had been operating officially for only a few months, yet already had entrusted to them millions of dollars that are now in the hands of cybercrooks," Paul Ducklin, head of technology for Sophos in the Asia Pacific region, said Tuesday in a blog post.
Malware writers have also taken a keen interest in bitcoins, with some -- especially Russian gangs -- modifying their crimeware tools to identify and steal any bitcoins found on infected PCs. "There are numerous malware families today that either perform Bitcoin mining or directly steal the contents of victims' Bitcoin wallets, or both," according to a blog post from Robert Lipovsky, a researcher at security firm ESET.
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Bitcoin Passes $1000 Mark

From USA Today:
Happy Thanksgiving Bitcoin.  The value of the so-called cryptocurrency surged above $1,000 as it becomes easier to use as a way to pay and easier to access for investors looking for an alternative to gold.
One Bitcoin was briefly worth $1.073 on Wednesday, up from less than $100 earlier this year, according to Mt. Gox, which hosts and operates a popular Bitcoin trading platform. Later in the day it dropped back to $930.
"Bitcoin is just starting to break out into the mainstream," said Eric Tilenius, executive-in-residence at Scale Venture Partners, who has a small percentage of his investment portfolio in the digital currency.
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Bitcoin Black Friday Shopping

The Bitcoin community is gearing up for a holiday shopping spree by hosting its own Black Friday event.

Hundreds of merchants will be joining "Bitcoin Friday" on Nov. 29, selling everything from Christmas trees to clothes, to web domains.

Bitcoin Friday deals include unlocked phones from GSM Nation and discounted plane tickets from Cheapair.com. OKCupid, which has been accepting bitcoins since April, will be participating as well.

Media outlets are jumping into the Bitcoin deals bandwagon too: GOOD Magazine is giving away $5 discounts for subscriptions and the Free Press is slashing shipping costs. Reddit is also offering a deal on "Reddit Gold."
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Bitcoin Gets Galactic Boost

From The Verge:
Richard Branson believes in Bitcoin, and he's putting his money where his mouth is. The billionaire CEO has announced that his commercial space startup Virgin Galactic will now accept payment from future astronauts in the virtual currency.
"Virgin Galactic is a company looking into the future, so is Bitcoin," Branson writes in a blog post on the Virgin site. "So it makes sense we would offer Bitcoin as a way to pay for your journey to space."
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Police Pay Cryptolocker Ransom

From The Herald News:
A computer virus that encrypts files and then demands that victims pay a “ransom” to decrypt those items recently hit the Swansea Police Department.
The department paid $750 for two Bitcoins — an online currency — to decrypt several images and word documents in its computer system, Swansea Police Lt. Gregory Ryan said.
“It was an education for (those who) had to deal with it,” Ryan said, adding that the virus did not affect the software program that the police department uses for police reports and booking photos. . . .

CryptoLocker, a new Windows ransomware virus sweeping across the country, hit the Swansea Police Department on Nov. 6. The virus encrypted several files that could only be decrypted through the purchase of Bitcoins, an unregulated digital currency, to pay for the special “decryption key.” A countdown clock appeared on a computer screen showing how much time the department had to buy the key before all the files were deleted.
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Bitcoin Blows Past $600

From CNBC:
Bitcoin touched a fresh all-time high on Monday as the digital currency continued to gain favor with investors.  The virtual currency rose to just under $619 on Mt. Gox exchange Monday afternoon in Asia, up by over 25 percent from the same time on Sunday.
Its latest gains come as the potential for regulation hangs over the market. The U.S. Senate Committee on Homeland Security and Governmental Affairs (HSGAC) is set to begin a hearing at 3.00 p.m. Washington time on Monday. The event will bring representatives from different federal agencies and representatives from the bitcoin community to discuss virtual currencies.
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RIAA Complaint Demonstrates Their Incomprehension of Technologies They Oppose

Really, laugh out loud.  From Torrent Freak:
The RIAA alerted the U.S. Government to several notorious pirate websites this week, including The Pirate Bay. While the inclusion of the infamous torrent site doesn’t come as a surprise, the RIAA did raise a novel issue. The music labels point out that The Pirate Bay has embraced the cryptocurrency Bitcoin, which they believe makes it harder to seize and trace the site’s funds. While the former is certainly true, a quick look at TPB’s Bitcoin wallet easily reveals where the donation money is being spent.
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Silk Road Shutdown an Opportunity for Black Market Internet Entrepreneurs

Nature abhors a vacuum.  With the shutdown of Silk Road, we are likely to see some copy cats spring up across the web.  From the Guardian:
Although it was certainly the most high profile, Silk Road was not the first illegal marketplace hidden within the dark web or on the open internet.
"Silk Road will almost certainly be replaced by a copycat-like site, as has been the case in carder markets where people trade fraudulent credit card information. Those kinds of places have been shut down in the past and very, very quickly replaced by others," said Rik Ferguson, vice-president of security research at Trend Micro, talking to the Guardian.
Sites similar to Silk Road already exist within the Tor network. Two stores called Atlantis and Sheep Marketplace offer illegal drugs, equipment and services akin to Silk Road.
However, some sites go further – Bitcoin-powered shop called Black Market Road, for instance, also sells illegal weapons, something Silk Road withdrew after high profile shootings in the US.
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FBI Seizes Silk Road, Arrests Operator

From The Orlando Sentinel:
U.S. law enforcement authorities have shut down "Silk Road," an anonymous Internet marketplace for illegal drugs like heroin and cocaine and criminal activities such as murder for hire, and arrested its alleged owner.

The Federal Bureau of Investigation said Wednesday it arrested Silk Road owner, Ross William Ulbricht, 29, known online as "Dread Pirate Roberts," in San Francisco on Tuesday, according to court filings.

Ulbricht, who holds an advanced degree in chemical engineering, appeared in federal court on Wednesday and a bail hearing was set for Friday.

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Federal Judge Rules that Bitcoin Is Money

A federal judge has ruled that bitcoin is money.  The suit before the court involves the case of Trendon Shavers, who is being prosecuted by the SEC for running what has been called a Bitcoin ponzi scheme.  In response to the SEC action, Shavers argued before the court that the SEC had no jurisdiction in the case because bitcoin is not money.  The court did not agree.  From the ruling:
First, the Court must determine whether the BTCST investments constitute an investment of money. It is clear that Bitcoin can be used as money. It can be used to purchase goods or services, and as Shavers stated, used to pay for individual living expenses. The only limitation of Bitcoin is that it is limited to those places that accept it as currency. However, it can also be exchanged for conventional currencies, such as the U.S. dollar, Euro, Yen, and Yuan. Therefore, Bitcoin is a currency or form of money, and investors wishing to invest in BTCST provided an investment of money.
Ironically, both Bitcoin enthusiasts and detractors see this ruling as a evidence in favor of their own positions.  Enthusiasts state that rulings like this will make the crypto-currency more palatable to the economic mainstream, while its detractors state that this is one more nail in the Bitcoin coffin.  Of course, only time will tell.  But the ruling does not seem to have affected the price of Bitcoin, which is currently trading at just over $100 per BTC.
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SEC Cracks Down on Bitcoin Ponzi Scheme

One of the most common and likely ill-informed criticisms of Bitcoin is that the virtual currency is nothing more than a Ponzi scheme.  A minimal amount of research into what Bitcoin is and how it functions should, however, dispel any reasonable doubt that Bitcoin itself is a scam.  Yet that does not mean that Bitcoin cannot be used to construct traditional scams like the Ponzi scheme.  The SEC has filed a suit against one such scammer who operated an enterprise called the Bitcoin Savings and Trust.  From Entrepreneur:
The Securities and Exchange Commission has filed its first fraud lawsuit involving the virtual currency, claiming it was used in a Ponzi scheme.  The SEC filed suit against Trendon T. Shavers, founder and owner of Bitcoin Savings and Trust, saying he raised more than 700,000 BTC from 66 investors. According to the SEC’s suit, that amounted to $4.5 million in cash based on the daily Bitcoin price at the time, according to the SEC. 
Of course, knee jerk detractors of the digital currency will argue that this proves Bitcoin is  nothing more than a scam, as if the structure of such a scheme were internal to Bitcoin itself.  Interestingly, however, this action by the SEC may inadvertently serve to strengthen the Bitcoin market, since it presupposes that the digital currency is a legitimate means of investment in securities, which are regulated by the SEC.  The article notes:
The SEC also took the step of asserting its jurisdiction over virtual-currency trading. “Any investment in securities in the United States remains subject to the jurisdiction of the SEC, regardless of whether the investment is made in U.S. dollars or a virtual currency,” the agency said. 
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Beware of Bitcoin Malware

One month ago, one bitcoin was worth around $50.  Today, Bitcoin has surged past the $200 mark, and, as if this writing, is trading at $218 on MtGox, the most popular bitcoin exchange.  There are many different theories floating around out there to explain this explosive growth in price.  By far the most common is the claim that we are in the midst of a massive bubble.  As new money pours into the system – and these days that new money is big money from professional investors – the incentives for scammers, hackers, crooks and the like grow accordingly.  If you are relatively new to Bitcoin, are are relatively new to it, make sure you do your due diligence to secure your wallet and coins, it is certain that there are a great many people out there salivating at the idea of making off with a great deal of coin.  Even if you have no interest in Bitcoin whatsoever, or even think that it is nothing more than a pyramid scheme, as some skeptics do, you should also be cognizant of these potential threats.  From The Next Web:
A new piece of malware propagating across Skype has been discovered that tries to convince the recipient to click on a link. What makes this particular threat different is that it drops a Bitcoin miner application to make the malware author money.  While malware has spread on Skype and mined Bitcoins before, putting the two together could be an effective new strategy. Security firm Kaspersky discovered the threat, which it names Trojan.Win32.Jorik.IRCbot.xkt
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Intro to Bitcoin

From Monetarism, an introductory article on Bitcoin:
In February 2013, version 0.8.0 of Bitcoin was released. This virtual payments system is the financial equivalent of Latin, the language with no native speakers. In the case of Bitcoin, though, what you are dealing with is a financial structure with no central bank, no one regulatory body as such, and no physical form.  That may sound odd – so let’s look in more detail at Bitcoin, how it works, and what its future might be . . .
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Bitcoin Reaches All-Time High

From CNN:
Bitcoin sounds like something from science fiction: A purely digital currency, created by an anonymous hacker, that operates outside the world's traditional banking systems. The four-year-old currency is very real, though, and it's trading an all-time high, tripling in value in the last two months alone.

One bitcoin is was worth about $40 U.S. dollars on Tuesday, and surged on Wednesday to nearly $49. . . . Because the number of transactions and overall value of coins in circulation is relatively low, the currency is quite volatile -- it went from under $1 to over $28, then back to $7 in 2011 alone. . . .

Bitcoin was created in 2009 by an anonymous developer using the pseudonym "Satoshi Nakamoto" -- the Japanese equivalent of a bland name like "John Smith." It has no central-bank backing. The idea was to create a currency that's free from government intervention and can be used to conduct transactions without hefty exchange or processing fees. . . .
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Bitcoin Exchange to Operate as Bank

From Ars Technica:

Bitcoin Central, a Bitcoin exchange that is popular in the eurozone, says it has secured approval from regulators to operate as a bank under French law. The announcement could be another sign of the cryptocurrency's growing legitimacy.
The news was announced in a Thursday post on the Bitcoin forums. A representative for Paymium, the French company that runs Bitcoin Central, said the firm had partnered with the French payment processor Aqoba and the French bank Credit Mutuel to create a Bitcoin-based payment service. Users will be able to deposit funds in either euros or bitcoins, and to easily convert between the two.
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