Archive for the ‘bitcoin’ Category

Crypto hedge funds struggle to recover from “bloodbath”

May 21st, 2020
Crypto hedge funds struggle to recover from “bloodbath”

Enlarge (credit: Yuriko Nakao | Getty Images)

Vlad Matveev has learned the hard way how volatile cryptocurrency hedge funds can be.

The 50-year-old Muscovite invested $250,000 last year with California-based Cryptolab Capital, which targeted double-digit gains from trading crypto regardless of whether the market rose or fell. But Matveev said his investment fell 98.5 percent in value when the fund folded in this year’s coronavirus-induced turmoil.

“I don’t really know what happened,” said Matveev, a fund manager-turned-private investor. “They said they had a diversified set of strategies.”

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Posted in bitcoin, Biz & IT, cryptocurrency, Policy | Comments (0)

Bitcoin’s “halving” is bad for miners, good for everyone else

May 12th, 2020
Bitcoin’s “halving” is bad for miners, good for everyone else

Enlarge (credit: Karen Bleier/AFP/Getty Images)

The bitcoin network underwent a significant change on Monday as the number of new bitcoins produced in each block fell by half. This is according to a schedule established by bitcoin founder Satoshi Nakamoto almost 12 years ago.

Previously, each block in the blockchain came with 12.5 new bitcoins worth roughly $110,000. Now each block includes only 6.25 new bitcoins worth around $55,000.

That's a challenge for the bitcoin mining industry, which derives the lion's share of its income from these block rewards. But it has a happy side effect for everyone else: the bitcoin network's energy consumption is likely to fall in the coming months as lower profits from bitcoin mining force miners to tighten their belts.

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Posted in bitcoin, cryptocurrency, environment, Policy | Comments (0)

Bitcoin loses 21 percent of its value in broad cryptocurrency rout

March 12th, 2020
Bitcoin loses 21 percent of its value in broad cryptocurrency rout

Enlarge (credit: Thomas Trutschel / Getty Images News)

The cryptocurrency world has experienced its biggest one-day plunge in months. Bitcoin, the most popular cryptocurrency, is down 21 percent over the last 24 hours. Earlier today, Bitcoin fell below $6,000 for the first time since May 2019.

Ether, the currency of the Ethereum network, is down a whopping 27 percent. Lesser-known cryptocurrencies have seen similarly large losses.

There's no obvious cryptocurrency-specific reason for the crash. Instead, it seems to be part of the broader coronavirus-related selloff that has rocked stock markets around the world.

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Posted in 2020 recession, bitcoin, coronavirus, ethereum, Federal Reserve, Policy | Comments (0)

A weed dealer’s $59M lesson: Don’t hide Bitcoin keys with a fishing rod

February 21st, 2020
If only it were this easy to catch lost Bitcoin credentials.

Enlarge / If only it were this easy to catch lost Bitcoin credentials. (credit: Cravetiger / Getty Images)

In a world where various mass breachers dictate the use of strong, randomized passwords more than ever, reliable and secure credentials management is paramount in 2020. One Irish drug dealer has evidently learned this lesson the hard way.

This week, the Irish Times reported the sad tale of Clifton Collins, a 49-year-old cannabis grower from Dublin. Collins quietly grew and sold his product for 12 years, and he amassed a small fortune by using some of that revenue to buy bitcoins around 2011 and 2012 before the price of the cryptocurrency soared. But in 2017, state authorities on a routine overnight patrol spotted and then arrested Collins with an estimated $2,171 of cannabis in his car. The man quickly earned himself a five-year jail sentence.

According to the Times: as part of authorities' investigation, Ireland's Criminal Assets Bureau discovered and confiscated 12 Bitcoin wallets belonging to Collins totaling nearly $59 million (reportedly the biggest financial case in CAB's 25-year-history). There was only one problem—CAB couldn't access the accounts because Collins had lost the keys.

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Posted in bitcoin, Biz & IT, Policy | Comments (0)

This alleged Bitcoin scam looked a lot like a pyramid scheme

December 15th, 2019
This alleged Bitcoin scam looked a lot like a pyramid scheme

Enlarge (credit: Chesnot / Getty Images)

The world of cryptocurrency has no shortage of imaginary investment products. Fake coins. Fake blockchain services. Fake cryptocurrency exchanges. Now five men behind a company called BitClub Network are accused of a $722 million scam that allegedly preyed on victims who thought they were investing in a pool of bitcoin mining equipment.

Federal prosecutors call the case a “high-tech” plot in the “complex world of cryptocurrency.” But it has all the hallmarks of a classic pyramid scheme, albeit with a crypto-centric conceit. Investors were invited to send BitClub Network cash, which would allow the company to buy mining equipment—machines that produce bitcoin through a process called hashing. When those machines were turned on, all would (in theory) enjoy the spoils. The company also allegedly gave rewards to existing investors in exchange for recruiting others to join. According to the complaint, the scheme began in April 2014 and continued until earlier this month.

Matthew Brent Goettsche, Jobadiah Sinclair Weeks, and Silviu Catalin Balaci are accused of conspiracy to commit wire fraud and conspiracy to offer and sell unregistered securities. A fourth defendant, Joseph Frank Abel, faces only the latter charge. Another unnamed defendant remains at large. Balaci’s name was redacted from one public version of the indictment, but appeared on another.

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Posted in bitcoin, Policy, ponzi | Comments (0)

Feds bust massive child porn sharing site—hundreds of users arrested

October 17th, 2019
Feds bust massive child porn sharing site—hundreds of users arrested

Enlarge (credit: Andrew Brookes / Getty)

Authorities have shut down a massive underground child pornography network, arresting 337 alleged users in the process, the Department of Justice announced on Wednesday. The mastermind, a South Korean man named Jong Wo Son, ran the Tor hidden service from a server in his bedroom, according to authorities.

The feds say the site hosted 200,000 video files. Users who uploaded videos to the site were rewarded with free access to videos uploaded by others. Users could also purchase access to the videos using bitcoin.

A notice on the upload page stated "do not upload adult porn." A search page listed popular search terms on the site including "PTHC" ("preteen hardcore") and "%4yo."

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Posted in bitcoin, child porn, Policy, South Korea | Comments (0)

Visa, Mastercard, Stripe, and eBay all quit Facebook’s Libra in one day

October 12th, 2019
Visa, Mastercard, Stripe, and eBay all quit Facebook’s Libra in one day

Enlarge (credit: Getty / Aurich Lawson)

Facebook's embattled Libra project suffered a major blow on Friday as four payment processors—Stripe, Visa, Mastercard, and Mercado Pago—withdrew from participation in the Libra Association, the Geneva-based group Facebook created to develop the virtual currency. eBay also announced its resignation Friday. eBay's former subsidiary, PayPal, quit the group last week.

The timing is not a coincidence. The Libra Association is scheduled to hold its first official meeting on Monday. At that meeting, members will be asked to make binding commitments to the project. So for members who weren't prepared to commit to the project, Friday was a good day to get out.

But this is an awkward development for Facebook. When the company introduced Libra earlier this year, it said it hoped to grow Libra's membership from 27 companies to more than 100 by the time the Libra network launched in 2020. Instead, the association's membership has fallen to 22 companies.

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Posted in bitcoin, Blockchain, cryptocurrency, Facebook, Libra, Policy | Comments (0)

Someone moved $1 billion in a single bitcoin transaction

September 10th, 2019
Holders of large amounts of bitcoin are known as "whales."

Enlarge / Holders of large amounts of bitcoin are known as "whales." (credit: Jenny Evans/Getty Images)

Late on Thursday night, US Eastern time, someone made one of the biggest transactions in bitcoin history: 94,504 bitcoins. At the then-current bitcoin price of around $10,600, this transaction was worth almost exactly $1 billion. It's now worth around $967 million.

Bitcoin's shared transaction ledger is open but addresses are anonymous by default. As a result, we know that the transaction occurred, but we don't know who made it or why. One analysis indicated that at least a third of the money comes from Huobi Global, a cryptocurrency exchange based in Singapore. So the transaction could reflect big withdrawals from a Huobi customer—or it could mean that Huobi itself was consolidating some of its deposits.

This isn't the largest transaction in bitcoin terms. In 2013, for example, someone moved 194,993 bitcoins in a single transaction. But bitcoins were much less valuable back then, so the transaction was only valued at around $150 million.

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Posted in billion, bitcoin, Blockchain, Policy | Comments (0)

Judge savages self-proclaimed bitcoin inventor Craig Wright

August 28th, 2019
Craig Wright, right, arrives at federal court in West Palm Beach, Florida, on June 28, 2019.

Enlarge / Craig Wright, right, arrives at federal court in West Palm Beach, Florida, on June 28, 2019. (credit: Saul Martinez/Bloomberg via Getty Images)

Australian Internet personality Craig Wright claims he is bitcoin inventor Satoshi Nakamoto. A lot of people don't believe him. But one person who does believe him is Ira Kleiman, the brother of deceased technologist Dave Kleiman. According to possibly forged emails published by Gizmodo in 2015, Wright and Kleiman worked together to develop and launch bitcoin in 2008 and 2009.

Those documents suggested that Wright and Kleiman collaborated to mine hundreds of thousands of bitcoins in 2009 and 2010. That would make Ira Kleiman the heir to a multibillion-dollar fortune. So last year, Kleiman sued Wright, seeking his share of the Nakamoto bitcoins.

Kleiman and Wright have been battling in a Florida courtroom ever since. In a Tuesday ruling, federal Magistrate Judge Bruce Reinhart savaged Wright for repeatedly misleading the court and generally wasting everyone's time.

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Posted in bitcoin, craig wright, cryptocurrency, dave kleiman, fraud, Ira Kleiman, Policy, Satoshi Nakamoto | Comments (0)

I tried to pay with bitcoin at a Mexico City bar—it didn’t go well

August 7th, 2019
Me at Bitcoin Embassy Bar in Mexico City.

Enlarge / Me at Bitcoin Embassy Bar in Mexico City. (credit: Amanda Rohn)

I traveled to Mexico City last week to have a relaxing vacation with my wife—not to find stories for Ars Technica. But our Airbnb apartment happened to be around the corner from a bar called Bitcoin Embassy. How could I not check it out?

The bar included a bitcoin ATM that lets users trade physical cash for bitcoins, and vice versa (there are more than 5,000 bitcoin ATMs like this around the world). Bitcoin Embassy offered a 10% discount if I paid for my tab in bitcoin.

So I inserted a 500 peso note—about $25—into the machine. I downloaded a bitcoin wallet app from Google's Play Store. It generated an address for receiving the funds and displayed it as a QR code the ATM could scan. A few second later, the ATM spit out a receipt stating "Bitcoin purchased: 0.00245589."

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Posted in bar, bitcoin, blockchains, Policy | Comments (0)