holy_calamity writes "Digital currency Bitcoin is gaining acceptance with mainstream venture capitalists, reports Technology Review, but at the price of its famed anonymity and ability to operate without central authority. Technology investors have now ploughed millions of dollars into a handful of Bitcoin-based payments and financial companies that are careful to follow financial regulations and don't offer anonymity. That's causing tensions in the community of Bitcoin enthusiasts, some of whom feel their currency's success has involved abandoning its most important features."
Catch up on stories from the past week (and beyond) at the Slashdot story archive
DavidGilbert99 writes "LulzSec's star burnt brightly in the short period it was active, but things quickly turned sour when its core members began getting arrested. Last week three of the six core members were sentenced in the UK, but this only served to highlight the fact that one member of the group, known as Avunit, has been able to remain unidentified despite the FBI having turned the group's leader Sabu into an informant. Who is Avunit? And does he hold the purse strings of the group's Bitcoin wallet which could have up to $180,000 in it?" As usual, be warned of the horrendous autoplaying video ads surrounding good content at the primary link.
hypnosec writes "The Electronic Frontier Foundation (EFF) has started accepting donations in the form of Bitcoins again after a two year hiatus, stating that the legal uncertainty hovering over the digital currency has all but disappeared. On their blog the EFF noted that a report from U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN), in addition to their own findings, 'have confirmed that, as a user of Bitcoin or any virtual currency, EFF itself is likely not subject to regulation.'"
An anonymous reader sends this excerpt from BetaBeat: "The Department of Homeland Security appears to have shut down the ability to use Dwolla, a mobile payment service, to withdraw and deposit money into Mt. Gox, a Bitcoin trading platform. ... A representative for Dwolla told Betabeat that the company is 'not party' to this matter and encourages those with questions to reach out to Mt. Gox or the DHS. 'The Department of Homeland Security and U.S. District Court for the District of Maryland issued a 'Seizure Warrant' for the funds associated with Mutum Sigillium's Dwolla account (a.k.a. Mt. Gox),' he said. 'In light of the court order, procured by the Department of Homeland Security, Dwolla has ceased all account activities associated with Dwolla services for Mutum Sigillum while Dwolla's holding partner transferred Mutum Sigillium's balance, per the warrant.'"
ASDFnz writes "It has been just over two months since the bitcoin block chain was rocked by a near disastrous fork causing the bitcoin price to crash. The culprit of the crash was found to be a bug that prevented pre version 7.1 bitcoin clients accepting large blocks that could be generated by version 8 clients. A temporary fix was put into place by Bitcoin Project lead developer Gavin Andresen that forced version 8 clients to generate blocks that version 7.1 could understand. It is important to note though, the fix was a temporary one! In just under two days on the 15th of May the fix will expire and version 8 clients will once again be able to make large blocks that older clients will not be able to understand."
An anonymous reader writes "The folks at Conformal have announced btcd, an alternative full-node implementation to bitcoind, written in Go! They have released the first of their core packages, btcwire, available for download at GitHub. As a bitcoin user myself, I love the idea of a full alternative. It will only make bitcoin stronger and more independent. This will be great for the Go community, too!"
After the E-Sports Entertainment Association admitted to sneaking Bitcoin-mining code into its client software, an anonymous reader writes "I thought that could have been a pretty clever idea, if it was made clear to the users that they could get the app and run it for free as long as, let's say, they accept that it would be run for Bitcoin mining for five hours a week, when their computer is idle. That could make a lot of profit for the developers if their app is truly successful, and without the users having to pay much (only a limited number of hours per week, and if the user is no longer running the app then it won't try to mine anymore). What do you think about this?"
hypnosec writes "The E-Sports Entertainment Association (ESEA) gaming league has admitted to embedding Bitcoin mining code inside the league's client software. It began as an April Fools' Day joke idea, but the code ended up mining as many as 29 Bitcoins, worth over $3,700, for ESEA in a span of two weeks. According to Eric Thunberg, one of the league's administrators, the mining code was included as early as April. Tests were run for a few days, after which they 'decided it wasn't worth the potential drama, and pulled the plug, or so we thought.' The code was discovered by users after they noticed that their GPUs were working away with unusually high loads over the past two weeks. After users started posting on the ESEA forums about discovery of the Bitcoin mining code, Thunberg acknowledged the existence of a problem – a mistake caused a server restart to enable it for all idle users." ESEA posted an apology and offered a free month of their Premium service to all players affected by the mining. They've also provided data dumps of the Bitcoin addresses involved and donated double the USD monetary value of the mined coins to the American Cancer Society.
massivepanic writes with an article that "runs through the logistics of mining a Bitcoin on everyday gaming computers while keeping an eye on power consumption, time spent, and return on investment. From the article: 'I have mined a Bitcoin. This was not much of an accomplishment a year or two ago, but in 2013, after the infamous early-April peak at $260, unearthing a Bitcoin is no easy task. Competition is on the rise and we are getting close to the end of the good ol' days of Bitcoin; the time when a desktop computer or two have any real mining capabilities.'"
First time accepted submitter semilemon writes "The Canada Revenue Agency has started paying attention to BitCoin transactions, as it says users will have to pay tax on all transactions using the currency. From the article, "The CRA told the CBC there are two separate tax rules that apply to the electronic currency, depending on whether they are used as money to buy things or if they were merely bought and sold for speculative purposes. "Barter transaction rules apply where BitCoins are used to purchase goods or services," Canada Revenue Agency spokesman Philippe Brideau said in an email. In this situation, that means whatever you've received in exchange for your $1 worth of vegetables must be documented as a taxable gain of at least $1 somewhere. When it comes to trading BitCoins for profit, the tax man says there are tax implications there, too. "When BitCoins are bought or sold like a commodity, any resulting gains or losses could be income or capital for the taxpayer depending on the specific facts," ruled the CRA."
Sparrowvsrevolution writes "Bitcoin's recent spike and then collapse in value has convinced many that it's too unstable to use as a practical currency. But not the founder of Silk Road, the black market drug site that exclusively accepts Bitcoin in exchange for heroin, cocaine and practically every other drug imaginable. Silk Road's creator, who calls himself the Dread Pirate Roberts, broke his usual media silence to issue a short statement that Silk Road will survive Bitcoin's bubble and bust. The market's prices are generally pegged to the dollar, with prices in Bitcoin fluctuating to account for movements in the exchange rate. And Roberts explained that vendors on the site have the option to also hedge the Bitcoins that buyers place in escrow for their products, so that they can't lose money due to Bitcoin's volatility while the drugs are in the mail. As a result, only about 1,000 of the site's more than 11,000 product listings were taken down during the recent crash."
PerformanceDude writes "Bitfloor (a New York-based online exchange for Bitcoin) yesterday made the following announcement on their website: I am sorry to announce that due to circumstances outside of our control BitFloor must cease all trading operations indefinitely. Unfortunately, our US bank account is scheduled to be closed and we can no longer provide the same level of USD deposits and withdrawals as we have in the past. As such, I have made the decision to halt operations and return all funds. Over the next days we will be working with all clients to ensure that everyone receives their funds. Please be patient as we process your request. Roman — bitfloor.com" According to the company's Twitter account, money should be returned to users' bank accounts shortly.
MouseTheLuckyDog writes "A brief editorial by Steve Forbes, one of our moneymeisters, on why bitcoins are not money.. Hint: For those who are too lazy to read the opinion,. Bitcoins are too volatile to be money." From the article: "Money is most optimal when it is fixed in value just as commerce is facilitated when we have fixed weights and measures. When you buy a pound of hamburger you expect to get 16 ounces of meat. An hour has 60 minutes. A mile has 5280 feet. These measurements don’t 'float.' So too money best lubricates commerce when it has a fixed value."
First time accepted submitter HeadOffice writes "Mark Gimein points out that Bitcoing mining uses a lot of power, enough that it is a real world problem: 'About 982 megawatt hours a day, to be exact. That’s enough to power roughly 31,000 US homes, or about half a Large Hadron Collider. If the dreams of Bitcoin proponents are realized, and the currency is adopted for widespread commerce, the power demands of bitcoin mines would rise dramatically. If that makes you think of the vast efforts devoted to the mining of precious metals in the centuries of gold- and silver-based economies, it should. One of the strangest aspects of the Bitcoin frenzy is that the Bitcoin economy replicates some of the most archaic features of the gold standard. Real-world mining of precious metals for currency was a resource-hungry and value-destroying process. Bitcoin mining is too.' However, not everyone is convinced that virtual mining is as bad for the environment as the real thing."
hypnosec writes "The open-source Radeon Gallium3D OpenCL stack has been modified to support Bitcoin mining through the use of mining application 'bfgminer.' To mine Bitcoins using the open source GPU driver, one must use Tom Stellard's non-stock branches of Mesa, LLVM and libclc OpenCL library. Further, bfgminer must be patched as well. Once the patches are applied and modified code of the stack is used, users will be able to mine Bitcoins using the Radeon HD 5000 and Radeon HD 6000 graphics cards; however the cards have to be pre-HD6900 Cayman in case of the HD 6000 series."
hydrofix writes "The Bitcoin-to-USD exchange rate had been climbing steadily since January 2013, from around 30 USD to over 250 USD only 24 hours ago. Now, the value bubble seems to have burst, at least partially. The primary trading site MtGox reported a drop in value all the way down to 140 USD today, a loss of almost half in real value. With many sites unreachable or slow, there are also news of a possible DDoS attack on MtGox: 'Attackers wait until the price of Bitcoins reaches a certain value, sell, destabilize the exchange, wait for everybody to panic-sell their Bitcoins, wait for the price to drop to a certain amount, then stop the attack and start buying as much as they can. Repeat this two or three times like we saw over the past few days and they profit.'"
An anonymous reader writes "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 both spread on Skype and mined Bitcoins before, putting the two together could be an effective new strategy."
Bruce66423 writes "The BBC reports that Mt.Gox, the main exchange dealing with Bitcoins, has been attacked, and other resources are off line. A scary reminder of how insecure ALL money is in the computer age..." Also at TechWeekEurope. A message at bitcoin storage service Instawallet's site begins "The Instawallet service is suspended indefinitely until we are able to develop an alternative architecture. Our database was fraudulently accessed, due to the very nature of Instawallet it is impossible to reopen the service as-is."
littlekorea writes "Mining companies are developing new systems for automating blasting of iron ore using the same open source physics engines adapted for games such as Grand Theft Auto IV and Red Dead Redemption. The same engine that determines 3D collision detection and soft body/rigid body dynamics in gaming will be applied to building 3D blast movement models — which will predict where blasted materials will land and distinguish between ore and waste. Predictive blast fragmentation models used in the past have typically been either numerical or empirical, [mining engineer Alan Cocker] said. Numerical models such as discrete element method, he noted, are onerous to configure and demanding of resources — both computing and human — and are generally not appropriate for operational use at mines. 'The problem with empirical models, by contrast, is that they tend to operate at a scale too coarse to give results useful for optimizations,' he added, noting typical Kuz-Ram-based fragmentation models (PDF) (widely used to estimate fragmentation from blasting) assume homogeneous geology (the same type of materials) throughout a blast."
Nerval's Lobster writes "Federal regulators are starting to make noise about Bitcoin, the digital currency that's gained in recognition and value over the past few years: the Treasury Department's Financial Crimes Enforcement Network (FinCEN) is offering up 'guidance' for digital currency and those who use it as part of commerce. But the Bitcoin Foundation, which is devoted to standardizing and promoting the currency, doesn't like that idea; as Patric Murck, the organization's general counsel, wrote in a March 19 blog posting: 'If FinCEN would like to expand its statutory authority over "money transmitters" to include brand new categories such as "administrators" and "exchangers" of digital currency it must do so through proper rulemaking proceedings and not by fiat.' If Bitcoin continues to gain in value, it could spark a rise in virtual currencies—and force some very interesting discussions over regulation. But here's the question: would regulation actually be good for Bitcoin, if it made organizations and businesses more comfortable with using it as a currency?"