Bitcoin API Developer Gem Raises $2m in Seed Funding

Bitcoin API developer Gem has announced the completion of a $2m seed funding round led by First Round Capital and Tekton Ventures.

The firm’s first major investment round was also supported by RRW Ventures, Mesa+, Amplify.LA, Idealab, Baroda Ventures, Crypto Currency Partners, QED associates, Bitcoin Shop Inc and angel investor James Joaquin.

The Californian startup says the money will help accelerate growth of its new API, which was announced earlier this month at TechCrunch Disrupt San Francisco.

With the investment news, Gem also announced the appointment of former PayPal executive Ken Miller as its new chief operating officer.

Poised as a ‘game changer’

Howard Morgan, partner at First Round Capital, said the company feels that Gem is positioned to become a leader as bitcoin disrupts the banking and payments industries.

“Gem’s approach to the bitcoin world, building a previously non-existent security platform for developers and others to integrate into any solution, was game-changing to us for the industry,” said Morgan.

RRE Ventures co-founder Jim Robinson described Gem’s API as the sort of disruptive innovation that has been lacking in the payments industry for a long time.

“This is a team with strong security chops building key bitcoin infrastructure,” he said.

Gem CEO Micah Winkelspecht explained that there is more to the deal than mere funding:

 “Each investor has contributed not just their capital and vast network access, but also deep strategic advice. With this funding, our team is well-positioned to continue building the world’s most highly scalable and security-focused API, and continue to add key talent to the team.”

Winkelspecht said there are currently over 16,500 bitcoin apps in development on GitHub and the company’s goal is to help developers focus on their overall product rather than the underlying bitcoin protocol, cryptography and security.

Built for speed

Taking these aspects of bitcoin app development out of the equation sghould streamline the process, speeding up development and cutting costs.

Winkelspecht said the company is excited to receive this early stage funding, as it will help the firm become the all-in-one platform for bitcoin app development. He added that Gem enjoys “tremendous backing” from bitcoin developers.

“The potential for an all-in-one bitcoin development platform and the rise of new and exciting bitcoin apps opens the door to new, innovative ways of managing not only bitcoin funds securely, but eventually any digital asset, and that was a technical and financial services revolution I wanted to help drive,” said Ken Miller, the company’s newly appointed COO.

Miller stressed that the future of the bitcoin ecosystem depends on developers and said he believes Gem will be key to that process:

“Gem’s platform will allow them to drive mainstream user adoption of Bitcoin with the next generation of great apps, using a highly secure solution from us that requires literally less than 10 lines of code. It’s going to change the game.”

Competition in API segment intensifies

Development on the bitcoin API front has intensified in recent months and three solutions are now vying for the title of bitcoin’s premier API.

Chain announced that it is developing a bitcoin API earlier this year. The startup said its goal was to eliminate the “heavy lifting” for bitcoin app developers by offering a comprehensive API that would reduce the amount of effort and resources needed for app development.

So far, the company has managed to raise $13.7m in funding and it is backed by investors such as Barry Silbert, Pantera Capital and Homebrew.

CEX.io joined the bitcoin API race this week, with the announcement of its free PlugChain API, which is currently in beta. The team told CoinDesk that the current version was developed in a matter of weeks.

Source : http://www.coindesk.com

Former MercadoLibre Director Joins Bitcoin Startup Moneero

 

Moneero has announced that Rodrigo Benzaquen, the former R&D director of Latin American e-commerce giant MercadoLibre, has officially joined its board of directors.

The announcement is the latest milestone for Uruguay-based bitcoin service provider Moneero, which exited stealth mode in July.

Speaking to CoinDesk, Moneero co-founder Steven Morell framed the announcement as a sign that his company is ready to move past its development stage to bring its wallet product, social apps and developer services to more consumers across Latin America and the world.

Morell told CoinDesk:

“We need somebody who has the experience from 14–15 years with MercadoLibre, starting in the garage and building up an online empire that made it to Wall Street. Having Rodrigo means a decade and a half of experience running a multinational operation.”

Launched in 1999, MercadoLibre – the ‘eBay of Latin America‘ – provides an e-commerce platform for consumers in 13 Latin American countries, and generates $7.3bn in annual merchandise sales. Notably, eBay itself is the firm’s largest investor, owning roughly one-fifth of the company’s total public stock.

In addition to his experience at MercadoLibre, Benzaquen most recently worked as an IT specialist at KaszeK Ventures, a major Buenos Aires-based capital fund that raised a $135m fund in February with support from Horsley Bridge Partners and Sequoia Heritage.

Early bitcoin adopter

Benzaquen also used the announcement to voice his support for both Moneero and the wider digital currency industry, describing himself as an “early adopter” of the technology and explaining that he first discovered bitcoin in 2011 during his tenure working for MercadoLibre in Silicon Valley.

The e-commerce veteran has been the most outspoken about his passion for bitcoin on his official blog, where he has reviewed bitcoin wallets and mining rigs, and even posted a presentation, cryptically titled “Bitcoin 101 for MELI“. The heading suggests that the slideshow may have even been shown to a wider audience at his former company, which uses the stock symbol ‘MELI’ on NASDAQ.

In statements, Benzaquen was equally vocal about his support for his new company, saying:

“Moneero is a very promising startup in the bitcoin field and I am sure this is going to be a great work with this exceptional team.”

Morell indicated that Benzaquen will work full time at Moneero following the announcement.

Moneero’s next steps

With its formal launch and the latest addition to its board behind it, Morell indicated that Moneero will move on to a new set of challenges, namely building its customer support, addressing legal matters, forming strategic partnerships and building market share

Morell explained:

“Over the last year and half, we’ve been focused on the pipes and screws on which all we can provide now is built. What will happen in the next months to come is that we go into operation.”

Moneero intends to focus its efforts on four core products, its social, bitcoin-sending apps; its proprietary bitcoin ATMs; its SMS bitcoin wallet; and its investor trading engine.

For more of Morell’s thoughts on how his startup may fare in the still nascent South American bitcoin market and the wider challenges he and his peers face, read our most recent report.

Source : http://www.coindesk.com

Louisiana GOP Becomes First State Republican Party to Accept Bitcoin

The Republican Party of Louisiana (LAGOP) is now accepting contributions in bitcoin via its official website, making it the first major state-level executive committee to turn to bitcoin payments for monetary support.

Only the Libertarian Party has made the same move – in Louisiana and Texas – following guidance from the US Federal Election Commission (FEC) determining that political campaigns and political action committees (PACs) can accept bitcoin as a form of in-kind donation under current federal election laws.

Speaking to CoinDesk, LAGOP executive director Jason Doré said other states may soon follow suit as their party leaders learn more about bitcoin.

Doré told CoinDesk:

“I think the rise of bitcoin’s popularity and use is forcing many public officials to learn about it. Still, many elected officials are not aware of it. If the bitcoin community embraces the use of bitcoin to support and oppose political campaigns, the role of bitcoin will only grow.”

Bitcoin campaign contributions are not the party’s first experience with the digital currency; it has also paid BitPolitic, the group that helped prepare LAGOP to launch bitcoin transactions on its website, in bitcoin.

BitPolitic provides consulting services to political candidates, campaigns and organizations that want to learn about bitcoin technology and incorporate it into the political system.

The LAGOP is using bitcoin payment processor BitPay to accept donations.

Fears over regulation

Doré said the move by the LAGOP was partly motivated by finding better ways to reach and engage its supporters, but that bitcoin also already embodies many conservative principles, such as embracing innovation and the free market, and opposing inflationary monetary policy.

Unfortunately, Democrats may be likely to target bitcoin for regulation, he said, calling for conservatives to “actively fight attempts to impose crippling regulations on the bitcoin community”.

“We know that the leadership of the Democrat Party has rarely met a regulation and a tax it doesn’t like. We see how Democrat-controlled cities have opposed innovative transportation companies like Uber and Lyft in favor of government monopolies.”

Doré juxtaposed left-leaning attitudes on government taxes and regulation against the inflow of libertarians and conservatives that have publicly embraced bitcoin.

Most of the bitcoin-embracing political candidates on this year’s midterm election ballot are running on the Libertarian ticket.

California Lieutenant Governor Gavin Newsom, Colorado Congressman Jared Polis and California Congressional candidate Christina Gagnier are among the few Democrats that accept the digital currency for campaign donations. Although Polis in particular has been an outspoken advocate of the digital currency.

A list of some of the major US political candidates that accept bitcoin can be found here.

The view on the New York BitLicense

In the interview, Doré also took aim at the BitLicense regulations proposed by the New York State Department of Financial Services (NYDFS), which he categorized as demonstrative of New York’s liberal bureaucracy.

Doré said:

“Those who seek to tax and regulate everything they can will certainly be looking to do the same to bitcoin […] These types of regulations are meant to strangle the growing bitcoin community while it is still in its infancy.”

Further, he insinuated that the LAGOP will seek to ensure that Louisiana does not take similar steps that could threaten bitcoin and its innovative potential.

Doré concluded: “In Louisiana, we will continue to take a different approach than our friends in New York by working to create an environment where innovators flourish.”

Source : http://www.coindesk.com

DigitalBTC Partners With Cryptsy for Mining Platform Launch

DigitalBTC and Cryptsy are building a new platform called digitalX Mintsy that will offer both tradable mining contracts and mining infrastructure, enabling users to mine with their own equipment as well as the hashing power they purchase.

As part of the deal, Cryptsy will invest $250,000 in the Australia-based bitcoin mining services provider. The project will open for registration tomorrow.

Mintsy will offer mining products and services on a range of digital currency hashing algorithms, including SHA-256 and crypt. Further, it will release its first products during the fourth quarter of this year.

Cryptsy CEO Paul Vernon told CoinDesk that the goal of the new platform is to offer the trading community a broad range of investment services. At the same time, Mintsy is aimed to provide more affordable access to hashing power, factoring the cost of electricity and labor expenses into the listing price.

Vernon explained:

“The price you pay is the price you pay – there’s no extra cost as you go. You don’t have to pay for extra power – you’ve already paid for the power. It’s not something you have to continuously calculate in your earnings to see how much you make. All of that’s upfront.”

Cryptsy and digitalBTC announced that, in order to help spur enrollment, Mintsy will hold a bitcoin raffle worth $5,000.

Interconnected platforms

Like other applications of this approach to selling mining contracts, Mintsy will make available 1 petahash worth of so-called ‘hashfracs’, each of which represent 100TH/s. There will also be ‘litefracs’ and ‘xfracs’ available, representing litecoin and an as-yet-undecided algorithm, respectively.

Mintsy will also feature mining pools for both bitcoin and a number of other altcoins, including a multi-pool function. This, Vernon explained, was to provide the site’s users with a wider array of mining resources and allow people to mine with their own equipment as well.

Vernon told CoinDesk that the goal is to align the coin offerings on the exchange and mining platforms, saying:

“There’ll be quite a few [coins available]. Basically, everything you see on Cryptsy that is mineable should probably be mineable on Mintsy as well.”

There will also be a degree of interconnectivity between Mintsy and Cryptsy. Similar to the relationship between CEX.io and GHash, users will be able to transfer balances between the two platforms.

Commodification of hash power continues

An increasing number of companies in the exchange and mining industries are offering tradable contracts as the model has emerged as an alternative to traditional cloud mining agreements.

This week, Bitfinex announced the launch of a beta tranche of tradable mining contracts. Cryptsy itself is no stranger to tradable hashes. Earlier this year, the exchange began offering an asset that allowed owners to earn daily dividends.

Despite the rising popularity of commodified hashing power, there are still major players in the space that offer more traditional mining contracts.

KnCMiner recently launched a cloud hashing initiative at its Norway-based data center. At the time, the company asserted that hosted solutions are becoming a more attractive option for miners, a sentiment that has been increasingly echoed by businesses that offer both tradable and traditional mining contracts.

Source : http://www.coindesk.com

Boston Fed: Bitcoin Could Be Reducing Online Shopping Costs

The Federal Reserve Bank of Boston has released a new report that suggests the technology underlying digital currency could reshape global payments.

Authors Stephanie Lo and J. Christina Wang note in their September policy perspective, Bitcoin as Money?, that while it’s not certain that bitcoin will supplant traditional currencies or payment systems, bitcoin’s “lasting legacy” will be the innovations it brings to payments technology.

In the full paper, the regional branch of the US Federal Reserve, examines whether digital currency as it exists today is a viable form of money, looking at it as a medium of exchange and a store of value. The paper echoes sentiments shared by many central banks worldwide – that bitcoin’s price volatility and lack of a central authority make it a risky form of money, though its underlying technology holds great promise.

Yet, the authors say that bitcoin could become a solution for online commerce, particularly as more e-tailers begin accepting digital currency. In the long term, bitcoin could be a viable candidate system to replace an existing financial infrastructure that the Boston Fed deems “fragmented” and “inefficient”.

The authors note:

“In principle, any of the functionality or services related to payment and transfer offered in the existing financial system should be, and likely will be, a candidate for reform if such reform can result in greater efficiency by using technology developed in the open-source distributed network framework that is at the foundation of bitcoin.”

Risky money

Overall, the report suggests that bitcoin can meet the primary functions of money, but not without potential risk to those who use and invest in it.

The paper examines one of bitcoin’s chief use cases – online commerce – and compared this utilization to how dollars are spent online. The data presented shows that bitcoin users, within the Fed’s sample of price changes across online retailers like Overstock and TigerDirect, experienced slight discounts when using bitcoin.

These indications, while tenuous, suggest that merchants are in fact being drawn to the idea that using digital currency is more attractive than accepting payment methods like credit cards.

As the authors state:

“Caveats notwithstanding, our finding that these retailers do not charge a premium and may in fact offer a discount, albeit slight, on purchases made with bitcoin suggests that retailers consider that payments made with bitcoin are on net at least as profitable as payments made with standard means. The most likely reason is that accepting bitcoin lowers merchants’ costs by reducing payment processing costs, chief among which are the credit card interchange fees, typically on the order of 2–4%.”

The report goes on to say that online bitcoin payments may serve as the technology’s primary use case, given its increasing acceptance by retailers.

This behavior, the authors suggest, may be attributed to the fact that payments processors in the bitcoin space assist merchants by insulating them against wide price fluctuations.

Mining process flawed

The Fed explored the role of bitcoin’s miners, assessing the network’s strengths compared to how the broader financial system establishes and settles transactions.

Overall, the report views the industry critically, suggesting that its pre-determined increase in mining difficulty and the trend toward consolidation constitutes a long-term risk.

Specifically, the paper notes, the competitive nature of bitcoin mining – wherein miners race to solve the complex cryptographic equations and discover new blocks – is self-defeating from the standpoint of a stable network. Noting its “social inefficiency”, the authors suggest that the rising cost of mining could one day outweigh the broader benefits of cheaper transactions.

The report highlights how the composition of the mining network itself is shifting from a cluster of small entities to fewer, more powerful operations. As mining power consolidates under a few centralized mining pools, the Boston Fed suggests, the risk of collusion between parties rises.

Consolidation or outright monopolization in the mining network may require greater oversight, the paper states. Yet even if the network maintains a level of distribution consistent with where it is today, the Boston Fed posits that regulation should be explored.

The paper stated:

“Regardless of the exact future structure of the mining operation, the inevitable increase in concentration suggests the need for enhanced oversight, either by the players themselves or by an independent third party, to guard against the likelihood of collusion or other non-competitive behavior.”

Such a process would not be easy. As a global industry, mining would require the oversight of supragovernmental organizations, as well as agreement among nations with significant mining industries, including China, Europe and the US. Regulating sources of hashing power that are more difficult to track would also complicate the matter.

Too early for remittances

The authors briefly touch on the subject of remittances, described by many as a potential catalyst for bitcoin use expansion worldwide. In the Boston Fed’s view, however, it’s still too early for digital currency in its current form to be a viable vehicle for cheap global payments.

At the same time, the report says, the prevalence of mobile devices in developing economies could make digital currency-based remittances more popular should information about how to use the technology become more widespread.

The report states:

“To the extent that a mobile application for international remittances using the Bitcoin network can be developed and accepted by a broad range of providers around the world, it can be possible for Bitcoin to capture a nontrivial share of this market.”

The global remittance marketplace is worth an estimated $500bn, and companies in the bitcoin space are already targeting this application. The Boston Fed says that the deciding factor will be the willingness of businesses that offer payments processing in developing countries to integrate bitcoin.

Bitcoin’s future

The Boston Fed says whether or not bitcoin succeeds depends on many factors, the evolution of digital currency technology itself notwithstanding. Any outcome rests in the hands of the broader currency-using public, who may or may not see bitcoin as worth using compared to existing methods.

The report’s authors also highlight the fact that information about bitcoin is still disseminating among consumers, business and regulators.

They write that questions exist that need to be answered before any conclusions can be drawn about bitcoin’s future, saying:

“For example, what are the fundamental needs satisfied by digital currencies such as bitcoin? How, if at all, should bitcoin intermediaries be regulated? What are the main drivers of bitcoin price movements?”

Source : http://www.coindesk.com

Bitcoin Threatening the 456 September-Low; Litecoin Stalls

Bitcoin remains bearish as we can see on the 4H chart.
– The 200-, 100-, and 50-period simple moving averages (SMAs) are sloping down, in bearish alignment, and price is below all of them.

– The RSI has held below 60, and show maintenance of the bearish momentum.

Today, bitcoin fell toward the September low of 456. It has been making lower highs and lower lows since the August 21st high of 534. If price breaks below 456, we have another new low, and the bearish trend would be intact. The next support would be the 442 low from August.

Bitcoin (BTCUSD) 4H Chart 9/17

On the daily chart, we can see that a break below 442 can open up the 340 low on the year. Note that the market is indeed bearish in 2014 based on the moving averages, price action, and RSI, except for the April-June rally, which was initially a bullish signal, but turned out to be an ABC correction.

Bitcoin (BTUCUSD) Daily Chart 9/17

 

Litecoin also turned bearish this week. The 4H chart shows the LTCUSD break below Septembers rising trendline, and below the cluster of 200-, 100-, and 50-period SMAs. The RSI was also dragged down to 30, showing nascent bearish momentum in September. The current support pivots are 4.85 and 4.60. A break break below these levels an revive a prevailing downtrend, and open up the 3.33 August-low.

Litecoin (LTCUSD) 9/17 4H Chart

The daily chart shows that the market is essentially edging toward the 2014-low at 2.21. It made a dramatic rally and almost an equally dramatic retreat at the end of 2013. In 2014, the market failed to push price back to those late 2013 highs, and litecoin dipped dramatically in June to 2.21. A tthis point, a break above 5.30 will be needed to at least neutralize the market in the 4H chart, especially if the 4H RSI also pushes above 60. Otherwise, the outlook is bearish toward 4.60, 3.33, and even 2.21.

Litecoin (LTCUSD) Daily Chart 9/17

 

 Source : http://www.livebitcoinnews.com

Capital Investment Groups Block Attempt at Bitcoin Adoption on Isle of ManinShare2

It was just a few months ago that the Isle of Man announced their plans to become a haven for Bitcoin and other cryptocurrencies. There is little doubt that the Island’s government hoped to establish them in the cryptocurrency sector in much the same way as countries with lax banking laws in the Caribbean had captured so much of the financial sector. This plan seems to have hit a major roadblock however after Capital Treasury Services, part of the Capital International Group’s financial empire, announced that as of next month they would no longer be doing business with digital currency businesses.

This is an especially interesting development considering that the government has been vocal about their support for digital currencies. The Isle of Man is a self-governing British dependency and in March of 2014 its Financial Supervision Commission (FSC) ruled the many of the island’s licensing laws did not apply to Bitcoin, which of course opened up a flood of interest from the Bitcoin community and speculation about new investment opportunities.

- Isle of Man

The Capital Treasury Group is part of Capital Group which is headquartered in Los Angeles, California. The company has more than 7,000 employees located in 23 offices and includes mutual funds such as American Funds and Capital International Funds. The company also acts as money manager for several governments. CTS has been offering banking for the Isle of Man digital currency organizations for some time now and also held funds for clients who were involved with Bitcoin.  But now CTS is claiming that it experienced negative influence from its banking partners with regard to Bitcoin, including HSBC and RBS. Such pressure from institutions forced CTS to ban services for all companies involved with digital currencies.

The statement released by CTS instructs account holders that their accounts will be closed no later than October 15, 2014. A company spokesman said:

“Although support from government is very strong, and we have been keen to get behind the government’s initiative, we are only able to do so with the wider support of the financial sector, which has, unfortunately, now been withdrawn.”

The local Bitcoin community is anything but pleased, although surprisingly understanding. Netagio, the only British exchange that allows users to trade Bitcoin, gold or GBP has a big stake in the Isle of Man Bitcoin community and CEO Simon Hamblin stated:

“We entirely understand that the decision is outside the control of CTS because of their active engagement with the Department of Economic Development of the Isle of Man Government and the wider Crypto-Currency community both locally and internationally. They rely on the support of the wider financial services sector, and this support has sadly been withdrawn. Britain is making claims about its commitment to innovation, not least in the area of FinTech, and yet, regrettably, the banking industry does not seem to share this commitment.  The sad impact is that this view – which some might argue to be anti-competitive – ultimately will drive innovation, talent and future economic benefit to other jurisdictions.”

The general attitude seems to be one of disappointment but with a slight c’est la vie flavor and some are already looking for alternatives providers in other jurisdictions. This might be a much harder task than they anticipate if the big European banks are arrayed against them. There does seem to be a great deal of support for the island however. Eric Benz of the UK Digital Currency Association said in a statement:

“No stone is being left unturned, and there is a great confidence that new banking solutions will be provided shortly. CTS still believes in digital currencies. CTS are just the victim of its banking partners, making it impossible to keep working the way they have been doing.”

This is the first time that a group of banks openly attacked Bitcoin but it is unlikely to be the last. There are a number of other locations where Bitcoin is being experimented with, such as Jersey Island, also a UK dependency, and Dominica in the Caribbean where an entire nation is being given free Bitcoin. Thus, as Bitcoin adoption moves forward, legacy financial groups may be finding themselves playing a game of Wack-a-mole as pockets of Bitcoin economic spaces emerge. And while capital investment groups may have won this battle, it remains to be seen just what kind of war we might expect in the future and just how disruptive of a technology Bitcoin really is. 

Source : http://cointelegraph.com

First State Republican Party Accepting Bitcoin

 

Bitcoin officially infiltrated one of the two major United States political parties this weekend when the Louisiana Republican Party (LAGOP) began accepting bitcoin donations. “The party hasn’t publicly launched our bitcoin donation page, but the link went live over the weekend,” LAGOP Executive Director Jason Dore told CCN. “We plan to do a public launch later this week.”

While the Libertarian Party was the first political party to accept bitcoin donations back in April 2013, the Louisiana Republican Party says they are the first major state political party to accept donations via the cryptocurrency. The Democratic Party has not moved to accept bitcoin, however, nearly 30 individual political candidates at all levels around the U.S. currently accept bitcoin donations.

“The Bitcoin market is growing as more and more people begin to use the currency, and companies of all stripes are now accepting bitcoins for payment,” said Dore. “In May of 2014, the Federal Election Commission released an opinion approving of political bitcoin donations. We want to make it easy for all people to get involved in the Republican Party of Louisiana.”

Dore added that the decision was made largely because “innovation and the free market are at the core of what the Republican Party stands for.” Individuals are limited to donating $100,000 at the state level, and $10,000 at the federal level.

The LAGOP worked closely with BitPolitic, who setup their donations page.

“They made the entire process painless and made sure to have the system comply with the all the respective campaign finance regulations,”

said Dore.

BitPolitic is a “fundraising consultancy and services team comprised of bitcoin specialists developing and exercising strategic solutions for political campaigns” who provide political campaigns access to bitcoin through a legally compliant bitcoin donation form.

In May, the Federal Election Commission gave the OK for political committees to begin accepting bitcoin donations,  also ruling that political committees can buy and sell bitcoin as an investment as long as all proceeds are converted into fiat prior to being spent. The commission deadlocked on whether political committees should be allowed to spend bitcoins on goods and services.

According to the decision, political committees “must sell the bitcoins and deposit them into a campaign depository within 10 days,” and  while they are allowed to purchase bitcoins, “they must also be sold and deposited in the campaign depository before they can be spent.  As such, Political organizations do not yet have the OK to pay salaries in Bitcoin, even though many other entities around the world are now trying this out.”

The three Democratic commission members expressed their desire to have bitcoin donations limited to $100 due to concerns over anonymity, but the final ruling did not restrict larger donations, and was only guidance as to what is considered legal.

While the advisory ruling was made to address the legality of bitcoin donations made to the Make Your Laws political action committee,  as CCN writer Caleb Chen noted, “It is easily arguable that any political organization regulated by the FEC can follow these guidelines to accept Bitcoin donations.”

Source : http://www.cryptocoinsnews.com

BREAKING: Massive Hack on Australian Computers, Demands Bitcoin

 

There has been a massive hack attack on more than 20,000 Australian computers according to SMH and Stay Smart Online. Reports say that thousands of Australian PCs have been frozen and locked by hackers using a software that encrypt all files on the computers. The malicious and damaging software then asks for a ransom in Bitcoin to unlock the computer.

Australian government agencies are closely monitoring and investigating the hacking of thousands different Australian computers. Multiple individuals have already paid the ransom to recover their files.

 The Ransomware

The malicious software, also know as the Ransomware, which has infected the Australian computers is called “Cryptolocker” that uses the payment wall “CryptoWall” to demand bitcoins as ransom. The infected computers received the ransomware by clicking on a link in an email supposedly from Australia Post. The files on the computers were then automatically encrypted making them inaccessible and useless to the owners. The “Cryptolocker” asks for a ransom to be paid in bitcoin within a limited timeframe. If the ransom is unpaid by the end of the timeframe, the ransomware threaten to encrypt the files permanently.

The software Cryptolocker was first observed in November last year and started to hit different Australian computers in June 2014.

Evgeniy Mikhailovich Bogachev // FBI

Russian Criminal Group Responsible

The FBI (US Federal Bureau of Investigation) claims that the Russian hacker Evgeniy Mikhailovich Bogachev (30) is leading a criminal group responsible for the ransomware. They estimate that the criminal group has made more than 100 million USD in ransom.

Hard to Stop

New variants of “Cryptolocker” have been discovered since the first ransomware requesting bitcoins as payment was released. Authorities have difficulties with stopping these ransomwares, including different Anti-Virus softwares which often are to no use in the case of “Cryptolocker”. Aaron Bailey, security manager at Australian firm Missing Link Security told SMH:

“We’ve spoken to at least a dozen or so organisations, many of which already have traditional signature-based [malware detection] technologies of various flavours and vendor solutions … that didn’t detect the virus … We believe that each iteration has been modified just enough to escape signature-based [malware] detection, even though the action of the virus is similar and the result is the same.”

The Ransom to be paid in Bitcoin

 

Some victims of the ransomware “Cryptolocker” have been charged with as much as 1 to 2 bitcoins, equivalent $500 to $1000. SMH reports that even a US police department had to pay the ransom to unlock their computer.

Help on the Way?

Two security companies have worked together on creating a service to combat the ransomware that threatens thousands of computers worldwide. They have made a service called Decrypt Cryptolocker that claims to be able to decrypt the files that have been encrypted by Cryptolocker. However, Aaron Bailey tells that the anti-Cryptolocker service doesn’t always work:

“We have seen this [website] work in some cases to be able to decrypt files and not for others,”

The Best Solution

The best solution to unlock your computer may not be to pay the ransom. One should always have backups of the files that are important, that is one of the greatest lesson to be learned from these events. Store your valuable files in the cloud or on different servers you control, and make sure you encrypt them yourself.

“It is important to note that for many victims, paying the ransom may lead to files being returned to normal. However, because you are dealing with criminals, you should be aware this is extortion and there are no guarantees you will regain access to your data.”

A whopping 41% ends up paying the ransom either way according to a survey released in March.

Read CERT Australia’s, the federal government’s computer emergency response team, own recommendation on how to secure yourself from ransomware like Cryptolocker here.

Source : http://www.cryptocoinsnews.com

Inside Bitcoins Day 1 In Review (By Serge)

It is Tuesday evening and the Inside Bitcoins conference has been concluded. It was very interesting & it was great  to meet up with our friends in the digital community. We also made a whole lot of new friends and contacts at this great conference. We will give a short comment about the sessions,most of which will get an additional article about the various subject at a later date. Nevertheless, we wanted to give you all some preview of what was said at day 1.

The first day started bright and early with  registration and networking with coffee in hand at 8 am. The first person we encountered was  Mr. Stewart Quealy, Director of Content at  MecklerMedia and the organiser of the Inside Bitcoins event.  We were very fortunate to meet him and have a nice little chat about Bitcoins and digital currency.

At 9 am. Mr.Quealy and Mr. Gavin Wood kicked off the event with “Crypto-law. what is it and why should i care? Gavin Wood did a sublime job about  sketching the strong points and the weak points of  Bitcoin and how laws could make Bitcoin a more stable an versatile platform. However he also thought that the current legal system is a difficult place to create a good law or laws about Bitcoin because of pressure groups, influence of big business that do not like Crypto ( mainly because these anti-crypto elites do not understand what Bitcoin and Crypto is).

After the fabulous presentation of Mr. Wood, Michael Geike took the front stage for the  “ Is blockchain technology the solution  to the world most urgent issues?” Mr. Geike, CEO of  Smart Equity AG, gave some interesting viewpoints about Bitcoin and the solutions the modus operandi could give to your current dilemmas.

During the coffee break we struck up some conversation with: Michael Morris, our longtime friend and director of the Blackcoin foundation (among other things, like Heliopay), the lovely ladies at CEX.IO and GHASH.IO, etc. to name a few.

After the coffee break it was Bob Swarup’s time to speak about his book: “Money Mania, a history lesson for Bitcoin”. It started reasonably well but the more Mr Swarup talked the less the audience was interested. We even heard some name calling in the back. Personally we find it a bit harsh because we respect the speaker’s views, even if it is completely wrong. The interest dropped when Mr. Swarup mixed up some of times (like telling us that Lydia, the first city state/region that first minted ‘coins’ in the world somewhere around  700 BC, and “the roman empire” are from the same period). There were also other slip-ups  which made it not such an interesting session for nearly everyone.

After Mr.Swarup it was the Lukas Gilkey’s turn to give his presentation about “Bitcoin in the cloud”. As you already guessed by the title of the session it focused on cloud mining. Mr Gilkey is the CEO of Cloudhashing and as such he gave us some interesting perspective on what is possible with cloud mining.

The next speaker  was the CEO of Coinometrics, Jonathan Levin. In his presentation, “ the Bitcoin economy visualised”, Mr. Levin talked about the state of Bitcoin economy. He focussed on the strong points and gave some hints on how the weak points need to be changed.

The last session of the morning was:” Europe and Beyond: emerging issues in regulatory compliance and Law enforcement efforts”.  This panel, consisting of 6 prominent people (lawyers and CEO’s alike) talked about the recent developments and tentative steps that some governments have taken to limit Bitcoin and other digital currencies.

After the lunch and networking opportunities, the afternoon sessions started with a panel about: “Bitcoin ecosystem investing. Do’s and don’t”. It was interesting to hear the panels’ views on the do’s and dont’s. Nevertheless investing is something personal. What person A thinks it is a “don’t” could be a “do” for person B.

The two following sessions were: “Decentralized technologies:lifeboats for society” and “Emerging markets versus developed markets”. Both were interesting to a certain point but again these were the views of the speakers. Though informative it were more opinions and own interpretations.

The fourth session of the afternoon was given by Peter Greenhill who is: Director of e-business and CEO of e-Gaming Development, Isle of Man government’s department of economic development. It was informative and quite gratifying that some regions are more open to the whole digital currency concept and Bitcoin than most countries.

The last  three sessions were about: “How to stop Bitcoin theft; Bitcoin and e-commerce pain points” and “ How to win in the Bitcoin ecosystem”. Suffice to say it was ok  but we found it not as interesting as it was a bit dryly presented, full with own opinions and generalizing. It may be different if they did it like Coinsummit last July concerning  the sessions.

So day one of the Inside Bitcoins conference was great, even with some less interesting sessions.  We did a lot of networking at Inside Bitcoins and at the CoinScrum after party.

Source : http://www.cryptoarticles.com