Entries Tagged "bitcoin"
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I agree with Lorenzo Franceschi-Bicchierai, “Cryptocurrencies aren’t ‘crypto’“:
Lately on the internet, people in the world of Bitcoin and other digital currencies are starting to use the word “crypto” as a catch-all term for the lightly regulated and burgeoning world of digital currencies in general, or for the word “cryptocurrency” — which probably shouldn’t even be called “currency,” by the way.
To be clear, I’m not the only one who is mad about this. Bitcoin and other technologies indeed do use cryptography: all cryptocurrency transactions are secured by a “public key” known to all and a “private key” known only to one party — this is the basis for a swath of cryptographic approaches (known as public key, or asymmetric cryptography) like PGP. But cryptographers say that’s not really their defining trait.
“Most cryptocurrency barely has anything to do with serious cryptography,” Matthew Green, a renowned computer scientist who studies cryptography, told me via email. “Aside from the trivial use of digital signatures and hash functions, it’s a stupid name.”
It is a stupid name.
Matthew Green and students speculate on what truly well-designed ransomware system could look like:
Most modern ransomware employs a cryptocurrency like Bitcoin to enable the payments that make the ransom possible. This is perhaps not the strongest argument for systems like Bitcoin — and yet it seems unlikely that Bitcoin is going away anytime soon. If we can’t solve the problem of Bitcoin, maybe it’s possible to use Bitcoin to make “more reliable” ransomware.
Recall that in the final step of the ransom process, the ransomware operator must deliver a decryption key to the victim. This step is the most fraught for operators, since it requires them to manage keys and respond to queries on the Internet. Wouldn’t it be better for operators if they could eliminate this step altogether?
At least in theory it might be possible to develop a DAO that’s funded entirely by ransomware payments — and in turn mindlessly contracts real human beings to develop better ransomware, deploy it against human targets, and…rinse repeat. It’s unlikely that such a system would be stable in the long run humans are clever and good at destroying dumb things but it might get a good run.
One of the reasons society hasn’t destroyed itself is that people with intelligence and skills tend to not be criminals for a living. If it ever became a viable career path, we’re doomed.
Attackers held an Austrian hotel network for ransom, demanding $1,800 in bitcoin to unlock the network. Among other things, the locked network wouldn’t allow any of the guests to open their hotel room doors.
I expect IoT ransomware to become a major area of crime in the next few years. How long before we see this tactic used against cars? Against home thermostats? Within the year is my guess. And as long as the ransom price isn’t too onerous, people will pay.
EDITED TO ADD: There seems to be a lot of confusion about exactly what the ransomware did. Early reports said that hotel guests were locked inside their rooms, which is of course ridiculous. Now some reports are saying that no one was locked out of their rooms.
EDITED TO ADD (2/13): More information.
Here’s the story of how it was done. First, a fake ad on torrent listings linked the site to a Latvian bank account, an e-mail address, and a Facebook page.
Using basic website-tracking services, Der-Yeghiayan was able to uncover (via a reverse DNS search) the hosts of seven apparent KAT website domains: kickasstorrents.com, kat.cr, kickass.to, kat.ph, kastatic.com, thekat.tv and kickass.cr. This dug up two Chicago IP addresses, which were used as KAT name servers for more than four years. Agents were then able to legally gain a copy of the server’s access logs (explaining why it was federal authorities in Chicago that eventually charged Vaulin with his alleged crimes).
Using similar tools, Homeland Security investigators also performed something called a WHOIS lookup on a domain that redirected people to the main KAT site. A WHOIS search can provide the name, address, email and phone number of a website registrant. In the case of kickasstorrents.biz, that was Artem Vaulin from Kharkiv, Ukraine.
Der-Yeghiayan was able to link the email address found in the WHOIS lookup to an Apple email address that Vaulin purportedly used to operate KAT. It’s this Apple account that appears to tie all of pieces of Vaulin’s alleged involvement together.
On July 31st 2015, records provided by Apple show that the me.com account was used to purchase something on iTunes. The logs show that the same IP address was used on the same day to access the KAT Facebook page. After KAT began accepting Bitcoin donations in 2012, $72,767 was moved into a Coinbase account in Vaulin’s name. That Bitcoin wallet was registered with the same me.com email address.
This is really clever:
Enigma’s technique — what cryptographers call “secure multiparty computation” — works by mimicking a few of the features of bitcoin’s decentralized network architecture: It encrypts data by splitting it up into pieces and randomly distributing indecipherable chunks of it to hundreds of computers in the Enigma network known as “nodes.” Each node performs calculations on its discrete chunk of information before the user recombines the results to derive an unencrypted answer. Thanks to some mathematical tricks the Enigma creators implemented, the nodes are able to collectively perform every kind of computation that computers normally do, but without accessing any other portion of the data except the tiny chunk they were assigned.
To keep track of who owns what data — and where any given data’s pieces have been distributed — Enigma stores that metadata in the bitcoin blockchain, the unforgeable record of messages copied to thousands of computers to prevent counterfeit and fraud in the bitcoin economy.
It’s not homomorphic encryption. But it is really clever. Paper here.
Interesting paper: “There’s No Free Lunch, Even Using Bitcoin: Tracking the Popularity and Profits of Virtual Currency Scams,” by Marie Vasek and Tyler Moore.
Abstract: We present the first empirical analysis of Bitcoin-based scams: operations established with fraudulent intent. By amalgamating reports gathered by
voluntary vigilantes and tracked in online forums, we identify 192 scams and categorize them into four groups: Ponzi schemes, mining scams, scam wallets and fraudulent exchanges. In 21% of the cases, we also found the associated Bitcoin addresses, which enables us to track payments into and out of the scams. We find that at least $11 million has been contributed to the scams from 13 000 distinct victims. Furthermore, we present evidence that the most successful scams depend on large contributions from a very small number of victims. Finally, we discuss ways in which the scams could be countered.
Network-attached storage devices made by Synology are being attacked, and their data encrypted, by ransomware that demands $350 in bitcoins (payable anonymously via Tor) for the decryption key. As of this moment, there’s no patch.
Sidebar photo of Bruce Schneier by Joe MacInnis.