Entries Tagged "bitcoin"

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Tracking Bitcoin Scams

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.

News article.

Posted on February 4, 2015 at 7:02 AMView Comments

The Problem with EULAs

Some apps are being distributed with secret Bitcoin-mining software embedded in them. Coins found are sent back to the app owners, of course.

And to make it legal, it’s part of the end-user license agreement (EULA):

COMPUTER CALCULATIONS, SECURITY: as part of downloading a Mutual Public, your computer may do mathematical calculations for our affiliated networks to confirm transactions and increase security. Any rewards or fees collected by WBT or our affiliates are the sole property of WBT and our affiliates.

This is a great example of why EULAs are bad. The stunt that resulted in 7,500 people giving Gamestation.co.uk their immortal souls a few years ago was funny, but hijacking users’ computers for profit is actually bad.

Posted on December 5, 2013 at 6:58 AMView Comments

Bitcoins in the Mainstream Media

Interesting article from the New Yorker.

I’m often asked what I think about bitcoins. I haven’t analyzed the security, but what I have seen looks good. The real issues are economic and political, and I don’t have the expertise to have an opinion on that.

By the way, here’s a recent criticism of bitcoins.

EDITED TO ADD (4/12): Four more good links.

EDITED TO ADD (4/16): Another good bitcoin story, although it’s from 2011.

Posted on April 9, 2013 at 6:05 AMView Comments

Analysis of How Bitcoin Is Actually Used

Quantitative Analysis of the Full Bitcoin Transaction Graph,” by Dorit Ron and Adi Shamir:

Abstract. The Bitcoin scheme is a rare example of a large scale global payment system in which all the transactions are publicly accessible (but in an anonymous way). We downloaded the full history of this scheme, and analyzed many statistical properties of its associated transaction graph. In this paper we answer for the rst time a variety of interesting questions about the typical behavior of account owners, how they acquire and how they spend their Bitcoins, the balance of Bitcoins they keep in their accounts, and how they move Bitcoins between their various accounts in order to better protect their privacy. In addition, we isolated all the large transactions in the system, and discovered that almost all of them are closely related to a single large transaction that took place in November 2010, even though the associated users apparently tried to hide this fact with many strange looking long chains and fork-merge structures in the transaction graph.

The paper has been submitted to the 2013 Financial Cryptography conference.

EDITED TO ADD (10/30): Some commentary.

Posted on October 18, 2012 at 6:11 AMView Comments

Sidebar photo of Bruce Schneier by Joe MacInnis.