It's All About the Bitcoins

Virtual Heist Paralyzes BitFloor, the U.S.’s #1 USD Bitcoin Exchange

Mr. Shtylman (Photo: Twitter)

The problem with virtual currency is that it doesn’t take an Italian Job-style heist to make off with hundreds of thousands of dollars worth of Bitcoins. There’s no need for expert safe crackers, gun-wielding maniacs or limber laser dippers; despite the currency’s hardcore encryption, all you need is an Internet connection, a hacker and probably some Mountain Dew.

The relative ease and inexpensiveness of robbing a Bitcoin repository has most likely contributed to the rash of heists the virtual currency has endured since June 2011. Bitcoin has certainly seen its share of bad publicity. Over the last 15 months, more than 290,000 BTC have been stolen, according to CNET and Bitcoin talk forum.

A big heist on Monday night signaled the 10th since June, and was so damaging that it has shut down BTC exchange BitFloor, which–according to BitFloor founder Roman Shtylman–is the number one USD exchange in the U.S. (Mr. Shtylman says it also ranks number four worldwide.) The hacker successfully stole 24,000 BTC, which amounts to over $250,000 as of this writing. Read More

Bitcoin Drama

FBI: That Bitcoin Report Was Authentic, But It Wasn’t Leaked by Us

(Wikimedia Commons)

Last week, Betabeat received an email from an anonymous source claiming to have leaked an internal FBI report about the virtual currency Bitcoin. The report, published April 24, revealed the agency is worried the currency could become a payment method for cyber criminals in the near future, and could be used to fund “illicit groups.” (Wikileaks, anyone?) The FBI also determined the currency to be an “increasingly useful tool for various illegal activities beyond the cyber realm,” and could become attractive to money launderers.

The report, titled “Bitcoin Virtual Currency: Intelligence. Unique Features Present Distinct Challenges for Deterring Illicit Activity,” was the FBI’s first research report on Bitcoin. The report was not classified, but it was marked “for official use only.” BetabeatWired, and a number of blogs ran with the story without confirming the report’s authenticity, but today we got a call back from the FBI. “It is legitimate, but it was not leaked by the government,” an FBI representative told Betabeat. Read More

Bitcoin Mania

Online Advertising Gets Bitcoined


A serial Bitcoin entrepreneur, “Andrew Bitcoiner,” contacted Betabeat over the weekend to announce the debut of, an online advertising network where business is done in the decentralized e-currency Bitcoin. Sign up, name a price, name the number of clicks in the campaign, and write the text for your ad, and BitcoinAdvertisers will charge you in Bitcoins to display your ad on sites in its network. As a publisher, merely type in your Bitcoin address and grab the generated code to place an ad spot on your site. BitcoinAdvertisers charges advertisers a 1 percent fee. Read More

Bitcoin Mania

Musicians, Artists Invited to Put Digital Goods Up for Bitcoin on CoinDL


A new Bitcoin commerce site, CoinDL, makes it fast and easy to buy and sell virtual goods from music to avatars. Traders on Wall Street may be speculating with Bitcoin, but it’s efforts like CoinDL that truly bolster the budding digital economy. CoinDL offers a marketplace where you can buy digital goods with digital money: wallpapers, ringtones, avatars, music, videos–basically anything that can be downloaded. “Our downloads are fast, easy, and for Bitcoin only. Scan our QR codes for maximal geek arousal,” the site says.

CoinDL was created by David Sterry, who formerly operated the Bitcoin exchange ExchB. ExchB closed in October as it faced increasing resistance from banks.

“People need to have a way to have a positive experience with Bitcoin,” Mr. Sterry said. “CoinDL enables people to buy digital items for Bitcoin, but also letting them do it really quickly. If things are virtual it can be very easy.” Read More

Bitcoin Drama

Bitcoin Exchange TradeHill Suspends Trading


The Bitcoin economy may be in some real trouble. After the announcement last week that e-payments service Paxum would no longer support Bitcoin clients, at least one major Bitcoin exchange has shut down. Chile-based TradeHill had been using Paxum, a PayPal competitor, for a large percentage of money transfers. The loss of Paxum, coupled with recent problems banking with Citibank that caused TradeHill to fall behind on processing transactions and other troubles, left the founders feeling like they had no choice but to suspend trading and return client deposits. Read More

Fun With Bitcoins

Silk Road, Secret Website Where You Can Buy Drugs, Is Hiring

Drugs, or not drugs? (

No publicity is bad publicity: Silk Road, the illicit online marketplace that came to light after Gawker’s Adrian Chen announced you could buy any drug imaginable there with Bitcoins, has been booming after increased awareness due to a rash of alarmist press coverage.

Drugs! Anonymous currencies! Hackers! Our children! But gradually Silk Road, and to a lesser degree Bitcoin, faded from the stage, largely because most people couldn’t understand how to use them. Silk Road can only be accessed using the anonymous network Tor, and you should probably know a thing or two about encryption before you buy anything.  Read More

Law and Order

Eight Months After Sen. Chuck Schumer Blasted Bitcoin, Silk Road is Still Booming

Way back in June, before Sen. Chuck Schumer wanted to break the internet, he wanted to break Bitcoin. After an incendiary story about Silk Road on Gawker, the site NPR called “the of illegal drugs,” senators including Sen. Schumer were up in arms. But Silk Road lives on, according to reports from techies savvy enough to traverse Tor to get there. Read More

It's All About the Bitcoins

Bitcoin on TV! The Good Wife Riffs on Satoshi With ‘Mr. Bitcoin’

A scene from "Bitcoin for Dummies."

Bitcoin has made its way into the great canon of television drama. The e-currency made its television drama debut last night on CBS’s legal thriller The Good Wife. Jason Biggs guest starred as an information rights lawyer who gets in trouble when he refuses to reveal to the Treasury Dept. the name of a client who created an online currency called Bitcoin. Treasury wants the name of the mysterious Mr. Bitcoin, as anyone who mints a private currency in competition with the dollar is in violation of the federal law—and puts Mr. Biggs’s character on the hook for 18 months, then 10 to 30 years of inprisonment. Treasury thinks Bitcoin is being used for illegal activities. Jim Cramer testifies in court. Drama! Read More