Topic:

Bitcoin Drama

Bitcoin Drama

Banking Partners Force Paxum to Drop Bitcoin Due to ‘Potential Risk’

(falkvinge.net)

Established banks and payments processors are skittish about the cryptocurrency Bitcoin, it would seem, prompting Canadian e-payments service Paxum to drop its Bitcoin clients last week.

Paxum, an e-commerce payments solution popular with adult web sites, started working with Bitcoin exchanges more than a year ago. Paxum hooked up with leading Bitcoin exchange Mt. Gox in December 2010, major Bitcoin exchange Tradehill in July 2011, and more recently with BitInstant, a service that speeds up Bitcoin transactions by fronting customers the credit, and others.

But on Friday afternoon, the operators of Paxum’s Bitcoin-related accounts received an email with the subject line “Bitcoin termination.” Paxum’s banking partners, which include MasterCard, had called off the Bitcoin party.

Paxum declined to name the partners that were responsible for the change. Read More

Bitcoin Drama

Price of Bitcoin Still Dropping, Falls Below the Price of Mining

(http://bitcoincharts.com)

The price of Bitcoin continues to drop by about a dollar every week to ten days, currently settling at about $2.80 USD, and Bitcoin enthusiasts are starting to get worried. “I am not trying to cause a panic here, but the value of Bitcoin has dropped very low today with huge spikes,” one user wrote on the Bitcoin forum on Reddit. “I do suspect it will hit 1 USD mark this week maybe even lower.We need to be discussing thoroughly on promoting Bitcoin and actively putting more effort to spread the message to newer users as I do suspect the popularity is dropping very steeply too.” Read More

Bitcoin Drama

The New Yorker’s Joshua Davis Attempts to Identify Bitcoin Creator Satoshi Nakamoto

satoshi

The New Yorker has a great story in its upcoming issue about Bitcoin, the cryptocurrency still trucking along after a glorious rise in value to $33 USD due to a spate of media-driven attention followed by a plunge to about $5 USD, where it stands now. The writer, Joshua Davis, attempted to find Bitcoin’s creator, the probably pseudonymous Satoshi Nakamoto, who after years of prolific postings on the internet wrote to Bitcoin project lead Gavin Andresen in April that he had “moved on to other things.”

“He’s a world-class programmer, with a deep understanding of the C++ programming language,” Dan Kaminsky, one of the country’s top internet security experts, said of Mr. (or Ms.) Nakamoto. “He understands economics, cryptography and peer-to-peer networking. Either there’s a team of people who worked on this, or this guy is a genius.”

Mr. Davis started following Mr. Nakamoto’s trail of online writing, and noticed that, after an initial post announcing Bitcoin that used American spelling, the programmer used the British spelling, referred to London newspapers and at one point using the phrase “bloody hard”–suggesting he had lived or studied in the U.K. or Ireland.

Mr. Davis headed to the close-knit cryptography conference Crypto 2011 to find more traces of Nakamoto. He found nine attendees who fit the bill. Two were dismissive of Bitcoin; two had no history with large software projects. Then Mr. Davis started looking into a man named Michael Clear. Read More

Bitcoin Drama

Search for Owners of MyBitcoin Loses Steam

bitcoin530

Energy has flagged in the hunt for the people behind MyBitcoin.com, the popular e-wallet service that disappeared with, according to them, 154,406 Bitcoins back in early August. After days of silence, a spokesman emerged for the site and a claims process was initiated to refund users 49 percent of their deposits, which in today’s prices shakes out to $861,755.

But that still leaves 78,747 BTC ($896,929 USD at today’s prices), which MyBitcoin’s spokesman says were taken by hackers, unaccounted for. Read More

Bitcoin Drama

MyBitcoin Spokesman Finally Comes Forward: “What Did You Think We Did After the Hack? We Got Shitfaced”

question mark face

The popular Bitcoin transaction processor that disappeared from the internet about 10 days ago, taking at least tens of thousands of Bitcoins in user deposits with it, has been communicating via statements posted to the site. In essence: We screwed up. We were hacked. We have enough BTC to refund some of the lost Bitcoins, and then we’re done. “It appears to be human error combined with a misunderstanding of how Bitcoin secures transactions into the next block,” the most recent statement says by way of explanation.

Some members of the Bitcoin community suspect foul play (more about that later). But as promised, there is now a claims form for users who lost Bitcoins in the debacle: “Claims are manually reviewed and will be processed within 48 hours of being filed. This claim form will remain online for 30 days.”

And as of Saturday night, the historically-reticent MyBitcoin has a voice: “Tom Williams,” who stepped forward to field questions from the Bitcoin community via the #bitcoin-police channel on IRC, where he verified his association with the site by moving Bitcoins from the MyBitoin IP to a pre-specified address and providing the same encrypted signature that was used to sign the official statements posted on MyBitcoin.

After passing muster with the tech-savvy denizens of #bitcoin-police, a loosely-organized group of Bitcoin enthusiasts who investigate various issues in the Bitcoin community, Mr. Williams got down to tacks. “Listen: what did you think we did after the hack happened? We got shitfaced for many days. What would you do? Fuck.” Read More