Fluffeh writes "Around a year ago, a person working for the ABC in Australia with the highest levels of access to systems got caught with his fingers on the CPU cycles. The staffer had installed Bitcoin mining software on the systems used by the Australian broadcaster. While the story made a bit of a splash at the time, it was finally announced today that the staffer hadn't been sacked, but was merely being disciplined by his manager and having his access to systems restricted. All the stories seem a little vague as to what he actually installed, however — on one side he installed the software on a public facing webserver, and the ABC itself admits, 'As this software was for a short time embedded within pages on the ABC website, visitors to these pages may have been exposed to the Bitcoin software,' and 'the Coalition (current Opposition Parties) was planning on quizzing the ABC further about the issue, including filing a request for the code that would have been downloaded to users' machines,' but on the other side there is no mention of the staffer trying to seed a Bitcoin mining botnet through the site, just that mining software had been installed."

dynamo52 sends this quote from Ars about a breach involving a Bitcoin exchange: "More than $87,000 worth of the virtual currency known as Bitcoin was stolen after online bandits penetrated servers belonging to Bitcoinica, prompting its operators to temporarily shutter the trading platform to contain the damage. Friday's theft came after hackers accessed Bitcoinica's production servers and depleted its online wallet of 18,547 BTC, as individual Bitcoin units are called, company officials said in a blog post published on Friday. It said the heist affected only a small fraction of Bitcoinica's overall bitcoin deposits and that all withdrawal requests will be honored once the platform reopens." Reader linhares points out a forum post discussing how the attacker(s) hinted at a 'mass leak' in the near future. This attack comes shortly after a leak of a different sort — an FBI document (PDF) about Bitcoin found it way onto the internet. It seems they're worried about the virtual currency's potential use in criminal activities.

CWmike writes "The internet is no stranger to crime, writes corporate investigator Brandon Gregg. From counterfeit and stolen products, to illegal drugs, stolen identities and weapons, nearly anything can be purchased online with a few clicks of the mouse. The online black market not only can be accessed by anyone with an Internet connection, but the whole process of ordering illicit goods and services is alarmingly easy and anonymous, with multiple marketplaces to buy or sell anything you want. Gregg started with $1000 and a took journey into the darker side of the Internet using two tools: Bitcoin and the Tor Bundle."

Sabbetus writes "Seattle based Bitcoin startup CoinLab secured a $500,000 investment from various investors such as Silicon Valley firm Draper Associates and angel investor Geoff Entress. CoinLab is an emerging umbrella group for cultivating and launching innovative Bitcoin projects. CEO Vessenes said 'if there is a currency that can trade around the world, it's semi-anonymous, it's instant, it's not controlled by government or bank, what's the total value of that currency? The answer to that is, if it works, it's gotta be in the billions. It just has to be for all the reasons you might want to send money around the world.' This type of talk is common from Bitcoin enthusiasts but apparently seasoned investors are starting to agree. Forbes explains the details of their business plan but in short it has to do with tapping the GPU mining potential of gamers, more specifically gamers of free-to-play games. This would add a new revenue stream for online game companies that are trying to provide free games profitably."

Fluffeh writes "Federal authorities have arrested eight men accused of distributing more than $1 million worth of LSD, ecstasy, and other narcotics with an online storefront called 'The Farmer's Market' that used the Tor anonymity service to mask their Internet addresses. Prosecutors said in a press release that the charges were the result of a two-year investigation led by agents of the Drug Enforcement Administration's Los Angeles field division. 'Operation Adam Bomb, ' as the investigation was dubbed, also involved law enforcement agents from several U.S. states and several countries, including Colombia, the Netherlands, and Scotland. The arrests come about a year after Gawker documented the existence of Silk Road, an online narcotics storefront that was available only to Tor users. The site sold LSD, Afghani hashish, tar heroin and other controlled substances and allowed customers to pay using the virtual currency known as Bitcoin."

Oldcynic writes "The Canadian mint has allowed 500 developers to enter a contest to create a new digital currency. The currency would allow micro payments using electronic devices. From the article: 'Less than a week after the government announced the penny’s impending death, the Mint quietly unveiled its digital currency called MintChip. Still in the research and development phase, MintChip will ultimately let people pay each other directly using smartphones, USB sticks, computers, tablets and clouds. The digital currency will be anonymous and good for small transactions — just like cash, the Mint says. To make sure its technology meets the gold standard in a world where digital transactions are gaining steam, the Mint is holding a contest for software developers to create applications using the MintChip.'" It looks like the Canadian Mint might have a bit of Sweden envy.

MrSeb writes "There's been a lot of noise about Sweden becoming a cashless economy, and the potential repercussions that it might cause, most notably the (apparent) annihilation of privacy. Really, though, I think this is a load of hot air. Physical money might be on the way out, but that doesn't mean the end of anonymous, untraceable cash — it'll just become digital. If Bitcoin has taught us anything, it's possible to create an irreversible, cryptographic currency — but so far it has failed because it doesn't have sovereign backing. What if the US or UK (or any other country for that matter) issued digital cash? We would suddenly have an anonymous currency that can be kept on credit chips (or smartphones) and traded, just like paper money. No longer would handling money require expensive cash registers, safes, and secure collections; your smartphone could be your point of sale. It won't be easy to get governments to pass digital cash into law, though, not with big banks and megacorps lobbying for centralized, electronic, traceable currency. Here's hoping Sweden makes the right choice when the referendum to retire physical money finally rolls around."

Sabbetus writes "Popular web hosting service Linode had a serious exploit earlier today. Apparently the super admin password for their server management panel was leaked and allowed a malicious attacker to target multiple Bitcoin-related servers. The biggest loss happened to a major Bitcoin mining pool that lost over 3000 BTC, which is currently worth almost 15 000 USD. Now the question is, will Linode compensate for lost bitcoins?" Update: The 3000 BTC theft was not even close to being the biggest, Bitcoin trading site Bitcoinica lost over 40,000 BTC.

itwbennett writes "In his keynote speech at Mobile World Congress in Barcelona, Google Chairman Eric Schmidt said the company once 'had various proposals to have [its] own currency [it was] going to call Google Bucks.' The idea was to implement a 'peer-to-peer money' system, but it was squelched by legal issues."

First time accepted submitter Sabbetus writes "On Monday the CEO of prominent Bitcoin exchange Tradehill announced that they are shutting down. Ars Technica ran a story on this stating that 'After Monday's news, the currency's value fell from $5.50 to $4.40, a decline of 20 percent.' Tradehill is returning all funds and meanwhile their competitors are fighting over who gets Tradehill's customers."

wasimkadak sends this quote from an article at Forbes: "Facebook's 27-year-old founder, Mark Zuckerberg, isn't usually mentioned in the same breath as Ben Bernanke, the 58-year-old head of the Federal Reserve. But Facebook's early adventures in the money-creating business are going well enough that the central-bank comparison gets tempting. ... Initially, the Credits-based economy was confined to the virtual world’s trifles. Credits could be spent to buy imaginary gold bars for aficionados of Mafia Wars, or bouquets of virtual flowers for birthday postings on friends’ Facebook accounts. This new form of digital money was cute but essentially useless for mainstream activities. Lately Credits have become more intriguing. Warner Brothers this summer offered movie-goers a chance to watch Harry Potter and The Dark Knight for 30 Credits apiece. Miramax and Paramount countered with film-viewing offers, too. In a provocative post this week on Inside Facebook, guest blogger Peter Vogel argues that Credits in the next few years will become more of a true currency. Facebook's 800 million worldwide users represent a lot of buying power. He figures Credits could evolve into commercial mainstays for digital movies and music."

smitty777 writes "Slashdot readers are no doubt informed of the infamous crash of Bitcoin. In fact, its demise was followed closely here. Wired has a recent article tracking Bitcoin's climb out of chaos. Valued at $17 before the crash, it had lost 90% of its value due to the hacking incident, down to a low of $2. It climbed back up to $3 in December, and is currently valued at $4. From the article: 'Bitcoin boosters have traditionally suggested that Bitcoin is an alternative to [the world's] currencies. But we'll suggest an alternative explanation: that Bitcoin is not so much an alternative currency as a "metacurrency" that allows low-cost and regulation-free transfer of wealth between nations. In other words, Bitcoin's major competitors aren't national currencies, but wire-transfer services like Western Union.' Still, Bitcoin has significant obstacles to overcome, such as covert mining, criminal uses, and other security issues." Amir Taaki of the Bitcoin Consultancy (who did an interview here a while back) disputes the reasoning and the conclusions in the Wired article.

An anonymous reader writes "Researchers at Microsoft Research and Cornell identified a potential flaw in Bitcoin's transaction propagation. In a recent paper they show how miner nodes in the Bitcoin network have an incentive not to relay transactions to the rest of the network, and propose to implement a scheme that rewards nodes [PDF] for relaying messages."

lee1 writes "Wikileaks has had to cease publishing classified files due to what the organization calls a 'blockade by US-based finance companies' that, according to Wikileaks founder Julian Assange has 'destroyed 95% of our revenue.' Assange also opined that 'A handful of US finance companies cannot be allowed to decide how the whole world votes with its pocket.' According to Assange the group was taking 'pre-litigation action' against the financial blockade in Iceland, Denmark, the UK, Brussels, the United States, and Australia. They have also filed an anti-trust complaint with the European Commission."

First time accepted submitter fyngyrz writes "Lousiana has passed a law that says people may no longer use cash for second hand transactions. The idea is to make all transactions traceable, thus foiling copper theft, etc. This move has profound implications that range from constitutional rights to Bitcoin, Craigslist and so forth; I wonder if there are any Slashdotters at all that support such a move." On the list of exceptions: people who deal in used goods or "junk" less frequently than once per month, and (drumroll, please) pawn shops. That means a pretty big chunk of the population who post in online classified ads in Louisiana are probably already in violation.

souravzzz writes with an update on the state of Bitcoin. Quoting the Ars Technica article: "Bitcoin, the world's first peer-to-peer digital currency, fell below $3 on Monday. That represents a 90 percent fall since the currency hit its peak in early June." That's still three times its value in April 2011.

bs0d3 writes "Last year, piratebay co-founder Peter Sunde gathered coders to begin a decentralized dns system. This is a direct result of the increasing control which the US government has over ICANN. The project is called P2P-DNS and according to the project's wiki, this is how the project is described: 'P2P-DNS is a community project that will free internet users from imperial control of DNS by ICANN. In order to prevent unjust prosecution or denial of service, P2P-DNS will operate as a distributed and less centralized service hosted by the users of DNS. Today the project continues, barely. A majority of interest shifted to namecoin once the idea was realized, but coder Caleb James DeLisle continues on the first project. So far he has DHT nodes and routers worked out, and awaits help on his IRC channel whenever volunteers are willing to join."

twoallbeefpatties writes "Prominent Keynesian economist Paul Krugman has left a note on his blog at NYTimes about his view of Bitcoin, discussing its similarity to the gold standard and suggesting a drop in 'real gross Bitcoin product' as its users hoard the currency rather than spend it."

An anonymous reader writes "Security researchers have unearthed a piece of malware that mints a digital currency known as Bitcoins by harnessing the immense power of an infected machine's graphical processing units. According to new research from antivirus provider Symantec, Trojan.Badminer uses GPUs to generate virtual coins through a practice known as minting. That's the term for solving difficult cryptographic proof-of-work problems and being rewarded with 50 Bitcoins for each per correct block."

An anonymous reader writes "Researchers from University College Dublin have conducted an analysis of anonymity on Bitcoin, and found it is not inherently anonymous, and that in many cases, users and their transactions can be identified. They use techniques such as context discovery and flow analysis to investigate and visualize an alleged theft of Bitcoins, which, at the time of the theft, had a market value of approximately half a million U.S. dollars."