Bitcoin !! i dont get it !!

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Post by Intrinsic »

Dill, i don't think bitcoin can be technically considered as fiat money since it isn't authorized/created by any government.
by definition a fiat means a decree from a government.

the use of bitcoin may be latter sanctioned by a government, but no government ever created it by fiat.

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Bitcoin !! i dont get it !!

Post by Intrinsic »

Bitcoin bloodbath as China shutters all trading sites
Cash will soon be the only way to pay for crypto-currency
By Phil Muncaster, 28 Mar 2014

China’s central bank has ruled that all banks and payment service providers in the country must cease dealing in Bitcoin.

The ruling, effective from April 15th, basically shutters all Bitcoin trading sites in the Middle Kingdom and means cash purchases will soon be the only way to buy into the virtual currency.

The People’s Bank of China (PBoC) has not officially announced the ruling, although Chinese business site Caixin claims to have seen an internal document stating that any banks failing to comply would be punished.
Said document apparently lists 15 trading sites which are set to be closed.
"The only one way out for Bitcoin websites is moving their servers abroad

Despite China's hardline stance, however, neighboring Hong Kong appears to be taking a more laissez faire approach.
In fact, it was the second location in the world to get its own Bitcoin ATM after an announcement from Canadian biz Robocoin in January
http://www.theregister.co.uk/2014/03/28 ... _pboc_ban/" onclick="window.open(this.href);return false;


FWIW at this writing one BTC = 506.8 US$.

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Bitcoin !! i dont get it !!

Post by country boy »

The irs has determined that bit coins are propert not currency:
http://www.reuters.com/article/2014/03/ ... LR20140325" onclick="window.open(this.href);return false;

(Reuters) - Wading into a murky tax question for the digital age, the U.S. Internal Revenue Service said on Tuesday that bitcoins and other virtual currencies are to be treated, for tax purposes, as property and not as currency.

"General tax principles that apply to property transactions apply to transactions using virtual currency," the IRS said in a statement, meaning that bitcoins would be taxed as ordinary income or as assets subject to capital gains taxes, depending on the circumstance.

Bitcoin, the best-known virtual currency, started circulating in 2009. Its present market value is around $8 billion, with up to 80,000 transactions occurring daily, according to accounting firm PricewaterhouseCoopers LLP.

Recent incidents have brought the currency under new regulatory scrutiny, such as the failure of Mt. Gox, a Tokyo-based exchange that filed for bankruptcy after losing an estimated $650 million worth of customer bitcoins.

Unlike conventional money, bitcoin is generated by computers and is independent of control or backing by any government or central bank, which its proponents like, but which also has led to calls for more guidance on U.S. tax treatment.

The IRS supplied that in its statement, which dealt a blow to bitcoin "miners," who unlock new bitcoins online. The IRS said miners must include the fair market value of the virtual currency as gross income on the date of receipt.

This change "is a disincentive to start looking for bitcoins," said John Barrie, a partner with law firm Bryan Cave LLP, who advises charities that receive bitcoins as donations.

NOT LEGAL TENDER

The IRS also said that virtual currency is not to be treated as legal-tender currency to determine if a transaction causes a foreign currency gain or loss under U.S. tax law.

For other forms of gains or losses involving virtual currency, the IRS explained how to determine the U.S. dollar value of virtual currency and said taxable gains or losses can be incurred in related property transactions.

"The character of gain or loss from the sale or exchange of virtual currency depends on whether the virtual currency is a capital asset in the hands of the taxpayer," the IRS said.

If a taxpayer holds virtual currency as capital - like stocks or bonds or other investment property - gains or losses are realized as capital gains or losses, the agency said.

However, when virtual currency is held as inventory or other property mainly for sale to customers in a trade or business, ordinary gains or losses are generally incurred, the IRS said.

Capital gains and losses are taxable and deductible at different rates and amounts than ordinary gains and losses.

Democratic Senator Tom Carper, who chaired a Senate committee hearing last year on bitcoin, said in a statement that the IRS guidance "provides clarity for taxpayers who want to ensure that they're doing the right thing and playing by the rules when utilizing bitcoin and other digital currencies."

MINERS HURT

New bitcoins come from a process called mining. Computer programmers around the world compete to crack an automatically generated code and the first to do so is rewarded with a small stash. This happens about every 10 minutes.

Some online retailers will accept bitcoins as payment. The maximum potential number of bitcoins in circulation is 21 million, compared with around 12 million currently.

On the IRS guidance, William Lewis, a lawyer in Sunnyvale, California, who represents a start-up company creating a platform for virtual currencies, said: "This is going to be unfavorable to bitcoin miners because they're going to have to include in income the fair market value of the virtual currency on the date they mined it.

"It's going to make life difficult for a lot of people who have been mining over the past year, who have to go back and see what the values were on those dates when they mined it."

(Additional reporting by Douwe Miedema; Editing by Steve Orlofsky)

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Bitcoin !! i dont get it !!

Post by Intrinsic »

Not specifically about bitcoin but a follow up on ransomware using bitcoins as payment.

Your files held hostage by CryptoDefense? Don't pay up! The decryption key is on your hard drive
By Iain Thomson, 3 Apr 2014

http://www.theregister.co.uk/2014/04/03 ... y_on_disk/" onclick="window.open(this.href);return false;
A basic rookie programming error has crippled an otherwise advanced piece of ransomware dubbed CryptoDefense – but the crap coders are still pulling in more than $30,000 a month from unwary punters.

Whoever coded this made the rookie mistake of storing the decryption key in plain view – that's right, the private key is stored unencrypted on the PC's hard disk. Even though the generated private keys are uploaded to the crooks' server, allowing the crims to send the keys to victims who pay up, a copy is left on the drive by the software. Symantec explained:
As advertised by the malware authors in the ransom demand, the files were encrypted with an RSA-2048 key generated on the victim’s computer. This was done using Microsoft’s own cryptographic infrastructure and Windows APIs to perform the key generation before sending it back in plain text to the attacker’s server. However, using this method means that the decryption key the attackers are holding for ransom, actually still remains on the infected computer after transmission to the attacker's server.

Infected users should check in the Application Data > Application Data > Microsoft > Crypto > RSA folder of their PCs for the private key.

"The malware author’s poor implementation of the cryptographic functionality has left their hostages with the key to their own escape," the security biz noted
**note the location is slightly different on win7 and win8 machines:
C:\Users\Username\AppData\Roaming\Microsoft\Crypto\RSA

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Post by Intrinsic »

Here is the interesting part, if yall missed, it is subtle:
All your private keys are stored in plaintext by Microsoft in a folder on your harddrive if you use their API's ?

ok i checked it out on one of my systems...
.. and i did find a key(long hexadecimal string) even tho i NEVER use any code that uses ms API's for encryption! I little snooping and i concluded the key i found is indeed encrypted.

Good Right? nope not at all:

The machine has to boot at startup. It has to read wherever you've put the key and get the PRIVATE key out of it (in order to be able to decrypt communications encrypted by the PUBLIC key that you give out to everyone and send to them as part of TLS etc.).

So then that machine, when powered on, without requiring passphrases, has enough information to boot, log in at the service account user (e.g. "httpd" or equivalent), read the keystore and get the PRIVATE key out of it.

Game over. It might be more tricky but still game over. Encryption is useless if you're storing the credentials on the same disk and you are booting from it without supplying external information (e.g. dongle, manual login, etc.). It's either storing the key in plain text or it's storing it somewhere where it can get to using no more information than is contained on its default storage devices.

And, thus, why most OS's don't try to "obfuscate" access to it, because that's just pretending to actually be secure. Fact is, if you have enough info to boot up and decrypt SSL encrypted with your private key, you have enough information that the key is effectively plain-text.

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Post by bentech »

encryption has always been useless IF they have physical access to the device,
because as youve gathered; in order to authenticate your key, it must have a copy to compare to

encryption is for security during transmission


but once you know this,
you get to be additionally pissed off whenever the fake news comes around to the next story about someone the law is threatening concerning encrypted data

if they have his computer, its a ruse
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Post by Intrinsic »

if they have his computer, its a ruse.
not if you have memorized your passphrases, private key ect, and don't have a hard record of it anywhere. as i was trying to say up there. Do not automate things for convenience as ms wants you to do. game over.

if MS api's did not store any of it any where except in volatile RAM. Then after one turns off the machine it is lost for ever, except for the user which has mesmerized it or stores it completely separate, say safe deposit box. But not on the drive platter with the associated public key! :facepalm: which is common advice and common sense. why ms does it .. well ms has never shown any real concern about users security. And i suspect MS has been in bed with the feds (NSA?) for a long time, notice how law suites against ms are always end up as a slap on wrist and business as usual, as if someone high up is protecting ms's monopoly.

** api = Application Program Interface... subroutines for programmers to use such as drawing windows, refresh, polling the keyboard, ect... so their code should still work when a newer version of windows comes out, sorta like BIOS on steroids.

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Post by bentech »

its ALWAYS has to be on the drive platters

that is IF it want to verify the person logging it has authorization


there is a copy on the drive platters
so if youve physical control of the drive

you dont need to break the encryption
you blunt force a serious shortcut

hell
even bluntforce is an extreme exageration
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Post by Intrinsic »

its ALWAYS has to be on the drive platters
What!? no. It could and should be done RAM. i don't follow you.
look at this way, one could have a ram drive. RAM drive are treated and behave the same as a hard drive to the OS
but is volatile storage and disappears (into the bit bucket as they say) when power is turned off.

unlike the new(ish) NAD solid state drives which are RAM too, but static ram, meaning the retain their state with or without power. dynamic memory needs power.
Hard drive are a static memory too, just not random acess memory,

so you type in private key from yer brain memory, it goes into right from the keyboard into ram even if only at first to a buffer
The public key is uploaded into ram. computation occurres, no permanent record kept.

I'm positive that ms's encryption subroutines work in ram too, that is why it bizarre they would then write the private key to the hard drive afterwards?? AND not tell ya!

that is IF it want to verify the person logging it has authorization.
No that is not how private/public keys work, just for that reason.

Wait unless ya mean a like a single pass word for say opening an encrypted hard drive or file; As opposed to private/public keys.
I was talking about generating and using private keys kind of encryption, the kind the ransomware is using.
They assumed, and rightfully so imo, the important private key wouldn't be save on the host machine IN PLAIN TEXT. who would of thunk.

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Post by bentech »

what im saying is that the server cant authenticate a password unless it has a copy of it
and its copy cant be kept in encrypted space on the disc

so if youve got physical access to the disc
you know that the password is located in a small percentage of allocated disc space
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