Month: October 2015

Senate Passes CISA Bill

/ Bitcoin Babe / Leave a comment

http://ift.tt/eA8V8J

On October 27, the Senate passed the Cybersecurity Information Sharing Act (CISA), which passed on a 74-21 bipartisan vote. The bill will allow companies to share information about cybersecurity threats with the government. The CISA act will only allow info to be shared that is considered as cybersecurity threats, however, critics, mostly within the tech area, say that this bill could be used to extend the surveillance capabilities of three-letter government agencies.

The CISA act passed the House of Representatives and the White House backs the bill too, so there is a big chance for it to pass.

Before the CISA bill passed, senators tried to come up with amendments that would offer more privacy protections, however, all these attempts failed. Senators adopted a 10-year sunset clause for the bill though privacy advocates (like Senator Al Franken) hoped the bill would expire in six.

Although the fact that the bill was expected to pass, the CISA act can be considered as a huge setback for tech’s lobbying efforts on surveillance issues. The most recent bill that was passed on surveillance activities was the USA Freedom Act, which was pushed by large technology companies against the US Government to limit the surveillance activities.

The post Senate Passes CISA Bill appeared first on Deep Dot Web.

from Deep Dot Web http://ift.tt/1Q1P8fA

Interpol Identifies Malware Threat To Virtual Currencies

/ Bitcoin Babe / Leave a comment

http://ift.tt/eA8V8J

The Singapore department of Interpol in a cyber threat research have identified a threat to the blockchain in virtual transactions, which could result in their being embedded with malware or other illegal data, including child abuse images.

It depends on the type of the virtual currency and its protocols, however, there is a fixed space on the blockchain, which is the public ledger of the transactions, this is the place where the data can be stored, referenced or hosted within the encrypted records and transactions.

This open space was identified as the potential target for malware by tech experts, Interpol and another expert from the Kaspersky Lab, in the Research and Innovation unit at Interpol’s Global Complex for Innovation (IGCI).

At the current design of the blockchain, there is a possibility of being injected by malware and permanently hosted. Currently, there are no methods available to wipe the data. This could also affect cyber hygiene as well since child pornography images can be attached to the open space of the blockchain and this method could be used for distributing child porn images.

This threat could also create crime scenarios in the future, such as the deployment of modular malware, a reshaping of the distribution of zero-day attacks and could also affect the hosting of illegal underground marketplaces dealing in private keys, which would allow access to this data.

IGCI Executive Director Noboru Nakatani has made this statement:

“To conduct this type of research and identify new cyberthreats were among the key aims behind the creation of the INTERPOL Global Complex for Innovation. Having identified this threat, it is now important for INTERPOL to spread awareness amongst the public and law enforcement, as well as encourage support from communities working in this field to find solutions for the potential blockchain ‘abuse’. In addition to our own experts, the research was conducted with support from a specialist from Kaspersky Lab based at the IGCI which again underlines the value of sharing expertise between the public and private sectors.”

The research was unveiled at the Black Hat Asia 2015 event in Singapore, just weeks before the official inauguration of the IGCI.

The post Interpol Identifies Malware Threat To Virtual Currencies appeared first on Deep Dot Web.

from Deep Dot Web http://ift.tt/1iuiZ2w

It’s Much Too Soon to Regulate Bitcoin, Says Deloitte Exec

/ Bitcoin Babe / Leave a comment

http://ift.tt/1PVglSe

Jon Watts, director of enterprise services at Deloitte, has weighed in on Bitcoin regulatory issues with clear and cogent arguments. Watts’ thesis is that Bitcoin is at the crossroads, and the race to regulate it could be happening much too soon.

Deloitte is a professional services firm headquartered in New York. Considered one of the Big Four auditory firms along with PwC, Ernst & Young, and KPMG, Deloitte is the second-largest professional services network in the world by revenue and largest by the number of professionals. The company provides audit, tax, consulting, enterprise risk and financial advisory services with more than 200,000 professionals in more than 150 countries.

Watts, based in the New York office, is a core member of Deloitte’s Capital Markets Technology practice and a national leader of the U.S. Foreign Account Tax Compliance Act (FATCA) service offering. The reputation of Deloitte should ensure that Watts’ advice on Bitcoin regulation is taken into account by regulators and policymakers.

“The Bitcoin ‘blockchain’ is a fundamental breakthrough in computer science that solves what seemed to be an unsolvable problem: how to ensure that a digital transaction happens only once,” notes Watts. “Yet there is a critical question that is hanging over Bitcoin, potentially slowing the pace of innovation, and adoption, i.e., how will Bitcoin be regulated​?”

Watts argues that global policymakers and regulators should consider giving Bitcoin more time to develop before insisting on regulation. Other key technology innovation such as the telephone, airplanes, radio, mobile phones, and the Internet, were given much more time to develop before coming under serious regulatory supervision.

“In fact, serious efforts to regulate disruptive technologies have traditionally been a function of the technology achieving mass adoption,” says Watts. Overwhelming regulatory supervision of Bitcoin is happening much too soon, only six years into the development of Bitcoin and “a long way away from the time it has typically taken for new technologies to achieve mass adoption in the past.”

In fact, Bitcoin is still very far from mass adoption, and represents but a very small fraction of the global economy. Though Bitcoin is all over the press – albeit often with shallow and sensationalist coverage – and venture capital investments in the Bitcoin space are taking off, only a tiny minority of people own bitcoin and use it to pay for goods and services.

“The highest daily dollar volume for Bitcoin transactions globally in February 2015 was less than $57 million, which is less than 1 percent of the average daily transaction volume for credit card platforms as measured in 2012,”notes Watts. Therefore, Bitcoin adoption is not yet skyrocketing with such a disruptive speed to warrant panic regulatory interventions.

Another important argument is that we could be still very far from real products that can generate true demand for Bitcoin-related services from mainstream consumers.​ In fact, Bitcoin’s most valuable and important uses may have yet to be invented. Watts notes that Bitcoin is much more than just digital money – its real value is the ability of blockchain technology to establish trust between parties who don’t know each other.

That, Watts notes, may very well change how people live and interact. “Bitcoin is likely to follow a path where one innovation leads to another and ultimately, the very products, services, and capabilities that were once difficult or impossible to imagine, become necessities in our daily lives,” he said.

Watts worries that policymakers and regulators, in looking to protect the public from all of the bad outcomes we might anticipate today, could “end up stifling the myriad (as yet) unimaginable capabilities that could potentially change the world for the better.”

His concluding recommendation is that American industry groups, policymakers and regulators should collaborate and consider whether the United States should be the country that provides the most supportive environment for Bitcoin-related innovation.

The post It’s Much Too Soon to Regulate Bitcoin, Says Deloitte Exec appeared first on Bitcoin Magazine.

from Bitcoin Magazine http://ift.tt/1XFX34x

Bruce Fenton: Blockchain Alliance is a Profoundly Bad Idea

/ Bitcoin Babe / Leave a comment

http://ift.tt/1HhLnvn

It was announced earlier this week that a significant group of prominent Bitcoin companies, individuals and institutions have united in a “Blockchain Alliance.” This alliance will serve as a resource for law enforcement to help combat criminal activity involving bitcoin and the blockchain, and has so far engaged with the Department of Justice (including the FBI and the U.S. Marshals Service), the U.S. Secret Service, Immigration and Customs Enforcement, Homeland Security Investigations and the Commodity Futures Trading Commission.

However, the Blockchain Alliance was not welcomed by the entire community.

One of the fiercest opponents of the initiative has been Bitcoin Foundation Executive Director Bruce Fenton. Shortly after the Blockchain Alliance was announced, Fenton took to Internet forums and Twitter to voice his concern about the industry’s outreach to law enforcement.

Speaking to Bitcoin Magazine, Fenton explained why:

Bitcoin’s relative anonymity has obviously led to it being used for criminal purposes. Don’t you consider that a problem that needs solving?

First off, I challenge the notion that the American government has an absolute and irrefutable right to know all financial information and private records of every person within our borders. This is a relatively new idea, and it’s a very bad one. Some things are just not their business, and the fact that I’m a little afraid to say that out loud shows how sad our current state is.

As for criminal activity, note that something being a crime is not always a measure of morality. In some countries right now being gay is a criminal act. Even in the United States we once had segregation mandated by law. “Aiding a runaway slave” was once a crime… Would we have wanted to “partner with law enforcement” to track the blockchain for purchases made by escaped slaves?

Today we have laws related to asset forfeiture and federal prosecution of crimes which voters in states decided to decriminalize. These are actions by law enforcement that many citizens feel are immoral.

But Bitcoin can also be used for criminal purposes that we probably all agree are undesirable. Extortion comes to mind.

Sure, Bitcoin makes some bad things easier to do — just as do shoes, phones and the Internet. But it’s unwise to punish technology and innovation rather than the actual harmful actors.

The Blockchain Alliance is established exactly to help law enforcers make this distinction…

But taking care of these bad actors is the responsibility of the law enforcers, not that of the innovations or the industry. Cars make it far easier for criminals to escape than by foot, but the technology of the motor vehicle and its industry has no responsibility for this.

The job of innovators is to innovate, not to catch those whom the state deems criminal. The job of law enforcement is to deal with new technology as best they can without harming or interfering in the lives of peaceful people who have harmed no other.

The Blockchain Alliance has no intention to conduct blockchain analysis, blacklisting, or anything like that. It’s just a forum where law enforcement can ask questions. Why do you consider this such a big deal?

Would the Blockchain Alliance be willing to put in writing a set of conditions under which they would break off ties with law enforcement? If not, then their stated intent is worthless.

Essentially every time any industry has had experiences with government which turned out to be destructive, it started with good intent. The Bitcoin community’s engagement with the New York Department of Financial Services, and the resulting BitLicense, is actually a good example of that.

These government organizations have poor track records and continually seek to expand authority. We even have blatant violations of the Constitution such as those of the NSA exposed by Edward Snowden. The very same agencies who seek to capture Snowden are now partners of the Blockchain Alliance…

Law enforcement will, eventually, figure Bitcoin out with or without the Bitcoin Alliance. Why not help them in the process, and build up some goodwill among regulators?

The job of law enforcement is not to figure new things out, not to be our friend, not to determine right or wrong, nor even to craft new laws or listen to logic — but to follow orders. Even if these orders flow from protectionist laws created by corrupt bureaucrats. And even if the banks and other special interests push for laws giving them a further competitive advantage over Bitcoin.

What about Bitcoin’s image problem? Bitcoin is often seen as the currency for criminals, at least among many regulators…

We seem to forget that this is our country. The regulators are supposed to work for us. I challenge the notion that they are “serving the public” here, unless they can produce evidence that a large number of public citizens are concerned about Bitcoin technology. They aren’t. No college students and grandmothers are lining up outside the doors of elected officials telling them that something must be done about “the scary blockchain.” Citizens are much more concerned about jobs, innovation and a competitive economy.

I believe we should first and foremost educate the public. Aside from educating citizens, we can also spend some effort educating lawmakers, preferably elected ones with some accountability rather than the unelected (Benjamin) Lawsky types.

But most importantly, we should take a page from the playbook of Uber and build something that’s loved by millions… then when the fat wrinkled hands of bureaucrats are raised with a signal to stop, the public collectively shrugs and ignores them.

As Bitcoin becomes more popular, not in the least among criminals, the trend of more and stricter regulation will probably continue. If you care about privacy, fungibility, censorship resistance, and these sorts of things, wouldn’t it make sense to focus on protocol-level solutions, rather than to fight regulation and law enforcement?

Definitely. The ultimate solutions are those of a technical nature. My goal in speaking about this is not to fight law enforcement or even regulation… but to simply question why it could make sense to work so hard to help law enforcement with a dubious mission.

I respect the members of that group a lot, many are good friends. I hope I’m wrong and it turns out great. Meanwhile, let’s all work together to build something amazing that changes our world for the better.

Photo Office of Public Affairs / Flickr (CC)

The post Bruce Fenton: Blockchain Alliance is a Profoundly Bad Idea appeared first on Bitcoin Magazine.

from Bitcoin Magazine http://ift.tt/1WmfmhQ

BitFury Looks to Go Green With 3M’s Novec 7100 Engineered Fluid

/ Bitcoin Babe / Leave a comment

http://ift.tt/1PasQrh

In an attempt to further decrease energy costs and its impact on the environment, BitFury announced that it was launching the world’s largest two-phase immersion cooling (2PIC) project at its new data center in the Republic of Georgia.

By using the technology from Allied Control, bought in January, and the Novec 7100 Engineered Fluid from industrial giant 3M, the company is hoping to optimize its operations and make them more green. The firm intends on using 3M’s fluid to cool more than 40 megawatts of processing power.

“The maintenance cost of traditional low-cost air cooling systems is quite high compared to immersion cooling, and it is very problematic to use low-cost air cooling systems in the areas with hot weather, it becomes very costly,” said Valery Vavilov, CEO of BitFury, in an interview with Bitcoin Magazine.

Vavilov explained that the utilization of immersion cooling allows for a reduction in maintenance costs. Further, it opens up the possibility of the company launching mining operations in parts of the world that would otherwise not provide efficient cooling.

“In addition, we are able to deploy it in the areas with hot weather climate which opens possibility to operate literally in any location in the world. Also, for chips, this fluid is ideal exploitation environment and it allows to run them with maximum possible efficiency that just cannot be achieved using low-cost air-cooled systems,” he explained.

2PIC works by placing hardware in a specially designed tank with a liquid coolant such as the Novec 7100. What makes this fluid particularly useful is that it has a low boiling point, which means that as it heats, it starts to evaporate much more quickly. That pulls the heat away from the hardware in the device, allowing them to operate at a higher rate for much longer. When the vapor hits a water-cooled condenser coil, it becomes a fluid again and falls back into the tank, thus reducing the amount of fluid loss significantly.

“One of the primary limitations for computer performance is the thermal environment. Two-phase immersion cooling with Novec fluids provides tight coupling between device temperatures and the fluid boiling temperature. This means that these devices operate in a narrower temperature band,” explained Michael Garceau, 3M Business Development Manager, Data Center Markets, in an interview with Bitcoin Magazine. “This is true not just for the processors, but for the circuits and devices delivering power to them. This, in turn, allows the hardware to be driven harder on average than would be possible in air and “overclocked” as is often done in the most profitable early stages of a mining deployment.”

Garceau also explained that because these 2PIC-specific boards don’t require heat sinks and cold plates, the processing hardware can be more densely packed with the 2PIC boards. This enables improved overclocking capacity.

“500-watt ASICs have been successfully overclocked to well over 750 watts. 2PIC with a Novec fluid will enable BitFury to lower operational costs by allowing them to run ASICs more efficiently,” Garceau explained.

The Environment is Key for BitFury

According to Garceau, “The streamlined system can deliver as much as 95 percent cooling energy savings with minimal fluid loss.” The cost of cooling hardware is an additional expense that many miners don’t consider when first starting out. Big scale fans require electricity.

“Green transaction processing is a significant and important part of our business strategy. With our acquisition of Allied Control, we have been able not only to utilize renewable energy sources like hydropower in our datacenter located in the Republic of Georgia, but also achieve a very energy-efficient cooling despite hot daytime temperatures,” explained Vavilov.

The NovecTMEngineered Fluids are nonflammable, have zero ozone depletion potential, have a low global warming potential, are Hazardous Air Pollutant-free, and are U.S. EPA SNAP-approved. And because the majority of the fluid condenses and drops back into the tank, replenishment isn’t needed for multiple hardware generations.

All told, BitFury is focused on delivering blockchain transaction processing in an efficient and green environment.

“We strive to ensure low carbon print and high efficiency of all our operations and already rely on renewable energy – thermal and hydropower – for all our operations,” Vavilov said. “We are also in the process of developing low-cost wind turbine technology that will provide another affordable and effective energy solution. We plan that by next year our data centers will be powered by the low-cost renewable energy generated by our new wind turbines. This will allow to further significantly lower our electricity cost and secure a long-term access to cheap electricity on a predictable basis.”

With electricity being the primary outlier that separates the profitable miners from the unprofitable, taking control of the supply of that power ensures that BitFury can remain profitable while also doing its part to reduce the significant carbon footprint found in bitcoin mining.

Jacob Donnelly is a full-time product manager and freelance journalist covering stocks, business and bitcoin. He runs a weekly digital currency and blockchain newsletter called Crypto Brief.

The post BitFury Looks to Go Green With 3M’s Novec 7100 Engineered Fluid appeared first on Bitcoin Magazine.

from Bitcoin Magazine http://ift.tt/1PV5l7b

Chinese Exchanges Agree: Bitcoin Price Has Nothing to Do With Capital Controls

/ Bitcoin Babe / Leave a comment

http://ift.tt/1M1tJhv

The price of bitcoin continues to rise, led primarily by the exchanges in China, which have, oftentimes, been trading at a premium of $10/BTC higher than the other major exchanges around the world. With China driving such an increase in the bitcoin price, many have been speculating that it could be driven by capital controls.

In China, the law stipulates that individuals cannot send more than the equivalent of $50,000 out of the country in a year. To get around this, individuals have hired smugglers to get cash out of the country, bought extremely expensive real estate in cities like New York and London, and even set up businesses in other countries with the goal of overpaying for inventory from China. All of this just to get money out of the country.

According to pseudonymous blogger Tyler Durden of Zero Hedge , the primary driver has been the Chinese purchasing bitcoin as a way of getting around capital controls.

“If a few hundred million Chinese decide that the time has come to use bitcoin as the capital controls bypassing currency of choice … sit back and watch as we witness the second coming of the bitcoin bubble,” he wrote in a recent blog post .

But is this, in fact, what is occurring?

According to Bobby Lee, the Founder and CEO of BTCC, while a hedge against capital controls is certainly a use case for bitcoin, it’s not what is driving this run up.

“I can tell you, being on the ground with the bitcoin exchange in China, I can guestimate that the vast majority of trading volume is not for that reason. The reality is, there are many loopholes around the capital controls. For the most part, it’s not a strict, strict capital controls,” he explained in an interview with Bitcoin Magazine. “If you look at countries like Myanmar and Argentina, which have very strict capital controls, you’ll have the price of bitcoin to USD [U.S. dollars] is much greater.”

Jack Liu, head of international at OKCoin, also disagreed with the notion that it had anything to do with capital controls. In an email to Bitcoin Magazine , he said, “I don’t think so. It’s speculation.”

Leon Li, CEO of Huobi, said in an interview with Bitcoin Magazine, “to be clear, it’s not about capital controls.”

BTCC, OKCoin, and Huobi are the three biggest exchanges in China. All three don’t see a fear of capital controls driving the recent run-up of the price of bitcoin.

If it’s not capital controls, what is it?

It’s About Perception

“Over the last two months, we’ve seen a steady increase in bitcoin activity and bitcoin volumes and price appreciation. The reason this price has happened is because of renewed interest,” Lee explained. “All the bad news has come out over the past year and a half, and now it’s over.”

Lee walked through a list of the bad news that held bitcoin back: Mt. Gox imploding, the Chinese government offering ambiguous opinions on bitcoin, and the Silk Road bitcoin being sold en masse. “We’ve been in a bear market for the past 18 months,” he said.

And with that bear market came the need for miners to liquidate more of their bitcoin than normal because they didn’t know what the future price would be, Lee explained. “There’s a constant selling pressured caused by bitcoin miners.”

“The price is recovering on a rebound after several months in a narrow range. Some Chinese traders are expressing a view on the CNY exchange rate after the last devaluation, and you have interest by mainland speculators to move to other assets after the stock market fallout,” Liu of OKCoin said to Bitcoin Magazine.

What Lee does believe is that there is only one reason that the price of bitcoin is going up:

“It’s mostly new users,” he said, referring to who was signing up for the site during this recent run-up in price. “Bitcoin price, if I may be bold, has been going up in the recent years for only one reason: more usage, more acceptance and more awareness. When bitcoin is in more hands, the price naturally goes up. It’s the law of scarcity.”

Li of Huobi believes that there are a multitude of reasons driving the price higher. He touched on the recent regulatory environment with the CFTC saying bitcoin was a commodity and, in Europe, the courts saying that it was exempt from VAT.

“More financial institutions entered this industry,” he said, “such as bitcoin-based ETN and ETF were founded in Europe. Organizations and individuals involved more in bitcoin market as the policy and funding is becoming in favor of bitcoin.”

But Li also offered some negative reasons in China that might support the recent rise.

“Finance industry is developing rapidly in China during recent years, however, there still exists a distance in terms of trading mechanisms compared to the developed countries, which hindered the small and medium-sized investors from enjoying convenient services and trades,” he said. “Chinese banking industry is still charging high transaction fees despite the fact that we’re living in the Internet Age.”

Nonetheless, bitcoin is rising, and China is leading the pack. Whether this run will last for only a short while or this is the beginning of another bull run, no one is certain. But the energy within the community is certainly more positive, this run-up encouraging more people to talk about bitcoin.

And as Lee said, as more people become aware of bitcoin, more people will use it, and that alone will drive the price up.

Jacob Donnelly is a full-time product manager and freelance journalist covering stocks, business and bitcoin. He runs a weekly digital currency and blockchain newsletter called Crypto Brief.

The post Chinese Exchanges Agree: Bitcoin Price Has Nothing to Do With Capital Controls appeared first on Bitcoin Magazine.

from Bitcoin Magazine http://ift.tt/1Oe8L4S