Dutch National Prosecution Service and police launch Hidden Service in global Darknet enforcement operation

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Reposted from the dutch prosecution site – The Dutch National Prosecution Service and police launched a so called Hidden Service on the darknet today. The set up took place within the framework of ‘Operation Hyperion’. This first global Darknet marketplace enforcement operation ever, was conducted 22 to 28 October.

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Two Men Convicted of Fraud After Using Darknet Acquired Credit Cards for Ticket Scams

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On October 25, Hanover Regional Court sentenced two men to nearly four years in prison on several counts of fraud. The men were accused of purchasing stolen credit cards from darknet marketplaces and using the cards to buy train tickets. The train tickets were then sold to individuals for less than the original ticket price.

Paul K. and his accomplice Peter P., according to the prosecutor, accumulated 350,000 euros by this scam. Paul K. recirculated 500 tickets, costing credit card companies, travel agencies, and train stations nearly a million euros worth of damage.

The defendants started in 2012 as a source of income they believed to be majorly untraceable. Tickets were sold to unsuspecting travellers and migrants who simply believed the stories behind the cheap tickets. The accused would often claim they had an uncle in the railway business who had access to cheap tickets. A similarly told tale was that the tickets were overstock from a travel agency.

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As significant debts were amassed on a stolen credit card, the issuing bank would grow increasingly suspicious. Victims would dispute the charges and have their money reimbursed. The bank would subsequently file a claim against the web portal where the tickets were purchased. As this process cycled throughout Germany, cybercrime investigators noticed a recurring theme.

Martin Gold, a cybercrime specialist for the Federal Police, was heavily involved in the case. Police reports used “Martin Gold” as the agent’s name but his true identity remains unknown. His desk was stacked with reports of the ticket fraud, welt.de reported. “Initially, the railway reported 14,000 suspected cases at once,” Gold said. He knew what was going on.

Gold, with his team, hunted databases, looking for similarities and following cash flow. Suspects are “almost exclusively tech-savvy men, between 16 and 30 from different origins: German and Turks, blacks and North Africans, he said.”

Over the past year train companies had been reporting disturbing numbers of the same type of fraud. Nearly 100,000 individual cases were reported last year. The scheme has proven to be lucrative for some but for others it is a “newfound money laundering technique.”

During the trial, Paul spoke of obtaining the credit cards. The majority were purchased on various darknet marketplaces for two euros per card. Cards were bought in bulk, “usually ten sets of cards at once,” he said.

The tickets were sold on eBay classifieds, for the most part, he described. Buyers initially had to pay by sending cash through the mail. However, Paul and Peter shortly switched to anonymous digital payment services.

Gold said that this case resembled one in southwestern Germany where the scam is not uncommon. Most recently, a 26-year-old and an accomplice were arrested for the same crime. At the time of arrest, the 26-year-old possessed 100,000 euros, all obtained through this scheme.

The anonymous investigator spoke of the growing concern this mutated type of fraud presents to law enforcement. He said “Drug smugglers are using the method to launder money; tickets get distributed to migrants in large quantities. This poses a new problem: you can not follow the money trail.”

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Bitcoin Wallet Developers Prepare for Segregated Witness

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Bitcoin Core 0.13.1 was released last week, which means miner signaling on the proposed Segregated Witness (SegWit) soft fork will start soon. If activated, SegWit offers a number of benefits, one of which is an effective block size limit increase to about 1.6 to 2 megabytes, depending on the types of transactions included in blocks.

If and when Segregated Witness is activated on the Bitcoin network, users will be able to take advantage of the added network capacity immediately — if their wallets are “SegWit-ready.” For users to enjoy this added block space, therefore, much will depend on Bitcoin wallet providers.

On GitHub25 wallets have indicated they will integrate SegWit. To poll their progress, Bitcoin Magazine reached out to a selection of them.

State of Readiness

Depending on miner signaling, Segregated Witness may, at the very soonest, be “live” on the Bitcoin network halfway through December. This somewhat unlikely best-case scenario leaves about six weeks for Bitcoin wallets to update their software.

The wallet providers that Bitcoin Magazine reached out to generally expected this should be sufficient time. Several of them are even ready to go already, or are in the final stages of development.

GreenAddress, the wallet provider that was recently acquired by infrastructure development company Blockstream, was among the first wallets to have completed Segregated Witness support, as early as February this year.

Speaking to Bitcoin Magazine, developer Lawrence Nahum said that GreenAddress users will be able to receive and send SegWit transactions as soon as the soft fork is deployed on the Bitcoin network. After that, he plans to improve the wallet, further utilizing the possibilities offered by Segregated Witness, such as MASTSchnorr signatures, and theLightningNetwork.

“I am very eager to make use of all good things in SegWit,” Nahum said. “I see it as a great stepping stone towards better fungibility and privacy, which I think are as important as — if not more important than — capacity increases.”

Regarding SegWit-readiness itself, Nahum added:

“Integration was quite easy. Desktop, iOS, and Android: All our wallets’ GitHub master branches support SegWit already, and recently we finalised some integration testing with hardware wallets such as Ledger to make sure it all works.”

Most of the other wallet providers contacted by Bitcoin Magazine also indicated they should be SegWit-ready if and when the soft fork activates, or not too long after. BTC.com — formerly known as Blocktrail — has been experiencing some delays due to the recent acquisition by ASIC-manufacturor Bitmain, but said that integration shouldn’t take much longer than several weeks. Electrum, the popular desktop and Android wallet, will include Segregated Witness support in the next major release, planned before the end of the year. BreadWallet, a wallet app available on Android and iOS, is in the testing stage, and will offer SegWit to users once it’s activated and deemed absolutely secure. AndMycelium, also available on iOS and Android, said it wrapped up the complicated part of integration, with only some user interface questions remaining.

Payment processor BitPay confirmed its intention to integrate SegWit as well for its Copay wallet and the new BitPay wallet, but the company is taking a slightly more conservative approach. Speaking to Bitcoin Magazine, BitPay CEO Stephen Pair explained that they will only start integration once it is more certain that the soft fork will actually activate.

“We do plan to support SegWit. The timeline for that support will be driven by the activation of the required soft fork,” Pair said, “but we don’t know exactly when the activation will occur, so we don’t want to spend time now only to have it take another six months or a year before activation happens.”

Increased Complexity

In order to be able to deploy Segregated Witness as a soft fork, the Bitcoin Core developers opted to place a reference to signature data in a somewhat odd part of Bitcoin blocks. Although this does not make the solution insecure, it does add some complexity to Bitcoin’s code-base, but the added effort for the wallet providers is not extreme.

Most of the complexity is “hidden inside” the open-source software libraries many wallets rely on. Several of these libraries have already integrated Segregated Witness support, and others should be able to include it within a few weeks.

Ruben de Vries is a developer for BTC.com, and one of the maintainers of the bitcoinjs JavaScript library. At BTC.com he also works with Thomas Kerin, lead maintainer of the Bitcoin-php library. Speaking to Bitcoin Magazine, de Vries said:

“Bitcoin-php has been ready for months. Bitcoinjs is pending review and some discussion because there are some backwards compatibility breaks. We could have it ready as soon as next week, though. For wallets, the change is very minor, technically. Looking purely at transaction building and signing, SegWit adds a bit of complexity, but not that much. Really, only full-node developers and projects have to bear with the full complexity.”

As a general sentiment, wallet developers seemed to agree that the Segregated Witness solution is somewhat “hacky” — but worth it. “I consider SegWit to be ‘Bitcoin 1.0;’ it’s fixing a couple of issues that are like ‘beta bugs,’” de Vries said.

For Mycelium, Daniel Weigl has done most of the SegWit integration:

“When — in a SegWit-world — a new developer learns about Bitcoin and how things work, he or she will stumble over a lot of strange things that will not be self-explanatory without knowing what transactions and blocks looked like before SegWit,” Weigl said. “That adds barriers to entry in an already complicated topic. But I’m no friend of hard forks either, so I also would not know how we could solve that without those quirks.”

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The Blockchain Developer Shortage: Emerging Trends and Perspectives

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Amid the steady rise of blockchain innovation, there are growing concerns about a looming shortage of qualified developers. With demand for talent outstripping supply, many companies are having to dial back blockchain related projects that are poised and strategically positioned for a rapid market launch.

In his book The Business Blockchain, thought leader and author, William Mougayar, briefly explores this emerging trend, noting that by his mid-2016 estimates, there were only “5,000 developers dedicated to writing software for cryptocurrency, Bitcoin, or blockchain in general.” He admits that “perhaps another 20,000 had dabbled with the technology, or have written front end applications that connect with the blockchain.”

All of this, he says, pales in comparison with the nine million Java developers worldwide, and about 18.5 million software developers in the world. But as the book documents, there is a silver lining of good news, namely, the blockchain’s good fortune of being tied to languages and scripts that are already in popular use — like Java, Javascript, C++, Node.js, Python, Golang and Haskell.

Says Mougayar, “Getting more developers proficient on Blockchain technology is key, and part of its successful evolution. We can’t avoid not having a critical mass of knowledgeable software engineers that know how to program blockchains and develop blockchain applications. Whereas it might take a few weeks of effort today to get a seasoned developer up to speed on blockchains, it might eventually take only two days.”

Mougayar believes that efforts to address the prevailing blockchain developer shortage can be impacted by the following:

  • More general mass awareness about the blockchain

Steven Nerayoff, Founder and CEO of Maple Ventures, a Venture Capital firm primarily focused on emerging blockchain-based technologies and payment systems, says the blockchain developer shortage is quite evident among many early stage companies he interacts with. “If you take high level programmers and cryptographers, like Gavin Wood, or someone who works for DARPA or NSA out of the equation, you’re now talking about only a few hundred people that truly understand this blockchain development at a foundational level. That’s such a small group of people for a technology niche that could significantly change how people organize and live their lives.”  

Nerayoff goes on to say that this talent shortage is such that there are more projects in the blockchain space than people who are qualified to contribute. He does believe, though that this problem will slowly balance itself out as more and more qualified people migrate out of the government sector, and matriculate from colleges and universities.

Nerayoff says that the prevailing shortage will continue to be acute for those startups working on what he calls “uninteresting projects.”

“As an advisor to Ethereum, I can personally tell you that people were fighting to get onboard there. They had no problems getting qualified programmers. The same with Lisk. They’re a little younger than Ethereum, but as I’m observing their hiring spree right now, there are lots of  people who are excited to go work there in large part because they’re cultivating so many new ideas and fresh approaches. In my opinion, the best programmers always want to go to the most interesting projects, while others will continue to struggle to hire people.”

Nako Mbelle, Founder and CEO of the Toronto-based Fintech Recruiters, sees the daily challenges businesses face in recruiting and retaining top (blockchain) developer talent. She says that Python developer shortages are particularly acute, and that her firm has also been receiving requests for functional developers in Haskell and Scala, two niche areas which she says are particularly hard to find. Erlang, Golang and Python are among the other most commonly requested skills. “These functional programming skills seem to be all the rage these days.”

According to Mbelle geographical demand is greatest in the U.S., particularly in New York City, followed by London and the UK. Strangely enough, she says, her firm is getting requests from as far away as Tokyo, Japan.

So what needs to take place in order to address these shortage concerns moving forward? Says Mbelle: “Companies and startups should offer more mentorship programs for developers who are just learning functional programming skills. There are simply not enough software developer internships available. Everyone wants someone with three to five years hands-on experience, yet they often won’t give developers who are trying to cross-over into the fintech space a chance to prove themselves.”

Mbelle continues: “In order to attract talent, startups should be flexible about remote working options. We’re seeing a trend where startups want people in the office in order to build a corporate culture. However, the more experience a software developer has; the more likely they will want to work remotely, or have very flexible working environments.”  

With respect to the long-term picture surrounding this talent shortage, she concludes:  “I believe that more and more fintech companies will open up offices in Eastern Europe and Russia, because that seems to be where many developers are from and currently located. I think we’ll also see more Functional Programming (training) bootcamps open up. And hopefully there will be more software developer mentoring and internship programs geared toward developers seeking to get into the space.”

Agentic Group LLC Is a global membership-driven consortium providing insight and consulting to corporations, non-profit organizations and government agencies seeking to understand and leverage emerging blockchain applications and digital currencies. Rik Willard, its founder and managing director, believes that the shortage is temporary. “Sure I think there is a shortage. But I think, as the space evolves, you’re going to find that the numerous non-profits and other learning outlets that are teaching blockchain technologies will have an impact on this issue.”

Willard says that what the blockchain world is facing at present in terms of talent deficiencies is much like what took place during the early days of the web. “There weren’t that many developers on the web in the early days. So various schools, academies, and groups got involved and began minting qualification certificates for the internet, ultimately leading to a massive influx of skilled programmers.”

Shidan Gouran is an angel investor with several blockchain startups and innovative tech firms, as well as the organizer of the Blockchain Event, a North American conference series. Gouran says that he doesn’t subscribe to the notion of a programmer shortage. “I hear people say that but in my experience there are lots of talented developers out there who are not involved with the blockchain space because it, frankly, isn’t important enough for them to be involved with.”  

He notes that there is nothing inherently more difficult about blockchain than there is with any other type of development. “You don’t have to be a cryptography wizard to understand how to develop a blockchain; you just have to know how to use cryptographic protocols. That’s something that people have been doing forever.”  

He says that the blockchain value proposition needs to make more commercial sense in order to get more programmers and developers involved. “More than anything, I think there is a shortage of good ideas. If a startup has a project that’s interesting and can really impact commerce and lives, then qualified people will sign on to start working on it.”

“I’ve often said that we need fewer white papers and more code,” said Gouran. “We need people who are starting projects and actually seeing them through rather than just doing crowd sales, raising money and kind of squandering it away, which we’re seeing a lot of nowadays. Ultimately that’s what I believe will attract top talent to this space.”

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