Examining the Bitcoin Address Graph

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Bitcoin is by far the most popular unregulated, decentralized cryptocurrency. Since the genesis block was mined, the number of bitcoin users has been rising at a rather exponential rate. While bitcoin’s public ledger offers high levels of transparency, it does not directly reveal the real-world identity of either the senders or receivers of bitcoin transactions. A single bitcoin transaction is represented by a set of inputs that point back to outputs, or the proceeding transactions, and a set of outputs, each allocating a certain amount of bitcoins that has been sent to a recipient’s bitcoin address. A bitcoin address is represented by a string of alphanumeric characters which are generated using the public key of a matching key pair created by some bitcoin user. Every user can have numerous key pairs, and bitcoin addresses, using his bitcoin wallet, and it is highly recommended to use a new bitcoin address for each and every transaction to heighten the level of anonymity of transactions.

A lot can be learned by studying the bitcoin address graphs; the scale of adoption, bitcoin remuneration, using bitcoin for storing value and others. A recently published study presented a longitudinal study that has included an analysis of the bitcoin address graph, which is comprised of all transactions and addresses right from the start of the bitcoin protocol in January, 2009, all the way to August 31, 2016. The results of this study are quite interesting. The analysis concluded that the bitcoin address graph exhibits a highly skewed degree of distribution, that is characterized by a small percentage of outliers and proves that the entire graph is expanding at an accelerating rate. Moreover, the study highlighted the power of bitcoin address clustering heuristics as means for tracing users in the real world, especially those who use bitcoin for transferring value rather than storing it.

The Goal and Framework of the Study:

The study aimed at presenting initial results derived from analyzing the bitcoin address graph longitudinally. The basic framework of the study can be described as follows:

1. The study provided a comprehensive representation of the graph that included all executed bitcoin transactions and created addresses starting from March 1, 2009 all the way down to the time of writing of the paper on October 31, 2016.

2. A structural analysis of the bitcoin address graph was meticulously conducted to investigate the structural changes of the graph over time.

3. The study investigated the proportion of bitcoin addresses that can be traced back to its actors in the real world, whether implicitly or explicitly, and showed how these patterns can change over time.

4. The study also closely examined the spending behavior of users who consider bitcoin’s real time fiat exchange rates.

5. The study analyzed the function of cryptocurrencies from users’ perspectives via thorough analysis of the periods of activity of bitcoin addresses and clusters of bitcoin addresses.

The Bitcoin Address Graph:

The below chart represents the bitcoin address graph that was included in the published paper and analyzes the evolution of number of bitcoin addresses over time.

The chart represents the overall number of bitcoin addresses, or distinct nodes, in addition to the number of newly added nodes and edges, or transactions, along with the average node degree per month. By examining the chart, you can easily discover that the number of used bitcoin addresses is steadily rising, which can be interpreted in one of two ways:

1. Users are creating new bitcoin addresses for each transaction they execute

2. New users are joining the network and creating new addresses

In reality, both scenarios are taking place simultaneously. A single user might be using multiple addresses to create lots of transactions within a given observation period. The number of transactions, or edges, is also steadily rising in the same manner, which reflects, at least partly, a steady rise in the number of users.

Implications of the study:

The analysis showed a highly skewed degree of distribution, which denotes that the bitcoin address graph is comprised mainly of a rather small proportion of outliers. Thorough examination of these bitcoin addresses revealed that most of these addresses belong to charity organizations that use them for collection of donations, and a number of online casinos. The study also showed that the bitcoin address graph is growing at a rapid rate as time goes by, as new transactions and bitcoin addresses are added everyday to the blockchain. However, the average node degree remains somehow stable over time.

Investigating real world actors has revealed that bitcoin address clustering via well known heuristics’ approaches can boost the number of implicitly recognized addresses across the entire address graph. Nevertheless, most of the addresses will remain anonymous.

The study also spotted a rise in the volume of transactions and how real world events can influence the bitcoin exchange rates. The study proved that real world actors prefer to use bitcoin for transferring value rather than storing it.

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Drug Trafficking by Foot Nearly Extinct in Germany

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Head of the Frankfurt Customs Office, Albrecht Vieth, announced that the world of drug smuggling has changed. Changed from carrying drugs on a human body to shipping drugs through the mail. This may seem trivial by itself; many countries, Germany not excluded, cracked down on darknet drug trafficking—an activity that required frequent monitoring of mail couriers. However, Vieth had a perspective and source of data that puts the trafficking into a perspective not often shared by officials or news outlets.

For the most part, the stories that made recent headlines involved something unique to even the customs agents themselves. One example of such a headline occurred late last year when customs agents caught $293,850 worth of cocaine, destined for spain, hidden inside a woman’s breasts. Hans-Juergen Schmidt, the Frankfurt Airport Customs spokesperson said customs employees were truly surprised by the ameteur job and poorly cdmpleled surgery. “This was the first case in Germany in which drugs have been smuggled in this fashion,” the spokesperson said.

“The biggest blow to the international drug smugglers in German seaports for seven years was achieved by Zoll on 18 January 2017. The 717 kilograms of cocaine were secured in the port of Hamburg, a press release revealed. While the physically transported drugs usually take more conventional routes or methods of transportation, submarines are not out of the question.

Another, according to Isabell Gillmann, press secretary at the Frankfurt Main Main Office, Customs found 250 grams of cocaine stuffed within a single printer. The package came from Colombia and passed through Frankfurt en route to South Africa. An x-ray machine picked up on the cocaine right away, she said.

Albrecht Vieth, used the woman’s cocaine-filled breasts example as a point of reference for the change he saw in the world of drug trafficking. He mentioned that the woman already received a sentence of two and a half years in prison. He continued with some of the examples from last year. One occurrence was a woman with 10 bottles of rum in her luggage but Customs officers noticed that the bottles contained 4.6 kilograms of cocaine—combined throughout all the bottles. She received five years imprisonment.

“The Frankfurt Airport is a hub for the global drug smuggling,” he said. And as a hub, he continued, “we have seen an extreme shift in drug smuggling from travel to mail. The freight airport Leipzig / Halle has also developed into a hub of smuggling in Eastern Germany, which is responsible in three federal states for package delivery.” The majority of that mail is international, a spokesperson said.

Vieth explained that the majority of this shift came from the darknet, a “small part of the Internet” where one can buy and sell drugs. Some Customs offices see more than drugs alone, the Customs officials explained. Udo Storch, a spokesperson from the Hamburg Customs Office, said that he saw a massive increase in counterfeit goods from China. In only a few weeks, the Hamburg Customs saw enough fake perfume to fill 500 bathtubs. The office seized 1.4 million individual items so far including drugs, protected animals, and counterfeit goods.

Although the overall seizures or interceptions were lower on paper, that is not the entire story. Officers previously seized 5,296 kilograms of drugs at the Frankfurt Customs Office. So far they noticed an increase of 182 percent with respect to mailed or shipped packages. And the traveller-based seizures only amounted to 160 individual drug seizures, These numbers, of course, came from a single customs office in Germany. Differences between the various offices is expected.

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Phony Bomb Threat Caller Sold Drugs on the Darknet

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In early April, police arrested 19-year-old Michael Kaydar at his home in Ashkelon, Israel. Israel’s Rishon Lezion Magistrate’s’ Court remanded the 19-year-old Israeli-American hacker for the third time in part of a larger investigation. Court advised the man of conducting hundreds of fake bomb threat phone calls to Jewish institutions. The investigation took off once the hacker called Jewish Community Centers in the United States.

The FBI traced the call back to a SpoofCard phone service—a website where Kaydar placed the bomb threat calls with a fake, or spoofed, phone number. FBI agents took the matter seriously as they suspected the calls were connected to the same entity that made calls since January and possibly more across the world. Also, the FBI dislike bomb threats and treat them all, phony or legitimate, the same.

They then subpoenaed the company behind SpoofCard. They hoped to find the account owner information as, to sign up for the service, one must provide a phone number of their own. It undoubtedly came as no surprise that the so-called hacker used another number that forced the FBI to work even harder. He used a Google Voice number. Far from anonymous but easy to sign up with fictitious information.

Google servers provide agents with little information to depend on. The caller routed the Google Voice calls through a proxy that kept his identity even further hidden than the woman’s voice he used when making the fake bomb threats. Kaydar’s payment methods only made matters worse for the FBI. Instead of paying for any services with standard forms of internet payment, he used Bitcoin.

He ultimately slipped up once he felt untouchable, authorities said. He accidentally made “one or two calls” without the proxy enabled and the FBI used those attempts against him. They found and traced his IP address to the family home in Ashkelon. They truly traced the IP to an access point near the home where Kaydar launched his calls from with an external antenna that he aimed out the window but the outcome stayed the same.

Now, at his third court appearance, we learned that investigators analyzed the suspect’s computer and found that “he had traded millions of dollars in bitcoin digital currency on the darknet.” Additionally, “the suspect used the darknet to sell drugs and forge passports, driver licenses and other identity papers.” Law enforcement is looking into any potential buyers of the products that the 19-year-old once sold.

The list of charges grew tremendously, including but not limited to: “malicious intent to cause harm, sabotage, extortion and intimidation, money laundering, illegal possession of weapons, receiving illicit benefits under aggravated circumstances, falsifying computer records, hacking, inciting public panic and unlawful impersonation for the purpose of committing fraud.”

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Portugal Notices Increased Darknet Trafficking

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The media payed special attention to cybercrime following several key moments throughout world history. The ongoing struggle between Russia and the United States, for instance, placed a spotlight on “election hackers” and hacking in general. With added attention to internet crime came added attention to the darknet. Although the rise of the original Silk Road attracted attention from the media, the excitement rapidly declined as did the original Silk Road. Now, law enforcement worldwide publicly acknowledged the rapidly growing online trade—most recently, the Portuguese Judiciary Police​.

Pedro Veiga, coordinator of the National Center for Cybersecurity, acknowledged that the darknet came from “good intentions.” He explained​ why US government researchers built Tor: rogue parties often attempted to steal classified information if transmitted over the clearnet. “A ‘normal’ internet web was created to guarantee the privacy of these journalists. It was very difficult to detect the person’s location or even who he was,” Veiga Explained.

“It started and was developed for a good purpose, but later on, criminals began to take advantage of this new medium to anonymously use the internet. This part is called darknet,” he added.

The department’s own, independent study called the 2015 Annual Report on Internal Security revealed an increase in darknet drug trafficking. Both singular instances and crime syndicates. One example, although the report left any mention of the words darknet or dark web, was that of a drug bust in March. The Judiciary Police raided a drug laboratory in the Greater Lisbon area that tested drugs in exchange for Bitcoin. Drug testing orders were placed on the internet with Bitcoin and the lab tested the drug in question.

While no names were mentioned, the structure and setup sounds similar to that of Energy Control and the DNM Avengers. The Greater Lisbon lab likely operated on a similar fashion. Since the report left out any mention of the darknet or deepweb, few know if the lab operated on the darknet. Artur Vaz, coordinator of Criminal Investigation for the Judiciary Police, reported that the raid marked the first time the police seized bitcoins in a case.

In 2015, 0.31 grams of heroin, 21,033 grams of cocaine, 27,520 grams of cannabis and 495 grams of ecstasy arrived at mailing stations, an official said. This number, he explained, is still quite low in comparison with conventionally trafficked narcotics. However the number is rising and becoming a concern for the Judiciary Police. “The drugs can be ordered over the internet, but they have to be delivered physically. The orders made via darknet are sent by parcel post to people’s houses. This is something the Judiciary Police are aware of,” Artur Vaz said.

They closed with figures that modeled the origin of drugs from overseas. For instance, Brazil provided the most cocaine and Morocco mailed the most cannabis. Cannabis is also sent from France, Belgium, Austria, Germany and United Kingdom, he explained. Regardless of any darknet trend, he c explained that according to current figures, darknet buyers needed to order significantly more drugs to match the physical traffickers.

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Three Arrested In The Netherlands For Selling Ecstasy On The DarkNet

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Law enforcement authorities arrested three men, aged 25, 26 and 47, in Roosendaal, the Netherlands, for allegedly selling large amounts of ecstasy pills on the darknet.

On March 30, Dutch authorities detained the three suspects for suspected trafficking in large quantities of drugs, which were sent via the national postal service to abroad countries, including the United States, Belgium, and Germany. According to police information, the alleged dealers conducted their sales on dark net marketplaces.

According to police spokesman Ed Kraszewski of the National Unit, investigators searched three houses in Roosendaal and one additional property in Schijf. Law enforcement authorities gathered a large number of evidence pointing on the sale of narcotics. In addition to that, investigators found a list with foreign addresses, which, according to the police, are the addresses of the customers. The addresses are currently transmitted to foreign authorities. During the large amounts of drugs were found, including Ecstasy pills with the Instagram logo. Investigators found the ecstasy pills in bags labeled as “fish food” and “aquarium sand”. According to the police, the logos had been used a trademark of the vendor shop. Apart from the narcotics, large quantities of packaging materials were found.

It is not yet clear how much drugs the men had sold on the dark web to their customers. The police are also investigating how long were the group engaged in the trade.

“But that was some time, it should be clear,” Kraszewski said.

The magistrate decided on Monday that the men should be kept in police custody for at least two weeks. Updates in the case should be expected soon.

Recently, the Dutch media outlet RTL Nieuws reported that criminals dealing with drugs seem to be moving their activities from the southern parts of the Netherlands to the rest of the country, especially when it comes to ecstasy. In Limburg, law enforcement authorities busted fewer drug labs last year and less drug waste was discovered than in the previous years. In Brabant, police discovered fewer narcotic labs, but more dumped drug waste. According to police information, the number of times law enforcement responded to reports of dumped drug waste in Brabant even doubled last year by an increase of 100%. The drug waste reports in Brabant represent more than half of the total of 177 responses to drug waste nationwide. But while these two provinces of the country still remain the leaders in drug-related crime, the differences are becoming less significant. As for an instance, 15 ecstasy labs were discovered in Brabant last year, and 14 in Limburg. Zuid-Holland is the third in the list, the region is not far behind with 12 ecstasy labs busted in the province in 2016. Based on these figures, law enforcement authorities believe that narcotic dealers and producers are moving their activities. The reason for the criminals’ move is because of the intensive law enforcement approach against drug crime in the southern provinces. However, the numbers are “still very high and the problem still very large”, the police added.

“The problem is more serious and deeply rooted in society than previously thought”, a police statement said regarding the case.

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Two Austrians Sentenced For Ordering Counterfeit Euro Notes To Finance Their Drug Addictions

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Two men from Schärding, Austria and Ried, Austria were sentenced to prison for ordering counterfeit euro bills from the darknet and putting them into circulation to finance their narcotic addiction issues.

According to police information, the two suspects, in order to finance their lives, and above it all, their drug addictions at least for a short time, ordered 50 pieces of 50 euro banknotes from the dark web. They paid using bitcoins and 2,500 euros worth of counterfeit bills cost them a total of 300 euros.

The 25-year-old man from the district of Schärding and the 30-year-old from the district of Ried were responsible for the crime of acquiring and possessing counterfeit or falsified money, and the offense of illicit involvement in narcotic-related crimes before the Regional Court of Ried. According to the criminal laws of Austria, both suspects could be punished with up to five years of imprisonment.

According to the accusation, the two previously convicted and unemployed men had always put just a few of the counterfeit 50 euro bills in circulation in various shops in order to buy low-priced products and get back genuine notes as change. The small illicit operation of the two suspects went well for a relatively long time. Police reported that the duo put more than 40 of the 50 banknotes to circulation. According to Alois Ebner, the spokesman for the public prosecutor’s office in Rüdesheim, there were indications against unknown offenders after the defendants used the fake 50 euro notes. After thorough investigations conducted by law enforcement authorities, on January 23, 2017, investigators arrested the two convicted criminals.

In court, the two defendants basically confessed. With the profits they made with the exchanged banknotes, they would have bought narcotics from the Czech border area, police information said. Law enforcement did not disclose whether the duo sought to order drugs from the dark web, or they used traditional methods to acquire the substances. However, since the two defendants used the dark net to purchase the counterfeit 50 euro notes, they possibly tried to order the drugs from the dark side of the internet too.

Judge Claudia Lechner sentenced the 25-year-old defendant to 15 months of unconditional imprisonment. In addition to that, the three conditionally imposed months, which were recommended by the defense, were canceled. The second defendant must spend a total of 14 months (one-year imprisonment and two months of rehabilitation) behind bars. The imposed sentences are currently legally binding.

Both in Germany and Austria, more and more persons are arrested or convicted for buying counterfeit euros from the dark web. Fake euro vendors offer the falsified bills for a portion of the “real price”, for example, 20% of the original price. Mostly, darknet users see the profit margin, and some of them choose to buy the bills. However, most of the time, the buyers are arrested because the counterfeit euro notes are bad quality.

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Update In German Vendor Shop Case: Six Suspects Sentenced To Prison

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We have reported earlier that seven suspects who were allegedly running a vendor shop selling narcotics in Germany were standing trial in January. Now, the Duisburg District Court sentenced six defendants to prison and probation sentences.

According to the court information, the gang had traded drugs between 2012 and their arrest on February 23, 2016. Police reported that the six defendants were running a vendor shop on the dark web, where they sold narcotics to their customers.

Two of the defendants, both from Duisburg, who were only 18-years-old at the time, sold about 50 kilograms of drugs, including marijuana, amphetamine, and cocaine. During the investigation, law enforcement authorities uncovered that three of the men were responsible for the “drug business”, which consisted of narcotics procurement and distribution. The other three defendants were operating the technical side (eg. running the vendor shop on the dark web) of the business. Police added that the drugs were produced and packaged in an apartment in Duisburg, and were sent to the customers using the national postal service. The investigation uncovered that all payments on the dark web were concluded exclusively in bitcoins.

Additionally, a thorough police investigation showed that some of the defendants were involved in the sale of drugs in the streets too. In addition to that, law enforcement authorities claim that one of the suspects bought counterfeit euro bills and professionally falsified badges from the dark web. However, despite the progress of the case, authorities did not enclose with the public the exact name of the vendor shop, and the marketplaces or forums where they allegedly dealt drugs at.

“The foreclosed internet presence of the perpetrators had been brought up in a highly professional and market-oriented manner,” the chairman of the criminal chamber said at the end of the proceedings. Among other things, the investigation revealed special methods of the criminals, which they used to offer drugs in the form of a lottery or as a holiday coupon.

The Federal Criminal Police Office (BKA) in Wiesbaden had been closely surveilling the criminals since 2015. The close analysis of the data investigators gathered from the dark web vendor shop led to the defendant from Hameln, and later, to the two Duisburg brothers. Undercover investigators placed orders for about 30 kilograms of amphetamine, which were sent out by the criminal group without hesitation. The accusation before the regional court was represented by the main public prosecutor for cybercrime in Cologne. When the list of the charges was read before the court, the prosecutor of the Cybercrime North Rhine-Westphalia Central Office (ZAC NRW) needed about three hours to read the 70-page prosecution sentence.

On April 5, for drug trafficking charges, the District Court in Duisburg sentenced three 20 to 30 years old men from Duisburg and Hameln to prison sentences or juvenile sentences between three years and four years and nine months. Three other, 22 to 24-year-old, defendants were sentenced to suspended prison sentences.

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Guilty Pedophile Walks Free After Years of Investigation

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Five years after the investigation began, Detective Garda Kieran Murphy received incriminating evidence from the suspect’s computers, he told Dublin Circuit Criminal Court. The detective explained that in 2010, Interpol provided the Garda with the information—a mere IP address—of a suspected child pornography viewer. A brief investigation followed wherein investigators discovered that a 37-year-old IT expert downloaded child pornography from the darknet.

He, upon the Garda’s search of his residence, handed over two laptops. The Garda mirrored his behavior and handed them over to the Garda Computer Crime Investigation Unit. That unit faced a workload of digital evidence that kept them in a continual “backlog” of forensic analysis. Although the 37-year-old suspect, Richard Coghlan, surrendered the laptops in 2010, Detective Murphy received no actionable information until November 2015.

Actionable information, in this case, provides a mixed message; Coghlan pleaded guilty to the possession of 325 pornographic images on September 21, 2010. Between the date in which the gardaí searched his computer and the date of his recent sentencing, Coghlan willingly confessed behind the guilty plea. He voluntarily told officers that child pornography from the the darknet was on the laptops. And, of course said the forensic analysis would find it.

The Dublin Circuit Criminal Court heard that Coghlan never committed any crimes pride to the one at hand nor recommitted in the seven years between hearings. The Court also heard the seriousness of the pictures found. Detective Murphy explained that 325 images existed in total. Of that 325, “52 fell into the lowest category of seriousness, 175 were in the second lowest category and 98 fell into the second highest category.” An unknown number of movies also came from the man’s computers, along with his darknet search history.

Forensic analysts found that Coghlan searched the darknet for several explicit terms, all related to child pornography.

Judge Martin Nolan sentenced Coghlan to a two year prison term, suspended on fulfillment of strict terms instituted by the Judge. Aside from the inability to access internet devices, the full list of terms have not been disclosed. A violation of the conditions carry a mandatory seven-year-sentence. Judge Nolan explained that the sentencing was so mild, compared to other sentences for the same crimes, because Coghlan possessed only “just over 300” images. He said that he previously dealt with suspects who downloaded thousands and tens of thousands of images.

‘It’s an odious crime to have committed and he should be ashamed of himself. I’ve no doubt that people who know him, think less of him now,’ the judge said before he added that Coghlan was an intelligent man and a man of ability.

As long as Coghlan does not reoffend or access internet devices, he will remain a free man, so to speak. Even the case detective believed the defendant showed a low risk of offending in the future.

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AsicBoost: Scaling Debate Turns into Investigation

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The Bitcoin scaling debate is one that has been going on for years and has been constantly evolving as new Bitcoin Improvement Proposals emerge. Most recently, Bitcoin Unlimited and SegWit have been competing for miner approval in order to activate their respective protocol changes.

With these two main options on the table, Bitcoin has been split in two factions. Those in support of Bitcoin Unlimited and its emergent consensus protocol and those in favour of SegWti and its soft-fork to increase block capacity and fix other issues like transaction malleability.

Several companies and individuals that hold influence in the Bitcoin community have aligned with either one or the other option (with exceptions). Although, Bitcoin Unlimited currently has an advantage in hashing power, a look at CoinDance’s political analysis reveals that most companies are in favour of SegWit and oppose BU. Among the supporters of Bitcoin Unlimited is Bitmain, one of the biggest mining pool and hardware providers in the industry.

While both sides of the debate are riddled with controversy, the latest theory regarding the actions of Bitmain towards BU and SegWit have caused outrage throughout the community.

CTO at Blockstream, Greg Maxwell made a proposal on the Bitcoin mailing list, claiming that someone successfully reverse engineered a particular mining chip and accused a mining hardware company of using AsicBost covertly. AsicBoost is an exploit that can provide the miner with a ~20% advantage by reducing the frequency of computing one part of the SHA-256 calculation. The post suggested a change

“Reverse engineering of a mining ASIC from a major manufacturer has revealed that it contains an undocumented, undisclosed ability to make use of this attack.”

However, this isn’t the most serious allegation, as miners are expected to be competitive. Although the company claims to have never used it on the Bitcoin network, they hold the Chinese patent for AsicBoost and they can legally use it.

The theory now is that Bitmain has aligned with Bitcoin Unlimited in order to block the activation of SegWit since the upgrade would be incompatible with the AsicBoost exploit. Maxwell wrote:

“An incompatibility would go a long way to explain some of the more inexplicable behavior from some parties in the mining ecosystem so I began looking for supporting evidence.”

Recently, Bitmain responded to the allegations via blog posts, claiming to have never used AsicBoost and that the “conspiracy theories do not add up”. Bitmain reminded the community that it has been in favour of the Hong Kong agreement which supported bigger blocks along with the activation of SegWit but that the chances of this happening looked slim and as so Bitmain started supporting BU. However, some have noted that the introduction of SegWit along with bigger blocks would allow Bitmain to keep their alleged secret advantage:

However, Bitmain also noted that it has always been in favor of bigger blocks, something that would reduce the advantage provided by the AsicBoost technology.

Since Bitmain’s response, others have weighed in on the recent rumours. Sam Cole, founder of KnCMiner, a Sweden-based hardware and mining company that is no longer active. Back in 2016, Sam Cole mentioned a secret advantage that the “Chinese” were possibly using.

However, in his recent blog post regarding the recent allegations, Sam Cole dismisses the theories and explains why they don’t make sense. He wrote:

“I also hear people claim to have reverse-engineered the chip not the device to look for the hidden laptop but the chip. This claim is not one that anyone should take as likely to be true. It’s nearly impossible to reverse engineer any 16nm ASIC chip without a huge lab. In one of those chips there are billions of transistors 16nm in size. The microscope needed to even see they exist isn’t exactly bought at Walmart. Without having access to the code of the chip it would be futile.”

Most recently, a member of the Bitcoin Unlimited team, Rhett Creighton, has decided to resign and made a blog post in which he claims that the only purpose of Bitcoin Unlimited is in fact to stop the implementation of any other upgrade. Creighton wrote in his blog post:

“I believe Bitcoin Unlimited was likely set up not to succeed, but simply to block any other progress from happening with Bitcoin.”

It is unclear if any of the allegations towards Bitmain are true. For now, we will have to wait and see.

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USPS Employee Helped Dealers Ship Cocaine

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In July 2016, seven men pleaded guilty violating federal narcotics and money laundering laws. Another man pleaded guilty shortly afterwards as part of the same indictment. That indictment accused former United States postmaster Joseph Borrelli of the same crimes. On April 7, 2017, United States District Judge Arthur Schwab sentenced the ex-USPS employee to four years imprisonment for conspiracy to distribute cocaine.

The 49-year-old former postmaster aided the other seven men in an intercontinental cocaine trafficking ring that used USPS as a carrier. Like many drug traffickers, dealers, or darknet vendors—whatever name one carries in relation to shipping narcotics or other illegal drugs—this ring used various tactics to conceal packages. Buyers often scrutinize darknet vendors for their stealth. And those with the best or unique stealth methods often utilize a tactic or trick when shipping orders. The less a package stands out, the better.

Stealth goes beyond looking good on the outside of the package. Sometimes even the best packages get randomly selected. According to reviews of vendors on darknet forums, good stealth involves measures that allow a package, even once opened, to return to the mail stream with the product undetected. Many methods play into the likelihood of a package seizure. Rubber gloves at the post office can give set off alarm bells, for instance.

This ring of eight, though, worked with an insider when it came to USPS stealth detection—to some degree, at least. Borrelli really only worked with three members of the group: Dante Lozano, Jeffrey Turner and April Racan. Lozano lived in Texas and shipped kilograms of cocaine to Turner and Racon in Pennsylvania. At the time, Borrelli lived in Pennsylvania as well. He worked as a postmaster and advised Turner on how to minimize the chances of law enforcement involvement.

Borrelli collected lists of vacant homes in the area and then have them to Turner. Turner then sent the list to Lozano, who ensured the packages had balls addresses on them. Borrelli opened a PO box for Turner that the DoJ called “untraceable.” He also intercepted packs as they arrived and before other employees saw them. In addition, Borrelli attempted to keep packages from delivery vehicles, minimizing the number of people that interacted with a package.

Judge Arthur Schwab sentenced​ the former postmaster to four years imprisonment and five years supervised release.

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