Bitcoiners fall for yet another blatantly obvious scam
I would like to introduce to you the “Cryonic FrostBitâ?¢ Bitcoin Miner,” a device so revolutionary in the world of computing that its innovations could only be put to proper use in a bitcoin miner.
Living on Bitcoin for a week: What we should have learned
If, for some reason, you missed it, Forbes blogger Kashmir Hill spent a week using nothing but bitcoins as cash in what I can only assume was an experiment to prove that it can be done and to demonstrate the viability of Bitcoin as a currency. The true believers will inevitably point to this experience as an example of Bitcoin working in the real world, but their bias blinds them to the truth: it is not possible to survive using nothing but bitcoins. As a publication is totally unbiased and entirely honest with regard to bitcoins, we’re here to point out the things that bitcoiners ignored or glossed over.
Our heroine (or victim, depending on your viewpoint) began with a sum of five bitcoins (when they were selling for roughly $142.00,) purchased through Coinbase, since the Magic: the Gathering Online eXchange is awful and legitimate banks won’t allow funds to be transferred to a shady Japanese “business.” She immediately discovered that you can’t buy food with bitcoins unless you’re willing to buy questionable preserves from strangers or stock up on end-of-the-world survivalist rations. Someone eventually pointed her to a service which acts as a middleman, ordering things from local restaurants and then delivering them, adding a service fee for the convenience. For some reason, they accept bitcoins. She immediately handed over an entire bitcoin, giving them around $130.00 at the time for orders yet to be made.
Bitcoin24 circles the drain
In case you haven’t heard the news, German Polish buttcoin exchange Bitcoin24 is no longer operating, due to “The Polish authority” closing their bank account in Poland.
Before we proceed, let’s take a moment to look at Bitcoin24′s long and untarnished history. Founded in May of 2012, Bitcoin24 was allegedly the largest buttcoin exchange in Europe, with only the mighty Mt. Gox surpassing it in terms of volume and profit. Apparently they also surpass the Magic: the Gathering Online Exchange in terms of utter incompetence and hilarity. Recently, people found the admins asking questions on StackOverflow about how MySQL works and how to round numbers when working with financial data.
This was followed by the site’s trading engine shitting the bed and started to give people more money or bitcoins than they deserved, like a faulty ATM spitting torrents of cash into the street. It then broke down even further, with trades randomly appearing and disappearing before the site’s functionality went down entirely.
A few days ago, the site made the above announcement, in even more broken English. Today, we find this PDF, outlining the following (thanks to SA forums goon Greyhawk for the translation):
Oh, boy. So first thing this is a very, very bad translation from Polish into German. Very bad. Half of it doesn’t even make sense.
But the gist of it is:
- The German prosecution knows everything there is to know about bitcoin-24 right from when they began operating. And I do mean everything. Current bank accounts, old bank accounts. Who the money was coming from, who it was going to. Everything. In total over 500000 Euro were transferred via these accounts mostly from Germany towards Poland, Romania and Bulgaria
- German prosecution sees bitcoin-24 as a massive money laundering operation and are proceeding against the owner
- German prosecution has evidence that the owner is involved in phishing attacks and is proceeding against him about that too. Apparently the owner was retarded enough to send the “pure profit” of those attacks to the polish bitcoin24 bank account.
Furthermore, we find that his home was raided and he is no longer free.
Meanwhile, MtGOX is suffering from yet another “DDoS” and having a slew of issues with banks and Bitfloor is gone again. Just another day in the life of the currency of the future!
The sound of Buttcoin
We’ve been so focused on the catastrophic crash of bitcoin that we’ve neglected to bring you some of the finest art that both the bitcoin and buttcoin worlds have to provide.
First, we bring you a labor of love from the SA forums:
Listen to Buttcoin
Be sure to check out the fantastic Cosby mode!
Now that we’re done with the good, on with the bad!
How I Learned to Stop Worrying and Love the Bitcoin
For anyone who has been under a rock or in a cabin in Canada or something for the past thirty-six hours, the price of Bitcoins has crumbled. After hitting a high of 266 filthy fiat dollars per tulip bulb, the price crumpled as thousands of people stepped back and realized they’d made a terrible mistake. The resulting selloff once more devastated the Magic: the Gathering Online eXchange‘s servers, pushing the lag up to over an hour, allowing us to watch the price topple down the charts like distant starlight reaching the Earth for the first time in millennia. It finally settled at a low of $105 before jumping back up to $200, then back down, then up, then down, up and down like a yo-yo. Relatively smarter people and panic sellers got out, while the true believers rode it all the way down, despite their losses.
GIF credit @bakedinapie
MtGOX finally admitted that they were not being DDoSed, instead announcing that they are merely incompetent and unprepared for actual web and exchange traffic. They then pulled the brakes and halted all trading entirely to let the market “cool down” following the price crashing.
Meanwhile, trading continued at smaller exchanges, with the prices falling well below $100 as wary “investors” jump ship. Many of them have experienced their own issues from the flood of traffic, with Bitfloor crying wolf DDoS.
What drove this ridiculously huge bubble? If you ask the average bitcoin chump, he’ll tell you that the citizens of Cyprus are buying up huge amounts of bitcoins to hide from their government’s “theft” as the country tries desperately to save its flailing economy. Amazing bitcoin ATMs and fantastic new bitcoin services are springing up all over the country, as well as everywhere else in Europe. None of this is true, however. Cyprus is involved, but not in the way that everyone is trumpeting. Bitcoiners saw the crisis in Cyprus and attempted to pitch their flaky “currency” to Cypriots as a way to escape government controls, hype built up around this, media attention built up around the hype, and then this all began feeding back on itself until yesterday’s reality check.
Today, prominent posts in the bitcoin subreddit included links to suicide helplines, angry screeds about MtGOX, people calling each other out for giving bad financial advice, and the occasional smuglord showing off that he’s still hoarding his buttcoins. The atmosphere there is rather deflated. Bitcointalk just wants MtGOX’s blood.
Who’s left holding the bag this time? Everybody who was gambling on the price going up uP UP forever, all the true believers who’ve been led astray by the likes of Rickard Falkvinge, Max Keiser, and Alex Jones, foolish investors who read about this newfangled “bitcoin” thing in shitty financial rags, and the Winklevoss twins (notable for such aptly named websites as “Hukkster” and “SumZero.”)
MtGOX is set to reopen tonight at 2:00 UTC (9:00 PM EDT, 7:00 PDT) to allow the crash and thefts to resume.
Update: MtGOX lasted an hour and a half before it collapsed beneath its own weight once more.
The best Buttcoin tweets
Choice cuts of butts here:
i am nude, shaved, & ready to be submerged within the digital chrysalis where i will generate bigcoins by doing ki warrior poses until i die
— wint (@dril) April 9, 2013
"Here, kid." you say, flipping the urchin a bitcoin. It's a large server and you've actually thrown it at the child. A woman screams.
— Dan (@dankmtl) April 9, 2013
Oh you're still into Bitcoin yeah I guess they're ok, I'm more into Litecoin and Namecoin, they're a bit more indie, but yah Bitcoin's cool.
— Andrew (@bn2b) April 9, 2013
2905: Scholars say the ancient Fedorite used to place a 'bitcoin' under his tongue to gain passage into the Underworld they called 'Reddit'
— Rei_ (@Random_Factor) April 7, 2013
Lemme cut to the chase here: Can I use bitcoin to buy drugs? Okay, super. Why isn't that the only question on your Q&A?
— Brock Wilbur (@brockwilbur) April 7, 2013
Silk Road fumbles and reveals its IP address
A bored pentester used this one weird old trick to find out Silk Road’s public IP address, which has the potential to compromise the entire operation.
EDIT: Don’t go into freak-out mode here! This is potentially serious, but is fixable and I disclosed to DPR alone about 15 hours ago. He’s good, skilled, and this will be investigated and fixed in no time, I am sure. In the interim, if you need to use Silk Road BE SURE TO USE GPG. The beauty of Bitcoin and Tor is that even if the server were to be seized, if your messages are GPGed, it’s near-impossible to get anything valuable. I just know that not everyone uses GPG.
I am a penetration tester by trade, and while I do not use SR, I do occasionally conduct informal tests of the security of various Tor Hidden Services.
I debated for hours whether to post this, but I need to alert the community in case no actions are taken:
Last night, while SR was down for maintenance, a brief few moments allowed a certain set of circumstances that caused me to be able to view the public IP of the httpd server of Silk Road. This isn’t an obvious flaw, but it is extremely simple if you know where to look – the server basically will publish a page containing all of the configuration data of the httpd server including the public IP address.
For the sake of the site’s security, that’s all the information I’m going to reveal.
I have messaged Dread Pirate Roberts and am currently waiting a response. I do have a SHA512 hash of the public IP which I have retained as evidence if DPR needs proof.
I will keep this updated with any news received.
With such information, authorities may be able to locate and shut down Silk Road and apprehend its operator, or more. What does this mean for Bitcoin? If the Silk Road gets busted, the only thing left to prop up the price of butts is the Magic: the Gathering Online Exchange’s creaky servers and meddling hands.