th-Bitcoin1-90x60SHADOW COMPUTER HACKER ON GREEN IMAGE www.socialselect.net

Bitcoin is a decentralised, crypto-currency, free from any government or central bank control (see video). Electronic transactions can be virtually anonymous, with the currency bought and sold at online exchanges.


Tradefortress, a young Sydney man who told ABC News he was over 18, but only just, refused to give his real name to Fairfax Media.

He offered the wallet service through a website called Inputs.io. The Inputs.io domain is registered to a person with a landline based at a block of flats in Water Street, Hornsby, NSW, according to Fairfax searches.

The site claimed to be ‘‘one of the most secure web wallets on the market’’ and charged customers a small fee to store their coins.

As well as utilising two-factor authentication and location-based email confirmation, it claimed it was set-up to prevent ‘‘the hack of Bitcoins even if the web server was compromised’’.

It now seems that claim has been proven untrue, with Tradefortress telling users on the site: ‘‘I don’t recommend storing any Bitcoins accessible on computers connected to the internet.’’

In an email interview with Fairfax Media, he said he would try to refund some of the hacked money using more than 1000 Bitcoins he personally owned and some not taken by hackers.

‘‘Users are being repaid up to 100 per cent depending on the amount (sliding scale), generally 40-75 per cent,’’ Tradefortress said.

‘‘I won’t have any Bitcoins left after this, except for a small amount of commemorative physical coins.’’

He said the hackers who made off with his customers’ coins were able to bypass the two-factor authentication securing the server hosting them ‘‘due to a flaw’’.

‘‘The attacker compromised the hosting account through compromising email accounts (some very old, and without phone numbers attached, so it was easy to reset),’’ Tradefortress said.

Because of the hacking incident, he said some users would probably lose trust in Bitcoin.

‘‘I think that’s likely – we haven’t seen any extremely sophisticated Bitcoin malware, however advanced malware that infects the computer you use to send [Bitcoins] can steal [them] from external hard drives [and the] browser.’’

He said he won’t be reporting the incident to law enforcement because there were ‘‘extremely limited actions’’ it could undertake considering the currency can’t be easily traced.

Many of Input.io’s users were ‘‘quite understanding’’ of what had happened, Tradefortress said.

‘‘I’ve received a lot of comforting support, but there’s also ugly responses. It’s quite different from the reactions of non-customers.’’

The ugly responses were from users who accused Tradefortress of making up the hacking story.

‘‘Some people think I have their money. I don’t and I’m using my personal coins to compensate users, yet there’s some ugly messages I’m receiving.’’

A sad face emoticon now sits at the top of the Inputs.io site, with text telling users that the hacking has ‘‘left Inputs.io unable to pay all user balances’’.

‘‘I know this doesn’t mean much, but I’m sorry, and saying that I’m very sad that this happened is an understatement,’’ the notice says.

A customer wrote on Twitter that they had lost four Bitcoins as part of the heist, worth about $A1216 today.

‘‘I was the victim of part of a $1.2 million Bitcoin hack of an online wallet, inputs.io. If I’m lucky I’ll get my principal back in a refund,’’ wrote Marco Martoccia (@sheet_metal).

‘‘I still have one ninth of my Bitcoin. I dunno how to feel,’’ he added.

Martoccia told Fairfax he was planning on using the Bitcoins as a deposit for a house.

Bitcoin investor Marco Martoccia

‘‘I hope to get my Bitcoins back some day,’’ he said. ‘‘I was [going to] use [them] to buy a house and start a family with my girlfriend in six years.

‘‘Four Bitcoins isn’t a lot, but it was everything to me.’’

Martoccia said he stored his Bitcoins on Inputs.io because he believed it would be safer than storing them on his own computer.

‘‘On the surface it seems safer to keep Bitcoins in a bank [like Inputs.io]. I know people can just hack my computer, so I guess they’re still vulnerable, even in that case. And paper wallets can be plain lost!’

The owner of the Inputs.io domain name, Tradefortress has been traced back to this block of flats at Hornsby in NSW using domain registration records

Ty Miller, director of Australian IT security firm Threat Intelligence, said the underlying problem with online Bitcoin wallets was lack of regulation.

“The users of Inputs.io were trusting a random person with their money rather than in the real world when you’re dealing with cash, where you trust banks to look after your money,” he said.

“They’re more likely to become compromised because they’re not being audited in the same way that those financial organisations are.”

The Rserve Bank of Australia declined to comment.

Miller said there were ways to secure Bitcoins to try to avoid fraud or theft.

“But it’s really at this stage a personal effort to do that.”

He recommended storing coins with a strong password on a device not connected to the internet, using hard-drive encryption and anti-virus.

For extra protection, storing the device in a secure room or safe was also recommended. When it came time to using the Bitcoins online, the amount needed could be transferred to an internet-connected computer, he said.

At the time of writing, one Bitcoin was worth $A309 or $US292.9 – up from around $US50 in mid-March. There are 11,925,700 million Bitcoins in circulation.

Those who invested early in the virtual currency have recently found themselves far better off. A Norwegian man spent 150 kroner ($A28.44) on 5000 Bitcoins in 2009, they are now worth $A1.5 million.


Henry Sapiecha

gold dollar sign line


Google chairman Eric Schmidt brands China in his coming book an internet menace that sanctions cyber crime for economic and political gain, The Wall Street Journal reports.

The New Digital Age authored by Schmidt in collaboration with Jared Cohen, a former US State Department adviser who now heads a Google Ideas think tank, is due for release by Random House in April.

The book looks at how the internet impacts culture, commerce, politics and other aspects of life, while depicting China as a powerful and dangerous force in this new world, according to the Journal.

The authors called China the most prolific hacker of foreign companies and the most enthusiastic filterer of information.

“The disparity between American and Chinese firms and their tactics will put both the government and the companies of the United States at a distinct disadvantage,” the newspaper quoted the authors as saying in the book.

“The United States will not take the same path of digital corporate espionage” due to stricter laws and the American “sense of fair play”, it added.

The book reportedly also points to US flaws, such as Washington’s suspected role in a Stuxnet virus that targeted nuclear facilities in Iran and private companies here that sell surveillance technology to oppressive regimes.

Schmidt and his co-author verge on suggesting that Western governments emulate China when it comes to building tight relationships between government interests and moves by technology companies, according to the Journal.

Countries stand to have an advantage if the gear and software they use to get online is made by companies they can trust, the book reportedly argues.

“Where Huawei gains market share, the influence and reach of China grow as well,” the Journal quoted the authors as writing.

Despite unscrupulously using internet technology to its advantage, China will see “some kind of revolution in the coming decades” as citizens armed with digital age gadgets are pitted against tight government controls, the book is said to predict.


Sourced & published by Henry Sapiecha

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