Monthly Archives: May 2013

Fox News asks if Bitcoin can “go legit”

BitcoinsIn the wake of the DHS seizure of a bank account tied to Mt. Gox and the government shutdown of Liberty Reserve, Fox News takes a look at the increasing regulatory scrutiny that digital currency exchanges are facing from the U.S. government. From the article:

“I really believe in complying and keeping track of bad guys,” said Peter Vessenes, CEO of a start-up called CoinLab, which is attempting to get full regulatory approval before launch. “But with all the different state rules we put in so much more time and energy … than we should have to.”

Despite the regulations, technology experts say that they will not prevent people from anonymously using bitcoins for illicit things like buying drugs online. The real-world analogy is cash; the government can tell when it is dispensed by banks, and to whom, but it loses track once it is dispensed.

“Bad people are going to do bad things. Right now the people who do the most bad things do it with cash,” Murck of the Bitcoin Foundation said.

WeMineLTC litecoin pool possibly underpaying miners

If you use WeMineLTC as your litecoin mining pool, you should take a careful look at your earnings. There have been an increasing number of reports from miners that the pool is underpaying by ~30%, either because the operators are intentionally skimming, or because the pool is misconfigured. You can read more in this Reddit thread, or here on the Bitcointalk forums.

I have never used WeMineLTC, so I can’t comment personally. Mining pool scams certainly aren’t unheard of, so regardless of which pool you choose, make sure to keep an eye on your earnings to ensure that they’re in line with expectation (don’t forget to account for the pool’s fee, any pool or miner downtime, and internet latency).

Update 5/29: Apparently there was a vulnerability in WeMineLTC’s pool code that was exploited by some users to steal coins. It has been patched as of today.

Bitcoin network more powerful than world’s fastest supercomputers—by far

The Bitcoin network is now nearly an order of magnitude faster than the world’s 500 top supercomputers combined, and it’s getting bigger every day.

Pretty remarkable considering Bitcoin has only been around for four years.

CGWatcher: A watchdog for cgminer

CGWatcherEver wish that you could keep an eye on your miners 24/7? Maybe you’ve had cgminer inexplicably stop mining in the past, or you’re currently testing out settings that you’re not sure are stable—whatever the reason, it’d be nice if you immediately knew about issues that required a cgminer restart.

Enter CGWatcher, a tool that will keep an eye on cgminer for you. CGWatcher monitors several cgminer outputs, and will automatically restart cgminer whenever an issue is detected (e.g.: a dead/sick GPU, no submitted shares for the past x minutes, hashrate below a set threshold, etc).

It’s a great little tool, and I highly recommend it—especially if you don’t have your miners at a point where they’re completely stable yet. You can read more about CGWatcher (and download it) at the author’s website.

Guide: Cryptocurrency Wallet Security

Litecoin walletSo you’ve built your own mining rig, you’ve mastered the art of trading for profit on the cryptocurrency exchanges, but you haven’t given much thought to securing your digital fortune against theft and accidental loss? Don’t worry, you’re not alone. Wallet security isn’t exactly a glamorous topic. In fact, many of you might even assume that you don’t need your own wallet at allafter all, mining pools and currency exchanges are more than happy to hold your money for you, right?

Letting somebody else control your money is a mistake that will likely end up costing you at some point. That mining pool operator that you assume is trustworthy could very well be a teenager halfway around the world that has no problem stealing your coins. The various digital currency exchanges are unregulated, not necessarily secure, and a daily target for hackersgood luck getting your money back when one is breached or goes belly up.

Since it’s still basically the Wild West when it comes to cryptocurrencies, the only way to ensure that your digital wallet can’t be stolen or lost is to secure it yourself. Thankfully, this isn’t all that difficult if you follow a few basic rules. Read on for the guide.

Department of Homeland Security orders Dwolla to stop processing payments from Mt. Gox

Users on Reddit and the bitcointalk.org forums are reporting receiving emails from Dwolla stating that they are no longer allowed to process payments associated with Mt. Gox, due to a court order from the US Department of Homeland security. The Mt. Gox / Dwolla combination has been the most convenient (and cheapest) way for most people to convert bitcoins into cash.

The full text of the email from Dwolla reportedly looks like this:

You’re receiving this notice because our systems have indicated that you’ve processed and completed a real-time Dwolla-to-Dwolla payment to Mutum Sigillum LLC (“Mt. Gox”) within the last 24 hours.

Due to recent court orders received from the Department of Homeland Security and U.S. District Court for the District of Maryland, Dwolla is no longer legally able to service Mutum Sigillum LLC’s account.

This is a courtesy email encouraging you to follow up on any uncompleted orders with Mutum Sigillum LLC as Dwolla is now unable to move money to and from Mutum Sigillum LLC’s Dwolla account.

Dwolla is not party to this matter nor does it have any information or further insight into the situation. We strongly encourages those with questions to contact Mutum Sigillum LLC

Note: Dwolla requires a court order before honoring requests such as seizing funds or revoking access to an account.

On behalf of Dwolla, we apologize for this inconvenience.

I haven’t seen anything official from either Gox or Dwolla yet, so it’s possible that this is a coordinated hoax in an attempt to manipulate market prices, I suppose. The prices of both BTC and LTC are already down quite a bit on the news.

Update: Mt. Gox has posted a short statement on their site regarding the order.

Update 2: CNET is reporting that they were able to confirm the validity of the story. Not a hoax.

Update 3 (5/15): Ars Technica has the reason for the DHS action.

Reminder: upgrade your Bitcoin client before May 15

Bitcoin logoIf you’re running Bitcoin-qt or bitcoind, check to make sure that you have the latest version before May 15th. Running old versions after May 15th will cause you problems.

Bitcoin.org explains why this is necessary:

A bug caused a temporary block chain fork on 11 March, 2013. After investigating that bug, we determined that the bug can happen even if the entire network was still running old versions of Bitcoin-Qt/bitcoind. Therefore, the only option is to require everybody to either upgrade or workaround the bug.

You can get the latest version at bitcoin.org.

Wall Street Journal: Why Bitcoin is being taken seriously

The Wall Street Journal posted a short commentary on Bitcoin today:


(if the video doesn’t load for you, click here)

The altcoin explosion… and how to profit from it

AltcoinsIf you’re following the cryptocurrency mining scene at all, you’ve probably noticed that there are digital currencies other than Bitcoin and Litecoin. Quite a few of them, actually. Bytecoin, Terracoin, PPCoin, Feathercoin, Freicoin, Novacoin… the list goes on and on, and it seems like there is a new addition weekly.

The sad reality is that virtually all of these coins bring nothing significant to the table when compared to Bitcoin. The Bitcoin code is open-source, which means that anyone with a few hours of time on their hands can make some minor adjustments and fork off a brand new virtual currency that is nearly identical to the original in everything but name.

But why would somebody make a near-clone of Bitcoin? Why would anyone use a knock-off currency when they could just use bitcoins instead? Read on for some answers about altcoins, and how you can profit from them as a miner.

Khan Academy on Bitcoin

The Khan Academy posted an introduction to bitcoin mechanics, including brief overviews of the block chain, mining, and how transactions work:

It’s a bit dry, but if you’re fuzzy on the basics of how digital currencies work, you’ll probably find it enlightening.