Tag: bitcoin mining

A New Type of Cyberattack is on the Rise: Cryptojacking

By Indri Schaelicke | United States

As technology continues to advance, our lives are becoming more and more comfortable. Technology allows us to spend less time and energy doing basic tasks by automating them. Perhaps the most revolutionary invention of all time is the Internet, with many services being brought into the digital realm. It is now possible to buy products online from halfway around the world and do all of our banking from web-based apps and websites, tasks that a few decades ago might have taken hours to complete in the real world. Being able to do these tasks efficiently allows us to increase our productivity as we direct our scarce resources towards other ends. However, as more services are moved online and our use of the internet increases, so does the risk of cyberattacks and fraud. A new type of dangerous cyberattack is on the rise: Cryptojacking.

What is Cryptojacking?

Cryptojacking is the use of a device’s resources and equipment to mine cryptocurrency. Hackers install software on computers, network servers, and mobile devices that remain hidden from the user’s view and mines cryptocurrency in secret. In some cases, this hidden software is loaded onto computers just like much other malware through tactics used in traditional phishing attacks. First, Cryptojacking victims receive an email that appears to be from a legitimate source, containing a link to another website. The link runs code that installs the crypto-mining script on the computer. The script then runs in the background as the user operates the laptop during their day-to-day activities.

Hackers can also make use of a victim’s computers’ resources by injecting the code into a website or an ad that is displayed on several websites. Once the victim visits that website or the infected ad is displayed in their browser, the code automatically executes. No code is stored on the victims’ computers, meaning that crypto-mining only occurs while that website running or that ad is being displayed. In either of these methods, the code uses the victim’s computer to run the code that mines the cryptocurrency computers and sends the results back to the hacker. This malicious activity harms victims by severely slowing down computer speeds and using up hard drive space. Cryptojacking is usually detected when a victim notices a significant drop in battery life and processing speed on their device.

What is Cryptocurrency?

Cryptocurrency is decentralized blockchain money that exists only online, the most notable of which is Bitcoin. It was created as an alternative to traditional money, which is issued by governments and is trackable, as well as centralized. This technology gained popularity for its potential for growth and the anonymity it offers users. Users make transactions using cryptocurrency, while others use it to make investments, which they hope will earn them a sizeable payout. While Bitcoin was one of the first to be created, several others have been invented since. The word “cryptocurrency” comes from “cryptography” and “currency”.

Mining is a process by which new coins are found and added to a blockchain. Individuals or groups who use computers to solve complex mathematical problems to discover these new coins are called miners. The mining process is what makes cryptocurrencies decentralized, as anyone can use their computer to mine. These digital monetary units are popular for the security that they provide, which is ensured during the mining process. So how exactly does it work?

Transactions that take place on a specific coin’s network are collected and bundled into a block by the miner. If the miner attempts to submit a block to the system that contains an invalid transaction, the block will be rejected, thereby ensuring the security and reliability of the coin. An invalid transaction would be when a user sends an amount that they do not have.

Once the miner has verified that all transactions in the block are valid, they must compute a cryptographic hash, a set of complex mathematical problems. This prevents fraudulent blocks from being created and therefore secures the network. Computing a cryptographic is done using a computer, which makes it much more efficient but is a significant drain on battery as the calculations require a large amount of energy. Cryptojackers attempt to economize their mining by outsourcing their energy input to victims. The block is sent to the network after the cryptographic hash is complete so that it can be checked against the coin’s consensus rules. After it is verified that the block does not contain invalid transactions and meets the consensus rules it is accepted and the block is then added to the blockchain network. The miner is rewarded for their work with a set amount of the cryptocurrency, thereby adding new coins to the system.

How Can I Protect Myself?

The easiest way to protect against cryptojacking is to install a cryptojacking blocker browser extension. These extensions block a list of domains that have been found to be associated with cryptojacking. Popular miner blocking extensions include No Coin and MinerBlock. If you prefer a more comprehensive anti-malware and cryptojacking program, Malwarebytes and similar software block crypto mining in addition to general cybersecurity.

Further reading:

Malwarebytes: How does cryptojacking work?

Mycryptopedia: What is cryptocurrency mining?

Mycryptopedia: Blockchain Consensus Algorithms Explained

Fossbytes: 7 Easy Ways to Block Cryptocurrency Mining in Your Web Browser


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Cryptocurrency Market Shows Life, Adds $40 Billion in 2 Days

By Ryan Lau | @agorisms

Over the past several months, the cryptocurrency market has slowed. Its peak market cap of $830 billion has fallen dramatically, losing over two thirds of its value.

However, over the past several days, it is beginning to show life again.

On July 2, Bitcoin finally saw growth after it reached a 12 month low in value. As of June 29, the cryptocurrency had fallen as low as just over $5800 USD. Yet, the value, as of July 3, has soared back to $6658 USD.

This shows nearly a 15% increase in Bitcoin in just four days, which averages to slightly under 4% a day.

Of course, since the cryptocurrency’s fall from a January high of nearly $20000 USD, it has jumped up by these percentages a number of times. Despite this, some investors believe that this rally is longer term.

Sustainable Cryptocurrency Market Gains

As Bitcoin rose, the cryptocurrency market as a whole also saw considerable gains in volume. In the past 48 hours, it has added $40 billion dollars in total volume. As part of this, Bitcoin’s volume rose to $4.6 billion.

Other coins, such as Bitcoin Cash, Cardano, and Ripple, have also risen in value and volume over the same span. Ethereum also showed strong recovery, bouncing from $400 to $467 USD.

Because of the increase in both volume and value, many expect this growth to continue. Some market estimates place a short-term value of Bitcoin at slightly over $7000 USD. If this occurs, it will represent a 21% payout since the cryptocurrency reached its low.

Smaller cryptocurrencies have yet to see the same rebound and uptick in volume. Yet, the market trend suggests that they may soon see similar looking gains, as demand for crypto increases.

The Cryptocurrency Market in U.S. Cities

Clearly, there has been a rapid increase of cryptocurrency market recognition since just one year ago. As this continues, demand not only rises for coin ownership, but for work opportunity. in fact, first quarter 2018 blockchain jobs on the freelance site upwork.com rose a staggering 6000%.

While some, like those on upwork.com, seek employment in blockchain, many others are finding another way to join the market.

Throughout U.S. cities, Bitcoin ATMs are beginning to appear. As of mid-June, over 2,000 of the machines existed in the United States, with almost 100 in the state of Michigan.

For a fee of 7 to 8 percent, consumers may purchase the cryptocurrency in order to hold, invest, or trade.

Generally, the machines exist in low income areas. Of course, many families with lower incomes do not have bank accounts. As an alternative, they may use these ATMs as a cheap alternative means of storing money.

Some even view the machines as an alternative to lottery tickets. With high levels of risk and reward, both are capable of bringing massive success for a small price.

Unlike a lottery, however, the cryptocurrency market shows trends that users can monitor for maximum gain. Detroit gas station owner Andy Attisha says that users of his Bitcoin ATM are doing exactly that.

“A lot of people do day trading on it,” Attisha remarked about his ATM. “I see people coming in here every day messing with the machine.”


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North Carolina Sends Cease and Desist Order to Cryptocurrency Mining Company

By Mason Mohon | @mohonofficial

The state of North Carolina sent a cease and desist letter to cryptocurrency mining company Power Mining Pool (PMP) last week. It was found that PMP was in violation of multiple parts of the securities act:

The Securities Division found that PMP is violating the Securities Act by: a. offering unregistered securities in the form of ‘mining pool shares;’ b. offering securities while it is not registered to do so; and c. making material misstatements when offering securities.

 

PMP was told that they must not act as a securities dealer in any capacity unless registered with the state, according to Bitcoin.com.

PMP received a cease and desist letter on March 2, but made no effort to respond. On March 6, its website had gone down. The website itself is the only place of business, for there is no known physical location for PMP. The individuals running the organization are also unknown.

The company claims to be able to mine seven different cryptocurrencies, each of which it will mine less when the computer detects that it is not currently “profitable.”


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The Free Market of Cryptocurrency is Under Attack

By Ryan Lau | USA

Last week, after a hard-fought legal battle in both the House and Senate, the Republican tax bill passed by a narrow majority. Since then, conservatives claiming to advocate for a smaller government have touted the move as a political success, and the biggest tax reform in decades. Though it does reduce some personal and corporate income taxes, the bill is in fact incredibly disturbing on a much different ground. In fact, the very people who claim to be calling for a reduction in government size have just taken a major step in killing the future of cryptocurrency. This tax bill, in its reclassification of the 1031 Exchange law, has in fact done more to extirpate any trace of legal economic freedom than any bill since the Affordable Care Act.

What is the 1031 Exchange, and why is it important? Essentially, this measure, an important part of our tax code, allows for investors to defer capital gains taxes, in the event that an investor is selling a property with the direct goal of purchasing a new one. This has been widely used by house flippers and cryptocurrency traders alike. However, the tax bill has removed cryptocurrency from the list of acceptable 1031 references. Though the IRS has classified cryptocurrency as a taxable capital gain since 2014, it previously was only taxable when exchanging large amounts of it for fiat currency. Hence, reinvesting and exchanging between cryptocurrencies was treated as a 1031 exemption, though this is no longer true. Now, the IRS has permission to tax any and all exchanges between cryptocurrencies, which is an attack on individual liberty and economic freedom.

What does this mean for the future of cryptocurrency? Though small investors will not be significantly impacted due to the simple fact that capital gains tax has a minimum threshold, the impact of larger investments is astronomical. A day trader, who may exchange cryptocurrency multiple times in one single day, he may now find himself subject to a 20% capital gains tax for each exchange. This new implementation will naturally take away some of the perks of trading, reducing the demand for such exchanges. Though investors may still leave their money in one single cryptocurrency for extended periods of time, this action naturally has a smaller maximum profit margin. Even so, the IRS is tight their fists around long-term investments, with a new Senate bill that threatens the future of all cryptocurrencies recently passing.

Though some coins, such as Monero, have greater levels of privacy than others, this ability to hide from the state is quickly shrinking. Action must be taken immediately to protect the rights of cryptocurrency traders, whether it be done through the law or the market. Though investing cryptocurrency in a 401K or Roth-IRA would currently avoid these taxes, these funds have virtually no liquidity, and there are very few, bleak alternatives, such as surrender of citizenship. One should never have to give up their United States citizenship or invest in an offshore account in order to avoid mass theft on personal property, yet with the government’s recent actions, is this fate inevitable? The IRS is concerned with losing out on income, yet forget that they are merely a collective of individuals with no legitimate claim to any individual’s income. This must be recognized, and this bill altered, if we are to protect the rights of the individual.

Senate Bill Threatens Future of Cryptocurrency

By Andrew Zirkle|WASHINGTON

Hidden within the “Combating Money Laundering, Terrorist Financing, and Counterfeiting Act of 2017”, also known as S.1241, are far-reaching regulatory provisions expected to heavily affect users, traders, and holders of all types of cryptocurrencies, including Bitcoin.

The bill was pushed into a Judiciary Committee hearing on the 28th of November, without much notice to the public. The bulk of the 2-hour hearing focused on other elements of the bill, with the only mention of cryptocurrency happening very briefly during a discussion on money laundering. The hearing also featured a testimony from Kathryn Haun, who is on the Coinbase board of directors. She did not mention any information regarding cryptocurrency or its exchanges.

The bill, which contains 20 sections, was written under the guise of preventing illegal money operations. However, its relatively small changes to the legal status of cryptocurrency are expected to have far-reaching ramifications. Section 13 of the bill indicates that “digital currency” is to be added to the list of items that the US Treasury Department will consider as “financial institutions.” Although this change in legal definition may seem small, the impacts it would have for cryptocurrency users would be significant.

The owners of cryptocurrency would be required to report their holdings in cryptocurrency to the IRS as assets, and also may be required to pay a long-term capital gains tax of up to 25%, or regular federal income tax of up to 39.6%, on the revenue earned from selling cryptocurrency for more than its previous value. Holders of cryptocurrency who do not report their holdings as assets to the IRS would be subject to tax evasion penalties or jail time. The bill fails to address many of the complexities of digital currencies, including the tax protocol for exchanging US Dollars for cryptocurrency multiple times before selling back to dollars, as well as any tax burdens that may be held by cryptocurrency exchanges.

The measure also subjects holders of cryptocurrency to more government scrutiny, meaning individuals who are believed to be misrepresenting their crypto holdings or transactions could have their financial information seized by the IRS or subpoenaed in court. Section 13 of the bill also requires the “detailing a strategy to interdict and detect…digital currencies…at border crossings and other ports of entry for the United States.”  This means that even someone with basic electronic equipment could be questioned or searched by border and customs officials, as well as the TSA.

Although the bill does contain a lot of important updates to the criminal code regarding money laundering, many in the cryptocurrency community are calling for a re-examination of the bill itself and section 13, as it is widely believed that it does not properly account for the nature of cryptocurrencies in its attempts to regulate.