Blockchain & Cryptocurrency Security- The Full Story


Level 13
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Jun 24, 2016
Blockchain & Cryptocurrency Security- The Full Story:

Understanding Blockchain & Cryptocurrency -

  • Blockchain:
A blockchain consists of blocks that hold timestamped batches of valid transactions. Each block includes the hash of the prior block in the blockchain, linking the two. The linked blocks form a chain, with only one (successor) block allowed to link to one other (predecessor) block,thus giving the database type its name.
Blockchain technology may be permissionless—public, or "open for anyone to use"—or permissioned—private, closed off and accessible only to chosen parties which have specific "credentials giving them a license to operate [on a] particular blockchain".

  • Cryptocurrency:
A cryptocurrency (or crypto currency) is a medium of exchange using cryptography to secure the transactions and to control the creation of additional units of the currency. Cryptocurrencies are a subset of alternative currencies, or specifically of digital currencies.
Cryptocurrencies use decentralized control as opposed to centralized electronic money /centralized banking systems.The decentralized control is related to the use of bitcoin's blockchain transaction database in the role of a distributed ledger.


Blockchain is considered great by some..

How the Blockchain is changing money and business:
[SOURCE: (ARTICLE DATE: 27th Aug 2016)]

The Blockchain is an incredibly clever methodology by which the computing power of millions of computers is used to craft algorithms that every ten minutes secures a publicly-accessible ledger of recent financial transactions into a near-impenetrable “block.” These blocks are connected into a single, constantly-growing chain. If the chain is comprised of 100 blocks, a hacker attempting to exploit a transaction made in block 64 has to first hack the succeeding 30 blocks, each of which has been secured through algorithms crafted by the computing power of millions of computers. Collectively, the computing power used to craft these blocks is equivalent to 10 to a 100 times that of Google. The number of blocks in today’s well-known Blockchain systems are well over 100,000. Ultimately, the security provided by the Blockchain is infinitely greater than that of today’s most-advanced computer systems...
[To read the full article please visit]

..Yet Others Remain Unconvinced by Blockchain....

Don't Believe the Blockchain Hype- Examining the Weaknesses and Risks:
[SOURCE: (ARTICLE DATE: 13th Apr 2016)]

Few if any technologies have been covered as breathlessly by the media in recent years as blockchain, the underlying platform for the Bitcoin digital currency.
Blockchain's adherents -- which include a rapidly growing number of government entities, financial services firms and software startups -- have done little to quell the exuberance, seeing the technology as something that can power new types of applications for identity management, health records and other areas.

That's a problem, since in its current state of maturity, blockchain has significant weaknesses and limitations, as Constellation Research VP and principal analyst Steve Wilson writes in an new in-depth report, "Beyond the Hype: Understanding the Weak Links in the Blockchain":

"Blockchain was designed specifically for one main goal: preventing the "double spend" of electronic coins, without a central authority. Yet few of the mooted use cases are vulnerable to double spend or anything analogous. At the same time, many important security objectives are not provided by blockchain at all. Thus, blockchain is neither necessary nor sufficient for many of its suggested applications; in practice it's massively over-engineered, or incomplete, or both."

Blockchain and Security: There's Room for Improvement-
Another commonly held view of blockchain is that it's inherently secure. While blockchain has some trappings of security, it's far from complete and ironclad, as Wilson writes:

"Classically, security is a blend of confidentiality, availability and integrity, or "C-I-A". Blockchain offers lots of "A" and "C" (though the confidentiality is fragile). But its integrity comes with fine print. Once committed to the blockchain, transactions are indeed immutable, but the veracity of each entry rests on who controls the private key of each account."..
[To read the full article please visit]

Blockchain usage is growing in popularity..

Australia Post Details Plan to use Blockchain for Voting:
[SOURCE: (ARTICLE DATE: 22nd Aug 2016)]

"The emergence of crypto currencies on the technology known as blockchain have highlighted opportunities to repurpose that technology to capture various digital transactions in immutable, distributed and secure ways," Australia Post State Director, Victorian Government and Tasmania, Tim Adamson, said in the submission.
According to Adamson, using the blockchain for voting would allow for a location agnostic, "tamper proof" system that would provide traceability, prevent manipulation, yet allow anonymity, and be resistant to denial of service attacks.
Earlier this month, Australia Post Accelerator partner Rick Wingfield said blockchain could be used to physically process the verification of a person's identity.
"When we think about the blockchain, we don't want to take people's private information and put it on a public ledger because that would very quickly become a honey pot for scammers and hackers, and even if that data was encrypted that's probably not a good idea," he said.
"In many ways voting is an ideal use case for blockchain technology application beyond crypto currency."...

[To read the full article please visit]

Public Blockchains gaining acceptance at Bank of Japan’s Payment and Settlement Forum:
[SOURCE: (ARTICLE DATE: 27th Aug 2016)]

A summary of the Bank of Japan Forum on Payment and Settlement systems, released on Friday, revealed that public blockchains were discussed in a positive light. Banks and financial institutions typically focus on projects using private blockchains, where a greater amount of privacy and control can be held by the issuer. Their public counterparts, such as Bitcoin’s blockchain, are usually sidelined.
“When digital currencies become to be widely used, people will not have to have bank accounts for payment purposes.” Commercial banks could become “unable to provide ‘finality’ to payments,” stated Kenji Hoki, KPMG AZSA Senior Manager

BOJ Director-General, Hiromi Yamaoka summed up the points raised by the participants and gave the Bank's view as well as a possible course of action.
“Blockchain and distributed ledger technologies try to enable a system free from an "entrusted third party to manage a centralized ledger." In applying those technologies to various practices, it would be important to examine to what extent the current institutional framework such as legal systems are based on the concept of a "centralized ledger managed by an entrusted third party," and whether we need to modify those traditional framework so as to apply new technologies to the real world.”...

[To read the full article please visit]

What about Cryptocurrency? How does it work?

Everything you need to know about Bitcoin:
[SOURCE: (ARTICLE DATE: 29 Aug 2016)]

Bitcoin is the most well-known digital currency. Bitcoins are not printed like dollars or coins; they are virtual. Bitcoin information is stored in the cloud and decentralized, meaning no government or bank controls it. Instead, computer networks using distributed ledger technology keep track of who owns what. Thanks to new software systems such as Bitcoin XT, users don’t even need a computer, but can keep and use bitcoins with smartphones.

The amount of bitcoins that can ever be produced has been set at 21 million. This limit was established to ensure the value of the currency. However, bitcoin’s value can and has fluctuated dramatically.

Bitcoins were first introduced in 2008, in a paper by a mysterious computer programmer going by the name of Satoshi Nakamoto. Nakamoto’s true identity remains unclear, despite the recent claim by Australian computer programmer Craig White that he is the inventor of bitcoin.

Bitcoins work like any other currency, at places where they are accepted. Bitcoins can also be accepted by individuals as payment. In this way, the fees for exchanging money internationally can be dramatically reduced since no banks or exchange rates are involved. However, not all businesses or individuals accept bitcoins.

Is bitcoin safe?

Bitcoin advocates say that because no governments or banks are in control of this cryptocurrency, it is safe. Their argument is that because there’s been a limit to the amount of bitcoins that can ever be produced, the danger of a central bank or government printing new money whenever it gets in trouble is non-existent; so the risk of bitcoins becoming devalued is removed. Bitcoin advocates also point to the transparency and redundancy of blockchain technology.

However, bitcoin’s value has had a volatile history, with more than one dramatic drop in value. The latest dramatic change came after Brexit, when the U.K. voted to leave the European Union, in June 2016: The value of a bitcoin dropped by nearly 30 percent..

[To read the full article please visit]

Is Bitcoin the only Cryptocurrency?...

There were more than 710 cryptocurrencies available for trade in online markets as of 11 July 2016 and more than 740 in total, but only 9 of them had market capitalizations over $10 million
See Also: Crypto-Currency Market Capitalizations -

Which are the most popular?...

These Are The Most Popular Digital Currencies Three Years Running:
[SOURCE: (ARTICLE DATE: 23 Feb 2016)]
From the years 2013-2015, the three largest cryptocurrencies have remained steady: they are, Bitcoin, Ethereum, Ripple and Litecoin, respectively.
  • Ethereum-- The most publicized of the Bitcoin 2.0 technologies, Ethereum has had an appreciable price increase YTD perhaps thanks to questions surrounding the block size limit in Bitcoin and rendering it the second largest alternative digital currency.
  • Ripple-- Ripple is different than Litecoin and Bitcoin. For one, its pre-mined, meaning its not a very good option for an investor, not to mention its lost more than 90% of its market cap over the past two years.
  • Litecoin-- Litecoin is the well-known crypto-currency designed by Charles Lee, who now works as Director of Engineering at Coinbase. This peer-to-peer internet currency is very much like Bitcoin from the user standpoint.
[To read the full article please visit]

What is this "Mining",and is it Dangerous?...

Cryptocurrency Miners Explained-
Why You Really Don't Want This Junk on Your PC:


uTorrent recently made headlines for bundling cryptocurrency-mining junkware. Out of all the junkware programs bundled with installers, cryptocurrency-miners like Epic Scale are some of the worst.

Modern malware makes money by using this technique to mine Bitcoin, too. Even if you don’t care about most junkware at all, cryptocurrency-mining software is something you really don’t want on your computer.

New units of Cryptocurrency are generated by “mining.” This is a computationally intensive task, and it requires a lot of processing power. Essentially, the computer is rewarded for solving difficult math problems. This processing power is used to verify transactions, so all that number-crunching is required for the cryptocurrency to work. That’s an extremely basic explanation — read our in-depth explanation of Bitcoin for more details.

Mining programs tap into your computer’s hardware resources and put them to work mining Bitcoin, Litecoin, or another type of cryptocurrency. And no, even if your hardware is used to generate money for them, you don’t get any of it. They get all the money from putting your hardware to work.

Worse yet, your desktop computer or laptop at home just isn’t powerful enough to profitably mine Bitcoin, Litecoin, or other cryptocurrencies. Doing this profitably requires specialized mining rigs with specialized hardware and cheap electricity. So, even if you put your computer to work mining Bitcoin for your own profit, you’d actually lose money. You’d run up your power bill as your computer draws more power, and you’d make back less than it would cost you in power.

In other words, cryptocurrency miners like the Epic Scale crapware or other malware programs that work similarly just run up your electricity bill for a small little bit of profit. The only reason they can profit is because they’re not paying the electricity bill — you are. You pay more in electricity so the junkware or malware authors can make a fraction of that in profit.
BitTorrent argues Epic Scale is completely justified in abusing your hardware because you agreed to it. If you clicked through the uTorrent installer and accidentally agreed to the Epic Scale offer because it was disgused to look like a legitimate license screen, it’s only your own fault for choosing to use Epic Scale...

[To read the full article please visit]

The Creation of a "Super-Anonymous" Cryptocurrency...

Meet Monero, the Currency Dark Net Dealers Hope Is More Anonymous Than Bitcoin:

[SOURCE: (ARTICLE DATE: 23 Aug 2016)]

Not even bitcoin is anonymous enough for some criminals on the dark net.

For years, the cryptocurrency has been the payment method of choice for people buying and selling drugs and other illegal items on the dark net. But it presents a double bind: bitcoin is pseudonymous, allowing folks to buy meth with a degree of privacy, but it’s also set up so that every transaction is traceable on a public ledger called the blockchain—not exactly ideal if you never, ever, ever want anybody finding out about your online habit.

Now, there’s an alternative. On Monday, AlphaBay—the largest online market for drugs and other unsavoury items like fraud tools—announced on Reddit that the platform is adding support for an ostensibly super-anonymous cryptocurrency called Monero starting on September 1st, citing its “security features.”

So, what is Monero? The first thing to know is that unlike most other bitcoin rivals, Monero wasn’t built using bitcoin’s own code. Instead, it’s based on a protocol called CryptoNote that was first described in a 2012 whitepaper written by one “Nicolas van Saberhagen,” anassumed pseudonym not unlike the one adopted by bitcoin’s Satoshi Nakamoto. While Monero shares similarities with bitcoin, like mining and a blockchain as core mechanics, it has some big differences that help its users maintain their anonymity online, at least according to the currency’s advocates.

Bitcoiners will often use a single wallet address, and all transactions connected to it are viewable by anyone. In contrast, Monero creates unique addresses for every transaction with a private “viewkey” that only lets the receiver, and whomever they give the viewkey to, access the full transaction information. In theory, that means no snooping by the feds. Monero also “mixes” coins automatically—basically jumbling one transaction with other similarly-sized ones—adding another layer of confusion for anybody trying to trace a transaction through the blockchain...

[To read the full article please visit]

Where There is Money ,There is Malware!..

Linux malware turns victim's machines into crypto-currency miners:
[SOURCE: (ARTICLE DATE: 12 Aug 2016)]
Security researchers have discovered a new malware looking to turn Linux-based machines into crypto-currency miners.

Dubbed Linux.Lady, the malware exploits Redis servers that have been put online by systems administrators without setting a password.
The malware was discovered by Russian antivirus software vendor Dr Web and was written by hackers using Google's Go programming language.
The malware does three things: Collect information about an infected computer and transfer it to the command and control (C&C) server; download and launch a crypto-currency mining utility; and attack other computers on the network in order to install its own copy on them.

The Trojan receives a configuration file containing information necessary for the Trojan's operation. Then it downloads and launches a crypto-currency mining program. This finds out an external IP address of the infected computer using special websites specified in the configuration file.
It then downloads Linux.Downloader.196 to download the main payload after infection. Linux.Lady then sends data about the system to the C&C server.

"This malware possesses the ability to collect information about an infected computer and transfer it to the C&C server, download and launch a crypto-currency mining utility, and attack other computers on the network to install its own copy on them," said the Dr Web advisory...

[To read the full article please visit]

But Are the Cyptocurrencies Themselves Secure?...

Test Attack on Krypton, Ethereum Classic Might be Next:
[SOURCE: (ARTICLE DATE: 29th Aug 2016)]
Krypton, Ethereum-based network, has recently recovered from a 2-step attack which resulted in a total of 21,465 KR, approximately $3000 USD, being stolen from Bittrex’s wallets. The Krypton team suspects that the attack might have been just a test: attackers might go for other Ethereum-based blockchains such as ETC, for example.

How the attack happened-
According to a press release by Stephanie Kent, Krypton’s Founder, attackers used Double-Spending to steal the KR from Bittrex. Attackers bought enough hashing power from NiceHash and used 4miners’ pool to achieve 51% of all mining power. Once they had 51%, they then deposited Krypton into Bittrex and “rolled back” the blockchain. Thus, they cheated the blockchain and double spent and got away with it.

After the attack, all deposits and withdrawals on both Bittrex and Yobit were disabled in case of another attack on the network and Krypton-accepted exchanges.

Kent states..
“This attack may be a “dry run” intended as proof of concept before targeting other Ethereum based blockchains. Shift, another Ethereum type coin, was also targeted by a similar 51% attack last week. Ethereum based blockchains are being targeted predominantly because they’re easy to fork and manipulate offline, while being used in conjunction with DDoS attacks.”..
[To read the full article please visit]



Level 13
Thread author
Top Poster
Jun 24, 2016
How blockchain will disrupt your business:

There are still challenges to overcome, but blockchain technology stands poised to rewrite how business is conducted if its potential is achieved. Are you ready?..

Like mobile and cloud, blockchain — first implemented in the original source code of bitcoin in 2009 — stands poised to profoundly disrupt business. If it lives up to its promise, it won't just be financial institutions that are disrupted.

"If you can transfer money or something of value through the internet just like another form of data, what else can you do with it? It provides a way to establish trust in the digital world," says Angus Champion de Crespigny, Financial Services Blockchain and Distributed Infrastructure Strategy Leader, Ernst & Young. "How do you ensure something is the original copy of something on the internet? Prior to blockchain technology, you couldn't."

"If you want to prove something happened in the digital world, there is no more secure place to do that," he adds. "Once information is recorded on there, it is, for all intents and purposes, impossible to go back and retroactively change that. When there are such drastic new technologies that emerge, it isn't just a matter of looking at your business and thinking how this technology is going to make your business more effective. What you should be doing is considering that maybe your business isn't structured correctly for this new world."

Ernst & Young cites one early experiment: A New York City neighborhood that has set up a private blockchain that helps homeowners share solar power generated on their rooftops without the local utility's involvement. There are other pilots, too: Internet of things (IoT)-connected washing machines that order their own detergent when supplies run low and autonomous agriculture sensors that control water flow in fields.

If the challenges can be overcome, Champion de Crespigny says blockchain adoption will be extremely rapid and extremely disruptive. For instance, Ernst & Young notes that if blockchains can prove they reduce cost and increase trust in financial transactions, we can expect financial services firms to abandon existing transaction-processing technologies in favor of blockchain technologies. Software and services incumbents that aren't prepared may be left in the dust. And the end result of the disruption could be even more significant...
[To read the full article please visit]

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