On Bitcoin and Red Balloons. On Bitcoin and Red Balloons Moshe Babaioff, Shahar Dobzinski, Sigal Oren, and Aviv Zohar June 2012 Many large decentralized systems rely on information propagation to ensure their proper function. We examine a common scenario in which only participants that are aware of the information can compete for some reward, and thus informed participants have an incentive {\em not} to propagate information to others. One recent example in which such tension arises is the 2009 DARPA Network Challenge (finding red balloons).
We focus on another prominent example: Bitcoin, a decentralized electronic currency system. Bitcoin represents a radical new approach to monetary systems. Bitcoin relies on a peer-to-peer network to track transactions that are performed with the currency. We show that our proposed scheme succeeds in setting the correct incentives, that it is Sybil-proof, and that it requires only a small payment overhead, all this is achieved with iterated elimination of dominated strategies. Mac OS X Trojan steals processing power to produce Bitcoins - sophos, security, malware, Intego - Vulnerabilities - Security. A newly identified Mac OS X Trojan bundles a component that leverages the processing power of video cards (GPUs) to generate Bitcoins, a popular type of virtual currency.
The new Trojan was dubbed DevilRobber by antivirus vendors and is being distributed together with several software applications via BitTorrent sites. Interview: Bitcoin technical lead Gavin Andresen "This malware is complex, and performs many operations," security researchers from Mac antivirus vendor Intego warned. "It is a combination of several types of malware: It is a Trojan horse, since it is hidden inside other applications; it is a backdoor, as it opens ports and can accept commands from command and control servers; it is a stealer, as it steals data and Bitcoin virtual money; and it is a spyware, as it sends personal data to remote servers," they explained. Bitcoin is a form of virtual cash that can be exchanged by users without the need for an intermediary bank or payment service. BitCoin forum hacked by donor. Close to US$500k stolen in first major Bitcoin theft - Industry. In the first Bitcoin theft of its size, a user has lost 25,000 BTC — or nearly $487,749 at today’s market rates — to an unknown thief.
While the Bitcoin community has always been quick to point out that it’s harder to forge a Bitcoin than to forge a dollar, it’s quite easy to take someone else’s Bitcoins: all you have to do is gain access to their computer’s hard drive. Once you’re in, stealing Bitcoins is easier than taking a wallet in the real world, and there’s no recourse for getting them back.
That said, it is possible to verify the movement of funds to ensure complainants are telling the truth due to Bitcoin’s public nature — services such as BlockExplorer allow users to see every transaction that has ever occurred through the network. The receiving account in this case, for instance, can be seen here. As a decentralized network with no authority and no identities attached to the addresses used to send and receive Bitcoins, once Bitcoins are stolen they’re as good as gone. 500k Bitcoins traded in 1h, Mt.Gox market hacked + crash. Banking eradicates many of the supposed gains of decentralized money - not all, but most.
I just dig a quick Google for "benefits of Bitcoin" and it seems most people agree on the following: - Anonymity/trackability. Gone if you are with a bank. Sure, possible to sidestep by going through the song-and-dance that is withdraw-send-deposit. We can do this IRL also, but there's a reason people do not. - Taxability. . - Abusive/coercisve government action (e.g., freezing) . - Lack of fees. In fact, the only major sell of Bitcoin that remains: - Inability for government to arbitrarily expand the supply of money. Still a win, but suddenly Bitcoins have lost a lot of charm, especially for the everyman for whom the above 4 points are much more salient than that last one.