Mining pools are simply a means for miners to combine their resources and share the rewards of mining, so that they can be guaranteed to earn at least some bitcoins rather than take their chances mining alone. There are many different pools available, and they each offer different advantages and terms for joining.
Bitcoin block rewards
The bitcoin network represents a huge amount of hashing power. With bitcoin difficulty passing 1,000,000,000 at the end of 2013 and 5,000,000,000 by the end of March 2014, miners need ever-faster rigs to compete for a limited share of coins. At the present rate, 25 bitcoins are released every 10 minutes, on average.
However, bitcoins are not evenly shared amongst the network. Every time a block is awarded, it is given to just one miner: the one who finds the hash that is used to verify that block. This all-or-nothing approach means that powerful miners have a better chance of gaining some rewards, whereas miners with lower-powered rigs stand practically no chance of ever receiving any bitcoins. This essentially means that a miner going it alone will be extremely lucky to see any return on their investment.
Pooling resources
The answer to this problem has been the development of mining pools. These allow miners to join together and form associations that can bring enormous collective hashing power to the network. Instead of being awarded to a single miner, any bitcoins received go to the pool. They are then shared amongst its members on a proportional basis, depending on how much hashing power each miner contributes. Lower-powered miners will receive less coins that those who contribute more hashing power. However, the benefit is clear: everyone will receivesomething.
Fees
There are many pools available, and each will have different terms. You should research these carefully as some may be more or less suitable for you. You can find a comprehensive list of pools here. As a broad rule, the amounts these pools pay out is roughly equal; however, there are slight differences and certain models appear to offer advantages at different stages of mining over the months. Others are better suited to newcomers.
Hashrates
The hashrate of a pool is the total amount of hashing power it brings to the network. This is not particularly important in itself, since the rewards you receive will be proportionate to the hashing power you bring, rather than the full pool. When it does become an issue is if a single pool collects enough miners that it represents more than 50 percent of the total mining power in the network. At this point there is a theoretical security issue, since that pool ‘decides’ what the official blockchain looks like. When this has come close to happening in the past, miners have left for other pools to prevent the potential for this to vulnerability to cause an issue.
Merged mining
Some pools allow mining on more than one blockchain using the same hashing. This only works on bitcoin derivatives which use SHA-256 (not on Litecoin and other Scrypt-based cryptocurrencies). It is a way of increasing your potential earnings.
Finally, you should check the reputation and track record of any mining pool you consider joining. Some pools have been subject to hacks and security issues.
Mining is the process of adding transaction records to Bitcoin's public ledger of past transactions. This ledger of past transactions is called the block chain as it is a chain of blocks. The block chain serves to confirm transactions to the rest of the network as having taken place. Bitcoin nodes use the block chain to distinguish legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere.
Mining is intentionally designed to be resource-intensive and difficult so that the number of blocks found each day by miners remains steady. Individual blocks must contain a proof of work to be considered valid. This proof of work is verified by other Bitcoin nodes each time they receive a block. Bitcoin uses the hashcash proof-of-work function.
The primary purpose of mining is to allow Bitcoin nodes to reach a secure, tamper-resistant consensus. Mining is also the mechanism used to introduce Bitcoins into the system: Miners are paid any transaction fees as well as a "subsidy" of newly created coins. This both serves the purpose of disseminating new coins in a decentralized manner as well as motivating people to provide security for the system.
Bitcoin mining is so called because it resembles the mining of other commodities: it requires exertion and it slowly makes new currency available at a rate that resembles the rate at which commodities like gold are mined from the ground.
Difficulty
The Computationally-Difficult Problem
Mining a block is difficult because the SHA-256 hash of a block's header must be lower than or equal to the target in order for the block to be accepted by the network. This problem can be simplified for explanation purposes: The hash of a block must start with a certain number of zeros. The probability of calculating a hash that starts with many zeros is very low, therefore many attempts must be made. In order to generate a new hash each round, a nonce is incremented. See Proof of work for more information.
The Difficulty Metric
The difficulty is the measure of how difficult it is to find a new block compared to the easiest it can ever be. It is recalculated every 2016 blocks to a value such that the previous 2016 blocks would have been generated in exactly two weeks had everyone been mining at this difficulty. This will yield, on average, one block every ten minutes. As more miners join, the rate of block creation will go up. As the rate of block generation goes up, the difficulty rises to compensate which will push the rate of block creation back down. Any blocks released by malicious miners that do not meet the required difficulty target will simply be rejected by everyone on the network and thus will be worthless.
Reward
When a block is discovered, the discoverer may award themselves a certain number of bitcoins, which is agreed-upon by everyone in the network. Currently this bounty is 25 bitcoins; this value will halve every 210,000 blocks. See Controlled Currency Supply.
Additionally, the miner is awarded the fees paid by users sending transactions. The fee is an incentive for the miner to include the transaction in their block. In the future, as the number of new bitcoins miners are allowed to create in each block dwindles, the fees will make up a much more important percentage of mining income.
The mining ecosystem
Hardware
FPGA Module
Users have used various types of hardware over time to mine blocks. Hardware specifications and performance statistics are detailed on the Mining Hardware Comparison page.
CPU Mining
Early Bitcoin client versions allowed users to use their CPUs to mine. The advent of GPU mining made CPU mining financially unwise as the hashrate of the network grew to such a degree that the amount of bitcoins produced by CPU mining became lower than the cost of power to operate a CPU. The option was therefore removed from the core Bitcoin client's user interface.
GPU Mining
GPU Mining is drastically faster and more efficient than CPU mining. See the main article: Why a GPU mines faster than a CPU. A variety of popular mining rigs have been documented.
FPGA Mining
FPGA mining is a very efficient and fast way to mine, comparable to GPU mining and drastically outperforming CPU mining. FPGAs typically consume very small amounts of power with relatively high hash ratings, making them more viable and efficient than GPU mining. See Mining Hardware Comparison for FPGA hardware specifications and statistics.
ASIC Mining
An application-specific integrated circuit, or ASIC, is a microchip designed and manufactured for a very specific purpose. ASICs designed for Bitcoin mining were first released in 2013. For the amount of power they consume, they are vastly faster than all previous technologies and already has made GPU mining financially unwise in some countries and setups.
Mining services (Cloud mining)
Mining contractors provide mining services with performance specified by contract. They may, for example, rent out a specific level of mining capacity for a set price for a specific duration. Hosted mining services and Cloud Mining create systemic risk for Bitcoin because they undermine the security assumption that the control of mining power is well-distributed. If too much hashrate is consolidated in large hosting centres, an attacker is more-easily able to compromise a significant portion of it and could potentially disrupt Bitcoin or steal back their own spent money.
Pools
As more and more miners competed for the limited supply of blocks, individuals found that they were working for months without finding a block and receiving reward for their mining efforts. This made mining something of a gamble. To address the variance in their income miners started organizing themselves into pools so that they could share rewards more evenly. See Pooled mining and Comparison of mining pools.
History
Bitcoin's public ledger (the 'block chain') was started on January 3rd, 2009 at 18:15 UTC presumably by Satoshi Nakamoto. The first block is known as the genesis block. The first transaction recorded in the first block was a single transaction paying the reward of 50 new bitcoins to its creator.
Selling bitcoin isn’t quite as straightforward as buying bitcoin, but fortunately CoinDesk is here to help. This guide will give you all the information you need to cash out your digital currency.
When deciding how to sell your bitcoin, you first need to consider which method best suits your situation: sellingbitcoin online or selling bitcoin in person. Each option has its own advantages and disadvantages.
Selling bitcoin online
Selling bitcoin online is by far the more common way of trading your bitcoin. There are now three ways to go about selling bitcoin online.
1. The first way involves a direct trade with another person, an intermediary facilitating the connection.
2. The second way is through an online exchange, where your trade is with the exchange rather than another individual.
3. New peer-to-peer trading marketplaces that allow bitcoin owners to obtain discounted goods with their bitcoin via others that want to obtain the cryptocurrency with credit/debit cards. The two groups are brought together to solve both problems in a kind of peer-to-peer exchange.
On these sites, you will usually have to register as a seller. This involves verifying your identity, which we will discuss again later. Once you have registered, you can post an offer, signalling that you want to sell, and the website will alert you when a buyer wants to trade with you. From there, your interaction is solely with the buyer, but you use the website to complete your trade.
The process of selling on Bitbargain UK and (more so) Bittylicious can be quite involved and requires some patience. However, support at the former site has been great in our experience. Bitcoin users with bank accounts in the United States should consider using Coinbase, which has won many fans with its simplicity.
2. Exchange trades: The other way to sell bitcoins is to register with an online exchange. You will still have to verify your identity, but in this case you won’t have to do as much work when it comes to organizing the sale.
Exchanges act as an intermediary who holds everyone’s funds. You place a ‘sell order’ (just as you would place a buy order), stating the volume (amount) and type of currency you wish to sell (eg: bitcoin), and the price per unit you wish to sell for.
As soon as someone places a matching buy order, the exchange will complete the transaction. The currency will then be credited to your account.
The downside that accompanies this ease of use is that, if you are selling bitcoin for fiat currencies, you will need to withdraw those funds to your bank. If the exchange is facing liquidity problems or issues with its banks, it can take an inordinate amount of time to receive your funds.
Mt. Gox became infamous for this problem before it went bankrupt, andBTC-e has recently been plagued with reports of similar difficulties. Therefore, you should carefully research the exchange you intend to use before committing funds.
Examples of other crypto-to-fiat currency exchanges include Kraken, Virtex and Bitstamp.
Alternatively, you could use a pure cryptocurrency exchange to change bitcoin for another cryptocurrency. It’s less likely that anyone would want to do this, but there are reasons such as arbitrage, or the rare occasion if a shop accepts something other than bitcoin (for example, Bitcoin Shop now accepts litecoin and dogeoin too, for a wide range of goods).
In addition, you’ll have to pay a fee to use some exchanges. BTC-e charges a flat 0.2%. For overviews of what fees are charged by the various cyrptocurrency markets and what volumes are being traded, see CoinCompare and Bitcoin Charts for up-to-date information.
Another consideration is that there will be some limit to the amount of money you are allowed to store (subject to change over time) on an exchange. Regardless, it is not wise to use exchanges to store your entire pot of coins, even though it can appear to be the easy option if all you are doing is speculating. You should take responsibility for your own funds, and store any unneeded amounts on your own devices or offline, rather than trusting an exchange that might one day be hacked.
3. Peer-to-peer trading marketplaces
A new development in the bitcoin space is the advent of sites likePurse.io, which set out to bring together two groups of people with specific and complementary needs. The first group are individuals who want to be able to use bitcoin to buy goods from sites which do not yet directly accept digital currencies. The second comprises of others who would like to buy bitcoin with a credit or debit card. The marketplace brings together individuals with matching requirements to effectively sell bitcoin to one and provide discounted goods for the other.
The marketplace acts as an intermediary, offering users the platform, bitcoin wallet and escrow for transactions.
How it works:
Alice posts her required Amazon wish list on the marketplace, stating the discount she would like (normally up to 25%).
Bob has a credit/debit card and wants to buy bitcoin matching the value of Alice’s purchase(s). He accepts the trade and, through the marketplace, buys the Amazon goods and requests they be delivered to Alice’s address.
Once the goods are delivered, Alice notifies the marketplace and Bob’s bitcoin are released from escrow and arrive in his wallet, minus Alice’s agreed discount and a small fee for the marketplace.
This system does mean that Bob will be paying a relatively high fee for the service, but also means he will be easily able to acquire bitcoin via bank card.
Concerns with withdrawing funds
The universal way to move money around the world is international wire transfers. Most (if not all) online bitcoin markets support this method of transferral.
Another way to transfer money to your bank after selling bitcoin is via the “Single European Payments Area” (SEPA) system. SEPA was designed to make international transfers between member states of the European Union more efficient. Some exchanges (such as Kraken and BTC-e) support these payments.
However, transfers take a very long time (around four days), and can incur large charges – potentially making trading prohibitively expensive. HSBC, for example, charges £4 per SEPA payment made via online banking and £9 per WorldPay transaction. Barclays charges £15 per SEPA payment and £25 for other international transactions.
If you are opening an account with the specific purpose of receiving funds from bitcoin trading, you may find high street banks refuse to do business with you. HSBC has explicitly refused the author of this guide accounts for bitcoin trading.
You can also use third-party payment processors to withdraw and receive fiat funds. The numbers of these services is dwindling, however. OKpay recently stopped engaging with bitcoin businesses, and PayPal has never officially dealt with bitcoin businesses. Note, though, that LocalBitcoins does show PayPal as a payment option.
Identity verification
While many of the bitcoin markets mentioned here require very little identification from buyers, they require a lot of proof of identity from sellers. There are few legal requirements from bitcoin markets to record who their users are, but most (if not all) are pre-emptively collecting identity data in anticipation of forthcoming regulations. To make becoming a seller easier, it is worth at least considering completing the identity verification process when you first join the site. Getting this step out of the way can remove barriers to selling if and when you’re ready to make the move.
Expect markets to ask you to upload scans of two utility bills displaying your name and address, along with a photo ID (such as a passport or driving licence). Some (such as BitBargain UK) may even ask you to take a selfie including your photo ID and the name of the market on a piece of paper! If you are not comfortable uploading such personal documents to an (effectively) untrusted business, then you will have a difficult time finding somewhere to sell bitcoin online.
2. Selling bitcoin in person
Selling bitcoin in person can, in many ways, be the easiest way to pass on your digital currency. Simply scanning a QR code on another person’s phone and accepting cash-in-hand is about as easy as a bitcoin transaction can get.
If you have friends or family who want to buy bitcoin, the process is simple. Set them up with a bitcoin wallet, send them the bitcoins and collect your cash.
There are several things to be aware of when selling bitcoin in person.
Agree a price: Decide on a rate works for you.
Many use a price from a prominent bitcoin exchange, or the CoinDesk Bitcoin Price Index.
Some sellers apply a percentage on top of these rates to cover costs and as a convenience/anonymity premium.
You could use a mobile app to calculate prices. Popular apps include Zeroblock and BTCreport.
It helps to be aware of local fluctuations in price. Price can vary from country to country, often due to difficulties in obtaining bitcoin with the local national currency.
There are many bitcoin meetups around the world where people are happy to trade bitcoin and other cryptocurrencies.
Stay safe
It is always wise when carrying a large amount of cash to meet in a public place and/or go with a friend.
LocalBitcoins
Alternatively, you could advertise yourself as a bitcoin seller to a wider audience. The definitive site for this is LocalBitcoins. This website allows users to rate each other, so one may assess the trustworthiness of a potential trade partner. You may be able to sell with a premium attached once you have a reliable reputation.
You do not need to verify your identity as on other sites.
Again, if you are setting yourself up for an in-person meeting using LocalBitcoins, you must always think about the general safety rules for meeting a stranger from the Internet.
LocalBitcoins also supports escrow transactions, however, these are for online transactions, not face-to-face deals. Therefore, do not comply with requests for someone who asks for escrow for a face-to-face transaction.
Bitcoin is an open source, peer-to-peer digital payment system that only exists in cyberspace and does not use physical bank notes or coins. The concept of Bitcoins arose in 2008, after an anonymous user published a paper on a cryptographic digital currency and released the Bitcoin software the following year.
The Bitcoin system is not controlled by any central bank, institution, or country, but operates as a digital currency where users are able to connect directly to each other and transfer Bitcoins anonymously using digital “wallets”.
How are Bitcoins created?
Bitcoins are created in a process known as “mining” which uses the processing power of users’ computers to verify the transfer of Bitcoins between users and create new Bitcoins. Miners verify transactions by using their computers to solve complex mathematical problems. The computer that solves the problem is rewarded with Bitcoins, thereby creating an incentive for others to assist in verifying transactions and support the system.
The Bitcoin system is setup so that as more people mine Bitcoins, the odds of successfully mining one goes down, making it more difficult to mine coins and increasing their value.
Once Bitcoins are created, then what?
Bitcoins can be used to buy goods and services both online and in person with hundreds of Canadian businesses already accepting Bitcoin as a form of payment. Bitcoin Exchange services have also been created to give users the ability to convert their Bitcoins both to and from traditional currencies. In Canada, some cities now have Bitcoin ATMs to make it even easier to buy/sell Bitcoins.
The value of a Bitcoin has recently experienced some volatility, subject largely to demand, world events and businesses activities. As of June 2014, one Bitcoin is equal to $574 US dollars. Over 12 million Bitcoins have been created.
Are Bitcoins considered a real currency?
In Canada, the Currency Act, Royal Canadian Mint Act and the Bank of Canada Act contain provisions governing legal tender and currency. Only Canadian bank notes and coins are recognized as currency and eligible to be used as legal tender in Canada. Barter transaction rules apply where Bitcoins are used to purchase goods or services. Other Governments and their respective financial institutions are still in the process of determining how they view Bitcoin.
Are there risks with using Bitcoin?
Yes, there are risks. Criminal organizations have gravitated to Bitcoin because of the anonymity it offers and the fact that governments are not involved in monitoring transactions. As a result, there have been several underground community websites setup to trade in illegal goods and services exclusively using Bitcoins.
You should also know that hackers have been infecting computer networks to install Bitcoin mining software as well as compromising several high profile Bitcoin exchanges causing numerous companies to go bankrupt, leaving their users with major losses.
You may never need to use Bitcoin, but now you know what it is and some of the risks associated with using this relatively new digital currency.
For many who do not know, the deep web is a tremendous section of the world wide web that isn’t accessible via regular queries through yahoo, google or various other search engines.
Doing a search online these days can be compared to pulling a net across the surface of the sea. Even though a large amount may possibly be captured in this net, there’s still a great deal of info which is deep, and for that reason,it will be missed.
This is because: The majority of the Internet’s info is actually hidden far down on dynamically generated websites, and regular search engines like google will never locate it.
Below are a few facts about the Deep Web:
General public info on the deep Web is actually 4 hundred to 5 hundred times larger compared to generally characterized as World-wide-web
The deep Web consists of 6,500 terabytes of information in comparison to 20 terabytes of information that is accessible in the surface Web
The deep Web is made up of closely 550 billion unique records and documents in contrast to the 1 billion from the surface Web
A lot more than 200,000 deep Internet sites currently are present
60 of the largest deep-Websites mutually consist of 750 terabytes of data — enough by themselves in order to surpass the size of the public Web by 40 times
The deep Web is actually the largest expanding division of fresh information on the Internet
Deep Websites are usually narrower, along with much deeper content material, as compared to regular surface sites
Overall quality content material from the deep Web is 1,000 to 2,000 times better than that of the surface Web
Deep Web material is remarkably relevant to every single information you need
A lot more than 50 percent of the deep Web content is located in topic-specific directories
A full 95% from the deep Web is publicly available information — absolutely not subject to charges or subscriptions.
What is placed under the surface area is actually a who’s who of online hackers, researchers, drug dealers, hitmen, anarchists, revolutionaries, Authorities officers, terrorists, perverts, kidnappers etc. Essentially, this party goes over the whole ethical spectrum.
I find this particular topic to be absolutely interesting that should be researched further. Even though there are lots of bad seeds that live in deep web, there is certainly good seeds who would like to distribute their info rapidly and most usually anonymously, in order to avoid legal or perhaps moral implications.
So What is the Hidden Wiki?
The Hidden Wiki is a really tiny but helpful reference point in order to begin your journey in the deep web
Maybe you’ve heard of the “Dark Web,” but aren’t sure exactly what it is. Maybe you don’t know anything about the Dark Web. Let’s begin by saying it’s aptly named. And as dark as it is, we need to know about it.
The term “Dark Web” (or Dark Internet) refers to areas of the Internet that are no longer accessible, or that have “gone dark” – i.e. dead ends. This happens when Internet routers stop referencing parts of the Internet, either because old addresses have become compromised by malware, or simply because the routers have forgotten where to access these areas…The Dark Web is therefore fundamentally different than the Deep Web in that the Dark Web cannot be accessed, period. The term “Deep Web,” refers to the “deeper” parts of the web that are accessible, but are considered hard to find because they are not indexed by regular search engines.
The Deep Web is made up of dynamic content, or content that is password-protected, unlinked, restricted by form-controlled entry, or updated ahead of search engine indexing. (Imagine an enormous labyrinth with a limitless amount of doors leading into it. But, you don’t know where the doors are, what is behind each door, or the code to open any of the doors.) Harmless examples of “dynamic” content include your emails on Gmail, .pdf or .doc files stored on Dropbox, personal information stored on Facebook, or private photo albums from your last family reunion.
The malicious Deep Web content that should concern us is primarily hosted on Tor and .onion peer-to-peer network servers (P2P networks), as well as obscure image sharing websites that can only be accessed if you have specific URLs, usernames and passwords. These areas of the Deep Web are where proactive action needs to be taken to stop the largely undeterred child predators who are trading child pornography or offering children for sale.
It is estimated that 50,000 people in the U.S. alone access the Deep Web for the sole purpose of trading child pornography. Due to the nature of the Deep Web, it makes it very difficult to track down these people, despite the best efforts of the Justice Department and Homeland Security. This business is built on human trafficking, the buying and selling of human beings. In this case, it is the most vulnerable among us: our children.
The universe of known images has ballooned since 2002, the year of the creation of the Child Victim Identification Program, which serves as a national repository for information on young victims, says John Shehan, executive director of the Exploited Children Division at the National Center for Missing & Exploited Children (NCMEC).
More than 100 million images and videos of suspected child abuse have been referred to the program housed within NCMEC to assist in criminal investigations and for the purpose of locating child victims, Shehan says.
“It is alarming,” Russ [Brad Brad Russ, who oversees federally funded training programs] said of the numbers, adding that suspects increasingly try to shield their activities from law enforcement.
Drew Oosterbaan, chief of the Justice Department’s child exploitation unit, says the demand for this type of material is rising, and the supply also continues to grow. The Deep Web provides not only a hiding place for child traffickers and pornographers, it has become a haven for many of them. One said,
My life is pretty lonely because I have no friends who are like me where I live. That’s why I’m happiest when I am … with people just like me. Thank you for the company, my fellow friends. Keep safe and may God bless you.”
Oosterbaan says that there is some profit to be made, but many of those involved in this type of activity do it for a form of acceptance or status.
We are not without tools to fight this:
The technology, known as ICAC (Internet Crimes Against Children) Cops, tracks the coding of images recovered in previous investigative operations that have been downloaded to individual computers.
During a recent demonstration of the technology, authorities were able to zero in on suspects who are actively downloading material in their local jurisdictions at any time of day or night.
One recent afternoon, the locations of possible suspects were depicted by icons blinking like warning lights across a large computer screen, from Scranton, Pa., to Los Angeles.
In Pennsylvania, for example, the online activity linked to the suspected transmission of child pornography and/or solicitations for sexual encounters involved more than 2,000 individuals.
And of the 114 arrests of porn distribution suspects in Pennsylvania last year by state authorities, the technology aided in the identification of about 80% of them, officials said.
It is good to remind ourselves and our children that once something gets put up on a website, shared through a social media site, or texted, it never goes away. The Dark Web is a place we don’t want any child to be.
The arrest last week of 26-year-old Ross Ulbricht brought to light a little-known world of secret websites dealing in drugs, guns and counterfeit documents that until now have been largely hidden from authorities.
The Silk Road, an online contraband marketplace operated by Ulbricht, was shut down last week. Another, called Atlantis, voluntarily shut down in late September. Both websites used a software called TOR, or The Onion Router, in order to conceal their IP addresses, the numbers that work like street addresses to allow computers, mobile phones and laptops to find them, explained Nicolas Christin, assistant professor of electrical and computer engineering at Carnegie Mellon University.
Both The Silk Road and Atlantis are just two of many websites that belong to what is known as the “deep web” or “dark web” of sites that conceal IP address from search engines and cannot be linked to by other Internet pages or blogs.
Christin said TOR’s encryption software allowed people to buy and sell drugs online (mostly marijuana according to his research), as well as trade pornography and even buy and sell illegal weapons. But TOR has also helped civil society groups in places like Egypt, Syria and Libya to avoid government eavesdropping, journalists to pass information and law enforcement agencies to receive secure anonymous tips electronically. Family members can also use TOR to share photos or other information privately. Christin compared the software to using old-fashioned couriers to carry messengers in between people who want to remain anonymous.
“It allows their couriers to find each other in the middle of the network," Christin said.
Christin said that the website itself does not sell the goods, but operates to match buyers and sellers. "The best comparison is Amazon marketplace,” he said.
It provides buyers with a user-friendly experience, complete with shopping carts and seller ratings, according to Christopher Budd, communications manager at TrendMicro, a IT security firm that recently produced a white paper on the workings of the dark web.
TOR is an open-access software available for anyone to download and install on their computers. In fact its early development was funded in the 1990s by the U.S. Naval Research Laboratory to protect military communications. Development of the current version of TOR was funded by the Electronic Frontier Foundation and released to the public in 2002.
Despite the indictment and arrest last week of Ulbricht, who allegedly operated Silk Road, it’s not clear that federal officials have figured out how to break TOR’s encryption methods.
“What the FBI did was break the human because they know they can’t get around TOR at all,” said Andrew Lewman, executive director of the TOR Project, a non-profit collective of computer specialists that assist TOR users. “They caught him using his real name on various forums.”
Lewman says that there are dozens of other similar sites like The Silk Road that specialize in contraband narcotics or weapons. “Now with Silk Road gone, any one of those can start moving,” Lewman said. That could make it difficult to find the next one.
“Law enforcement is engaged in an ongoing game of whack-a-mole against these sites,” Budd said. “It will be interesting to watch if the takedown of Silk Road will result in increase in prices. Like any thing else in the free market they will respond and probably are going to price in the cost of that additional risk.”
Budd said there’s another way for criminals, spies or just privacy fans to keep communications and commerce secret besides using TOR. A person could reconfigure a computer to access the dark web sites via alternative top-level domains and reach a kind of “shadow internet” that isn’t typically visible.
Budd likened it to an old-time speakeasy where customers in search of a drink need to know where they are and the secret password to get inside.
“It would be great if these sites would go away, but given the nature of the internet it’s not going to happen anytime soon,” Budd said. “They are related to the openness of the Internet and the only way to get rid of things is to create a version of the internet was so controlled and locked down that most people in this country would find that unacceptable.”
Twenty years after the first computer became “infected” with malignant code, computer viruses have hacked enterprises, stolen data, smuggled money, pilfered identities, and exploited our social weaknesses to perpetuate themselves. Here we put together a hall of fame of the most memorable (and devastating) programs to ever poison PCs.
Robert Morris's worm infected 10% of computers online at the time--around 6,000 machines. Morris built the virus to test the size of the Internet, when he was a grad student at Cornell. The bug slowed infected computers to a halt, prompting the government to sue. Under the Computer Fraud and Abuse Law, in December 1990, Morris became the first virus-maker convicted in U.S. court. This first criminal hacker's legal troubles were ironic: His dad, a coauthor of UNIX, was the former chief scientist of the National Computer Security Center for the NSA.
The harm was done by mistake: Morris designed his bug to replicate in 14% of cases, even if it detected a copy of itself, as a safeguard against security programs trying to outsmart it. This extra load of viral copies drew administrators' notice, and inadvertently clogged infected computers.
Due to "potential loss in productivity," the Morris worm cost between $200 and $53,000 per infected system, authorities estimated. Morris was sentenced to three years of probation, 400 hours of community service, a fine of $10,050, and the costs of his supervision.
Morris bounced back in later years. In 1995, he cofounded Viaweb, a startup that made software for building online stores. Viaweb sold for $48 million in 1998, to Yahoo. The next year, he got his PhD from Harvard.
In 2006, the once-infamous hacker cofounded Y Combinator, the seed-stage startup funding firm. The next year, he got tenure as a computer science prof at the hacker school where his rep might be best appreciated: MIT.
Chernobyl gets its name from its trigger date: April 26, the anniversary of the 1988 nuclear disaster. Created far from the former USSR, in Taiwan, the virus is only associated with the incident by coincidence--a red herring to investigators.
Chernobyl, also known as CIH, effectively paralyzes a computer by overwriting a chip inside PCs. The author, Chen Ing-hau, then a college student at Tatung University, was caught by Taiwanese police. His virus infected 60 million computers and caused U.S. $1.6 billion in damages. Since the Taiwanese government was unable to prosecute Chen--no victims came forward to sue--the virus led to new anti-malware legislation in Taiwan.
Chernobyl is sometimes called "spacefiller" because it works differently than other computer worms, in a way that brings to mind DNA insertion by biological viruses. While most viruses add their code to the end of an infected file, this one looks for gaps in code to add its own. Since the "insertion" doesn't change the infected file's size, it makes the virus harder to detect. Chernobyl is an example of how computer viruses, much like the organic ones that give them their name, evolve to exploit weaknesses in their hosts.
If you want a virus with personality, look no further than Melissa: Named for a Miami stripper, she was made by a porn-fiend fan of The Simpsons, who ended up behind bars when his email-Frankenstein invaded Microsoft and Intel. By the time the 30-year-old was arrested, Melissa was the worst computer virus outbreak to date.
The first ever email-aware virus hid inside an attachment called "List.DOC," which contained a list of 80 passwords to porn sites. Spreading through Microsoft Outlook emails, it hijacked infected address books, sending itself to the first 50 contacts. In a subset of cases--whenever the day of the month and minute coincided--Melissa printed a line of text at the current cursor position in a Microsoft Word doc:
"Twenty-two points, plus triple-word score, plus fifty points for using all my letters. Game's over. I'm outta here": a quote from Bart Simpson about Scrabble.
Unleashed by New Jersey hacker David L. Smith on the alt.sex newsgroup, the quirky virus wasn't meant to do harm, just mischief. But Melissa got out of hand: On March 26, she clogged Microsoft's and Intel's email servers. The tech juggernauts sought vengeance, after an estimated $80 million worth of damages: The FBI, New Jersey state police, AOL, and a Swedish computer scientist collaborated to hunt down the horny hacker, who was arrested on April 1.
Melissa cost her maker a 10-year prison sentence (he served 20 months), plus a $5.000 fine. She showed hackers the potential real-world consequences of cyber play.
Imagine a computer virus that operates like a lover-boy con artist: It exploits lonely people, stealing by seducing. This bug isn't a cyber spy, terrorist, or identity thief, but in a way, it's more malicious: It gets in your head. And takes your stuff when it leaves.
The Trojan Horse that arrived in millions of email boxes on the morning of May 5, 2000 carried an email attachment labeled "I Love You." Recipients expecting a secret admirer's confession got a rude surprise: When the doc was opened, all image files on the computer were overwritten. Photos of family, friends, lovers and pets--all deleted in a flash by the would-be Internet Romeo. The psychological weapon then launched anew, sending itself to the first 50 contacts in the user's Windows address book.
I LOVE YOU spread like a sexually transmitted disease out of southeast Asia. It was unleashed on May 5, 2000 near Manila, in the Philippines, and chased daybreak across the world: first to Hong Kong, then Europe, and finally the U.S., when people began work that Friday morning. It was later estimated to have caused U.S. $5.5-8.7 billion in damages internationally and cost around $15 billion to remove.
To protect themselves, the CIA, Pentagon, and many major corporations chose to shut down their email systems. The worm ended up affecting 45 million computers, making I LOVE YOU one of history's most dangerous computer disasters.
The Filipino authorities arrested two college students alleged to have released I LOVE YOU, but the hackers couldn't be charged since the state had no law against malware. In July 2000, two months after the outbreak, the Philippine Congress passed its E-Commerce Law to protect against future worms.
You might call it the Miss Lonelyhearts virus, after the novel by Nathaniel West: a bug that preys on the human desire for love. The intensity of that longing drove the book's protagonist, a romance advice columnist, out of his mind. So might I LOVE YOU.
Code Red forced the White House's website to shut down temporarily on June 19, 2001, along with several other government agencies. Red exploited a flaw in the Microsoft Internet Information server, which allowed it to vandalize websites with its graffiti:
"HELLO! Welcome to (URL redacted)! Hacked By Chinese!"
Since the virus targeted U.S. government websites, it was seen as a potential cyber-attack by terrorists or a foreign government (like... China?), but the hacker is unknown.
This cyber villain got its name, as usual for computer viruses, from a coincidence. The security investigators at eEye Digital Security who first chased the bug were drinking Code Red Mountain Dew at the time.
Red infected 359,000 computers at its peak, on June 19. "Hacked By Chinese!" became an Internet meme representing online defeat. Its claim to fame is that it was the first virus to push around the White House-- though its sophomoric vandalism would be upstaged by its more sinister successor, agent.btz. Check out Virus #9 for more information.
The Anna Kournikova Worm posed as a photograph of the sexy tennis player, but was actually a virus made by Dutch fanboy Jan de Wit, on February 11, 2001.
"Here you have, ;0)" was the subject, "Hi: Check This!" the body of the message that carried de Wit's worm. The bait was a file labeled "AnnaKournikova.jpg.vbs." Kournikova was a tempting lure, no doubt, for male recipients: at the time, she was the face of the sports-bra maker Berlei, in its "Only the ball should bounce"billboard campaign. People voted her one of the 50 Most Beautiful People in 1998 and ESPN.com voted her "hottest female athlete."
Kournikova was the most searched athlete on the Internet through 2008, the eighth most searched woman in 2001, and even one of the most searched terms on the Internet for a while. Net surfers searched her not so much for her tennis prowess, which was good but not great (ESPN voted her the #1 "most overrated athlete" and #18 in the "25 Biggest Sports Flops of the Past 25 Years"), but for her image. The 2004 Swimsuit Issue featured photos of her which are still famous today, along with photos in Maxim and FSM. The year after the worm, she would place first in FHM's 100 Sexiest Women in The World.
So, the timing could not have been riper for an Anna Kournikova worm than when it hit.
De Wit was 20 when he made the virus, using a bug-making toolkit he got online from an Argentinian coder. Anna was similar to I LOVE YOU, but it didn't corrupt or delete any files on infected computers. Anna spread fast enough, though, that she got the FBI’s attention. They used David L. Smith-- author of the Melissa virus, now finished his 20-month prison sentence and still collaborating with anti-virus investigators--to find the real name, home address, and email of the coder called “OnTheFly.”
De Wit turned himself in on February 14, after conferring with his parents. He was prosecuted in Dutch court, and given a community service sentence--despite the FBI arguing that US$166,000 of damages were caused by Anna. The mayor of de Wit's town, Sneek, calling the virus "a joke," said his town should be proud to have produced such a talented kid, and that the tech crew at his office should interview him for a job when he finished school.
Bank of America ATMs, a 9-1-1 Emergency Response system in Washington state, and anOhio nuclear plant were all victims of this "denial of service" attack--a flood of robo-zombie information packets that overwhelms an automated system with noise.
Slammer wrought havoc fast: The virus slammed 75,000 machines within 10 minutes of being released. Like the ingenious mind-child of a deranged James Bond villain, the bug burrowed into America's electronic systems of cash-flow, public safety, and energy, and tried to break them down. If it had succeeded--particularly in the case of the nuclear facility--the costs in money, injury, and even human life could have been catastrophic.
The source of the bug is unknown. Ten years later, Slammer holds the record for the fastest spreading virus to date.
German teenager Sven Jaschen was arrested on May 7, 2004 for spreading 70% of all malware on the Internet at the time.
The coder admitted he'd written the viruses, known as Netsky and Sasser, but insisted he never intended harm: He saw himself as an avenger, a virus hunter. His fast-moving bugs were designed to infect computers in order to delete other viruses.
The high school student learned about viruses in a computer class he was taking. At the time, the virus MyDoom had just exploded onto the Internet, eclipsing I LOVE YOU as the fastest spreading bug. MyDoom's creator, believed to be a programmer in Russia, is unknown, but its effect was to spam millions of email boxes with the message "andy; I'm just doing my job, nothing personal, sorry." It seemed like a Distributed Denial of Service (DDoS) attack, aimed at companies, programmed to flood their systems with noise mail.
When MyDoom was launched on January 26, 2004, Jaschen was a 17-year-old novice programmer, and he took the virus as a call to arms. What if he could write a bug that would outpace MyDoom and delete it? He'd become a hacker hero.
The Terminator inspired Jaschen's first virus. Netsky gets its name from Skynet, the computer network that Arnold Schwarzenegger's android character fights in the Terminator movies. It was written in 2000 lines of code, which took the novice programmer weeks of after-school sessions to write. Netsky's mission was woven into the lines of code: "we are the skynet- you can't hide! - we kill malware writers (they have no chance!) - [LaMeRz-->] - MyDoom is a thief of our idea! --<-<- ->->"
Jaschen built Netsky in his parents' basement, where he chugged seltzer and listened to MTV. Netsky had some success at deleting MyDoom, until the virus writers caught on, and redoubled with new code. Jaschen countered with Sasser, which he released on his 18th birthday, April 29, and then went to sleep.
The next morning is when the anti-virus virus got out of control. Since it was crudely written by a newbie coder, it accidentally caused infected machines to reboot constantly. Jaschen tried to fix the bugs in his bug by releasing frantic follow-ups, but to no avail. Within 48 hours, Sasser infected 1.3 million PCs--especially groups of PCs linked together in Windows-based local area networks common in business offices.
Sasser halted rail service in Australia, paralyzed one third of Taiwan's post office, forced Finland's Sampo Bank to shut down 130 branches, and prompted Delta Airlines to cancel several transatlantic flights. Its effects were so intense, so fast, that many businesses opted to install a new Microsoft security patch immediately.
Police arrested Jaschen at his home on May 7. A year later he was sentenced to 21 months of probation, plus 30 hours of community service at a retirement home. Microsoft paid two of his high school classmates $250,000 for information leading to his arrest.
On September 1, 2004, just four months after his arrest for virus-making, 18 year old Jaschen was hired as an "ethical hacker" by Securepoint, a German security company.
Think of this virus next time you change clothes or share a bed in front of your laptop, edit private documents, or surf embarrassing websites: Poison Ivy may be watching. This "remote access Trojan" (R.A.T.) gives the hacker full control of the hijacked computer, to record or edit content--documents, pictures, passwords, online purchases--or even use the speaker and webcam to record audio and video.
Ivy can bring "eyes and ears" into your home, the way FBI surveillance characters do on the TV shows The Wire andHomeland--only this bug is wireless. It spreads by email, quietly infecting unsuspecting computers. You may be bugged without knowing it, as you read these words. Watch out.
Ivy has been used to infiltrate U.S. defense and chemical industries,according to the security firm Symantec. Nobody knows who created it, but it has been traced back to China--perhaps designed by Chinese hackers to spy on foreign governments.
Ivy is very much a DIY virus, popular with amateur hackers. YouTube tutorials show cyber voyeurs how to install and use Poison Ivy from home, after disclaimers like “don’t be dumb!” The PoisonIvy-RAT.com website provides support for users, led by a mysterious character called Codius, whose email address issupport@poisonivy-rat.com. So it’s not just China: Anybody with computer skills who wants eyes inside your computer has a tool to try.
Agent.btz sparked a security scare which forced the Pentagon to issue a temporary ban on thumb drives. The U.S. Cyber Command unit, a new military group to fight online spying, was created soon after, motivated by this worst-ever cyber breach. The outbreak started with a thumb drive left in the parking lot of a U.S. base in the Middle East.
Agent.btz spreads through infected thumb drives, installing software that steals data. It works by copying existing files and replacing them with viral software, while storing the original in the background. Foreign spies presumably designed the virus, as former Deputy Secretary of Defense William Lynn III claimed inForeign Affairs in October 2010, when the issue was declassified. The bug invaded when it was inserted into laptop at the base, which was connected to and uploaded itself onto a network run by U.S. Central Command.
America’s traditional Middle Eastern enemies, like Al Quaeda, Iran, or Afghanistan, are obvious suspects. But the government either never learned the source of the thumb drive attack, or they never told us.
This little beauty was built by engineers working for the governments of the United States and Israel to fight the “bad guys.” Iran, to be specific.
Stuxnet was the first computer virus to cause damage not online or in computers, but in the outside world--by obstructing Iranian nukes from getting made. Stuxnet traveled by thumb drive, like agent.btz--only this time the victim wasn't U.S. Central Command, but Iran's nuclear program. The virus worked as military sabotage in ways that previously could only be done by physical bombing, rockets, or a human spy planting explosives or snipping wires.
Stuxnet targeted software controlling industrial systems in a uranium enrichment facility in Natanz, Iran. By mucking up machines, it made their centrifuges spin out of control and self-destruct, according to data from the International Atomic Energy Agency.
The New York Times described the virus's development through anonymous interviews with current or previous workers on the classified project. At Stuxnet's peak, soon after the virus spread beyond Iran and was discovered, it shut down around 1,000 of the 5,000 centrifuges at Natanz. U.S. officials argued that Stuxnet set the Iranian nuclear program back between 18 months and two years. Others consider this an overstatement, and caution that U.S. involvement in cyber-warfare may give our enemies justification for their own. The case has even been made that this cyber-weapon was a net benefit to Tehran.
Good or evil aside, Stuxnet set a new standard for cyber sabotage. In the evolution of computer viruses, Stuxnet is the bleeding edge. Begging the question: What's next?
