The Puzzle: https://www.federalreserve.gov/newsevents/speech/brainard20200813a.htm The Pieces: https://www.algorand.com/bbw#Panel https://www.newyorkfed.org/research/economists/azar https://www.algorand.com/who-we-are/our-team Still very much speculation but look at the above links and some things just point to Algorand. Jim Cunha, Senior Vice President of Secure Payments and FinTech, Federal Reserve Bank of Boston - Was on the panel for Algorand Boston Blockchain Week. (See the panel link above) Pablo Azar - Joined the New York Fed in 2020 as an economist in the Money and Payments function. Was Chief Economist at Algorand Inc. (See the New York Fed Link Above) Christian Catalini, Economic Advisor - Christian is one of the principal investigators of the MIT Digital Currencies Research Study, which gave access to all MIT undergraduate students to Bitcoin in the fall of 2014. He is also part of the MIT Initiative on the Digital Economy and the recently launched Digital Currency Initiative. (See Advisors in Our Team link) Also don't forget the genius of Silvio Micali and the entire MIT based Algorand team solving the blockchain trilemma (correction: Micali solved the blockchain trilemma. Over his numerous years at MIT he met, taught, and collaborated with many talented people. The Algorand team has quite of few of these people on it). As well as the Marshall Islands choosing Algorand, Circle and USDC, and also just diving into the code for ASA and seeing how this could work. It makes sense that this option may be explored. This is not investment advice but just want to see if anyone else has put these pieces together. One thing for sure is big things coming from Algorand, regardless of a CBDC by the United States Federal Reserve.
Phone services talk and text 1) lifeline 5-7$ month Unlimited talk and text 2) consumer cellular 20$ a month 250 minutes, texting unavailable 3) At&t pay as you go plan Unlimited talk, text, and data for 2$ a day Note: if you get telegram or signal on your phone. Then have family and friends signup for it. You'd have unlimited talk, text, and video chat for free! Just need WiFi or data Data and WiFi plan 1) at&t data connect pass 30$ Now it's used for iPads only. It's just they don't tell you this but you can pop the sim into your phone. You can purchase this from a eBay reseller for about 40$. You'll also be able to use this in a dual sim phone or purchase a comparable router. Unlimited data for 30$ a month! Purchasing food, electronics, etc 1) use coupons, rebates, etc to get money back 2) sign up for a credit card with money back on purchases and by everything with it. Combined with 1) 3) use purse. Io a website that allows you to purchase everything from Amazon with bitcoin at 15-20% off. It works great use it a lot! Now for purchasing bitcoin use Abra it's a app on iOS and Android no fees nothing! Windows keys, Microsoft office keys, antivirus keys 1) getitcheap. Pro Use PayPal on all purchases! If something happens you'll get your money back. Video games (Primarily PC) 1) Kinguin 2) humble bundle- 10% off with .edu student email 3) g2a -just like Kinguin NEVER use Steam you'll get ripped off most of the time. You can get it way cheaper via Kinguin and other sites. Free Birthday meals Breakfast Freebies & Deals Bojangles – When you subscribe to Bojangles’ e-club, you’ll receive a free sausage, steak, Country Ham or Cajun Filet biscuit on your birthday with any purchase. Denny’s – You can get a free Original Grand Slam on your birthday at if you’re a Denny’s Rewards Memeber. ID required. Einstein Bros Bagels – As a member of the Einstein Bros Bagel Club, you’ll get a free bagel and schmear on your birthday when you buy a drink. IHOP – Enroll in the IHOP Pancake Revolution email list and get a free coupon for a Rooty Tooty Fresh n’ Fruity breakfast on your birthday (2 eggs, bacon, sausage and fruit-topped pancakes) Waffle House – Enjoy a free waffle on your birthday when you join the Regulars Club. Appetizer Freebies & Deals Abuelo’s – Enjoy a free appetizer or dessert on your birthday when you become a member of Mi Abuelo’s Rewards. Black-eyed Pea – Sign up for the EClub and you’ll get a free appetizer on your birthday when you purchase an entree. Brio Tuscan Grille – Score a free filet and crab shrimp cake on your birthday after you subscribe to Brio Tuscan Grille’s email club. Joe’s Crab Shack – Sign up for Joe’s email list and get a coupon for a free appetizer to use on your birthday. Logan’s Roadhouse – You can choose between a free appetizer or dessert on your birthday if you sign up for the Nut-E email club. Lunch and Dinner Freebies & Deals Au Bon Pain – Free lunch on your birthday when you sign up for their e-Club! Baja Fresh – Enjoy a free burrito on your birthday as a member of Club Baja. bd’s Mongolian Grill – Free meal on your birthday when you join Club Mongo, plus $5 off your next visit for joining. Participating locations only. Bennigan’s – When you sign up for the rewards club at Bennigan’s, you’ll get a buy one, get one burger deal on your birthday. Black Angus Steakhouse – Enjoy a free steak dinner with the purchase of an entree on your first birthday as a Prime Club member. Blimpie – Score a coupon for a free six-inch sub on your birthday when you join Blimpie Rewards. Bonanza Steakhouse – Become a member of the Bonanza Steakhouse eClub and get a coupon for a free steak dinner with the purchase of an entree on your birthday. El Torito – You’ll score a coupon for a free entree when you join El Torito’s E-Club. Firehouse Subs – When you sign up for Firehouse Rewards before your birthday, you’ll get a free medium sub Reward. The Reward will be valid on your birthday or within the following six days. Fox and Hound – Enjoy a free entree when you sign up for the All Star Club.
Jersey Mike’s – Join Jersey Mike’s Email Club and score a free sub and drink on your birthday.
McAlister’s Deli – Get $5 off for your birthday when you sign up for DeliGrams. Moe’s Southwest Grill – Free burrito on your birthday for Moe’s Rockin’ Rewards members Noodles & Company – Get a free dish on your special day if you join the E-Club. Red Robin – Become a member of Red Robin Royalty to get a free burger on your birthday. Ruby Tuesday – Free burger or garden bar entree on your birthday when you join the So Connected Club Shula’s – If you join Team Shula, you’ll score a free entree on your birthday with the purchase of another entree.
Souper Salad – Join the Souper Salad eClub and get a coupon for a free buffet on your birthday.
Spaghetti Warehouse – Score a free meal on your birthday when you become a member at Spaghetti Warehouse. Steak ’n Shake – When you become a member of the Steak ‘n Shake eClub, you’ll get a coupon for a free birthday meal. Sticky Fingers – If you join the StickEClub, you’ll be treated to free ribs on your special day. Texas de Brazil – When you join Texas de Brazil’s eclub, you’ll be treated to a free dinner on your birthday. Dessert and Treats Freebies & Deals
A&W – When you sign up for the A&W Mug Club, you get a free root beer float on your birthday. Applebee’s – Receive a free birthday dessert coupon when you join the Applebee’s email club.
Arby’s – Sign up for the Arby’s email club and get a coupon for a free 12-ounce shake on your birthday. Auntie Anne’s – When you join My Pretzel Perks, a coupon for a free Signature or Classic pretzel on your birthday is automatically loaded into your account. To redeem, open the coupon in the Rewards section of your My Pretzel Perks app and show it to a crew member. Baskin Robbins – As a member of the Birthday Club, you’ll get a free ice cream and discount on a birthday cake on your birthday. Beau Jo’s – Enjoy a free birthday bundt when you purchase a meal for $7.99 or more. Beef ‘O’ Brady’s – When you sign up for the rewards program, you’ll receive a free dessert on your birthday with the purchase of any entree. Ben & Jerry’s – Sign up for the Chunk Spelunker email list to receive a coupon for a free ice cream on your birthday. Bertucci’s – Free dessert on your birthday when you join Dough Nation! Plus a gift on your half-birthday Biggby Coffee – Every year, you’ll get a free drink on your birthday if you join Biggby Coffee E-wards. BJ’s Restaurant & Brewhouse – Join the BJ’s email list for a free birthday pizookie coupon. Bonefish Grill – Join the Bonefish Grill Insider list to get a free dessert on your birthday! Boston Market – Join the Boston Market V.I.P. club and get a coupon for a free Boston Market dessert on your birthday. Bruster’s – As a member of Bruster’s Sweet Rewards, you’ll get a buy one, get one free treat on your birthday. Buffalo Wild Wings – Receive a free dessert coupon if you join Buffalo Circle. Cafe Express – When you sign up for the Cafe Express e-Club, you’ll be rewarded with a special treat on your birthday. Caribou Coffee – Enjoy a free drink on your birthday with photo ID. Carrows Restaurants – Get a free dessert on your birthday when you become a member of Carrows e-Club. Carvel – When you join Fudgie Fanatics, you’ll get a free treat on your birthday. Cinema De Lux – Sign up for a Starpass Membership, and you’ll receive a free regular popcorn on your birthday. Coco’s Bakery Restaurants – Enjoy a free slice of pie. Cold Stone Creamery – When you become a member of My Cold Stone Club, you’ll receive a buy one, get one Creation for your birthday. Dairy Queen – Receive two-for-one Blizzards on your birthday if you sign up for the DQ Blizzard Fan Club. Del Taco – Enjoy a free shake on your birthday when you join the Del Taco Raving Fan eClub. Dunkin’ Donuts – You can get a free drink coupon for your birthday when you sign up for the Dunkin’ Donuts email list. Flat Top Grill – As a member of the Flat Top Grill E-Club, you’ll receive a free treat on your birthday. Friendly’s – Join the BFF Club and get a free Happy Ending Sundae on your birthday. Glory Days Grill – If you sign up for the MVP Club, you’ll score a free treat on your birthday. Great American Cookies – When you sign up for the Great American Cookies CookiE-mail list, you’ll get a coupon for a free slice of Cookie Cake when you purchase a beverage on your birthday. Huddle House – Enjoy a free dessert on your birthday. Jack in the Box – You can get a free dessert during your birthday week with a valid ID.
Jamba Juice – Enjoy a free birthday smoothie or juice when you show your ID.
Krispy Kreme – Become a member of Friends of Krispy Kreme E-Club to get a free doughnut on your birthday. This Offer varies by location. La Madeleine – Join the e-Club to get a free pastry on your birthday. McCormick & Schmick’s – You can get a free dessert on your birthday. MaggieMoo’s – Receive a birthday surprise when you become a member of Slab Happy. Marble Slab Creamery – Enjoy a free ice cream on your birthday when you become a member of Slab Happy. Marie Callender’s – As a member of Marie Callender’s eClub, you’ll receive a free slice of pie and $5 off your check on your birthday. Ninety Nine Restaurant – To get a free dessert on your birthday, sign up for Ninety Nine Restaurant eClub. Olga’s Kitchen – As a member of Olga’s Rewards, you’ll receive a free dessert anytime during the month of your birthday. pinkberry – You’ll receive a free yoghurt on your birthday when you join PinkCard Loyalty. Papa Murphy’s – Sign up for the Email Club to get free cookie dough on your special day. Quiznos – When you sign up for the QClub Email, you’ll score a free cookie on your birthday. Ram Restaurant & Brewery – As a member of the MVP club, you’ll get a free Mile High Mud Pie on your birthday. Rita’s Italian Ice – When you join the Birthday Club, you’ll get a birthday treat. Ruby Tuesday – Enjoy a free treat on your birthday when you join the Ruby Tuesday So Connected Club. Shari’s – Free slice of pie on your birthday when you join Shari’s Cafe Club Smashburger – When you join the Smash Club, you’ll receive a free shake on your birthday. Smokey Bones – When you sign up for the Bones Club Loyalty email list, you receive a free dessert on your birthday. Smoothie King – You’ll be treated to a buy one, get one free smoothie on your birthday as a member of the Smoothie King mailing list. Sonic – When you create a My Sonic account, you earn a free treat on your birthday. Sprinkles Cupcakes – If you join Sprinkles Perks, you’ll be treated to a free cupcake on your birthday. Starbucks – Enjoy a free birthday drink as a Starbucks Rewards member. Taco Bueno – When you sign up for the Buenoheads Email Club, you’ll get free cheesecake chimichangas on your birthday. TCBY Become a member of the TCBY eClub and receive a free small yogurt coupon to redeem on your birthday. Ted’s Montana Grill – To get a free dessert on your birthday, sign up for the Ted’s Mavericks Email Club. T.G.I. Friday’s – Join the Give Me More Stripes Rewards Program for a free dessert on your birthday. Tropical Smoothie Cafe – You’ll be treated to a free smoothie on your birthday when you join Tropical Email Club. Wingstop – Sign up for The Club to get a birthday gift on your special day. Yogurtland- As a member of Yogurtland Real Rewards, you get a free three-ounce treat on your birthday. Kids Only Freebies & Deals Benihana – When you join Kabuki Kids, your child will receive a free souvenir mug on his or her birthday. Bob Evans – Join the Birthday Club for a free kids meal on your child’s birthday with purchase of adult entree. Bonanza Steakhouse – When you sign up for the EClub, you’ll get a free kids buffet on your child’s birthday with the purchase of an adult meal. Bubba Gump Shrimp Co. – Your child will receive a free kids birthday meal if you sign up for the email club. California Pizza Kitchen – If you join the CPKids Birthday Club, your child will receive a free CPKids meal during their birthday month. This Offer is valid for youngsters ages 12 and under. Captain D’s – Join the Captain D’s Kid’s Birthday Club and receive a free kids meal and special message from Captain D’s on your child’s birthday. Chili’s – Enjoy a free dessert on your birthday when you join My Chili’s Rewards. Chuck E Cheese – Sign up for Chuck E Cheese’s email club for free tokens on your kid’s birthday. Zaxby’s – Receive a free Kidz Meal on your child’s birthday when you sign up for the Zaxby’s Kidz Club. If you have any question or ideas comment down below. This is all I have for now. I will thing of some other stuff later and edit the post as it comes.
Okay, Okay, just entertain me for a moment here... Big news today Circle aquires Poloniex. Circle Investors: Jim Breyer and FENBUSHI Breyer and FENBUSHI backup from the linked article: "While many Western companies have gotten crushed in their attempts to cross the Pacific, Circle’s executives have navigated the waters successfully so far. The company has taken money from strategic Chinese investors, including Fenbushi Capital, China Everbright Investment Management, China International Capital Corporation, and Baidu Ventures. In 2016, Jim Breyer launched a $1 billion China-focused fund in partnership with IDG Capital Ventures, another Circle investor, and he has toured China with Allaire to meet entrepreneurs and government officials on several occasions. “Much of the innovation today in fintech is occurring outside the U.S.,” says Breyer, who has a long history with Allaire’s earlier ventures, including Macromedia, which acquired the eponymous Allaire Corp. for $360 million in 2001, as well as the video service Brightcove, which held a successful IPO in 2012. Few stateside companies “have their pulse on global blockchain innovation in the way that the leaders of Circle do,” Breyer says." Vechain Investors: Jim Breyer and FENBUSHI Backup: https://www.vechain.org/about/#backers Also it might be important to note that Goldman Sachs is invested in Circle. Can you guess what this might mean for VeChain? A big US fiat on ramp. Poloniex was one of the first exchanges to list ETH, guess who was an early investor in ETH (Jim Breyer). Backup from article: "The desk struck a relationship with Poloniex, its Boston neighbor, after Poloniex became one of the earliest exchanges to list Ether, the native coin of Ethereum, the biggest cryptocurrency network next to Bitcoin. Poloniex, which for now trades only digital tokens (about 70 types), needed a way to translate its cryptocurrency exchange fees into fiat money like U.S. dollars—“to buy cookies and milk and pay rent,” as Allaire likes to say. Often Poloniex did so through Circle’s trading desk. And so began a relationship that would culminate in Monday’s acquisition." Am I crazy is anyone following me here? Link: (in this link they talk about FENBUSHI/BreyeCircle and Poloniex being one of the first exchanges to list ETH) http://fortune.com/2018/02/26/circle-cryptocurrency-trade-bitcoin/ Jim Breyer on Circle CEO Jeremy Allaire (from linked article): Breyer compares Allaire to Mark Zuckerberg in terms of long-term strategic thinking: Just as the Facebook founder “instinctively understood” the need for an overarching, sticky social platform, not just a network for colleges, Allaire has designs on an entirely new financial operating system—not just another bank. “Our vision was always how to fuse the existing financial system with cryptocurrency as a hybrid, digital model,” Allaire says. A little bit about Circles vision and product (from linked article above): "But the trading desk is only part of Circle’s vision. The company has a bevy of other products, too. There’s its Venmo-like Circle Pay app, which lets users send money with the ease of a text message. There’s its soon-to-launch Circle Invest app, which aims to encourage small, steady investments in cryptocurrencies the way Robinhood does for stocks. And there’s its Centre protocol, an open-source project designed to make disparate digital wallets—like those from Alipay, PayPal, or, yes, Circle—interoperable with one another."
Looking for a local Bitcoin expert to come speak at my university
Is there anyone in the Boston area that would be interested in coming and speaking at Brandeis University to the BITMAP club (Brandeis Initiative for Technology, Machines, And Programming)? If you are, or know anyone who might be a knowledgeable source on the topic, please let me know in the comments or through a PM!
At MIT expo. As a long time bitcoiner, today is the first time in a while I've gotten goosebumps...
At the Expo, it's early on a beautiful Saturday in Boston. Sean from Circle is speaking on taking Bitcoin mainstream. There are hundreds of MIT students here, hanging on every word. No chatting, no texting, no surfing. Some of the world's brightest minds, spending their free time learning Bitcoin.. I can't help but feel we're watching Bitcoin go mainstream in realtime. We've almost reached the mountain top. Couldn't get a good angle on the photo but huge lecture hall is about 70% full. Questions have been really smart. About 3 hours in and barely anyone has left. http://m.imgur.com/EZnpMwu
US Bitcoin traders who identify as users are under siege. Do you have the same issue in your country?
As a bitcoin trader myself, I follow all the news of us trader arrests. These fall into two categories. First, the user did something otherwise unlawful such as trafficking drugs or committing money laundering and was charged with "operating an unlicensed money servicing business" and "conspiracy for agreeing to distribute controlled dangerous substances". In these types of cases I agree that the user should be punished for conspiracy to distribute drugs and money laundering. The second type of case that is becoming far more prevalent now is where the bitcoin user has simply made sales and purchases of bitcoin for his or her own account. These users are still charged with "Operating an unlicensed money services business." This I do not agree with at all because FIN-2008-G008 declared that "When a broker or dealer in currency or other commodities accepts and transmits funds solely for the purpose of effecting a bona fide purchase or sale of currency or other commodities for or with a customer, such person is not engaged as a business in the transfer of funds, and is not acting as a money transmitter as that term is defined in our regulations.8 In such circumstances, the transmission of funds is a fundamental element of the actual transaction necessary to execute the contract for the purchase or sale of the currency or the other commodity. The transmission of funds is not a separate and discrete service provided in addition to the underlying transaction. It is a necessary and integral part of the transaction." This determination was reiterated in subsequent guidance FIN-2013-G001 & response FIN-2014-R002. Simply put a bitcoin user who only purchases or sells bitcoin of his own account to or from a customer is not a money transmitter. Most simple bitcoin traders operate under this guidance and are simply flabbergasted when confronted with charges for operating an "unlicensed money services business" or "operating an unlicensed bitcoin exchange". When the government makes their case the conveniently only quote the portion of the rule that states " An exchanger is a person engaged as a business in theexchange of virtual currency for real currency, funds, or other virtual currency". [FIN-2013-G001] Except that it is clearly explained in FIN-2008-G008 that "When a broker or dealer in currency or other commodities accepts and transmits funds solely for the purpose of effecting a bona fide purchase or sale of currency or other commodities for or with a customer, such person is not engaged as a business in the transfer of funds, and is not acting as a money transmitter as that term is defined in our regulations." This is carried forward and reiterated in FIN-2013-G001 where it states "In 2008, FinCEN issued guidance stating that as long as a broker or dealer in real currency or other commodities accepts and transmits funds solely for the purpose of effecting a bona fide purchase or sale of the real currency or other commodities for or with a customer, such person is not acting as a money transmitter under the regulations. However, if the broker or dealer transfers funds between a customer and a third party that is not part of the currency or commodity transaction, such transmission of funds is no longer a fundamental element of the actual transaction necessary to execute the contract for the purchase or sale of the currency or the other commodity. This scenario is, therefore, money transmission. Examples include, in part, (1) the transfer of funds between a customer and a third party by permitting a third party to fund a customer’s account; (2) the transfer of value from a customer’s currency or commodity position to the account of another customer; or (3) the closing out of a customer’s currency or commodity position, with a transfer of proceeds to a third party. Since the definition of a money transmitter does not differentiate between real currencies and convertible virtual currencies, the same rules apply to brokers and dealers of e-currency and e-precious metals. A simple way to think about the definition of a money transmitter is that a money transmitter typically collects funds from one customer and transmits those funds to another customer via its agents in a remote location. So A western Union agent for example collects $100 from Bob Smith in Iowa and deposits this money into its Bank of America Account. Peggy Sue in Ohio goes to a western union agent where the agent prints out a check from western union or gets an ach credit into its business checking account from Bank of America and pays out a portion of the received funds to Peggy Sue. Western Union is transmitting money by accepting it from agent A and transmitting it to agent B for further credit to Peggy Sue. So let's think about this in terms of bitcoin. Bitcoin is a centralized ledger of funds for each public key or "account". If I have 0.05 bitcoin in account 1001 and I want to pay my landlord 0.05 bitcoin rent,I send the bitcoin to account 1002. All this does is make a notation on the blockchain that account 1001 now has 0 bitcoin and account 1002 now has 0.05 bitcoin. This is simplified a bit so you programmers out there don't cringe over the details of constructing a bitcoin transaction, inputs, and outputs. Suffice it to say, that sending my landlord who is standing next to me, 0.05 bitcoin, does not make me a money transmitter any more than paying him with my VISA card. In fact in both cases we could consider VISA or bitcoin a money transmitter since they take funds from person A and transmit them to person B via their agents. In VISA's case the party's banks are the agents, while in bitcoin's example the agents could be the wallet program on each phone or computer that reads the person's wallet or account balance. Circle back to our friendly traders under siege. No, not the criminals slinging drugs, they knowingly committed their actions. I'm speaking about the bitcoin users, only selling or purchasing bitcoins from their own account to or from a customer. These traders haven't committed an offenses at all according to fincen's directions. What does the government do? Do they engage in a public information campaign to inform these traders of their rights and responsibilities? Do they create a new MSB category for digital currency and define rules and responsibilities for a virtual currency trader? No, instead they try to mislead traders in these cases where a secondary offense such as drug trafficking hasn't been committed. "You have got to be kidding me. Right?" No, I'm really not. If you start reading into these cases you'll find literally hundreds of examples of agents encouraging traders to send bitcoin to a trader in Africa for example so that trader can disburse local currency to a friend. Agents buying bitcoin for less than $10,000 USD without ID and considering this illegal behavior in the indictment! Remember a user doesn't need to report any transaction unless it exceeds $10,000 USD if it is part of his trade or business. If an auto worker who is a casual user that only trades bitcoin 3 times a year sold his for Christmas money to a friend, he wouldn't even need to report the $15,000 sale. But most traders who trade on a daily basis or do it for a living will need to file either an IRS 8300 or a Fincen CTR. Such agents who approach these casual traders entice them with inflated rates and use such phrases as "I'm going to make you rich!'". And they often ask questions about limits and regulations that don't apply to the bitcoin user. They consider all responses as violations of the money transmitter regulations that aren't supposed to apply. So what is a trader to do? You have two choices. You can follow the law literally as most have done and have countless agents come and test you...and then worry about being arrested on charges that don't even apply to you except when acting unlawfully when strongly encouraged or even elicited under duress in some cases by government agents. Or you can falsely claim you are a money transmitter and follow those rules. On my own personal journey I decided in October of 2014 to register with Fincen because I saw that one of my suppliers had done so on his website. I asked him about it and he said it was a precautionary measure. I asked around and I was told by many that I had to select money transmitter and other and write in bitcoin trader because there was no selection for bitcoin trader. This in spite of not being a money transmitter. After I had registered I received a call from a man in "Internal Revenue" in Boston about my registration. He asked me about my bitcoin trading and then he said he had to consult with a supervisor. About 15 minutes later he returned my call and told me, "You are not a money transmitter, so I don't need anything from you." A couple months after that, I received a call from Key Bank's compliance office in Cleveland. They had detected my registration as a money transmitter with Fincen and wanted to ask me a few questions. After questioning me, the lady told me that she previously worked for fincen and that I was not an MSB. Key bank had me sign an affidavit that I wouldn't perform any money services businesses activities such as cashing checks for profit, transmitting money, issue money orders, or create gift cards. This compliance officer understood that I was not an exchange in any way and that I only purchased and sold bitcoin of my own account. She understood I didn't hold funds for customers to trade with each other of their own accord like Bitstamp, Kraken, or Gemini. In the years that would follow, I would have many bank accounts shut down due to this registration as a money transmitter. Most banks simply looked and said, you are a money transmitter. After all, you registered as one. I called Ficen and asked if I could un-register. "No, you cannot". The banks wouldn't even listen to the facts and make a decision. The only other business to actually study my investment model and grant me user status was Gemini. They also agreed I was a user. I think years later they came under pressure to terminate all localbitcoins accounts because many were terminated and at the end of those, mine was too. Was it a coincidence? Or could one of my customers have sabotaged me? It is possible for a user to lie about his wallet address and give out one belonging to a site such as Alphabay. I had one customer do this to me when I was selling him coin from Alphabay. Coinbase questioned me about the transaction and I informed them that someone I was sending money give that wallet out as his own. They reinstated my account since I had years of history with them and it was only one transaction. After that I was careful not to send to customer wallets directly from coinbase. I guess my point is here, if you don't register as a money transmitter they want to harass and prosecute you; but if you do register as a money transmitter they still want to harass and shut down your business. I have recently been engaged in conversations with Fincen by email and by phone and other traders. I haven't been able to speak with many compliance people who are knowledgeable about bitcoin. When I do, for example I've spoken with BitAML on this subject, they agree with me about being a user as a trader. Other compliance people won't even answer my emails or call me back. Now I'm on the verge of either retiring or going the whole money transmitter route and even following the $3,000 ID requirement that only applies to money orders, traveler's checks, and money transfers, but not virtual currency. So my question to you is, do you have the same kinds of problems in your country? Is it better, or worse where you are? Tell me your stories. From my perspective now at least, it seems like the USA has the most malfeasance and harassment of the simple bitcoin traders, excluding those who commit crimes. Thanks for reading
Leak: Bruce Fenton attempts to revive failed and incompetent Bitcoin Foundation
Source: http://pastebin.com/8a2EdtSV (archive: https://archive.is/JK0wO) To The Core Development Team (BCC: BF Board, Craig Sellars & Bitcoin Error Log) TLDR: The Bitcoin Foundation is working hard to be an asset to Core Dev and we have some ideas on that -/ we'd appreciate help and feedback. The Foundation is here and here to stay - lets have this organization be a resource that helps Core and Bitcoin as much as possible. MOST IMPORTANTLY: We hope for Core Devs to consider the foundation an asset that belongs to you just as much as us or anyone else. We've fixed much of what needed fixing and would welcome your help to make this the most effective benefit to Bitcoin it can be. Some ways this could be carried out: - Board Seat / I would recommend that the board consider and I believe they would vote to accept a qualified member of the Core Development team to serve - the foundation belongs to you and you can help us lead it
Committee Chair / Officer Role - as Executive Director I am able to appoint Committee Chairs and officers - I would be glad to appoint a qualified developer to a role of Chief Technology Officer / Chief of Development / Chairman of Technical Development or some similar role - we could then build a committee around this role and fundraise and assist the dev volunteer with time being effective while also aiming to have real impact. Eric Lombrozo and Greg Maxwell are two names we thought would be a great fit, certainly we'd love feedback from anyone interested
Speakers bureau / press coverage - we'd welcome any Core Devs to join our speakers bureau or press matching service
General feedback - we are in this together - we understand that you may not have been a fan of the foundation in the past - many of us were not either (at least three of us, including me, were involved in founding organizations which serve as alternatives) Please let us know your ideas about how we can use this organization effectively
WHAT IF THE FOUNDATION 'BELONGED' TO YOU PERSONALLY OR CORE - Closing or destroying the foundation isn't on the table we are here to stay -- however EVERYTHING else is on the table. If you were an official steward of this organization what would you do tomorrow? MORE DETAILS: The foundation, like Bitcoin itself, had its four share of ups and downs early on. While the group did some good things: funding of three developers, the bitnodes project, some solid events and a response to Bitlicense, there were some stumbles as well. In general, the decisions most consider to be mistakes at the foundation were the result of management that is long gone. The current team, the board and I, volunteered our time to make the foundation the best asset it can be. A COUPLE INTERESTING FACTS: My role as Executive Director had previously been a paid role with a $100,000 salary. Currently I serve in this role as an unpaid volunteer. Likewise all board seats are volunteer positions. No board member or me as Executive Director receives any compensation at all for this work. We also do not have any related business, travel pay or any other such perks. Bobby Lee / BTCC, Brock Pierce and I personally each donated $10,000 to the foundation this quarter The Bitcoin Foundation is the oldest and largest industry group with, by far, the most broad cross section of key industry leaders as members: Circle, Xapo, BTCC, Bitpay, BitFury and many many others. We also represent individual members ranging from newcomers to long time Bitcoin leaders and early adopters to many Core Devs such as Greg Maxwell and Peter Todd. Most importantly, we are objective, neutral and global. We have maintained representation of a wide variety of members on all sides of major issues and also are the most major organization working on a global scale. NICK SZABO GRANT RECOMMENDATION FOR CRUCIAL BITCOIN SECURITY STUDY We've spoken to cryptographer and digital asset expert Nick Szabo for his help and suggestions on the most effective use of a grant. (Please note, his involvement is confidential until the donation received and he confirms.) In summary: There is is a large amount of code development based on handwaving. In Nick's opinion the blocksize debate showed that even some of the developers don’t really know how secure Bitcoin is they are at the very least very reluctant to talk about the topic, which leaves everybody else in the dark (and not knowing whether some of the developers themselves are in that dark having talked with them about these topics Nick is afraid that many of them are). That is the biggest reason there is so much heat and so little light in the blocksize and related debates about performance vs. security. So instead of primarily funding yet more development he instead recommends using the funds to increase the rigor of the thinking involved. Specifically, Nick recommends providing it to: (a) a computer scientist (or small group of same) who is/are familiar with probabilistic and anonymous Byzantine consensus generally, and Bitcoin and Ethereum specifically, in order to (b) write a paper on proofs of security (technically a proof of highly reliability in a Byzantine consensus-like model that includes defense against Sybil attacks) in abstract models based on Bitcoin and Ethereum, and discuss assumptions and limitations when applying those proofs to actual Bitcoin and Ethereum (this is the most important part), and optionally (c) recommending or designing next-generation blockchain technology based on improving on those assumptions or reducing those limitations Nick has agreed to recommend computer scientists who would make good referees to peer review such a paper. He is a widely respected and relatively non-controversial figure in this industry who also has among the deepest understanding of the real issues facing Bitcoin. The board and I believe that this may be an effective possible use of the funds. We'd also like feedback from core for any development funding or other initiatives you suggest. OVERALL ACTIVITIES / WHERE THE BITCOIN FOUNDATION IS TODAY In addition to the Nick Szabo proposal and development grants, the foundation supports many activities which we believe are beneficial to the Bitcoin ecosystem. A few notable points: · The Bitcoin Foundation remains the largest industry group and one of the only major industry groups with an international focus. · Membership includes over 1500 and many of the top industry leaders including KnC, BitPay, BitFury, BTCC, ItBit, Circle, Blockchain, Perkins Coie, Chain, Ok, Pillsbury, Lightspeed, Xapo and many others. · We have international affiliates in a dozen countries and members all over the world. · All board members, the Executive Director serve as unpaid volunteers. · Expenses for the foundation have been significantly reduced and fixed costs are very low - currently at less than 10% of peak spending · Current Board Members: Elizabeth McCauley (formerly Ploshay), Global Business Development Head, Coinsecure Bobby Lee, CEO, BTCC (Board Vice Chair) Vinny Lingham, Founder, Civic and Gyft Michael Perklin, Head of Security (Ledger Labs), President (C4) Brock Pierce, Managing Director, Blockchain Capital (Board Chair) Francis Pouliot, Director-Bitcoin Embassy
Other volunteers include: Executive Director, Bruce Fenton (Atlantic Financial) Chairman of the Regulatory Affairs Committee, Marco Santori, Education Committee, Colin Gallagher and many others
· As discussed above, the main focus areas for The Bitcoin Foundation are in three areas:
Developing Development: increasing the number of developers and the training and knowledge available to them - the flagship of this area is our DevCore event series, next slated for Toronto - past speakers include Greg Maxwell, Charlie Lee, Jeff Garzik, Matt Corallo, Andreas Antonopoulos, Jeremy Allaire and many others.
Education and adoption: our Education Committee focuses on providing knowledge, white papers, and data to individuals and organizations with a goal of explaining the technology and increasing usage.
Promoting technical solutions to industry and regulatory challenges: the Bitcoin Foundation does not focus on lobbying and, as an internationally focused organization, we do not actively work on legislation issues. We do however believe that there is benefit in education of international regulators and officials, particularly with a focus on solutions of a technical nature.
OTHER INITIATIVES OF INTEREST: DevCore Toronto @ The Blockchain Training Conference: The Bitcoin Foundation has hosted a number of DevCore events, these are not-for-profit workshop intensives designed to encourage development. Following the successful DevCore Boston, London and San Mateo events, The Bitcoin Foundation is proud to be bringing The Blockchain Training Conference to Toronto in June. This conference - the first of its kind - will host hands-on technical courses from DevCore in addition to hands-on non-technical courses teaching them relevant blockchain skills such as tracking bitcoin sales in QuickBooks (for accountants), how to avoid legal issues when using bitcoin in your company (for lawyers and entrepreneurs), and how buying/selling/trading bitcoin works (for investment advisors). This unique training conference hits two of our three main focus areas and represents The Bitcoin Foundation’s commitment to preparing the global community for the Development Communicstions: One exiting new expansion of our "developing development" efforts is in the area of increasing communication and focusing on common areas of development consensus. Leading this effort is Craig Sellars who will join me and the board in working to bring industry leaders together and to foster communications between various development opinions, CEOs and the public. Speakers Bureau: We have created a Speakers Bureau which includes industry leaders like Andreas Antonopoulos, Nic Cary, Erik Voorhees and many others Press matching service: We have an additional group of prominent members and friends of the Bitcoin Foundation who we can match to press inquires based on location and topic If you are still reading this long email, thank you. More importantly, thank you for the work you do on this mission critical software that makes this amazing tech we all love and care about possible. We know your work is misunderstood and unappreciated at times and we also understand that we and Bitcoin owe you a great debt. Please let us do our part and make this organization a resource that you are happy with and which is seen as an asset to core. I available anytime to discuss.
Ether Thief Remains Mystery Year After $55 Million Digital Heist
Ether Thief Remains Mystery Year After $55 Million Digital Heist 2017-06-13 08:00:18.224 GMT By Matthew Leising (Bloomberg Markets) -- Summer colds are the worst, and Emin Gün Sirer had caught a wicked bug from his 1-year-old son. So it was with watering eyes and a stuffy nose that the associate professor of computer science at Cornell found himself working from his sickbed on Monday, June 13, 2016. Gün—everyone calls him Gün—couldn’t tear himself away from his laptop. He had another type of bug in his sights, a flaw in a line of computer code he feared put $250 million at risk of being stolen. It wasn’t just any code. It was the guts of the newest breakthrough in software design related to blockchain, the novel combination of decentralized computing and cryptography that gave life to the virtual currency bitcoin in 2009. Since then, the promise of blockchain to transform industries from finance to health care has captured imaginations in corporate boardrooms and governments alike. Yet what the Turkish-born professor was exploring that Monday was the next leap forward from bitcoin, what’s known as the ethereum blockchain. Rather than moving bitcoin from one user to another, the ethereum blockchain hosts fully functioning computer programs called smart contracts—essentially agreements that enforce themselves by means of code rather than courts. That means they can automate the life cycle of bond payments, say, or ensure that pharmaceutical companies can authenticate the sources of their drugs. Yet smart contracts are also new and mostly untested. Like all software, they are only as reliable as their coding—and Gün was pretty sure he’d found a big problem. In an email sent to one of his graduate students, Philip Daian, at 7:30 p.m., Gün noted that the smart contract he was looking at might have a problem—on line 666. (They say the devil is in the details.) Gün feared the bug could allow a hacker to make unlimited ATM-like withdrawals from the millions, even if the attacker, who’d have needed to be an investor, had only $10 in his account. This staggering amount of money lived inside a program called a decentralized autonomous organization, or DAO. Dreamed up less than a year earlier and governed by a smart contract, the DAO was intended to democratize how ethereum projects are funded. Thousands of dreamers and schemers and developers who populate the cutting edge of computer science, most of them young, had invested in the DAO. This was real money, a quarter of a billion dollars, their money, meant to build a better version of the world, and every cent was at risk. Gün, who wears his dark hair short and looks a decade younger than his 45 years, had already been tracking and publicizing flaws in the DAO’s design. A few weeks earlier, on May 27, along with two colleagues, he’d urged investors to stop buying into the DAO until security issues could be fixed. It had been too late, however, and the program went live the next day. Smart contracts such as the DAO are built to be entirely reliant on their code once released on the ethereum blockchain. That meant the DAO code couldn’t be fixed. Other blockchain experts—including Peter Vessenes, co-founder of the Bitcoin Foundation—had also pointed out security flaws in the smart contract, but Gün appears to be the first to pinpoint the flaw that put the money in jeopardy. The problem was the code was so new that no one knew what to expect—or even if there was actually a problem in the first place. Gün had his doubts, too. This wasn’t even his job. He does this for fun. Daian didn’t think they’d found anything either. Over email, he said, “We might be up the creek ;).” Later, when Gün pointed to the error in line 666, Daian replied, “Don’t think so.” Gün says, “We don’t sound the alarm bell every time we find a bug that seems suspicious.” Instead, he went to bed to try to kill his cold—the one bug he knew to be real. “I was too miserable to sort it out,” he says. Four days later, Christoph Jentzsch lay on the floor of his home office, taking deep breaths, trying not to panic. It was Friday morning, and software developers all over the Western world were waking up to the news that the DAO, which Jentzsch had created, was being attacked. Gün had been right. Jentzsch, who has dark hair and a perpetual five o’clock shadow, lives with his family in the Mittweida region of Germany, a rural spot not far from the Czech border. Mornings in the Jentzsch household are a whirlwind as he and his wife get their five children—age 2 to 9—fed and off to school. Yet today, after his brother Simon woke him with a call that the DAO was being hacked, Jentzsch had to ignore his familial duties. “You’ve got the kids,” he told his wife. “I have an emergency.” This is the story of one of the largest digital heists in history. And while you may have heard last year that hackers breached Swift, the bank-to-bank messaging system, and stole $81 million from Bangladesh’s central bank, the DAO attack is in a different category altogether. It played out in front of anyone who cared to watch and couldn’t be stopped. Just as the global WannaCry ransomware attack in May laid bare weaknesses in computer operating systems, the DAO hack exposed the early frailties of smart-contract security and left many in the community shaken because they hadn’t found the bug in time. The aftermath would eventually pit good hackers against bad ones—the white hats vs. the black hats—in the strange and futuristic- sounding DAO Wars. The roots of the DAO belong to an idea Jentzsch borrowed from another internet-fueled phenomenon: crowdfunding. The 32- year-old Jentzsch, a theoretical physicist by training, and a few colleagues started Slock.it in 2015. As they considered how to fund the company, Jentzsch approached it as many had—sell a digital currency, effectively a token, to raise cash. But why should each new startup have to program its own initial coin offering? Jentzsch wondered. What if one huge fund ruled them all? He introduced his idea to the world at DevCon 1 in London in November 2015. “What is the blockchain way of creating a company?” Jentzsch asked his audience. “Of course, it has to be a DAO.” It would work like this: Ether, a virtual currency like bitcoin, would be used to fund and develop applications on the ethereum blockchain—things such as making a music app similar to iTunes or a ride-sharing service along the lines of Uber. Investors would buy DAO tokens with their ether; the tokens would allow them to vote to fund projects they liked. If the app they backed made money, the token holder shared in the profit. In the six months he spent creating the DAO, Jentzsch thought it would raise $5 million. From April 30 to May 28, the DAO crowdfunding pulled in $150 million. That’s when ether traded just below $12. As the price of ether rose in the following weeks to $20.75 the day before the attack, so too did the value of the DAO, putting a $250 million target on this thing Jentzsch had unknowingly brought into the world with a fatal, original sin. “Our hope was it would be the center of a decentralized sharing economy,” says Jentzsch, who now regrets not capping the amount raised. “For such a big experiment, it was way too early.” In the weeks after the attack, Jentzsch and the rest of the ethereum community would come to grips with their own crisis that, writ small, echoed the bank bailouts and government rescues of 2008. “It became too big to fail,” he says. But why would anyone invest in the DAO in the first place? It has something to do with the strain of digital libertarianism at the heart of the ethereum community, much like the set of beliefs that led to the birth of bitcoin. Think of bitcoin as the first global currency whose use can’t be stopped by governments or corporations; on top of that, bitcoin is almost impossible to hack. Ethereum, then, is another level beyond. It’s an uncensorable global computer. As amazing and unprecedented as that is, it’s also a bit terrifying. Brought to life, the DAO ended up staggering off the table and turning on the community that wanted it so badly. Accustomed to working into the night to stay in touch with colleagues in North America, Jentzsch blows off steam by jogging or kayaking on the nearby Zschopau River. Yet on that Friday morning, he had the more pressing task of pulling himself up off the floor and dealing with the attack. “I went into emergency mode: Don’t try to save the DAO,” he says. “No, it’s over.” It was far from over. Several hours later and half a world away from the Jentzsch household in Mittweida, Alex Van de Sande was waking up in his apartment in the Copacabana neighborhood of Rio de Janeiro. The baby-faced ethereum developer had been born in the small fishing village of Santa Cruz Cabrália in the Bahia region of Brazil and moved with his parents to Rio when he was about 3 years old. These days he’s known as “avsa” on Reddit and Twitter. After reaching for his phone to see why it was blowing up with Skype messages, he turned to his wife and said, “Remember when I was telling you about that huge unhackable pile of money?” She nodded. “It’s been hacked,” he told her. His first thought was to get his DAO tokens out. He owned about 100,000 of them, valued at about $15,000 at the time. He’s the lead designer of the Ethereum Wallet app, a program that allows him and anyone else to interact with the blockchain. Van de Sande scrambled to log in to it, but his password didn’t work. It was glitching, and as he worked to fix it, his panic subsided. He realized he shouldn’t be bailing on the DAO but trying to save it. And to do that, he needed Griff. Griff Green, who’s worked variously as a massage therapist in Los Angeles and a community organizer in Seattle, is one of only a handful of people in the world who holds a master’s degree in digital currencies. He got it online, natch, from the University of Nicosia. A self-described “dreamer,” the 32-year- old is the closest thing Ethereumville has to a mayor. Green knows everybody; in fact, he’d been the first to relay word of the attack to Simon, Jentzsch’s brother and a co-founder of Slock.it. Green had been working for Slock.it for about six months by then and woke up that morning in the house belonging to Jentzsch’s mom in Mittweida. Jentzsch is one of nine children, so his mother had a spare bedroom where she could put Green up for a few days. Using his extensive contacts, Green started identifying as many people as he could who were interacting with the DAO—going so far as to ask strangers to send pictures or scans of their IDs—in an attempt to sort friend from foe. And then something strange happened: The attack stopped working. In the six hours since the attack began, the thief had managed to steal 30 percent of the DAO’s 12 million ether—which that day equaled about $55 million. “We don’t even understand why the guy had stopped,” says Van de Sande. Now Green raced to protect the remaining 70 percent of the DAO the attacker hadn’t stolen. Once Van de Sande got in touch with Green in Germany, along with two or three others, the foundation was laid for what would become known as the Robin Hood group—white hat hackers who’d devise a bold good-guy plan to drain the remaining DAO. To save the DAO, they’d have to steal the remaining ether, then give it back to its rightful owners. And yet as they scrambled that Friday, qualms emerged within the group. “What does it even mean to hack something?” Van de Sande asks. No one knew if what they were about to do was legal. Also, wouldn’t their hack look just as bad as the theft they were trying to stop? Then there were the practical issues. “Who pushes the button?” he remembers wondering. Doing so would initiate their counterattack and alert the community. “Someone has to push the button.” The price of ether the night before the attack had hit an all-time high of just above $20. News of the hack sent it tumbling to $15 by the end of Friday, wiping out almost a half- billion dollars in market value. At that price, the DAO still held $125 million, and the Robin Hood group worried the attack would resume. They might be the only line of defense if it did, so Van de Sande agreed to use his DAO tokens to fuel their counterattack, thereby becoming a public face of the group. At this point, it might help to think of the DAO as the spacecraft in Alien after Ripley initiates the self-destruct sequence. To flee, she’s forced to use an escape pod. DAO investors had to initiate a similar sequence to deploy escape pods that would allow them to get their ether out of the DAO. The code that dictated the escape pods’ behavior is where the bug lived, so to steal the remaining DAO funds the Robin Hood group would have to be in a pod to exploit the flaw—and because of the way Jentzsch wrote the DAO, they had only a short window of time and just a few pods to choose from. A few minutes before launching the attack, Van de Sande joked on the group’s Skype chat, “Let’s go rob a bank!” No one laughed. “Not everyone really appreciated the humor,” he says. In his Copacabana apartment, Van de Sande readied to push the button on his laptop. Then, suddenly, he lost his internet connection. His router was down. “I was like, What the f--- is going on here?” he says. He had less than 30 minutes left to execute the Robin Hood hack. He frantically called NET, his Brazilian internet service provider, but couldn’t get past the automated customer service experience. He says the robotic voice told him, “We see there’s an internet issue in your neighborhood.” The irony was not lost on him: Here he was trying to steal millions of dollars from a robot but was being waylaid by another robot. “Then we missed,” he says. The window closed. He went from the high of feeling like they were about to come to the rescue of the vulnerable DAO to the crushing low of having their international connection severed by NET’s breakdown. He took his dog, Sapic—named after the one in Pedro Almodóvar’s All About My Mother—for a walk, then crawled into bed, defeated. The next morning was Saturday, and Van de Sande tried to reconvene the Robin Hood group to infiltrate another escape pod. But folks were busy and couldn’t get together. “We felt like the worst hackers in history,” Van de Sande says. “We were foiled by bad internet and family commitments.” Who, exactly, were they at war with? No one really knows, but there are some clues. One address the attacker used is 0xF35e2cC8E6523d683eD44870f5B7c C785051a77D. Got that? Like everything else in a blockchain, a user’s address is an anonymous string of characters. But every address leaves behind a history on the blockchain that’s open for examination. Not that it makes sense to 99.9 percent of humankind, but Green gets it. To pull off his heist, the attacker needed to create a contract that would interact with the DAO. He did so on June 15 and deployed it in the early morning hours two days later, according to Green. Once activated, the attack contract started sending about $4,000 worth of ether through the attacker’s account every three or four minutes to drain the DAO. But where did the original money to fund the attack come from? To interact with the ethereum blockchain, every contract must be funded by an amount of ether. This attack contract was funded by two addresses, but tracing it further back becomes tricky. That’s because the second address used an exchange called ShapeShift to send 52 ether into its account on June 14. ShapeShift doesn’t collect any information on its users and says it turns one virtual currency, such as bitcoin, into another, like ether, in less than 10 seconds. While there are valid reasons for using ShapeShift, it’s also a great way to launder digital assets and cover your tracks. After the attack contract stopped working, the thief needed to deploy it again, says Green. He tried but failed, and after a few more transactions, the hack whimpered to an end. (One possible reason the attack stopped, Green says, is that the hacker’s tokens became corrupted, which means he had no way to exploit the bug.) We know this limited amount of one-sided information from the blockchain’s public record. Digital asset exchanges see both sides. An internal investigation by one such exchange concluded that the DAO attacker was likely part of a group, not a lone wolf, based in Switzerland, according to an executive there who wouldn’t speak on the record or allow the company’s name to be used. Exchanges are in the unique position of being able to analyze the trading activity of their customers because they know who they are, even if they’re anonymous on the blockchain. The executive says the exchange shared the analysis with the Boston office of the FBI, though there’s been no further contact since October of last year. Cornell’s Gün says he also spoke to the Boston office of the FBI—and to agents in the New York office and to the New York State Attorney General’s Office. “It’s very difficult to coordinate an attack of this kind without leaving breadcrumbs behind,” Gün says. He encouraged the FBI to look at the ethereum testnet, where programmers can run their code in a safe environment to work out kinks. The attacker wouldn’t just launch such a complicated hack without testing it, Gün says he told federal officials, and the feds might be able to get clues to his identity there. Gün says he also pointed them to addresses linked to the attacker, such as the one described above, that were listed by his grad student Daian on his blog. (The FBI declined to comment.) “I’m absolutely amazed. Why has no one traced this back and found out who did it?” asks Stephan Tual, the third co-founder of Slock.it. “It still bugs me to this day, because what that person has done is incredibly unethical.” On Tuesday, four days after the initial attack, the hacker returned and somehow resumed the heist. The Robin Hood group had feared this moment would come and was ready. Early Sunday morning they’d finally managed to convene online and successfully infiltrate an escape pod, but had held off their counterattack. Now they had no choice. One strike against the group was their distance from one another—one in Rio, others scattered about Europe. (Some of the group’s members didn’t want to be identified for this story.) It was important that they coordinate their activities because, like in Charlie’s Angels, they all had different specialties: Green the community organizer, Van de Sande the public face, others who wrote the Robin Hood group attack contracts. So Van de Sande needed to be walked through the step-by-step hacking process they were about to unleash, because that wasn’t his area of expertise. “I’ll be honest, I was excited,” Green says. “This is the craziest thing that’s ever happened to me. This is the craziest thing that’s almost ever happened to anyone.” Whether it was legal remains an unanswered question. “You literally have cyber ninjas warring on the blockchain,” says Vessenes, the programming expert. “What they’re doing is almost certainly illegal, but they’re claiming it’s for the greater good.” And now it was Van de Sande’s job to let the community know that the Robin Hood group counterattack was benign. He took to Twitter, where he wrote “DAO IS BEING SECURELY DRAINED. DO NOT PANIC.” A nod to the classic Hitchhiker’s Guide to the Galaxy, his plea to not panic was met with all the snark and real-life concern Twitter can handle. “NOTHING SAYS DO NOT PANIC LIKE ALL CAPS,” one user responded. “#RealLife is more exciting than
MrRobot !!” tweeted another. Yet as the Robin Hood group attack
gained steam, they noticed something strange and worrisome—the attacker was with them in every escape pod. “We escaped the mother ship, but now we’re alone in space with the alien we were trying to escape,” says Van de Sande. This was a big problem. Because of how Jentzsch wrote his code, the Robin Hood group would have to wait several weeks before they could secure the ether they recovered. Yet if the attacker was in that escape pod with the group, he could just follow them—what’s known as a stalking attack. If the hacker stalked the Robin Hood group, the ether wasn’t really safe after all. “The game only ends when one of these parties doesn’t show up to fight,” Van de Sande says. This, in essence, is the heart of the DAO Wars, the never-ending battle that would have to be waged to keep the recovered ether safe. If only there were a way to reverse the theft once and for all. What happened next is one of the strangest and most contentious episodes in blockchain’s early history. The morning of July 20 dawned cool and clear in Ithaca, N.Y., the home of Cornell. A weeklong ethereum boot camp on campus had brought developers and programmers from all over the world to town. The mood was anxious, but not because the workshops were about to begin. This was the day the ethereum community would decide to rewrite the past. The weeks since the DAO hack had been filled with acrimonious debate as developers, coders, investors, and other community members considered their options to undo the theft. As the Robin Hood group battled the attacker mostly in private, a public debate was raging. The white hat hackers weren’t the only ones trying to save the DAO. Jentzsch worked almost around the clock, fielding hundreds of requests from DAO investors on what they should do. Vitalik Buterin, 23, who created the ethereum blockchain before he was 20, became a focal point as he led the community through their options. In short, what they could do was change the ethereum blockchain to fix the DAO, but only if they got a majority of computers running the network to agree to a software update. Pull that off, and it’s as though the attack never happened. This is known as a hard fork. The decision stirred such strong reactions that it remains controversial a year later, both within the ethereum community and with bitcoin users who insist a blockchain’s history is never to be tampered with. In an interview in October, Buterin was unapologetic about pushing for the change. “Some bitcoin users see the hard fork as in some ways violating their most fundamental values,” said Buterin, who didn’t respond to requests to speak specifically about this story. “I personally think these fundamental values, pushed to such extremes, are silly.” Within the ethereum community, at least, Buterin’s views won the day, and computer nodes all over the world accepted the fork. Contained in block 1,920,000, the fix to the DAO was simple and did only one thing—if you had ether invested in it, you could now get it out. But why hadn’t the attacker made off with his money? It had been more than a month. The same code that exposed the DAO to the theft, in the end, enabled the ether to be returned. Everything to do with the DAO is a parameter: rules, if-then statements, and more rules that are all finalized before the program is set loose. One of these parameters stated that anyone wanting to get their ether out of the DAO had to wait a certain amount of time—27 days after the initial request, then another seven days. This fail-safe, written by Jentzsch, applied to the attacker as well. So even though somebody had effectively robbed a bank, he then had to wait 34 days before crossing the street to make his getaway. While he was waiting, the money was stolen back. A month after the original heist, the ether thief now had nothing to show for his caper. Back on the Cornell campus, ethereum boot camp attendees celebrated. The next day, Gün brought Champagne to the session he was teaching. He’d pasted makeshift labels on the Chandon bottles with a picture of the utensil that said, “Congratulations on the successful fork.” Then something else unexpected happened. The original ethereum blockchain, the one with the DAO attack in it, kept growing. Imagine a hard fork is a branch of a tree that sprouts in a different direction at the end of the main limb. The end of that limb is supposed to wither after a hard fork, but here it continued to grow as a small group of users continued to process transactions on that version of the blockchain. Instead of dying, this became a second form of ethereum, quickly dubbed ethereum classic, complete with a digital currency that now had value. Even in the science fiction world of blockchain, this was an unprecedented turn of events. It meant the DAO attacker suddenly had about 3.6 million ethereum classic coins in his DAO account, known as the DarkDAO, which were slowly gaining in value. The Robin Hood group held about 8.4 million, because in this parallel universe they still controlled 70 percent of the DAO funds they had recovered. The Robin Hood group couldn’t believe it. “We did everything to avoid this, but now we’re being dragged back into this fight,” Van de Sande says. Now, the bitcoin supporters who viewed the hard fork as a violation of the core values of blockchain could back up their belief by buying ethereum classic. That’s exactly what entrepreneur Barry Silbert, a heavyweight in bitcoin circles, did. “Keep in mind, the original chain is ethereum classic,” he says. “The fork is ethereum.” Putting his money where his mouth is, Silbert’s firm, Grayscale Investments, recently issued an investment thesis outlining the benefits to ethereum classic over ethereum. A section heading sums up the rationale: “The DAO and the Death of Principles.” Alexis Roussel, co-founder of Bity.com, a digital currency broker in Switzerland, still marvels at the aftereffects of the hard fork and the wild world of the blockchain. “This is something that doesn’t happen in traditional finance,” he says. “If something happens with Apple, you don’t suddenly have a clone of Apple.” It’s been about a year since the DAO attack, enough time to take stock of what went wrong. Van de Sande is eager to move on. “It was really just a blip,” he says. “We are ready to move past it and leave the DAO story behind us.” Green, who’s organizing an ethereum conference at this summer’s Burning Man festival in the Nevada desert, has kept a sense of humor about it. “The Robin Hood group was just a s--- show,” he says with a laugh. “I hope the movie portrays it better than it actually was.” As for the bug itself, apparently many smart people looked at the code before Gün but missed one major flaw. The order of commands in the code allowed DAO token holders to withdraw any profit they’d made from their investments. It reads “withdrawRewardFor(msg.sender)” and adds, almost improbably, a note to anyone reading the code that says, “be nice, and get his rewards.” That’s line 667—let’s call it “The Neighbor of the Beast Bug.” If the withdraw line had come after these lines: totalSupply -= balances[msg.sender]; balances[msg.sender] = 0; paidOut[msg.sender] = 0; return true; the attack wouldn’t have been possible, Jentzsch says. But if the code had been in the correct order, the reward parameter wouldn’t have worked. As for the note, this line of code was meant to allow investors to withdraw any profit—“Reward”—their investments had earned. Instead it became one of the biggest backdoors in hacking history. It would have been better to not pay rewards during the split function from the DAO, what we’ve been referring to here as the escape pods, according to Jentzsch. Another decision he made when he had no idea of the bug shows how quirky and unforgiving code can be. “If the capital ‘T’ in line 666 had been a small ‘t,’ that would also have prevented the hack,” he says. Jentzsch has many regrets but insists no one was aware of the specific problems in lines 666-667 (other observers had pointed to flaws in other lines, just not here). Had more people looked, “it would have made no difference at all,” he says. “If you don’t know what to look for in a security audit, you won’t find it.” Even Gün, who had it in his grasp, let it go. “I still missed it,” he says. Green’s emotions are still raw related to Gün. “I actually got really pissed at him about this,” Green says. “He started bragging about how he found the bug.” He adds that it was “very irresponsible of him to not tell anyone of his inkling.” Still, Green “respects the hell out of Gün” and says they’ve since made amends. Asked to recount that night last June as he lay sick in bed, Gün says, “I came away from this thinking there’s potentially an issue.” But he’d consulted Daian, his grad student (“whom I trust”). Daian had said it’s “not exploitable.” Gün says that had he been certain of the danger, “I would have told people.” In a blog post that explained the mechanics of the DAO heist Daian published the night of the attack, he gave a shoutout to his professor in the acknowledgments. “Gün, we were so damn close—sorry it wasn’t quite enough this time :),” Daian wrote. As for the attacker (whoever he or she or they are) and the ethereum classic booty, Gün says, “Great, wonderful, he should cash out.” The hard fork proved it wasn’t just the DAO that needed to be fixed, but the ethereum blockchain itself. He says: “The fault lies somewhere on the system side as well.” But the fear that smart contracts are too clever by half and that by extension so is the ethereum blockchain itself—prevalent in the days following the DAO attack—has dissipated. At least that’s the market’s verdict, judging by the price of ether. After the attack, it traded from $10 to $12 for about nine months. Then in March it took off; it’s valued at $341.19 as of June 12. (That would have valued the DAO at $4.1 billion, but let’s not even go there.) Ethereum classic has risen as well, and it now trades for $18.71. Both versions of ether remain viable, in other words. The thief holds one; the revisionists, the other. Going forward, the choice is really: Whom would you rather believe? Since the hard fork, the attacker ended up making off with his ethereum classic. That means he got away with about $67.4 million, assuming the stash hasn’t been sold. Not too shabby, 0xF35e2cC8E6523d683eD44870f5B7cC785051a77D. Leising covers market structure at Bloomberg News in New York. To contact the author of this story: Matthew Leising inNew York at [email protected] To contact the editor responsible for this story: Joel Weber at [email protected]
Edit: Oh crapbaskets the similarity section messed up. Oh well no one cares. The bot took hours to get the necessary data, so I'm not running it again just for the similarities. Also, fucking captchas. Just sayin'.
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