Tag Archives: #crypto

EU Commits €5 Million to Fund Blockchain Surveillance Research

A group of government agencies, law enforcement groups and academic researchers are partnering on a new digital currency surveillance project.

EU Titanium Project

Backed by €5m in funding from the European Union, the initiative, dubbed "Tools for the Investigation of Transactions in Underground Markets", or TITANIUM, will be conducted over the next three years.

Participants include Interpol, Interior Ministries from Spain and Austria, Finland's National Bureau of Investigation, and University College London, among others.

In statements, the project's backers cited a recent wave of ransomware attacks around the globe, pointing to the event as a justification for beefing up the ability to track cryptocurrency payments.

At the same time, those involved pledged not to violate user privacy rights.

"The consortium will analyse legal and ethical requirements and define guidelines for storing and processing data, information, and knowledge involved in criminal investigations without compromising citizen privacy," said Ross King, senior scientist for the AIT Austrian Institute of Technology GmbH, one of the research institutions taking part.

That the EU would take this approach – let alone fund one – is perhaps unsurprising, given past efforts and statements from leaders and officials of the economic bloc.

The EU's executive branch, the European Council, began pushing aggressively for greater oversight of digital currency users in early 2016, with the European Parliament following suit earlier this year.

According to a press release published by the Austrian Institute of Technology (AIT), the European Union funded a three-year project investigating the criminal use of virtual currencies and the darknet. Fifteen members from seven European countries are participating in the project. The solutions developed in the research are intended to prevent criminals and attackers from using the blockchain technology for criminal purposes while at the same time preserving the privacy rights of legitimate users.

Blockchain technology makes it possible to organize records in a distributed network without central control and thus presents new challenges for investigating authorities, the press release says. The best-known application of the blockchain technology is Bitcoin, a cryptocurrency currently on its all-time high at almost $2,500, which offers legal use, however, the virtual currency could be also used for criminal purposes. The press release stated that BTC’s illicit use most happens on the dark side of the internet, for example on darknet marketplaces or hacking forums. Since the dark web could not be accessed or crawled via common search engines, such as Google, and provides more anonymity to its users than the clearnet (the normal part of the internet everybody knows), criminals often take advantage of these perks and decide to conduct their illegal activities on the darknet. The press release emphasized that the WannaCry attackers, who locked computers in approximately 150 countries on May 12, 2017, also demanded the payment of the ransom in bitcoins.

The aim of the TITANIUM (Tools for the Investigation of Transactions in Underground Markets) project is the development of technical solutions for investigating and combating criminal and terrorist acts on the internet, which are carried out with the help of virtual currencies and underground marketplaces. The three-year project, worth a total of EUR 5 million, is funded by the European Union.

The tools developed and implemented by the partnership (including four law enforcement agencies and INTERPOL) are intended to support the forensic analysis of criminal transactions, identify anomalies in their application and identify money laundering techniques. In addition, the researchers will carry out training courses in order to “anchor” the corresponding know-how and knowledge to the law enforcement authorities of the EU helping officers in preventing and prosecuting cybercrime more efficiently. Furthermore, the tools and services developed in the project are to be tested and validated on site by the law enforcement authorities in order to check the project results for their success and effectiveness.

“Criminal and terrorist activities related to virtual currencies and dark net markets are developing rapidly and vary widely with regard to technical maturity, resilience and targeted goals,” Project Coordinator Ross King, Senior Scientist at the Austrian Institute of Technology (AIT), said in a statement.

In order to counteract these activities, according to Dr. King, the development of efficient and effective forensics tools is a must, which can use different types of data from different sources, including virtual currencies, online forums, peer-to-peer networks on darknet marketplaces, and on electronic equipment, which law enforcement authorities seized from the suspects. Dr King emphasized that the development of the tools within the framework of the TITANIUM project is an important focus on the protection of the personality and fundamental rights of the users.

“The partnership will analyze the legal and ethical requirements and develop guidelines for the storage and processing of data, information, and findings from criminal investigations without affecting the privacy of citizens, Dr King said.

In addition to the AIT Austrian Institute of Technology, the following partners are part of the TITANIUM consortium: the Federal Criminal Police Office from Germany (BKA), Coblue Cybersecurity from the Netherlands, Countercraft SL from Spain, Dence GmbH from Germany, University of Innsbruck from Austria, INTERPOL (International Criminal Police Organization), Karlsruhe Institute of Technology from Germany, Federal Ministry of the Interior of Austria, Ministry of Interior of Spain, National Bureau of Investigation from Finland, TNO from the Netherlands, Trilateral Research Ltd. from the United Kingdom, University College London from the United Kingdom, VICOMTECH-IK4 from Spain.

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Stephen Hodgkiss
Chief Engineer at MarketHive

markethive.com


Jack

EU Commits 5 Million Euros to Fund Blockchain Surveillance Research

A group of government agencies, law enforcement groups and academic researchers are partnering on a new digital currency surveillance project.

EU Titanium Project

Backed by €5m in funding from the European Union, the initiative, dubbed "Tools for the Investigation of Transactions in Underground Markets", or TITANIUM, will be conducted over the next three years.

Participants include Interpol, Interior Ministries from Spain and Austria, Finland's National Bureau of Investigation, and University College London, among others.

In statements, the project's backers cited a recent wave of ransomware attacks around the globe, pointing to the event as a justification for beefing up the ability to track cryptocurrency payments.

At the same time, those involved pledged not to violate user privacy rights.

"The consortium will analyse legal and ethical requirements and define guidelines for storing and processing data, information, and knowledge involved in criminal investigations without compromising citizen privacy," said Ross King, senior scientist for the AIT Austrian Institute of Technology GmbH, one of the research institutions taking part.

That the EU would take this approach – let alone fund one – is perhaps unsurprising, given past efforts and statements from leaders and officials of the economic bloc.

The EU's executive branch, the European Council, began pushing aggressively for greater oversight of digital currency users in early 2016, with the European Parliament following suit earlier this year.

According to a press release published by the Austrian Institute of Technology (AIT), the European Union funded a three-year project investigating the criminal use of virtual currencies and the darknet. Fifteen members from seven European countries are participating in the project. The solutions developed in the research are intended to prevent criminals and attackers from using the blockchain technology for criminal purposes while at the same time preserving the privacy rights of legitimate users.

Blockchain technology makes it possible to organize records in a distributed network without central control and thus presents new challenges for investigating authorities, the press release says. The best-known application of the blockchain technology is Bitcoin, a cryptocurrency currently on its all-time high at almost $2,500, which offers legal use, however, the virtual currency could be also used for criminal purposes. The press release stated that BTC’s illicit use most happens on the dark side of the internet, for example on darknet marketplaces or hacking forums. Since the dark web could not be accessed or crawled via common search engines, such as Google, and provides more anonymity to its users than the clearnet (the normal part of the internet everybody knows), criminals often take advantage of these perks and decide to conduct their illegal activities on the darknet. The press release emphasized that the WannaCry attackers, who locked computers in approximately 150 countries on May 12, 2017, also demanded the payment of the ransom in bitcoins.

The aim of the TITANIUM (Tools for the Investigation of Transactions in Underground Markets) project is the development of technical solutions for investigating and combating criminal and terrorist acts on the internet, which are carried out with the help of virtual currencies and underground marketplaces. The three-year project, worth a total of EUR 5 million, is funded by the European Union.

The tools developed and implemented by the partnership (including four law enforcement agencies and INTERPOL) are intended to support the forensic analysis of criminal transactions, identify anomalies in their application and identify money laundering techniques. In addition, the researchers will carry out training courses in order to “anchor” the corresponding know-how and knowledge to the law enforcement authorities of the EU helping officers in preventing and prosecuting cybercrime more efficiently. Furthermore, the tools and services developed in the project are to be tested and validated on site by the law enforcement authorities in order to check the project results for their success and effectiveness.

“Criminal and terrorist activities related to virtual currencies and dark net markets are developing rapidly and vary widely with regard to technical maturity, resilience and targeted goals,” Project Coordinator Ross King, Senior Scientist at the Austrian Institute of Technology (AIT), said in a statement.

In order to counteract these activities, according to Dr. King, the development of efficient and effective forensics tools is a must, which can use different types of data from different sources, including virtual currencies, online forums, peer-to-peer networks on darknet marketplaces, and on electronic equipment, which law enforcement authorities seized from the suspects. Dr King emphasized that the development of the tools within the framework of the TITANIUM project is an important focus on the protection of the personality and fundamental rights of the users.

“The partnership will analyze the legal and ethical requirements and develop guidelines for the storage and processing of data, information, and findings from criminal investigations without affecting the privacy of citizens, Dr King said.

In addition to the AIT Austrian Institute of Technology, the following partners are part of the TITANIUM consortium: the Federal Criminal Police Office from Germany (BKA), Coblue Cybersecurity from the Netherlands, Countercraft SL from Spain, Dence GmbH from Germany, University of Innsbruck from Austria, INTERPOL (International Criminal Police Organization), Karlsruhe Institute of Technology from Germany, Federal Ministry of the Interior of Austria, Ministry of Interior of Spain, National Bureau of Investigation from Finland, TNO from the Netherlands, Trilateral Research Ltd. from the United Kingdom, University College London from the United Kingdom, VICOMTECH-IK4 from Spain.

If you believe that my message is worth spreading, please use the share buttons if they show on this page.

Stephen Hodgkiss
Chief Engineer at MarketHive

markethive.com


Jack

What is Cryptocurrency?

A cryptocurrency is a medium of exchange like normal currencies such as USD, but designed for the purpose of exchanging digital information through a process made possible by certain principles of cryptography. Cryptography is used to secure the transactions and to control the creation of new coins. The first cryptocurrency to be created wasBitcoin back in 2009. Today there are hundreds of other cryptocurrencies, often referred to as Altcoins.

Put another way, cryptocurrency is electricity converted into lines of code with monetary value. In the simplest of forms, cryptocurrency is digital currency.

Unlike centralized banking, like the Federal Reserve System, where governments control the value of a currency like USD through the process of printing fiat money, government has no control over cryptocurrencies as they are fully decentralized.

Most cryptocurrencies are designed to decrease in production over time like Bitcoin, which creates a market cap on them. That’s different from fiat currencies where financial institutions can always create more, hence inflation. Bitcoin will never have more than 21 million coins in circulation. The technical system on which all cryptocurrencies are based on was created by Satoshi Nakamoto.

While hundreds of different cryptocurrency specifications exist, most are derived from one of two protocols; Proof-of-work or Proof-of-stake. All cryptocurrencies are maintained by a community of cryptocurrency miners who are members of the general public that have set up their computers or ASIC machines to participate in the validation and processing of transactions.

History of Cryptocurrency

bitcoin stack

The first cryptocurrency was Bitcoin. Bitcoin was created in 2009 by a pseudonymous developer named Satoshi Nakamoto. Bitcoin uses SHA-256, which is a set of cryptographic hash functions designed by the U.S National Security Agency. Bitcoin is a cryptocurrency that is based on the proof-of-work system.

In April 2011, Namecoin, the first altcoin, was created to form a decentralized DNS to make internet censorship more difficult. In October 2011, Litecoin was released and became the first successful cryptocurrency to use scrypt as its hash function rather than SHA-256. This gave the general public the ability to mine for litecoins without the purchase of specific hardware such as the ASIC machines used to mine Bitcoin.

Litecoin began receiving media attention in late 2013 – reaching a market cap of $1 billion.Ripplecoin, created in 2011, was built on the same protocol as Bitcoin but services as  a payment system – think of it like a Paypal for cryptocurrencies that supports any fiat currency, cryptocurrency, commodity or even frequent flier miles.

Cryptocurrencies & Market Capitalization

Bitcoin is the largest cryptocurrency in both market capitalization, volume, acceptance and notoriety, but it’s not the most valuable coin. NEMstake, while only having a market cap of $1,116,720, trades at $1,117 a coin. Looking at the market cap, Litecoin takes second place after Bitcoin with Ripple close behind.

One coin that you are more than likely familiar with is Dogecoin. Dogecoin ranks, on average, thirds in trading volume, but has a relatively low market cap – ranking number six in the largest cryptocurrency.

hashWhat is a Cryptocurrency Hash?

Cryptocurrency mining power is rated on a scale of hashes per seconds. A rig with a computing power of 1kH/s is mining at a rate of 1,000 hashes a second, 1MH/s is a million hashes per second and a GH/s is one billion hashes per second. Every time a miner successfully solves a block, a new hash is created. A hash algorithm turns this large amount of data into a fixed-length hash. Like a code if you know the algorithm you can solve a hash and get the original data out, but to the ordinary eye it’s just a bunch of numbers crammed together and remains practically impossible to get the original data out of.

SHA vs. Scrypt

While Bitcoin and a several other coins are mined using SHA-256, Litecoin and many other coins, use Scrypt. This are the two major hashing functions, but several different kinds exists and are used by other cryptpcurrencies such as scrypt-N and x11. The different hashing functions were adopted to answer concerns with the SHA-256. Before, individuals were able to mine Bitcoin with their GPU’s, which require a large amount of energy. But as Bitcoin grew in popularity, ASIC SHA-256 machine were built which  made GPU mining obsolete.

To give you an idea of just how powerful these machines are, a mining rig running 4 GPU’s would get a hash rate of around 3.4 MH/s and consume 3600kW/h while an ASIC machine can mine 6 TH/s and consume 2200kW/h. This effectively killed GPU mining and left many individuals worried about the security of the network. With less individuals being able to profitably mine from their home computer, the network become less decentralized. Scrypt mining was implemented with the promise of being ASIC resistant due to the memory problem it introduced.

Scrypt hashes require lots of memory, which GPU’s are already designed to handle and ASIC machines were not. However, Scrypt mining require a lot of energy and eventually scrypt-ASIC machines were designed to address this problem. At this point Litecoin consideredchanging their proof-of-work function to avoid ASIC mining. Scrypt also taut that their proof-of-work is much more energy efficient than SHA-256. Bitcoin blocks are solved at a rate of 1 per 10 minutes while Litecoin blocks are solver at a rate of 1 per 2.5 minutes.

securityCryptocurrency Security

The security of cryptocurrencies is two part. The first part comes from the difficulty in finding hash set intersections, a task done by miners. The second and more likely of the two cases is a “51%” attack“. In this scenario, a miner who has the mining power of more than 51% of the network, can take control of the global blockchain ledger and generate an alternative block-chain. Even at this point the attacker is limited to what he can do. The attacker could reverse his own transactions or block other transactions.

Cryptocurrencies are also less susceptible to seizure by law enforcement or having transaction holds placed on them from acquirers such as Paypal. All cryptocurrencies are pseudo-anonymous, and some coins have added features to create true anonymity.

 

Cryptocurrency Legality & Taxes

Taxation

Bitcoin Taxation

While cryptocurrencies are legal in most countries, Iceland and Vietnam being an exception – Iceland mainly due to their freeze on foreign exchange, they are not free from regulations and restrictions. China has banned financial institutions from handling bitcoins and Russia, while saying cryptocurrency is legal, has made it illegal to purchase goods with any currency other than Russian rubles.

In the U.S., the IRS has ruled that Bitcoin is to be treated as property for tax purposes, making Bitcoin subject to capital gains tax. The Financial Crimes Enforcement Network (FinCEN) has issued guidelines for cryptocurrencies. The issued guidelines contain an important caveat for Bitcoin miners: it warns that anyone creating bitcoins and exchanging them for fiat currency are not necessarily beyond the reach of the law. It states:

“A person that creates units of convertible virtual currency and sells those units to another person for real currency or its equivalent is engaged in transmission to another location and is a money transmitter.”

Miners seem to fall into this category, which could theoretically make them liable for MTB classification. This is a bone of contention for bitcoin miners, who have asked for clarification. This issue has not been publicly addressed in a court of law to date.

Cryptocurrency Services

There are a host of services offering information and monitoring of cryptocurrencies.CoinMarketcap is an excellent way check on the market cap, price, available supply and volume of crypto currencies. Reddit is a great way to stay in touch with the community and follow trends and CryptoCoinCharts is full of information ranging from a list of crytocoins, exchanges, information on arbitrage opportunities and more. Our very own site offers a list of crypto currencies and their change in value in the last 24hrs, week or month.

Liteshack allows visitors to view the network hash rate of many different coins across six different hashing algorithms. They even provided a graph of the networks hash rate so you can detect trends or signs that the general public is either gaining or losing interest in a particular coin.

A hand website for miner is CoinWarz. This site can help miners determine which coin is most profitable to mine given their hash rate, power consumption, and the going rate of the coins when sold for bitcoins. You can even view each coins current and past difficulty.

Chris Corey

CMO Markethive

Images from Shutterstock

Jack