Bitcoin or Bitcon?

Recently a number of users have been looking into this Bitcoin thing. While it sounds too good to be true I decided to do some digging around the internet and on the Symantec blogs. This article hopes to bring to light some of the possible security problems with Bitcoin and also give some insight on private currencies.

Bitcoin is by no means the only private currency in use nor the first and or only used online. Other examples of private currency include: Ithaca hours, BerkShares, United States Private Dollars, Liberty Dollars and in Germany the Chiemgauer. In addition to the previously mentioned currencies the last major online private currency was e-gold which ended in disaster in 2009. E-gold, operated by Gold & Silver Reserve Inc., was in 2007 found to be violating money laundering regulations and was "the medium of choice for many online con-artists, with pyramid schemes and high-yield investment programs". (Wikipedia) Only time will tell if Bitcoin will turn out to be another e-gold; however, there is nothing wrong with the idea of Bitcoin or any private currency at face value.

Bitcoin recently grabbed a lot of media attention on June seventh when CBS ran an article titled "Bitcoin: the future of money". The article focuses on how Jeff Garzik, the developer and founder of Bitcoin watch, envisions the future of Bitcoin. Additionally the article references other stories on a site called Silk Road which is referred to as "the online black market for any drug imaginable". (CBS) The use of the Bitcoin on Silk Road has caused a lot of flak resulting in the company working with authorities to distance themselves from Silk Road. So while there has been some media worry over where Bitcoins can be used there is little on any problems with Bitcoin itself.

One thing that Bitcoin has come under scrutiny for is the ability for it to be used by cyber criminals to generate illegal money from bot nets. However, while a bot net could be used to generate Bitcoin revenue, the revenue would not likely be anywhere near as high as what could be by renting botnet time for DDOS attacks. Although, it is likely that many botnets have off time which could be utilized by running Bitcoin then thus capitalizing on all available resources. The larger threat to users signing up for Bitcoin is not from Bitcoin but from the criminals trying to break into your account.

Bitcoin fraud and account hackings have already taken place and as Bitcoin becomes more popular even more are sure to come. On June forth Bitcoin suspended trade noting that "fraudulent behavior has created a tremendous backlog of 'Unconfirmed' BMBTC/PPUSD trades". (Bitcoin) Recently on June seventeenth Symantec reported that Bitcoin wallets are under target by a Trogen called Infostealer.Coinbit which locates your wallet.dat file and sends it to the attacker. This may be the first known malware that is targeted toward Bitcoin but it is sure not to be the last. Bitcoin users can encrypt their wallet but they need to manually select the option to do this which can leave many users vulnerable to attack.

So is Bitcoin safe, well so far it looks like it is. The biggest threat to users currently is the same old internet account hacks and fraud. However, noting history of things like e-gold in the past it may be a good idea to keep an eye on this one because you just never know. On another note, it may also be a good idea to watch your cooling for those of you who will be running this 24/7 as many computers do not have proper cooling design for 24/7 operation, especially under heavy load.

Please feel free to leave comments on the next page!

Below is a list of sources:
http://en.wikipedia.org/wiki/E-gold
http://www.cbsnews.com/8301-504943_1...-10391715.html
http://www.symantec.com/connect/blog...-botnet-mining
http://www.symantec.com/connect/blog...coins-are-ours
http://en.wikipedia.org/wiki/Private_currency
https://bitcoinmarket.com/