Bitcoin self destructing after series of knockout punches

Bitcoin transactions are fully traceable

Bitcoin is in dissaray after news broke that hundreds of paedophiles have been arrested in a sting operation on a global paedophile ring, using bitcoin transactions to trace the locations of those involved. Criminals the world over are now in a frenzy after it was revealed that Bitcoin is completely traceable and the rumours have resurfaced that Bitcoin may have even been designed by a government organisation as a way to track criminals.

While it is highly doubtful that Bitcoin was created by an agency as a trojan horse, it is very likely that one or more government agencies quickly got involved during the early days of development in order to understand the code fully and ensure anonymity was a myth.

At least two key early days Bitcoin developers have a long history working for the United States government with:

  • Dave “Satoshi Nakamoto” Kleiman being a highly decorated US Army veteran who then worked in law enforcement at a county sheriff’s office and then at a computer crimes division and computer forensics lab. Some of Kleimans other security and cryptography software have been used by among others, the NSA, NASA and the US Treasury Dept.
  • David “XRP” Schwarz was an early Bitcoin developer who has also worked for the NSA.

Bakkt launch a damp squib

The launch of Bakkt was lauded as the catalyst for a bull run. Instead the dissapointing results have shown there is very little institutional interest in Bitcoin and the price has dropped from $10k on launch day to $8k after 4 weeks with volumes shrinking week over week.

Bitcoin self destructing after series of knockout punches

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While the world is talking about the latest Binance hack which saw 7,000 BTC stolen, the major breaking news comes from Bitcoin Core developers who advised that they can perform a “coordinated reorg” to reverse Bitcoin transactions at will. This admission from Bitcoin itself has finally laid to rest many of the false promises of the Bitcoin system (and all other Proof of Work tokens for that matter) and proved:

  • Bitcoins maximum supply is far greater than 21 million (aside from all the many dozens of forks, the main Bitcoin mining pools and a number of key Bitcoin developers have been in discussions about stopping the mining reward “halvings” thus making the total number of Bitcoins infinite)
  • Bitcoin is CENTRALISED
  • Bitcoin in not immutable
  • Bitcoin is prone to 51% attacks
  • Bitcoin is not secure
  • Bitcoin is not a “store of value”
  • Bitcoin transactions are traceable
  • Bitcoin is completely worthless

With large scale institutional investor exchanges like Fidelity and Bakkt opening up soon and with Japanese regulators set to outline their crypto and blockchain proposals to the G20, the question has to be posed whether Bitcoin will be killed off this year or whether the world leaders will fly in the face of climate change and the devastating environmental disaster that is Bitcoin and whether Wall Street and other financial giants will try and wring every last drop out of this epic BTC ponzi scam?

Bitcoin devs advise CZ Binance they can reverse the Bitcoin blockchain and undo transactions

Jeremy Rubin (Bitcoin Core Dev) – “if you reveal your private keys for the hacked coins (or a subset of them) you can decentralized-ly at zero cost to you, coordinate a reorg to undo the theft.” Source

CZ Binance – “After speaking with various parties, including JeremyRubin, prestwich, bcmakes, hasufl, JihanWu and others, we decided NOT to pursue the re-org approach.”

CZ Binance – “cons: 1 we may damage credibility of BTC, 2 we may cause a split in both the bitcoin network and community. Both of these damages seems to out-weight $40m revenge.” Source

Binance Security Breach Update:

Binance press release 08/05/2019:

We have discovered a large scale security breach today, May 7, 2019 at 17:15:24 (UTC). Hackers were able to obtain a large number of user API keys, 2FA codes, and potentially other info. The hackers used a variety of techniques, including phishing, viruses and other attacks. We are still concluding all possible methods used. There may also be additional affected accounts that have not been identified yet.

The hackers were able to withdraw 7000 BTC in this one transaction:

The above transaction is the only affected transaction. It impacted our BTC hot wallet only (which contained about 2% of our total BTC holdings). All of our other wallets are secure and  unharmed.

The hackers had the patience to wait, and execute well-orchestrated actions through multiple seemingly independent accounts at the most opportune time. The transaction is structured in a way that passed our existing security checks. It was unfortunate that we were not able to block this withdrawal before it was executed. Once executed, the withdrawal triggered various alarms in our system. We stopped all withdrawals immediately after that.

Binance will use the #SAFU fund to cover this incident in full. No user funds will be affected.

We must conduct a thorough security review. The security review will include all parts of our systems and data, which is large. We estimate this will take about ONE WEEK. We will post updates frequently as we progress.

Most importantly, deposits and withdrawals will need to REMAIN SUSPENDED during this period of time. We beg for your understanding in this difficult situation.

We will continue to enable trading, so that you may adjust your positions if you wish. Please also understand that the hackers may still control certain user accounts and may use those to influence prices in the meantime. We will monitor the situation closely. But we believe with withdrawals disabled, there isn’t much incentive for hackers to influence markets.

In this difficult time, we strive to maintain transparency and would be appreciative of your support.

PS, I (CZ) will continue the previously scheduled Twitter AMA in a couple of hours.

– CZ


Keep up to date on the environmental cost of Bitcoin and Ethereum with Digiconomist

The #energy footprint for one #Bitcoin transaction (428 KWh) equates to:

  • 1 US household 14 days (DE: 44, CN: 120)
  • 283768 VISA TRXNs
  • #CarbonFootprint per TX: 203 KG
  • Driving 835 miles in a Tesla
  • 250 in a Hummer
  • #Ewaste per TX: 59 grams

The latest #Bitcoin Energy Consumption Index is:

  • 59.023 TWh per Year
  • 5.47 Mil US households (+0.3%)


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