Day: August 5, 2017

There are a few different companies specializing in Bitcoin blockchain analysis. Every single one of those entities seeks to provide law enforcement agencies and other parties with actionable insights on the Bitcoin network. One of these companies is Neutrino, based in Italy. Now would be a good time to check up on what this company provides exactly and how it could be both a blessing and a curse to Bitcoin users.

Neutrino Analyzes the Bitcoin Blockchain

It sounds quite interesting if a company claims they can properly analyze the Bitcoin blockchain. Companies such as Neutrino — not to be confused with the infamous exploit kit used by criminals — specialize in searching for malicious behavior on the Bitcoin network. If criminals were to steal funds or move funds belonging to suspicious addresses, companies like these would immediately track them down to the best of their abilities.

Contrary to what a lot of people think, Bitcoin is not an anonymous currency. It is true that transactions do not include personal information, but it is a pseudonymous currency which allows anyone to keep tabs on network transactions in real-time. Doing so does not even require specialized software. All it takes is a browser and a mouse to start going through Bitcoin transactions and their histories.

Companies such as Neutrino take this concept one step further. The company uses a proprietary machine learning algorithm known as P-Flow to constantly monitor the Bitcoin blockchain and all activities taking place on it. The software also categorizes money flows and labels risks accordingly. Interestingly enough, P-Flow is apparently capable of analyzing all transactions, even the obfuscated versions.

Any compliance officer looking to assess risk of Bitcoin operations could certainly benefit from a tool such as P-Flow. It enhances AML/KYC checks and sets up customizable “red flag” alerts based on a blacklist approach. Users can flag any transaction potentially related to Bitcoin obfuscation as a threat as well. It is even capable of ascertaining whether or not a particular BTC transfer has a link to the darknet. All of this makes for an incredibly powerful solution.

Neutrino was founded back in 2016 with a strong focus on cybersecurity in general. Bitcoin quickly became one of its areas of expertise, as the company aspires to develop highly specialized cybersecurity solutions for use by partners and companies. Given the increasing popularity of Bitcoin over these past few years, developing P-Flow made a lot of sense. It is also the company’s first project to come to market. Blockchain analytics companies are in high demand these days.

Neutrino is the company responsible for tracking the recent WannaCry Bitcoin funds movements. Its research indicated how these funds were transferred to the ShapeShift exchange and converted to Monero. That statement was later confirmed by ShapeShift themselves, although they never indicated whether all of the remaining WannaCry proceeds were laundered in such a manner. This development highlights the value of Neutrino as a Bitcoin analytics company. Anyone trying to abuse Bitcoin for nefarious purposes will certainly now have a difficult time getting away with it.

Most people will remember the NotPetya ransomware outbreak from a few weeks ago. One of the things that became immediately obvious was that most of the victims of this ransomware were located in Ukraine. It now turns out that one local firm may face legal action as a result of damages caused by this malware. 

NotPetya Ransomware Causes a Lawsuit

Apparently, ransomware can lead to a court case. The company responsible for developing the M.e.Doc accounting software will be the defendant in this case, not the ransomeware developer. That software had been the main source of distribution for NotPetya. The malware was downloaded onto computers through Intellect-Service LLC’s company servers. It is not entirely surprising that some people would be looking to press charges in this regard.

The lawsuit was launched by the Juscutum Attorneys Association, a law firm based in Ukraine. The association hopes to rally enough victims of the NotPetya ransomware attack and form a collective lawsuit against the M.E.Doc creators. For now, this lawsuit is still in its early stages, and it remains unclear whether anyone has even decided to press charges. It would certainly make sense to do so, as quite a lot of damage was caused by this malware strain. Articles regarding the lawsuit have been published by the Ukrainian press.  

NotPetya was spread through backdoored M.E.Doc update servers. It made sense that the parent company would face some backlash. Further investigation into the malware distribution revealed that a cyber-espionage group going by the name of Telebots had compromised these servers. In fact, they did so multiple times over the past few months. That in itself is very disturbing. It is unclear why Intellect-Service LLC never took action against these intrusions. It is possible they could have prevented the NotPetya outbreak altogether.

The M.E.Doc servers were backdoored to distribute multiple versions of ransomware. XData and NotPetya were distributed through a malicious software update hosted on these servers. This had been made possible by Intellect-Service’s grossly mismanaging the hacked servers, which had not received any updates since 2013. That constitutes gross negligence, and certainly warrants filing a lawsuit.

Whether or not this class-action lawsuit will be getting much interest remains to be seen. There are legitimate reasons to go this route, since Intellect-Service has made some grave mistakes to say the least. The company certainly played its part in making the NotPetya ransomware distribution a success, even unwittingly. Juscutum is seeking to offer legal retribution for all victims of this malware, as there is plenty of reason to ask for some form of compensation.

The present class-action lawsuit has a decent chance of succeeding. First of all, there are plenty of victims of NotPetya, especially in Ukraine. Secondly, official documents released by the Ukrainian Cyber Police confirmed that M.E.Doc servers had been backdoored multiple times, including for the distribution of NotPetya ransomware. Juscutum stipulated that victims who partake in the lawsuit must pay all court fees and return 30% of awarded damages to the company in exchange for its help.

Now that the Bitcoin Cash ecosystem is finally off the ground, it will be interesting to see how things evolve over time. As it happens, there are some fascinating statistics already. Many coins have been transferred across the network over the past 24 hours, even though the number of blocks on the network is still fairly low. All of these statistics are rather remarkable.

Bitcoin Cash Statistics Are a Mixed bag

It is still too early to judge how Bitcoin Cash is shaping up, yet things are not looking all that bad right now. The network is only starting to get on its feet. The number of blocks discovered on the network is still incredibly low, but that is to be expected with so few miners supporting BCH right now. A total of 333 BCH blocks have been discovered on the network over the past 24 hours. That is nothing major, but it shows that the time between blocks is slowly coming down.

The mining difficulty itself keeps readjusting in order to accommodate the lack of hashpower.  The network has around 241 Petahash per second of mining power, which is not all that much. It is even a small decline compared to 24 hours ago, but that number will continue to fluctuate for some time to come. Few mining pools actually support BCH right now as most miners have stuck with BTC due to profitability.

It also appears that the people holding large numbers of BCH tokens are somewhat limited in scope. At present, around 5% of all tokens in circulation are held by the top 10 addresses, although for all we know, quite a few of these may still belong to various cryptocurrency exchanges. The vast majority of coins are controlled by addresses between the top 1,000 and top 10,000. There are nearly 60,000 unique BCH addresses in use right now. That number is surprisingly small, but these are still the early days.

One thing that many are certainly interested in is how large the Bitcoin Cash blockchain has become. Right now, the chain is nearly 150GB in size, making it a bit larger than the actual Bitcoin chain. Then again, with a project supporting blocks of 8MB, that size will continue to expand rapidly. None of the blocks are even remotely full right now, although there was a 4.9 MB block in existence just yesterday. 

The Bitcoin Cash network processed 23,420 transactions in the last 24 hours. That is a solid amount, although most of those transactions revolved around people moving funds to exchanges and converting BCH to BTC accordingly.  The total number of BCH tokens sent over the network over the past 24 hours is nearly 7% of its market capitalization. Over 1.148 million coins were sent to different addresses, a remarkable number. The average transaction value was 49.04 BCH, or around US$16,500.

Transaction fees are one of the main reasons why people support Bitcoin Cash right now, as the average transaction fee is $0.245. Considering that there is plenty of space within every network to accommodate transactions, that fee will not be going up anytime soon. In fact, it seems that the Bitcoin Cash mempool has cleared out with every network block so far. Whether or not that trend can be maintained remains to be determined. For now, things are slowly falling into place for Bitcoin Cash.

“Hedge funds with crypto exposure “exploding,” writes economist and investor Tuur Demeester.

We have another interesting development regarding the WannaCry ransomware strain on our hands. Just last month, some of the Bitcoin funds that this malware strain had stolen were moved from its original address. It now appears the remaining funds have been moved to a different address as well. Considering how BTC-e cannot launder the proceeds and BitMixer is gone, the question now becomes where these funds will end up.

WannaCry Bitcoin Funds Are Moving Again

It is somewhat easy to analyze the Bitcoin blockchain and flag suspicious wallets. That is exactly what happened with the WannaCry ransomware distribution wallets, which were easily sniffed out by security researchers. Ever since that time, people have been keeping a close eye on the balances of those accounts to see if the funds would be moved over time. It appears that this is the case, and that funds were moved on two separate occasions.

The first batch of funds was moved in July of this year. Although no one knows for sure where the money ended up, it is certainly possible that at least part of it wound up at the BTC-e exchange. Considering that the platform is responsible for laundering 95% of all global ransomware proceeds, no one would be surprised to learn that some money had been converted to fiat currency through the company. The remainder of the funds, which added up to over US$140,000, has now been moved to an external address as well.

Laundering the WannaCry proceeds will be a lot more difficult than it had been before, as it is impossible to send money to the BTC-e exchange since the domain was seized by U.S. law enforcement officials last week. It remains unclear if the platform will ever be operational again, but it seems highly unlikely that it will be. Secondly, the criminals cannot use BitMixer anymore, as the largest Bitcoin mixing service shut its doors not too long ago. Mixers are a great way to remove taint from a Bitcoin balance and eliminate any trace of where it came from or where it ended up.

Spending the money on darknet markets will not be a walk in the park either. Both Hansa and AlphaBay were taken offline in quick succession. There are legitimate reasons to believe that law enforcement officials will target Dream Market next, as they have been cracking down on all illegal online activity. Making US$140,000 worth of Bitcoin disappear and turning it into clean money will be pretty challenging, if not outright impossible at this point.

There are other mixing service providers, however, which could help out in this regard. We discussed a few of those service providers a while ago and most of them are still operational to this very day. Another option would be to just sell the coins through LocalBitcoins, although that might attract even more attention from law enforcement officials. Agencies have been keeping a close eye on LocalBitcoins as well as anyone selling large amounts of cryptocurrency.

It is interesting to see this money being withdrawn right now. The motive behind this idea remains a big mystery, and there is seemingly no reason to move funds now rather than a few days or weeks ago. It remains uncertain if the money will be cashed out or just moved to more secure solutions. Bitcoin is very valuable right now and sitting on a lot of money can make even the toughest criminal a bit antsy.

Bitcoin exchange Changelly is helping police in WannaCry related investigation.

On August 5, less than four days after the Bitcoin Cash (BCH) hard fork, Bitcoin price surged drastically within a 24-hour period, recording a new all-time high at $3,212.

Many companies are currently developing driverless cars. We have also seen driverless trucks, although they are still in the very early stages of development. It sounds like we will also have autonomous boats in the future. That is simultaneously a very interesting and a scary trend. Self-driving container ships will soon be swarming the oceans, by the look of things.

Driverless Boats Are an Interesting Development

It is not the first time we have seen companies exploring the opportunities provided by driverless boats. There are thousands of cargo ships crossing the oceans at any given time, so automation makes sense. Automation can improve efficiency, productivity, and cut down on overall costs. Less happily, it will also lead to job cuts if these trials are successful. Such is the double-edged sword of technology.

Autonomous boats may take longer than many people think. The shipping industry certainly could do with some innovation right now, since things have not changed all that much over the past few years. Additionally, it seems that cargo ships have been being scrapped a lot sooner than originally assumed, which creates an adverse effect on the industry as a whole. Additionally, company losses due to mismanagement or bankruptcy is a major problem.

If things go according to plan — which hardly ever happens — we may see the first remotely-operated vessels in operation by 2020. This will only be testing in closed waters rather than exploring the open sea. It will take an additional three to five years until the latter happens. Unmanned ocean vessels will eventually become more common over time, assuming that they can be perfected to some degree in the coming years.

Ships have had autopilot features for quite some time now. These features have evolved substantially over the past few years, growing out to become a full-fledged autopilot feature which requires GPS coordinates to work successfully. However, this is still a far cry from successfully automating travel from one port to another. It appears that will change very soon, and most believe that autonomous shipping is the future of the maritime industry. Smart ships will not necessarily be the same as smartphones, but their impacts could be quite similar in the end.

Indeed, some real progress can be made now that the foundations for autonomous ships are in place. While they may not necessarily be seaworthy — please pardon the pun — they do exist and are ready to be improved upon. No groundbreaking technology need be built from the ground up. That will significantly speed up the process of bringing autonomous ships to life. The required sensor technology is commercially available and the algorithms are close to being finished.

The big question remains why we need automated seafaring, or whether we do at all. Safety is one reason to explore this option, as are efficiency and cost reduction impacts. With no crew to accommodate, ships can become lighter yet offer more cargo space at the same time. We may see a major revolution in the way autonomous ships are designed as well. 

It was party time in New York, hours after a new cryptocurrency was forked off from the main bitcoin blockchain.