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Bitcoin and Deep Web

NAISG.org May 2013. This presentation is for information purposes only. The presenter and author take no responsibility for the use or misuse of the information included here nor any guarantee of its accuracy.
by

Paul Bowen

on 13 June 2014

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Transcript of Bitcoin and Deep Web

Bitcoin and Deep Web
What is Money?
Historically
Precious Metals/Gems
Gold
Advantages of Gold

"Real Money" Can't be printed (yet)
Almost Universally accepted for trade
Limited Supply
Must be mined which has a cost
which can be related to value
Disadvantages of Gold

Not very portable
Storage costs and security
Finite natural supply limits currency and economic growth. There is less than one ounce per person on earth $1,073.33 PP as of May 3, 2013
Gold Standard
The gold standard is a monetary system in which the standard economic unit of account is based on a fixed quantity of gold
The United States had a Gold Standard and later a "Gold Exchange Standard"
The Gold Exchange Standard was established by the Bretton Woods Agreements in 1944
Many countries fixed their exchange rates to the U.S. dollar which was fixed to gold at $35 per ounce
Central banks could exchange their dollar holdings for gold
Individuals had limited rights to own gold
The US left the Bretton Woods Agreements in 1971 after France began redeeming their dollars for Gold to weaken US influence
Gold was worth more than $35 an ounce and if the United States did not act, the US gold reserves would have been depleted
The United States was no longer on any Gold Type Standard
The dollar became a Fiat currency
Fiat Money
Money declared by a government to be legal tender
State-issued money which is neither convertible by law to any other thing, nor fixed in value in terms of any objective standard
Money without intrinsic value
Fiat Currency
Pros: Can be expanded to allow growth

Cons: Can be expanded to devalue currency
There will be only be 21 million bitcoins ever

Each bitcoin is divisible by 100,000,000
25 bitcoins are generated by the network every 10 minutes
The number of new bitcoins created is halved every 4 years until the year 2140 where this number will round down to zero
They are "mined" by solving an block chain algorithm
The cost of electricity required to solve the block chain algorithm is often more than the "value" of a the mined bitcoin
Limited Quantity like Gold
Cost to mine like Gold
If the value of the 21M bitcoins was worth the total value of gold, each bitcoin would be worth $357,776.19. 1/100Millionth would be worth .4 cents
Because is each bitcoin is divisible, bitcoin can be expanded like a Fiat Currency
Like a Fiat currency its value is dependent on faith
Easy to transfer and use
Not bound by borders
Because it is digital it can be used anonymously outside of government and banking regulations
Bitcoin steps
Get a digital wallet or wallets
Get bitcoins (mine, trade or buy)
Use or save bitcoins
Bitcoins are minted/mined using Bitcoin Miner software which tries to find a new block in the chain of Bitcoin network
Whenever a new block is found by hash calculations to find a new block, the account is awarded 25 Bitcoins
The concept for Bitcoins was proposed by Satoshi Nakamoto (fake name) and completed in as an open project under an MIT license
Bitcoin creation and transfer is based on an open source cryptographic protocol SHA256
Bitcoin is not managed by any central authority
The public listing only shows the transaction ID and the amount of currency transferred. No personal details like your name, address, email, phone number are used.

There are no middlemen in transactions (no credit card processing fee)

There is no fraud because if you have the bitcoin it is yours (not like a stolen credit card # or paypal account)

Once a transaction is done, there is no reversing it unless the receiving party does it themselves (no charge backs)
There is too much competition and networks set up to mine individually
Solving an algorithm is a race
See a bitcoin mining profitability calculator at: www.bitcoinx.com/profit/
Bitcoin, a digital crypto-currency
Bitcoin can be used virtually anonymously now
Use multiple wallets
Exchange bitcoins with others
Use Anonymizing digital tools and techniques
There are proposals to turn it into an anonymous currency by design
Deep Web

The internet backroom

Don't start using this stuff. I am teaching you this because you should know it as security folks but don't start using it. You can ruin your life if you do the wrong thing.

Leave now if you are under 18
Tor (The Onion Router)

Originally sponsored by the U.S. Naval Research Laboratory
Internet traffic sent through a free, worldwide volunteer network consisting of thousands of relays to conceal a user's location or usage from anyone conducting network surveillance or traffic analysis
Data is encrypted and re-encrypted multiple times, and then sent through a virtual circuit comprising successive, randomly selected Tor relays. Each relay decrypts a "layer" of encryption before passing the data on to the next relay and, ultimately, its destination
Onion Sites

They end with “.onion” and are hosted as Tor hidden services – an anonymous way to host websites.

You have to use a Tor browser to get there because .onion is not a top level domain that other browsers will recognize

Such as http://silkroadvb5piz3r.onion/
Tor is available for dissidents, whistle blowers and others who need to worry about oppressive governments in their fight for freedom.
Tor is also available for people concerened with internet privacy including:
Astroturfers, terrorists, criminals, pedophiles, murders, drug dealers etc...

There are other tools too
Make your Bitcoins anonymous
Use a directory

deepwebresearch.info Great list

Tor hidden Wiki (down now)
http://xqz3u5drneuzhaeo.onion/users/hackbloc/index.php/Mirror/kpvz7ki2v5agwt35.onion/Main_Page
Have something stolen for you
Or credit cards or guns
Or counterfeit money
Or worse
Biggest Disclaimer in History
You WILL go to PRISON or worse if you do some things discussed here
This is presented for information security purposes only, don't do them ever
The material provided is for research and information purposes only, and does not constitute advice or recommendations. Any products referenced or linked in the material are not endorsed by the author and people who choose to pursue particular products or services cannot hold the author liable for any losses or other problems experienced.
This presentation is not representative of the views of the presenter or ANY organization
Thank you
paul@brainrinsing.org
Like any tool, Tor can be used for good or bad

A hammer can build a house or bash a skull in.

Build houses with what you have learned today
Bitcoin is a peer to peer network which allows you to do anonymous currency transactions

All transactions are tracked in a public list so when a transaction is done, its validity is checked by confirming from the list that the digital currency was not used before

Transactions can sometimes take tens of minutes to become confirmed by the network but usually don't
Each bitcoin is subdivided down to eight decimal places, forming 100 million smaller units called satoshis.

Subunit

.001 mBTC (millicoin)
.000001 μBTC (microcoin)
.00000001 satoshi[4]
Losses have been the result of stolen wallets and broken banks which hold bitcoins not breaks in the cryptographic elements of the block chain or forgeries or duplications

Like currency or coins, if your wallet is stolen the contents are gone

There is no FDIC

If your wallet is not backed up your bitcoins are gone if you lose your system
The Questions
Will it survive?
Will governments try and stop it?
Will people still trust it?
Full transcript