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Ross Ulbricht: The Untold Story, Episode 1: Silkroad, Mt Gox and DPR

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Silk Road was a darknet Marketplace initiated by Ross Ulbricht, in February 2007 which incorporates the functionalities of Tor Network and Bitcoins.

Elaborating the consequences leading to a 21,000 BTC hack.

How is the silk road connected to Mt Gox?

The various investigations that undergo behind various kinds of hacks and scams in the Crypto domain are very crucial, as trust is the rarest commodity one can find in this era. Let’s understand the background connections between Mt Gox and Silk Road, through this detailed extract.

 

Traveling the Silk Road

Silk Road was a darknet Marketplace initiated by Ross Ulbricht, in February 2007 which incorporates the functionalities of Tor Network and Bitcoins to provide a completely anonymous E-commerce website.  Although it was not initiated with bad intentions, the Marketplace eventually was one of the leading Centre for the trading of illegal drugs, predominantly Cannabis. However, due to the illegal use of the Silk Road, one of the US Senate members, Chuck Schumer called upon to bring down Silk Road, as it was misusing Bitcoins.

 

Passing the Torch

The original inventor Ross Ulbricht, was not a core developer and therefore had fever technical knowledge. The Silk Road expanded by multiple folds which let him approach one of his friends named Richard Bates, who agreed to offer him help but later distanced himself from the project, citing the regulatory concerns. This indirectly led Ross Ulbricht, to take assistance from a complete stranger who he met through Silk Road itself. The Stranger cited a vulnerability in the website code, that could potentially be exploited to steal Bitcoins from the accounts and persisted Ross to give him access to them. Once Ross was utterly convinced he granted him all the access. Taking advantage of which, the stranger took over the entire website and formally declared it on the website, with the name “Dread Pirate Roberts (DPR).”

 

Targeting Karpeles

The illicit use of Silk Road was exposed when an investigator named, Jared Der-Yeghiayan found unusual drug packages at the Chicago Airport. He further went into investigation and found out that the parcels were a part of Silk Road. Through Bitcointalk.org he found out information about a website which specifies the users how to incorporate Tor, to use Silk Road. On further investigations, he found out that the domain name for silkroadmarket.org was registered with a company owned by Mark Karpeles. His further investigations led him to one of his lead Ashley Barr, one of Karpeles’s associates. All the investigations are done, where submitted to the Homeland security investigations on July 2012 by Der-Yeghiayan.

 

For Control

The investigation was further handed over to an agent named McFarland. He proved to be one of the significant obstacles in all the investigations done by Der-Yeghiayan. He tried to move Der-Yeghiayan away from the case as he would gain an opportunity to exploit the vulnerabilities of the Silk Road and various other members related to it, by blackmailing them and eventually extorting money out of them. Both of them were assigned to jointly work on the project, but McFarland tried to monopolize over the case for his interest. Baltimore’s Drug Enforcement agency was also involved with the project and had similar reports with that of Der-Yeghiayan’s which indirectly let him know that McFarland had leaked his investigation reports to everyone.

 

Going Rogue

It was later found out that the complete information had been leaked to two of the agents named Carl Mark Force and Shaun Bridges. Eventually, bridges went rogue and had almost seized $2 million worth Bitcoins from the account of Mark Kerpeles. Later, both of them undertook a secret mission, where they captured Curtis Green, ae and inquired one of middleman for DPR, by undertaking a deal with a leading cocaine vendor on Silk Road, “googleyed”. They acquired the knowledge of taking over multiple accounts on Silk Road, from Green. The allegedly stole 21000 Bitcoins indirectly. They first transferred the Bitcoins, through the newly acquired knowledge to the Green’s account and indirectly from Green’s account to theirs.

 

By incorporating the new knowledge two of the agents jointly, scammed and blackmailed many vendors on Silk Road to extort money from them. This was the dark reality of the agents which who misused their power within the judicial system. Stay tuned for the Episode 2 on Coinnounce.

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Donald Trump policies push Mexico to Bitcoin

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Mexico has seen a new all-time high trading volume on localbitcoins. This comes out on the back of the announcement from the Trump Whitehouse.

Mexico has seen a new all-time high trading volume on localbitcoins. This comes out on the back of the announcement from the Trump Whitehouse that remittance payments of Mexican migrants in the United States of America will potentially be the target of new restrictions essentially ending the possibility of Mexican migrant workers to be able to cheaply send money back home to their families.

 

Mexico adopting Bitcoin:

Mexico has been experiencing a massive increase in the number of transactions on localbitcoins. Mexican migrant workers are believed to be exploited by the remittance companies which are charging around 10% fees. What is essentially being discussed here by the Trump Whitehouse is a new tax on these migrant workers. The number that they are currently floating around is a 3% tax on the remittances going from the USA to Mexico. This may not seem super crazy but considering the $33.4 billion which were sent to Mexico in 2018 alone, that extra 3% could mean $1 billion more per year for the United States government.

 

98% of the transactions that were sent during the last year, were sent via electronic means which means that there is actually a very strong remittance route that is ready for mass disruption going from the United States to Mexico and Bitcoin could be the perfect answer. However, the average size of a remittance payment from the United States to Mexico is $322 last year and the problem is that if the fees rise again exponentially on bitcoin, then bitcoin might not be the ideal cryptocurrency for these kinds of smaller remittance payments. Maybe we are going to see some other cryptocurrency being adopted in that situation. But regardless of which cryptocurrency is used, we can see that there is a clear need for disruption as government policies again seeks to impede or overly exploit the free float of money.

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Bitcoin Crashes Downwards: Is BTC Going to Fall Back to $4000?

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Bitcoin fell down to test the $5000 support level. If the current support around $5000 is broken, BTC might really crash to $4500 and $4200 support levels.

Bitcoin fell down to test the $5000 support level which is the most crucial level for BTC currently. The downward correction started after bitcoin tested the $5500 resistance level yesterday at around 18:00 UTC.

 

The resistance around $5500 proved very strong and pushed the price downwards sharply. The sharp declining pattern attracted a lot of sellers which even pushed the price below $5200 support level and BTC tested the $5000 support reaching up to $5018.

BTCUSD Price Chart- Coinbase

BTCUSD Price Chart- Coinbase

Bitcoin is currently trading around $5070 (at the time of publication) showcasing a bearish pattern.

 

Bitcoin Price Drop:

The sudden price drop has led to people speculating that BTC might soon crash back to the $4000 range. Earlier, analysts were also predicting the sudden rise of bitcoin to be a conspiracy. Also, Bloomberg had also called the sudden rise a Blip. If BTC had successfully crossed over the $5500 range, the next major resistance was around $5800, however, BTC fell sharply losing more than $400 in value over the last 24 hours.

 

The bearish move does not clearly indicate a crash towards $4500 and $4000 range, however, if the current major support around $5000 is broken, BTC might really crash to $4500 and $4200 support levels. With the price of bitcoin falling, other major altcoins are also in the red zone today with Ethereum falling more than 8% in the last 24 hours, XRP falling more than 6% and Litecoin falling around 12% in the last 24 hours.

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China to completely ban crypto mining: Bitcoin about to Crash Hard?

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As reported by Bloomberg, China is moving towards putting a complete ban on mining bitcoin and other crypto as it causes serious wasatage of resources.

As reported by Bloomberg, China is moving towards putting a complete ban on mining cryptocurrencies such as bitcoin. In accordance to a document posted by the National Department and Reform Commission of China, the mining of cryptocurrencies should be completely banned as it causes serious wasatage of resources.

 

China is known to be the largest hub of cryptocurrency mining with huge mining rigs been set up in the country. Earlier, China has also banned small investors to invest in security token offerings or STOs and only large investors with more than $1 million funds are allowed to invest in such projects. Now, the country is planning to take strict action against cryptocurrency miners in the country.

 

Cryptocurrency miners were earlier attracted to China due to their cheap electricity rates and subsidies in the country, however, due to the strict actions being taken by the government with the guidelines of the NDRC which has disincentivized cryptocurrency mining, a lot of miners have shut down their operations or moved to other nations.

 

Largest Mining Pools in China:

China has been a hub for some of the largest cryptocurrency mining polls. Even though the mining pools have been shifting to other countries, there has been some effect of the ban on the market for bitcoin and other cryptocurrencies as the mining is a major part of the overall working of cryptocurrencies.

 

How do you think the complete ban on cryptocurrency mining in China will effect the bitcoin price? Tell us in the comments section below.

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