Official: Bitcoin Loan Shark 'pirateat40' Defaults

A mountain of problems have been growing the past several weeks surrounding the recent drama around massive Bitcoin lender, pirateat40, as reports of fund inaccessibility came out of the wood work.

Purported to have had somewhere around 500,000 BTC in Bitcoin Savings & Trust, his fund that was offering deposit account holders up to 7% weekly interest on their holdings. The lending service provider announced a default on borrowed assets just a short while ago; the estimated value for the defaulted assets is $5,000,000 USD.

<@pirateat40> As much as I've tried to meet the deadlines within the community, there're conditions beyond my control which have escalated the process to the point it is today.
<@pirateat40> Bitcoin Savings & Trust has hereby given notice of default to it's account holders.
[redacted]
<@pirateat40> At his time, all Pirate Pass-Thru operators are required to submit a list of their sub-accounts including; balance, forum / IRC name (or any other way of linking and confirming the account) and Bitcoin withdraw address. Payments will be processed directly by Bitcoin Savings & Trust to Pirate Pass-Thru sub-accounts upon verification and cleared of any outstanding conditions.
<@pirateat40> Payments will be processed directly by Bitcoin Savings & Trust to Pirate Pass-Thru sub-accounts upon verification and cleared of any outstanding conditions.Payments will be processed directly by Bitcoin Savings & Trust to Pirate Pass-Thru sub-accounts upon verification and cleared of any outstanding conditions.
[redacted]
<hashking> When is the deadline to send this to you.
[redacted]
<@pirateat40> hashking, Friday by midnight.

You can follow the hearty discussion, or join up with your torches and pitchforks over on Bitcoin Talk.

Free State Project Now Accepts Bitcoin Donations

The Free State Project is a movement that seeks to bring 20,000 "freedom loving" individuals to move to the state of New Hampshire and collectively create a society in which the maximum role of government is the protection of life, liberty, and property. New Hampshire was chosen as "the land of milk and honey," so to speak, because "a vote that ended in September 2003, FSP participants chose New Hampshire because it has the lowest state and local tax burden in the continental U.S., the second-lowest level of dependence on federal spending in the U.S., a citizen legislature where state house representatives have not raised their $100 per year salary since 1889, the lowest crime levels in the U.S., a dynamic economy with plenty of jobs and investment, and a culture of individual responsibility indicated by, for example, an absence of seatbelt and helmet requirements for adults." The FSP has received favorable commendation from the likes of Dr. Ron Paul, Penn Jillette, and Dane vonBreuchenruchardt, President of the United States Bill of Rights Foundation.

Recently, the FSP has started accepting Bitcoin donations, via the BTCinch eWallet service.

Do you want more information about the Free State Project? Read the Intro to the FSP.

Bitcoin7.com Bitcoin Exchange Gets Hacked

Bitcoin7.com, one of the medium-sized Bitcoin Exchanges posted this message on their website today: Dear User,
Please read carefully the following critical announcement.

On Oct 5th 2011 Bitcoin7.com became the victim of a number of pre-planned hacker attacks. While our investigation is still going, evidence reveals that the attacks originated from Russia and Eastern Europe.

The attack itself took action not only against the bitcoin7.com server but also against other websites and servers which were part of the same network. Eventually the hackers managed to breach into the network which subsequently lead to a major breach into the bitcoin7.com website.

As a result of the hacking, unknown individuals managed to gain full access to the site's main bitcoin depository/wallet and 2 of the 3 backup wallets.

In addition the hackers gained access to our user database.

Even though our faith in the bitcoin project and community remains as strong as it ever was, it is our responsibility to admit that the scale of the damage is far beyond our financial and physical capabilities.

This is why we have decided to cease the operation of bitcoin7.com and instead of investing in new technology and personnel that could possibly help us overcome this unfortunate situation, we decided that we'd rather gather all possible finances through all possible means and initiate a crisis plan for reimbursing the lost balances of our users.

This is also an open invitation to all interested investors which have interest in taking over the site at the only cost of recovering the stolen bitcoins.

The crisis plan will take action over the next 90 days. On behalf of the management of bitcoin7.com we want to apologize for this extremely stressful situation.

More specific updates will follow within the next 24 hours with detailed instructions about how to withdraw your funds.

Bitcoin7.com was registered via a proxy service, so not much is known about the true owners at this point. Purportedly, it was managed by a gaming software firm, XS Software, in Sofia, Bulgaria. Users of Bitcoin7 would do well to follow the BitcoinTalk thread about the incident.

Bitcoin Startup Incubator, CoinLab, Launches in WA

Several enthusiastic Seattle entrepreneurs have banded together to form what most certainly is the first startup incubator specifically tailored to the Bitcoin niche.

CoinLab is the handiwork of Peter Vessenes, Mike Koss and Tihan Seale and shares a space within Mike Koss's co-working space (StartPad) located in downtown Seattle, Washington. CoinLab is already hard at work on BitSent, which aims to solve the problem of making transactions "in the wild" without a smart phone.

This has been a plan in the works by both Vessenes and Koss, who had both met with Nefario (alias), a Bitcoin developer (owner and maintainer of the Bitcoin Global Stock Exchange) and English teacher in a Chinese University, who was also interested in creating a hackerspace for startups revolving around Bitcoin. However, United States customs prevented the meeting from taking place, and Nefario had to return to China.

Recovering Lost (Due to Format) Bitcoin Wallets

It seems to be more commonplace than one would think to hear about someone formatting their hard drive and forgetting to take a backup of their Bitcoin wallet. Well, if you are one of those unlucky users, you might be in luck! (As long as you didn't zero write your hard drive.)

Bitcointalk user, makomk, has created a utility that scans a hard drive looking for any indications of the missing Bitcoin wallet and the private keys stored within it. Right now this process is somewhat restricted to users who can operate Linux, as you'll need to boot to a live Linux operating system to use the recovery tool.

So, if you've gotten yourself into this precarious situation after formatting your hard drive, to recover your lost Bitcoin wallet, boot to a live Linux distribution and execute the following commands in a command prompt:

• wget http://makomk.com/~aidan/wallet-recover
• chmod +x wallet-recover
• sudo ./wallet_recover recovered-wallet.dat

Hopefully, the recovery tool finds its mark(s) and outputs lots of public and private key combinations. If it is successful, it will also generate a file called recovered-wallet.dat, which is a usable Bitcoin wallet containing all of the Bitcoin addresses and private keys the tool could find. It is recommended to take this file, load it onto a USB drive, and open it on another system to check if you recovered your wallet and Bitcoins.

View Bitcoin Wallet Recover source code.

Read the Bitcointalk thread.

Bit-Pay Mobile Checkout Will Change Everything

Bit-Pay Mobile Checkout will allow brick-and-mortar merchants to accept Bitcoin payments via a point-of-sale application on a mobile smartphone. Combined with Bit-Pay's instant cash-in feature, retailers no longer have to worry about the fluctuating Bitcoin price, they can just charge their regular dollar amount and receive exactly that.

Bit-Pay Mobile Checkout is currently being piloted at several businesses in Orlando, Florida. It offers any retailer a brandable point-of-sale mobile application, and a dashboard to track all sales. Now there's absolutely no reason for a merchant to not accept Bitcoins, it's just turning down money!




Check out Bit-Pay Mobile Checkout today!

Bit Address Makes Offline Wallets Easy For You & Me

How do you protect yourself (and your wallet.dat) from hapless predation?

Creating an air-gapped cold store for your Bitcoin is one of the most crucial steps you can take to ensure their livelihood. Having an active wallet.dat file or even mentioning your use of the Bitcoin currency can possibly turn you into a target for attack. Securing your Bitcoin is as easy as creating a Bitcoin wallet offline, initiating a transaction with it via an active wallet, and verifying this transaction on BlockExplorer, or another similar website. You can then denote the wallet address for this secure, offline wallet and tuck away the private keys to authenticate it in a nice, safe place. Sounds complex, right? Well now, it's not.

Bit Address is a simple tool that allows you to generate the private keys and public address for a Bitcoin wallet right from your browser! You can then print out these private keys for safe keeping, whether that be in a safe deposit box at your bank or under the old maple tree in your backyard, that's up to you.

But it's a website, you said offline wallets were the way to go!

Right you are, Bit Address employs JavaScript for the creation of the Bitcoin wallet, which means all of the action is taking place using your browser. Load their website, disconnect from the internet, and THEN click the 'New Address' button to generate a truly air-gapped wallet.

Remember: Proper Protection Prevents Pirates from Plundering