back to article Russian cybercrooks shun real currencies, develop private altcoins

Fraudsters are using private currencies to conduct transactions with each other on Russian-language cybercrime forums. The advent of new private financial systems and currencies in the Russian-language cybercrime community is a trend indicating a stronger level of collaboration, cooperation and sophistication amongst individual …

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'criminals don't trust Bitcoin'

Of all the damning things I have heard about Bitcoin this has to be one of the worst. It was a good run, but I think it is time to pack up and go home now.

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Re: 'criminals don't trust Bitcoin'

And of course it's true. I read it on The Register.

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Re: 'criminals don't trust Bitcoin'

Criminals don't tend to trade stocks and shares either, they'd be called Bankers if they did...

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Re: 'criminals don't trust Bitcoin'

bankster is just an euphemism for criminal

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Re: 'criminals don't trust Bitcoin'

Lost track of the number of times I've read bitcoin's obituary from a poster on here. But it keeps bouncing back.

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Re: But it keeps bouncing back.

And bouncing back down, and up and down ...

Good for speculation (potentially) No good for cash flow you are running a business regardless of legality.

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Anonymous Coward

Made up stuff?

Why not?

It's worked for religion for centuries.

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There must be a pretty small community of people who all know each other. Or they're putting a lot of trust in what are by definition other criminals.

Even in a small group of people who know each other online, some people can build up trust over time - but if the motivation is right, might decide it's time to leave the community. With a big pile o' cash...

Back when I played EVE Online there were many banks - and an EVE stock market. I believe this is no longer true, due to the repeated scams and failures. I knew (online and voice only though) one of the medium-sized bankers. Who I think ended up stealing several tens of billions of ISK. I think he decided the workload was too high, and/or fancied a change. Paid back all the investors he knew in-game or was in an Alliance with, then kept the rest. I think 1 billion ISK buys you about £30-£40 of subscription - so reasonably serious monetary value. At the time there was still a market on eBay, I'm not sure if that's true anymore.

Anyway the fun and games over Silk Road looks very familiar. Silk Road 3 gets dubiously hacked.

That's all where there's no comeback though. If the cyber-crims are tied in with scary types with guns, things might be different. At least if their real-world identities are known, or can be found out.

Stealing virtual money (with some realy mometary value) from gamers is rather different to stealing virtual money from criminals.

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Honour amongst thieves

No wonder there is huge trust, the enforcement and the Terms And Conditions are very different.

If you lose your shirt in bitcoinland and try to get your money back in court, some bloke with a wig will point you to the T&C and tell you that you were a muppet.

The Russian mob-coins are administered by blokes called Yuri carrying baseball bats and cleavers. It these blokes want it to work and be trustworthy, then they can, and will, make it so.

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Re: Honour amongst thieves

Exactly. A Mexican Standoff is a form of trust after all.

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Interesting

It could be that Silk Road being busted proves that law enforcement might be able to trace 'em. Also, BTC exchanges falling under regulation by certain entities (FinCEN) means that they might be traced at the exit points of conversion. Volatility may be a reason, but "I might get busted" is probably the main reason behind this.

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Internet Cash

The concept of untrackable internet payments seems to be here for good. Lets call it 'cash' payment for it may fill the same role as cash payment in real life and the fact that it is anonymous doesn't make it inherently good or bad.

We all trust in the value of the colored slips of paper in out pocket. Not because of any inherent guarantee of value (inflation comes and goes and sometimes currencies even cease to exist). It's more of a habitual thing: we simply got used to the idea of bills being valuable based on past experiences. We even trust banks when they tell us that the money is still in our accounts. I am sure that the experience can be re-created on the internet. It won't be smooth -- the history of real money surely was not -- but I am sure we'll get used to it eventually.

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They don't like the volatility

I'm not sure how creating their own currency is going to solve, rather than add to, their volatility problems here.

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Corp Scrip

The thing that I'm seeing here is that these folks are using various in-house cryptocurrencies as, essentially, scrip--the same kind of thing that the old Robber Barons used to do with 'company towns' and the like, where they paid for work in scrip that was only good in company-owned stores.

It's an interesting notion, as it not only keeps your workers under management's thumb, but management also can adjust prices to make working for them more or less attractive as their particular needs go. Not only that, but the management also can regulate the amount of scrip in circulation, allowing them to induce artificial scarcity or plenty as they see fit.

In a way, this is also similar to other organizations' attempts at in-house scrip; didn't Facebook have something similar going on a while back, with some kind of facebook bucks or credits or the like that you could cash in for various things? Various MMORPGs have the same kind of in-game credit that can be cashed in for real-world money or vice versa, as well.

If I were in a predicting mood, I'd say that the rise of bitcoin and the various altcoins provides a model for many different businesses, and that a smart fellow would get into the business of scrip exchange, maintaining as many different kinds of scrip accounts as possible so's to glean commissions from interchanging amongst the vast amounts of corporate-specific scrips that are likely to show up in the near future.

Those of you who play Shadowrun may find some of this to be very familiar as well.

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Re: Corp Scrip

Or indeed, Telstra dollars, which are bought at around 10:1 AUD and burn at over $2/min.

Its up there with the forcibly pre-paid systems used on Myki and road tolls for making me think, "wrong!"

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An online Hawala scheme

The system described here qualifies as an electronic implementation of a Hawala scheme, and accordingly has a long and illustrious history.

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