Elon Musk comments for the first time on Ethereum – because of a scam

Crypto currencies made it into the mainstream media some time ago. Spectacular rises and falls in the price of Bitcoin, hundreds of millions of hacks at Mt.Gox & Co. and scandalous cheating tricks à la Bitconnect. The reporting is predominantly negative and that is again the case this time. Elon Musk has spoken about crypto currencies for the first time.

The founder of Tesla wonders who is running the “Etherium” scambots. The spelling mistake with the name of the second largest crypto currency suggests that he didn’t deal too deeply with the topic. Incidentally, the tweet to which Musk responds didn’t refer to a scambot or ethereum, but to a young man who asked Musk to send him Bitcoin. It was only a matter of time before the topic would reach famous personalities outside the cryptospace sooner or later. Because the scam lives on the fame and range of well-known people.

How the Bitcoin evolution works

The scam creates a fake account. The Twitter Bitcoin evolution address is written so similarly that the difference is not noticeable in hasty moments. So @elonmusk would become e.g. @elonmusc. Such an account then announces an alleged giveaway in the answers to a real tweet of Elon Musk. In this case, for example, one to ten ETH should be sent to one ETH address. Participants are promised the return of the doubled amount. It sounds simple and transparent. But enough people actually fall for this trick. For the scammers, it’s very lucrative: little effort and income from Ethereum worth hundreds to thousands of euros.

ETH Scams cast a bad light – not only on Ethereum

Victims of these scams are mostly newcomers to cryptospace. If they look for help in the forums of the crypto community, they learn there unfortunately that not much can be done for them. In the forums they also make fun of the scammers and even the victims. It is their own naivety or greed that is responsible for these incidents. Of course this gives a very bad impression to people who are waiting for crypto currencies or are sceptical about them. Twitter, too, has to put up with negative publicity through this scam.

We must stop focusing on our various clones and why Twitter, apparently, does not give a flying fuck, and instead put our attention on the genetic flaw in our species that allows an individual to believe that anyone, at any time, throughout history, has ever given away money.

Is the criticism of Twitter justified?
It is not the case that Twitter does nothing about these scams. Messages are usually checked within 24 hours. They can be done both by the people you have stolen your identity from as well as by other users. The problem is that a tweet can find victims within the first hour of being sent. What critics like McAfee disregard is that Twitter alone is massively overtaxed by laws such as the Network Enforcement Act and the new EU-wide data protection regulation. The scam is new and answers have yet to be found.

How can the problem be solved?
Radical solutions such as the introduction of stopwords on Twitter are probably not the answer. The introduction of a stopword mechanism in which you are not allowed to call “Ethereum” and “Giveaway” would be of little use. Since these words can easily be paraphrased. Other possible combinations such as “ethereum” and “send” would amount to censorship and would be as negatively received in the crypto world as the ICO bans on Facebook and Twitter.

In fact, there is already a simple and quick solution to the problem. The block function can prevent certain accounts from responding to their own tweets. Past tweets will also be deleted from your own timeline. You can’t demand that a McAfee does this for every single scam account. However, you should also be a little reluctant to criticize.

Facebooks Ben Davenport switches to Bitcoin Startup BitGo

Software engineer and Bitcoin investment angel Ben Davenport has left Facebook after three years to join BitGo, a company that helps users and organizations better protect their Bitcoin assets. Davenport, who invested in at least seven Bitcoin startups very early on, joins the company as head of product management and co-founder of BitGo. He says, “I think BitGo is a leading pinier in Bitcoin security.”

BitGo and Multisig

Davenport pointed out that BitGo was one of the first companies to launch Multi Signature (or “Multisig”) Bitcoin Wallets. Multisig Bitcoin Wallets are characterized by a higher level of security than traditional Bitcoin Wallets. Most Bitcoin wallets in use today are based on a private key – that’s all you need for a transaction. However, if you lose this key, you no longer have access to your credit and if the key is stolen, your entire credit can be stolen.

Multisig, on the other hand, uses several keys. In order to release a transaction, for example, at least two of three keys must be entered correctly. Additionally a redundancy is provided. This means that if you lose a key, you can still access your credit with the other keys.

For conventional wallets, BitGo currently uses three keys: One key for the user, one for BitGo, and one key is stored in an offline backup. To access the account, the user needs at least two of the three keys. Since at least two keys are required to gain access to a wallet, there are several sources instead of one source to which, for example, a hacker must gain access. For commercial use, however, the company is planning a much more complicated encryption technique. With this type of encryption, BitGo will make use of modern tools that are also used in corporate accounting software products.

Complex systems

Large organizations have complex systems by nature. Companies have different management levels from the CEO down. Somewhere in between is the accounting that moves the company’s funds. “All these people act with Bitcoin, but at the same time have to fulfil their function,” explains Davenport. “This includes transaction limits, speed limits and approval chains, among other things”.

And this is where BitGo comes into play: BitGo wants to offer companies the possibility to better control Bitcoin processes with several private keys. This option coupled with a cold storage (offline wallet) will provide companies with an enhanced level of security.

Multisig also offers a form of transaction sharing, Davenport said:

“This type of transaction sharing does not yet exist for the Bitcoin. BitGo will make it possible.”

BitGo will also not only focus on traditional companies, says Davenport, adding that the product will also be of interest to Bitcoin stock exchanges, mining pools or wallet providers.