Using basic social engineering skills, hackers have managed to use the data on cell phone bills to get customer service reps to move service to a set up mobile phone, and then use that to get into CoinBase through 2 Factor Authentication. As such, one hacker stole 8,000 BitCoin from a user named Cody. Read the full article here.
Bad news from the realm of crypto currency. According to BitCoin developers, the notion of Bitcoin is dead, as it is controlled by "Bitcoin" miners and many exchanges have gone under.
Sarah wants to know about Bitcoin. Leo says that Bitcoin is just like paper money, in that it's a "fiat currency." But the danger is that it's not backed by the US government (even though they will take it as payment). The main thing to understand is that a bitcoin wallet is the only place that bitcoin lives and if someone steals that wallet, it's over. So it should be backed it up. It's a challenge to make money with it, and it's wildly speculative. That's why Leo doesn't recommend investing in it. But it's an interesting way to pay people online.
Bitcoin's Satoshi Nakamoto found, and his name is...Satoshi Nakamoto! Reporters from Newsweek Magazine claim to have found the Satoshi Nakamoto, the founder of Bitcoin, and he's been hiding in plain site in Southern California. Some believe it's a made up story and can't believe that a man who was obsessed with privacy enough to create an anonymous digital currency would keep his own name. Leo says that Nakamoto is in hiding and may be at risk since the last president of BitCoin was found dead in Singapore. Other BitCoin companies have been going bankrupt due to theft.
Alvaro is interested in what Leo thinks of Litecoin and Bitcoin. Leo says that Litecoin is a different technology than Bitcoin that makes it easier for users to buy into it. Bitcoin has a finite amount of currency and it is harder to "mine." Both are cyptocurrencies online, but the difference between that and actual physical currency is that it isn't backed by the government. It's fiat currency based on faith. Since the US government is now taking Bitcoin as payment for taxes, it has official value. However, that value can disappear in a heartbeat.
Carl keeps hearing about Cryptocoin. Is it the modern day gold rush or a pyramid scheme? Leo says that it remains to be seen. Value is reliant on the full faith and credit of the US government. All currency is based on that faith. But Toshi Nakamoto created BitCoin, which is a digital currency. There's no government backing it. The benefit, though, is that it's anonymous. But it can also be stolen just as easily, and there is no central bank or authority. If governments start banning it, like China has, it could doom the concept and make BitCoin worthless.