Bitcoin Researcher Has Bitcoins Stolen From Private Key on Shirt

Bitcoin Magazine
Bitcoin Researcher Has Bitcoins Stolen From Private Key on Shirt

The rising trend of bitcoin and substantial growth of investments in the digital currency space has increased the awareness of bitcoin across major cities in the United States.

Since early 2015, an escalating number of mainstream media outlets, international government agencies and law enforcement agencies have exclusively featured bitcoin in various publications and reports.

Such coverage brought bitcoin one step closer to mainstream awareness and adoption, as more people began to understand and notice bitcoin as both an alternative currency and an innovative financial network.

Seeking to explore the awareness of the digital currency in the country’s largest cities, including Chicago, business strategist and consultant Tal Newhart and his small team of researchers conducted a social experiment in the suburbs of the city.

Newhart’s experiment was divided into two main phases: During the first part of the experiment, Newhart’s team wore a t-shirt with a QR code embedded at the back of the clothing which led to a bitcoin address for a donation to Bitcoin research.

In a few days, the short-term campaign generated about $68 in donations. Newhart then used the same bitcoin address and QR code to see if anyone would try to steal the money generated from the Bitcoin research campaign in the streets of Chicago.

During the second phase of the experiment, Newhart’s team printed a QR code of the private key corresponding to the bitcoin address and included the word “SHA-256” on the bottom of the shirt, as a reference to the hashing algorithm used for bitcoin.

In less than five minutes of wearing the shirt in the suburbs of Chicago, Newhart received an automated text notification that the bitcoin address used for Bitcoin research campaign was emptied. Some individual used a mobile phone to import the private key printed on Newhart’s shirt and used it to transfer the funds to a personal account.

“While the first part of our experiment showed that people can be generous, phase two proved that Bitcoin thieves can be lurking anywhere,” said Newhart.

Newhart and his team then devised this experiment to explore the vulnerability of bitcoin wallets and the awareness of the digital currency.

“A recruiting client, the CEO of a financial services company, had previously had some personal bitcoins stolen when he left his private key in plain view in the back seat of his Mercedes when he had it valet parked. We devised this experiment to see if this was a one-in-a-million event,” Newhart said.

Based on the results of the experiment, Newhart advices all bitcoin users to keep private keys secure and stored in an encrypted format.

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Three Startups Trying to Transform the Music Industry Using the Blockchain

Music was once scarce. Before the days of MP3 and P2P file sharing, you didn’t have the ability to hear songs whenever you wished unless you bought them.

Today one does not even need to download songs, as platforms such as VEVO and YouTube host many of the most popular songs of yesterday and today.

The industry was faced with a definitive problem in an age of liberal copy and distribution technology: finding new ways to monetize digital music files that lacked scarcity.

A gang of computer programmers – united by the Bitcoin technology – are trying to revolutionize an industry after 15 years of disruption which began with Napster and was cemented by BitTorrent.

Bitcoin’s blockchain – a decentralized system powered by a network of computers – serves as the transparent backbone of the Bitcoin network. The blockchain, which functions as a public ledger, maintains the accounting of the Bitcoin network, timestamping each transaction and assigning a unique ID.

Numerous individuals and companies are excited about the future of the blockchain and the music industry. Three companies, PeerTracks, Bittunes and Ujo Music, each claim their business model will liberate musicians from being under the thumbs of overbearing music labels and streaming services.

Peertracks, strives to use the blockchain technology to develop an artist equity trading system. Bittunes, strives to create an independent music market. Ujo Music, seeks to design a system to fix global royalty distribution and licensing problems faced by the industry.

These entrepreneurs believe that in the future when an artist creates a song it will be stored on the blockchain with its own unique ID, just like bitcoin is today.

The music industry has attempted to solve some of these problems before. But projects such as the Global Repertoire Database (GRD) never came to be. Still, the music industry has needed a new revenue and business model in the wake of Napster and peer-to-peer file sharing.

Peertracks strives to become the perfect music streaming and retail platform that propels peer-to-peer discovery. Peertracks depends on the creation of “artist tokens,” a sort of Bitcoin alternative, the value of which depends on the popularity of the artist who created the coin. As in basic economics, the higher the demand, the higher the worth of the artist token. The less demand, the lower the worth.

“Our goal is to enable new ways of monetizing music and not be forced to rely so much on royalties coming from the sales of nonscarce digital files,” Peertracks CEO, Cedric Cobban, tells Bitcoin Magazine .

Peertracks introduced MUSE at the Fair Music Public Forum, held by Berklee’s Rethink Music on October 2 in Boston. The MUSE blockchain purports to be an open, global ledger, specifically engineered and tailored for the music industry. MUSE seeks to not only manage copyrights but also the payment mechanism itself.

“No need for legacy banking to pay out royalties earned from music streams/sales,” Cobban says. The system revolves around Muse_USD, “a cryptocurrency that tracks the purchasing power of the U.S. dollar.”

MUSE will also allow artists to create their own “Notes” – a limited edition, cryptographic token that acts like a VIP pass into the artist’s career. Notes initially allow artists to crowdfund and know who their most engaged fans are.

“For the artist, there is great value in knowing who exactly is supporting him financially and enabling him to continue making a living from music,” Cobban said.

MUSE isn’t the only such project. Bittunes seeks to use peer-to-peer file-sharing technology with the latest technology in digital payment systems “to radically change the way the technology has been applied so that ordinary people actually earn money by becoming the new distribution channel for digital music,” Bittunes managing director Simon Edhouse told Bitcoin Magazine .

“In this way, Bittunes deals directly with the music piracy problem, with a carrot not a stick, rewarding artists fairly, and allowing users to potentially earn 5-to-10-times profits on song purchases,” Edhouse said. “To achieve this will not be easy, but the end result could be nothing short of revolutionary.”

Then there is Ujo, a proposed new shared infrastructure for the creative industries that aims to return more value to content creators and their customers. Built in collaboration with the Grammy-winning artist Imogen Heap, Ujo was released last month, and is headed by Phil Barry, who led a team advising Thom Yorke on his BitTorrent strategy for his solo album, Tomorrow’s Modern Boxes. Barry also advised Radiohead on its digital strategy for the band’s ninth studio album.

Ujo’s model is different, focusing on creating an open-source rights database and payment infrastructure. Ujo, like Peertracks, wants to revolutionize how money is distributed to artists and rights holders.

“Our open platform uses blockchain technology to create a transparent and decentralised database of rights and rights owners, and automates royalty payments using smart contracts and cryptocurrency,” said Phil Barry, founding partner at Edmund Hart, which oversees Ujo. “We hope that it will be the foundation upon which a new more transparent, more efficient and more profitable music ecosystem can be built.”

For Barry, the heart of the music industry is the content creators.

“The most important participants in the music industry are artists and writers,” Barry says. “They create the raw material upon which everybody else is dependent.” He acknowledges the music industry is 15 years into a major transformation and disruption.

“The pattern that I see emerging is that the purpose of a record company is becoming increasingly focused,” Barry said. “Major music companies no longer add value through ownership of chains of record stores or manufacturing plants, but they still finance and market the majority of hit records.”

Barry believes this will change over time.

“I think we will see a big reduction in the share of revenue record labels command as compared with artists and writers,” Barry said. “Handing over copyrights will become increasingly rare.”

What’s more, he believes the industry is watching the changes.

“Many companies and performing rights organizations share a really quite bold vision of what the future might look like if blockchain is widely adopted,” he said. “I think everybody can see that sooner or later blockchain is going to bring about change in not just music but all creative industries.”

Therefore, players in the creative industries have a duty to understand the technology.

“Nobody wants to repeat the mistakes of the Napster era,” he said.

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