Hackers exploit Bitcoin inflation bug to print 235M fake Pigeoncoins

The collateral damage from Bitcoin’s epic inflation bug continues to spread. The developers of small-cap cryptocurrency Pigeoncoin have confirmed hackers successfully exploited the vulnerability to print 235 million Pigeoncoins , worth around $15,000.

Attackers exploited remnants of bad Bitcoin code to work around Pigeoncoin’s ‘strict’ 21 billion supply, CoinDesk reports .

This represents the first time hackers have successfully exploited the inflation bug in the wild. Last week, attackers used it to split the controled Bitcoin testnet into two separate blockchains.

Recently, security researchers discovered a potentially crippling flaw in Bitcoin Core that could have been leveraged to print practically infinite amounts of Bitcoin, inflating its supply above the theoretical 21 million limit.

As Bitcoin Core software (the software that runs the Bitcoin network) is open-source, many developers of new cryptocurrencies borrow its code to create their own blockchains, a process called forking.

Pigeoncoin is a “forked-fork” of Bitcoin, meaning that it is really a copy-of-a-copy. It shares lots of code with the older, vulnerable versions of Bitcoin Core.

While the hackers haven’t sold – or even moved – the newly minted Pigeoncoins since they created them, it does set startling precedent for the coming months, as small-time, Bitcoin-related cryptocurrencies work on their individual fixes.

This is a warning to all developers maintaining cryptocurrencies that share code with Bitcoin Core: it is necessary for developers of forked Bitcoin cryptocurrencies to issue fixes in order to protect investors from unstoppable inflation.

Again, it is up to the individuals responsible for maintaining each network, as well as cryptocurrency exchange desks, to push those fixes, or else remain vulnerable to having hackers flood markets with millions of fake coins.

In Bitcoin’s case – machines called nodes run its network – and we still don’t really know how many of them are currently protected against the inflation bug. Current estimates suggest that anywhere from 50 percent to well over 80 percent of nodes are still completely exposed.

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Google erroneously banned a cryptocurrency mining app with 1M+ downloads

In an effort to curb the spread of crypto-jacking software, Google updated its terms of service in July to ban on-device cryptocurrency mining apps from the Play Store. Unfortunately, it appears that (in addition to a slew of mining apps) the internet giant has erroneously banned some legitimate apps – including one with over a million installs.

The removed app – MinerGate – originally offered both on-device mining and a remote cloud mining management functionality. To comply with the updated terms of service from the Big G, MinerGate removed the on-device mining feature from its app.

“Mining on your phone directly was among the core features of the MinerGate app before the last changes in Google Play Development policies,” a MinerGate spokesperson told Hard Fork. “With the last update, we are removing this functionality to meet the updated requirements.” Despite that, Google proceeded to purge the app from the Play Store.

At the time of writing, MinerGate is still unavailable

In previous coverage, Hard Fork highlighted that there were numerous apps that did not meet the new terms of service, yet were still live on the Play Store – even after the ban had been implemented.

MinerGate was part of the minority to actually update its app to comply with the new terms. Understandably MinerGate is bemused to say the least at the news of the apps removal.

In an email to Hard Fork, MinerGate simply stated, “MinerGate mobile app was improperly banned by Google Play.”

It would seem that while Google has intentions to protect both developers and users of the Play Store, it is inconsistent with the enforcement of its terms of service. As it stands today, mining apps on the Play Store are much less visible, so we sort of get a fresh start, if nothing more.

We reached out to Google for comment on this matter and will update the article accordingly if and when we hear back.

China breaks up underground $1.5 billion World Cup crypto-gambling ring

In a first for China, an illegal World Cup gambling ring has been busted holding more than $1.5 billion in live bets – all in cryptocurrencies. Six major suspects are in custody.

Nestled in a southern Guangdong province, the syndicate is reported to have themselves been sitting on $1.5 million in cryptocurrency, which was seized by police, alongside half that in yuan, stored in bank accounts – now frozen.

Surprisingly, no privacy coins – ones that provide inherent anonymity – were accepted by the platform, just Bitcoin, Ethereum, and Litecoin. Ballsy, considering the sheer amount of money supposedly flowing through the platform, although it was only accessible through the dark web.

Its remarkable success, until now, could perhaps be attributed to their rather militaristic approach to marketing. Reporting shows that the group had amassed an ‘army’ of over 8,000 ‘agents’ who actively recruited new users from across the world.

Police allege the group pulled in 330,000 people globally, systematically building a sizable crypto-betting economy – which, due to the commission-based incentive program, inevitably became a lucrative pyramid scheme .

The same report also details another online World Cup gaming ring taken down by Chinese authorities recently – but that one only handling a measly $48 million in lousy analog money.

There are ‘legitimate’ applications for blockchain when it comes to World Cup betting. One above-board inventive Ethereum dApp is CryptoCup . It’s a token exchange- slash -betting platform where users, themselves, create ERC-721 tokens for each of the teams.

The tokens are effectively valued based on the predictions betters make on how well the teams fair.

Ones that advance deep into the tournament are worth more on the free market than those knocked out early.

Make it to the top 10 percent of betters on the leaderboards and you win the share of the pot. This year, the prize is 56.55 ETH – which valued at today’s prices is around $25,000.

Having $1.5 billion in live bets using cryptocurrencies is noteworthy, regardless of the legalities. The Times reported the UK was to spend just over double that in bets on the World Cup in 2014.

So, really, this particular crypto-syndicate was to generate the same amount of World Cup bets as a small European nation – a true sign of the times.