Bitcoins – Here Today Gone Tomorrow?

Bitcoins have been around for a few years but they have only been making headlines that I have noticed for about 9 months or so. I suppose what has made people sit up and notice is the staggering increase in the value of this essentially virtual currency. As they have gained so much in value this year many people wish (like me) that they had bought some a year or more ago, other people are quite suspicious that this could just be a temporary bubble that will inevitably pop spectacularly. Whatever your own thoughts it seems to have pushed most people, who don’t yet hold a bitcoin account into 3 camps: The first is the suspicious – why should I risk buying something that only exists in the internet world of 1’s and 0’s? The second is the curious, how can I make them work for me or get my hands on/or earn them from the countless ‘Opportunity to Make Money’ companies and mining schemes sprouting up all over the Internet? And of course finally the last group, who want to get their hands on as many of these things as they can through illicit means.


As of today’s date a single bitcoin is currently trading at $936; which is up massively from around $20 of just a year ago. This is despite it not being regarded as legal tender by any central bank in any country in the world and following a few setbacks including the operators of two exchanges for the bitcoin being arrested in the US and charged with money laundering because they were engaged in a scheme to sell more than $1m in bitcoins to users of online illicit drug marketplace the Silk Road, which was shut down last year after its alleged owner was arrested.

Of course where ever there’s money to be made, there are people who want to get at it illegally, especially a currency with such a trajectory of growth as bitcoins. Only this month some adverts on Yahoo’s homepage were infected with malware specifically designed to mine bitcoins. Yahoo confirmed that for a four-day period in January, malware was served out in ads on its homepage. Experts estimate that as many as two million European users could have been hit. Was your computer one of them?

Security firm Light Cyber said the malware was intended to create a huge network of Bitcoin mining machines. “The malware writers put a lot of effort into making it as efficient as possible to utilise the computing power in the best way,” Bitcoin mining malware is designed to steal computing power to make it easier for criminals to accumulate the virtual currency with little effort on their part, as generating bitcoins is “basically a guessing game with numbers, so the first one to guess the right number gets 25 bitcoins and if you have a large volume of computers guessing in a co-ordinated way then you have a more efficient way of making money,” he added. Other than a computer running slower, victims will be unaware that their machine is being used in what has become known as a bitnet.

What do you think of Bitcoins, do you know how they work, or did you even know what they where before I wrote this?

Bitcoins – How They Work
Imagine there’s a room that anyone can access. The room has security cameras that anyone can view, and every second of recorded footage is available online forever. That room is also filled with indestructible wallets made of transparent plastic, so everyone can see which coins are in which wallet. And oh yeah – these wallets can never, ever leave that room.

Each person has a key that can open their own wallet; so let’s say I want to buy a new X-box and you want to sell one to me. First, you tell me which wallet is yours. Then, I go into the room with a mask on. Anyone in the world can see me on the security cameras, but not my face. Next, I unlock my wallet, take some coins out put them into your locked wallet, then I leave the room. Now, everyone in the world knows that your wallet has coins that were previously in my wallet. This is the unique case with every single transaction, everyone knows the history of every single coin.

So how did it all start? Who got the first coins? Imagine there’s also a robot in the room that runs lotteries. Every so often, this robot randomly chooses a wallet in the room, and puts 50 coins into it. When it first started, there weren’t many wallets in that room, since nobody knew about it. Back then, it was quite easy to win the lottery. However, today, as you can imagine there are millions of wallets in that room, so your odds aren’t very good.

I suppose someone could make their own fake coins? No, because everyone has records of every single coin in that room, and they know when the robot hands new coins out. If a fraudster were to put fake coins into his own wallet, everyone would know that those coins were never handed out by the robot, and wouldn’t accept them.

So now the big question – Who made that robot?! Well it was supposedly a super genius Japanese man named Satoshi Nakamoto, but nobody knows for certain. Since the security camera footage is available from 2009, we can see that the robot was putting coins into a wallet since day one. We assume it’s Satoshi, but they say nobody really knows for sure.


Turkish Corruption Scandal – Dirty Plot or Erdogan’s Endgame?

If you live in Turkey you would need to have made a recent visit to the moon or perhaps had your head buried deep in sand not to have noticed a massive political crisis for the ruling Justice and Development Party (AKP) government, which began in the middle of last month. The Turkish lira has also lost almost 25% since last May causing inflation to surge, while foreign investment capital seems to have fled as the perception of a government lurching from one crisis to another, gains greater currency.
The political fallout from a corruption probe into four government ministers, several businessmen and bankers, has become the biggest challenge to Prime Minister Recep Tayyip Erdogan’s AKP government’s 11-year rule. Although, the ever combative Mr Erdogan was quick to retaliate, condemning the probe as a “dirty plot” to topple his government and said he would not permit “a state within a state”, a phrase apparently referring to the movement led by the highly influential Islamist cleric Fethullah Gulen, who has lived in self-imposed exile in the US since 1999.

Mr Gulen is said to have millions of followers across the world and extensive influence over the state bureaucracy, the police force and the judiciary in Turkey. Erdogan’s government accuses his movement, referred to as “Cemaat” in Turkey, of being behind the graft probe – a charge Mr Gulen denies. However, the ongoing crisis in Turkey is increasingly seen as not only a corruption investigation, allegedly involving the closest circles of Mr Erdogan, but a bitter power struggle between the AKP and Cemaat.

Many people here believe Cemaat’s support was crucial in the AKP’s three consecutive election victories. Also that they helped the government curb the powers of the military through their influence within the judiciary with the help of high-profile cases like Ergenekon and Sledgehammer, which saw hundreds of military officers – including the previous chief of staff of the armed forces – jailed. However, the current thinking is that as the “common enemy” was forced to relinquish its historical power the AKP and Cemaat started to become wary of each other’s influence to the point that some commentators now believe a new fight to hold the ropes of power in Turkey may have begun.

So where did it all go wrong? Just twelve months ago, Turkey’s effervescent Prime Minister Recep Tayyip Erdogan seemed to be on top of the world, at least his world. He was putting his final touches to a new constitution under which he’d be transformed into a president with executive powers at home at the same time as some believed his diplomatic overtures to the new leaders, following the Arab spring, almost gave him the spiritual authority of a Muslim Caliph abroad. Indeed Erdogan’s “neo-Ottoman dream” appeared to have succeeded enough for Turkish voters to almost give his AK Party a lock on power for the foreseeable future.

However, in the past few weeks Erdogan has looked more like someone fighting for his political life, with his “neo-Ottoman dream” seemingly in tatters, while all the talk in political circles in Istanbul, home to almost a quarter of Turkey’s population, is leaning towards how to ease Erdogan off the stage and into history. Why this sudden turn of fortune? The short answer, according to an international press, not hamstrung by the governments burgeoning restrictions on domestic media freedom, seems to be hubris.

Erdogan claimed his electoral success came from his understanding of the root cause of Turkey’s relative underdevelopment and almost permanent political crisis was a clash of ideologies. The Kemalists, supporters of Ataturk (the founder of the republic), had turned his legacy of a secular state into a rigid ideology that ignored the inevitable diversity of a complex society such as modern Turkey. At the other end of the spectrum, pious Muslims regarded secularism— that is to say, the separation of the mosque and state — as a direct attack on their religion. This pattern of Kemalist-Islamist power struggle prevailed for decades until the AKP finally won its first general-election in 2002.

Erdogan’s “de-ideologization” method succeeded in giving Turkey political stability (especially immunity against coups), and paved the way for economic development. Over the last 10 years, Turkey has tamed its once-notorious inflation, revived its moribund currency, created more than 8 million new jobs and, with average economic growth rates of 6 percent to 7 percent, joined the ranks of emerging industrial powers. More importantly, in the eyes of many Turks, Erdogan managed to drastically reduce corruption, the endemic bane of Turkish politics.

However, in 2011, seemingly intoxicated by Turkey’s success in his decade of power, Erdogan began acting out of character and started behaving in a different, ideological way. Firstly he began purging the military of officers indifferent if not hostile to religion, and replacing them with those with AKP connections. He then started purging the judiciary by promoting Islamist judges in place of the secularist ones pushed into early retirement. His next target was the big business elite, which had formed over decades with army support, while juicy government contracts were granted to people with AKP links — and, as recent revelations appear to show, even to members of his own family and party entourage.

If all that wasn’t enough for a perfect storm, Erdogan unveiling of a gargantuan project to transform Istanbul into “the greatest city of Islamic civilization” was instrumental in triggering the Gezi Park riots, which so tarnished his and Turkey’s reputation last summer. The project was part of his grand scheme to “breed a new generation of pious Turks.” So Erdogan, who once marketed himself as a leader who rejected ideological dogma, has gradually become regarded as the most ideologically dogmatic leader modern Turkey has ever seen. And despite having won his early support by arguing that a government should administer a country rather than engage in social and cultural engineering, he now talks of “creating the new Turkish man” in terms that some of his enemies would have us believe, recall the rantings of men like Hitler, Stalin and Mao and their versions of the “new man.”

In my years in Turkey, the one thing I have learned about Turkish politics is that nothing is ever quite what it seems. So Mr Erdogan may well be around for quite some time yet. However, perhaps the one certainty the deepening political storm has for him, is that he risks not only losing a good chunk of his AKP base, like President Abdullah Gul and his faction, but his dream of ruling Turkey for another 20 years now strikes a growing number of Turks, whether they are secular or religious, as a potential nightmare scenario.