Critics of unregulated virtual currencies like Bitcoin have long argued that the core utility of these payment systems lies in facilitating illicit commerce, such as buying drugs or stolen credit cards and identities. But recent spikes in the price of Bitcoin — and the fees associated with moving funds into and out of it — have conspired to make Bitcoin a less useful and desirable payment method for many crooks engaged in these activities.
Bitcoin’s creator(s) envisioned a currency that could far more quickly and cheaply facilitate payments, with tiny transaction fees compared to more established and regulated forms of payment (such as credit cards). And indeed, until the beginning of 2017 those fees were well below $1, frequently less than 10 cents per transaction.
But as the price of Bitcoin has soared over the past few months to more than $15,000 per coin, so have the Bitcoin fees per transaction. This has made Bitcoin far less attractive for conducting small-dollar transactions (for more on this shift, see this Dec. 19 story from Ars Technica).
As a result, several major underground markets that traffic in stolen digital goods are now urging customers to deposit funds in alternative virtual currencies, such as Litecoin. Those who continue to pay for these commodities in Bitcoin not only face far higher fees, but also are held to higher minimum deposit amounts.
“Due to the drastic increase in the Bitcoin price, we faced some difficulties,” reads the welcome message for customers after they log in to Carder’s Paradise, a Dark Web marketplace that KrebsOnSecurity featured in a story last week.
“The problem is that we send all your deposited funds to our suppliers which attracts an additional Bitcoin transaction fee (the same fee you pay when you make a deposit),” Carder’s Paradise explains. “Sometimes we have to pay as much as 5$ from every 1$ you deposited.”
The shop continues:
“We have to take additionally a ‘Deposit fee’ from all users who deposit in Bitcoins. This is the amount we spent on transferring your funds to our suppliers. To compensate your costs, we are going to reduce our prices, including credit cards for all users and offer you the better bitcoin exchange rate.”
“The amount of the Deposit Fee depends on the load on the Bitcoin network. However, it stays the same regardless of the amount deposited. Deposits of 10$ and 1000$ attract the same deposit fee.”
“If the Bitcoin price continues increasing, this business is not going to be profitable for us anymore because all our revenue is going to be spent on the Bitcoin fees. We are no longer in possession of additional funds to improve the store.”
“We urge you to start using Litecoin as much as possible. Litecoin is a very fast and cheap way of depositing funds into the store. We are not going to charge any additional fees if you deposit Litecoins.”
On Carder’s Paradise, the current minimum deposit amount is 0.0066 BTCs, or approximately USD $100. The deposit fee for each transaction is $15.14. That means that anyone who deposits just the minimum amount into this shop is losing more than 15 percent of their deposit in transaction fees.
Incredibly, the administrators of Carder’s Paradise apparently received so much pushback from crooks using their service that they decided to lower the price of stolen credit cards to make potential buyers feel better about higher transaction fees.
“Our team made a decision to adjust the previous announcement and provide a fair solution for everyone by reducing the credit cards [sic] prices,” the message concludes.
Mainstream merchants that accept credit card payments have long griped about the high cost of transaction fees, which average $2.50 to $3.00 on a $100 charge. What’s fascinating about the spike in Bitcoin transaction fees is that crooks could end up paying five times as much in fees just to purchase the same amount in stolen credit card accounts!
bitcoin work on blockchain decentralized if any body take risk his/ her own responsibility but one loss other profit
@mohd shabir: “bitcoin work on blockchain decentralized…” What does that mean?? !! https://youtu.be/nRItzSX0aCM
What it means is that Bitcoin uses a technology called blockchain (which, if I understand it correctly, is how it keeps track of each and all transactions). Additionally one person’s loss is another’s gain.
Pretty simple…..
And more importantly perhaps, is the fact that Bitcoin transactions are not run through a central server, but are spread around the net by being decentralized. Computers all over the world are used as storage locations for the blockchains.
Thanks to bitcoin and cryptocurrencies you can be free financially! Ask me! Now I’m saving the bitcoin to be worth 1 million dollars and if it falls is not a disadvantage I see it as an opportunity to acquire more and cheaper I learned here bit.ly/2BRdCGs
Mario, thanks for the spam! I’m sure your scheme works very well for you. However, please fuck off!
(full disclosure: I’m an Ethereum guy)
If they complain about the fees now, what will they say when the “currency” collapses and dies?
For now, isn’t what we are seeing just a type of “inflation”?
I wonder how many “honest” investors realize they are funding criminal activities bu supporting this “currency”?
how are investors FUNDING anything lol, your an idiot, but keep your investments in Fiat and the stock market, that ALWAYS works, right?
Ahhhh, nothing says I’m reading comments on the internet like the phrase “your [sic] an idiot.” Thanks for that.
…”nothing says I’m reading comments on the internet like the phrase “your [sic] an idiot.” ….
and thank you for a great laugh. So true.
I wonder how many “honest” investors realize they are funding criminal activities by supporting the US dollar?
“On the news the other day there was a guy that robbed a bank and he drove away in a car. We should also get rid of Cars because they support bank robbers.”
LOL, this guy thinks that cars are designed to rob banks. 🙂 On the other hand, Bitcoin has always been primarily a tool for criminals. That’s the difference, something that rightarded (no offense) people don’t seem to understand (just look at their insane gunloon NRA stupidity where they also fail to notice that guns kill 33,000 Americans every year.)
Speaking of useless statistics… about 150K per year die from simple accidents (slips and falls kind of stuff), and 1.3 million die each year in automobile accidents, so maybe instead of focusing all your efforts on the NRA you should lobby to outlaw cars and clumsy people!
Way to try to skew the math. 33,000 *Americans* die from guns every year and you’re spouting *global* numbers. Sorry bud, 1.3 million Americans DO NOT die every year in car accidents; the real number is 37,000. So, 37,000 Americans die in auto accidents but we accept it because motor vehicles are so important to daily life. Hard to argue that guns are 89% as important as cars to our daily lives.
Allow me to add more useless statistics, like, by a large percentage (approximately 98,000), more people are killed in the US by health care provider mistakes than all the violence that is done by people with guns. Do we suddenly jail all health care providers who makes mistakes, and outlaw their clinics?
None of this matters, because 2nd Amendment rights are not to be infringed – for any reason whatsoever. Just because idiots abuse their rights does not make a case for taking away said rights. A right is a right – no government can take away or give such rights, they are inherent.
“For now, isn’t what we are seeing just a type of “inflation”?”
No. Bitcoin was designed so that the maximum number of Bitcoins is fixed at 21 million. The rise in value is a matter of supply and demand.
Would a supplier of a service or good selling for 5 Bitcoins in 2016 continue to sell for 5 Bitcoins in December 2017? I would think the prices of goods & services would rise (just like the transaction fees) as the value of Bitcoins increased. So you can have inflation in a monetary system without creating more of the currency.
It seems like a BTC holder is actually in a deflationary spiral–prices for all things denominated in BTC are falling. It is one of the things that makes non-fiat currencies problematic. The whole point of currency is to facilitate commerce. In a deflationary environment there is an incentive to hoard money rather than spend or invest.
Let me know if I am missing something.
My God some people are beyond stupid.
Do some research and don’t just believe everything the press tells you. Also have a read of some recent history into the funding of criminal and terrorist organisations before tou blame ‘Bitcoin’ for all the World’s ills…..
I was a victim of Bitcoin Ransomware over 2 years ago – did I pay up not effing likely – was cheaper to purchase
a GENUINE Win8.1 CD and not use S/E Asian copy that
let the criminals into my pc. Would I have purchased them then if I had known what was going to happen to the price (note I did not say ‘value’) again, not on your life?
What we’ll see in 2018 is the rise of altcoins, particularly ones with fast transaction times and very low fees like Stellar (XLM) and Ripple (XRP) though these two are not very suitable for the darknet. Privacy coins like Verge (XVG) will become more prevalent on the darknet, particularly as they become easier to use.
Investing in Bitcoins is a waste of time.
You’re correct. BTC is DEAD. ETH, XRP, LTC (and tbh, I’m not so keen on LTC after Charlie Lee’s latest babbling on Twitter last week), but those coins are the future. When you can buy Ripple (XRP) at $1.00 today and considering it’s about to be carried on Coinbase (rumor) in early 2018, it’s a no brainer. ETH with its smart contracts. Mmm. FEELS GOOD MAN!
Really….
On the news the other day there was a guy that robbed a bank and he drove away in a car. We should also get rid of Cars because they support bank robbers.
Just because the utility of this technology is used by a very small percentage of bad people in the wrong way does not remove the true purpose of what is happening here. Crypto is in a really immature place. That is a fact. It’s young and is being developed. The high transaction fees and scalability issues will be solved. This is the future. It is going to give all of us a better solution where we are not controlled by banks and governments. Take the United States out of it. This technology will mean so much for many parts of the world that do not have the benefits and structure will all get to live with every day. So I really hope people take the time to understand the full scope of Blockchain Technology and how it will change the world beyond the common criminal that will always be there no matter what you adopt.
Bumpitty-bump-bump!
(That means I like your post.)
Banks and governments will never let that happen.
Keith,
I agree with you 1000% (yes! 1000!)… Financial institutions feel threaten by the use of crypto-currencies because they are not the middle man anymore (no fees for them!) and one way they are trying to stop the growth of the currency is by “demonizing” it by saying that is only used for criminal activities such as laundering money. They really don’t care about the benefits if those benefits are not for them. As you said “This technology will mean so much for many parts of the world that do not have the benefits and structure will all get to live with every day.” That is where this technology will do the most good! not in the pockets of multi-billion financial institutions.
So, either the author is not privy to the facts or is being intentionally dishonest to try to be yet another cog in the coordinated attack on Bitcoin in the media to prop up another coin.
Fees are now diving, backlog of transactions are nearly gone, and even when it was temporarily bad for A FEW DAYS it was still possible to pay very little fees if you handle the transfer process other than buying on Coinbase.
Intentionally dishonest? I cited multiple sources in my story referring to others who were taking rather extreme action in response to skyrocketing transaction fees. I’m sorry you see this as a story about attacking Bitcoin (which it isn’t). You’re quite clearly emotionally (and probably financially) invested in Bitcoin, because you completely missed the point of the story.
You tell him Brian – you were a lot more polite that I would have been. Also tell those on here why the banks really do not want ‘coin’ – it is because, it is possible for the whole financial structure to come crashing down if taken to the nth degree not because of their profits
Brian – why was my post supporting your character which had been impugned by calling you untruthful?
Brant,
If you look at MOST of the bigger exchanges, there is still a backlog with BTC transactions and the fees are still high. The wait times, fees and minimum amounts are currently killing BTC. This does not mean it will be completely gone but as the rise of ALT coins strengthens, this will bring more competition and BTC will shift to be the choice for larger transactions. The alts will be better for small and faster transactions. Brian was not knocking BTC. He was merely stating current facts without bringing emotions or speculations into play.
There is some irony in this. 🙂 If cryptocurrency actually worked, if it were actually viable, the corporate fascist (Italian model) State would have put a stop to it as soon as it evidenced being workable. The fact that Bitcoin et al. are failures according to any metric one cares to examine is evidenced in the fact that corporate fascist elites have not shut them down.
Recall the reason why the Christian terrorists invaded Iraq: Saddam started selling Iraq’s oil in Euros, no longer in U. S. Petro Dollars. That was a deliberate attack on the United States’ economy and threatened to fatally destabilize the country from shore to shore thanks to the U. S. Petro Dollar becoming worthless in an economy supported by Saudi Arabia (among other terrorist States.)
If cryptocurrency was a workable idea, it would have been banned long ago.
The US military (not Christian Terrorists) acted when Saddam Hussein went into Kuwait. This was going to be a threat to the free-market flow of oil. Everyone knew this was the right thing to do. They got him out of Kuwait. That was the objective.
Also, “If cryptocurrency actually worked”…. Tell that to myself and many others who have purchased new homes and cars with profits from cryptocurrency.
Just get back to the barn and milk your cows. Send me a smoke signal when dinner is ready.
Not correct. Iraq had told Kuwait to stop cross drilling into their oil fields for many months before ending up taking military action. Kuwait is the private property of Saudi family and having a very long agreement with the US to be their military to protect oil interest we assisted in false accusations of Saddam attacking hospitals and such – which was later proven to be all BS. But it did get the US military to run Iraq back. These facts are readily available to be read. There is no moral high ground for anyone to stand on over Iraq. They took Gadhafi out for trading in gold only, that’s more of a threat than any crypto currency to the real world bank – Rothschild, with their largest gold stash in the world.
How many lizard squad members are remaining? Why do you advocate for the punishment of autistic teenagers?
I wonder if FDIC will ensure bit coin?
“I wonder if FDIC will ensure bit coin?”
“Ensure”. You mean insure, unregulated anonymous decentralized digital currency? The Federal Government?
Brian, can you put a math CAPTCHA on the comment section please.
The “math CAPTCHA” comment cracked me right up!
Can you pay your taxes in Bitcoin? Until you can do that and it is “legal tender” with a nuke-powered government behind it, it is useless.
What has to do Bitcoin with security? Besides being a living proof of how secured decentralized consensus based systems are viable, none.
If it the ones using the Bitcoins were mostly crooks it would hadn’t appreciated so much so fast, because it would be a currency serving a specific purpose, allowing to conduct pseudo-anonymous transactions for illegal purposes. Bitcoin would be just a mean not and end itself. The USD would have been flowing in and out of it keeping its price more or less stable and rising only as the demand for illegal transactions in Bitcoins rose above the growth rate of the Bitcoin pool.
Some agents good or bad are buying large amounts of Bitcoins and holding to them, instead of transacting with them (not using them for anything other than to speculate/invest).
Bitcoin worst enemy is that it was not designed to be a global currency and it’s short term success as an speculative instrument.
Brian,
I am not sure if you’re willing to post about this here but what are your thoughts on BTC as well as the alt coins? I know it is still fairly nascent in nature but do you see a bright future for the cryptos? I am fairly diversified between many of them and am just looking for your thoughts on the future of blockchain and cryptos. I would love to know what viewpoint a security-minded person like yourself holds toward these digital currencies.
Here’s one viewpoint of a security-minded person towards these digital currencies…
Digital currency nodes, transaction processors, are subject the DDoS attacks. Until that threat is removed from the Internet, the Internet can’t really be used for a stable financial system.
The internet bad guys are getting their margins squeezed by those who are (legally) manipulating the price of the imaginary currency used by said bad guys.
Somehow that seems ironic as well as amusing.
how large is the BTC blockchain now? Over a GB. Will it continue to grow to unmanageable size?
The size of the Bitcoin blockchain is currently 148.29 GB and the chain state is another 2.8 GB.
No it won’t grow indefinitely – bitcoin creation requires electric power – and the power required is proportional to the “difficulty.” At some point there will simply not be enough spare power because saving civilization (or not) will become a more important place to allocate power resources (the grid is already 4x – 5x too small to support civilization on 100% electricity – which is required to save civilization). Of course, internet/computers won’t be able to run without power, either.
So difficult decisions will have to be made about the balance between mining difficulty vs. available mining (electric) power. And, of course, it’s possible that a new crypto algorithm can break the whole system…
The Bitcoin blockchain is already hitting limits of practicality.
https://arstechnica.com/tech-policy/2017/12/bitcoins-insane-energy-consumption-explained/
Signing transactions (mining coins) chews insane amounts of electricity. If things go on the way they’re going, everybody will have to replace their electric baseboard heaters with mining rigs. And that will extend Bitcoin’s useful life by a few months.
Dream drug market is now accepting bitcoin cash because of the high fees, it is now over $1,500 0.1 btc to open a vendor account
https://steemit.com/drugs/@safetony/bitcoin-was-orignally-the-currency-of-drugs-now-it-s-bitcoin-cash
I would like to see more of these types of articles, perhaps with the NK angle on it. I would not be surprised if NK is manipulating the market.
high btc fees are insane! btc transactions are slow and and fees are high. Liberty reserve was only good money wallet ever.
all others are bs!
sad stroy! very sad! btc is not good as before:(
Thanks Donald Trump
BitCoin is nowadays a trend but I don’t know what basically it is and is it legally way to make money Online?
There *is* one minor (depending on what you care about) but pernicious problem with cryptocurrencies – they basically directly convert power (usually from coal/gas) into coins and CO2. The best available science assessment (IPCC AR5) already puts the world at 1.5% chance of a global-kill event with current CO2 levels, and that increases with increasing CO2. (For brevity, I omit an explanation of what 1.5% actually means.)
Just set up a small monthly donation via paypal – thank you so much for all your work!!
Wow. Thank you, Patti! HNY to you and yours.
Oh, ya, Christmas! I guess it’s Merry Christmas krebsonsecurity. Haha 🙂
666.66 $ by Pay Pal and you welcome .
thats problem now,what solution cArders will have ?
what payment solution they will start use ?