FBI breached Bitcoin, here's what you MUST know

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The FBI recovered 2.3 million dollars worth of stolen Bitcoin that was paid by Colonial Pipeline as a a ransom to a group called Darkside. This created a bunch of rumors from hackers trying to break Bitcoin to now the US government could basically steal your private keys, and therefore your money which all contributed to the downfall of the price. Remember your private key is everything, if you show your private key to someone, it’s game over, they can take your Bitcoin from your wallet and steal it forever.

WHAT THIS WAS NOT:

This was not a breach of Bitcoin’s code, Bitcoin was not breached, quantum computing did not break the blockchain and no the US government doesn’t have some automatic software to steal your Bitcoin. So let’s take a look at what actually happened because this didn’t happen this week, the ransom happened last month and we’re just seeing the resolution of that this week and there’s a lot of confusion about it.

WHO IS DARKSIDE?
Darkside is an RaaS which stands for ransomware as a service, and you can think about them like a work for hire software service where you call them up, you present them your sketchy illegal idea. Darkside is the ransomware developer which creates the software used to breach into a company, where they then take 15% of the cut. Then there is the "affiliate" who is the person or group of people taking 85% of the ransom. It’s a criminal organization that creates software for people that are both willing and have access to the ability to install malicious software.

WHO IS COLONIAL PIPELINE?
Colonial Pipeline is a company which made roughly $421 million in 2020, they deal with transporting jet fuel, and gasoline. On May 7th, Darkside's affiliate left a ransom note asking Colonial Pipeline and the CEO to pay 75 Bitcoins. The CEO had to make a choice - pay the ransom or ignore it and potentially face way worse consequences. They decided to pay up.

GAS PRICES:
Colonial Pipeline made the decision to shut down over 5,500 miles worth of pipeline which caused a huge shortage in their gasoline supply, which is also why if you’re living in the east Coast you may have seen gas prices go up so much these last few weeks. Colonial Pipeline supplies something like 45% of the fuel to the east coast but, here’s where the confusion comes in with Bitcoin.

WHAT HAPPENED AND HOW?
The FBI seized 69 Bitcoins from Darkside's affiliate: (https://www.justice.gov/opa/pr/department-justice-seizes-23-million-cryptocurrency-paid-ransomware-extortionists-darkside)

How were the FBI able to do this? More than likely because the affiliate of Darkside was not as sophisticated and careful in their approach to hiding the private key. They stored it on a private server which was able to be tracked and exposed by the government through a series of transactions.

MY THOUGHTS:
I don’t think this was a conspiracy to undermine Bitcoin. Sometimes we over estimate the intelligence and level of care criminals will take. The truth is our government is becoming more efficient at tracking Bitcoin transactions - aka “following the money” which is why Blockchain is awesome - it’s transparent and pseudo anonymous. Darkside usually targets corporations with billions of dollars.

HOW TO KEEP YOUR BITCOIN SAFE:
Either way, if you're worried about keeping your coins safe, use a cold storage wallet like a ledger nano. Here is the tutorial for that: https://www.youtube.com/watch?v=peSLM6ncHMw

Credit: https://www.elliptic.co/blog/elliptic-follows-bitcoin-ransoms-paid-by-darkside-ransomware-victims

The wallet in question: https://www.blockchain.com/btc/address/bc1qq2euq8pw950klpjcawuy4uj39ym43hs6cfsegq

*None of this is meant to be construed as investment advice, it's for entertainment purposes only. Links above include affiliate commission or referrals. I'm part of an affiliate network and I receive compensation from partnering websites. The video is accurate as of the posting date but may not be accurate in the future.