Interesting new scam from ESEA: farm clients for bitcoins

SquishpokePOOPFACE · May 2013

http://www.rockpapershotgun.com/2013/05/02/crafty-mining-esports-leagues-secret-bitcoin-slaves/

Basically ESEA (competitive gaming league) got caught with their pants down by farming their users' GPU power for generating bitcoins.

I think this is something the general populace needs to look out for. Malware distributors can just as easily apply this sort of thing to the major botnets out there.

Svenpa · May 2013

I would like to know how a currency that is supposed to have any kind of value can simply be generated en masse by large computer farms such as was described above. I heard of a few similar stories as of late but the bitcoin value just recently inflated as far as I know. However, computer farms have existed long before these scandals were highlighted..

TychoCelchuuu · May 2013

Bitcoins come from solving complex math equations - that's just an artificial means of making them scarce, because you can't have any sort of currency without some kind of scarcity.

SquishpokePOOPFACE · May 2013

Yea, the value comes from the difficulty of creating a bitcoin.

Imagine gold, for example. You gotta mine that stuff, that takes time and resources. Of course, illicitly generating bitcoins as described above isn't doing it any favors...

edit: also, there is a limit on how many bitcoins can be made, but we are a looong way away from that.

ScardyBob · May 2013

Obviously, what ESEA did was wrong, but it does provide an interesting alternative payment source for subscription based services. What if instead of paying a monthly subscription for WoW, you allowed Blizzard to mine bitcoins on your GPU when its idle? The 'price' would be negotiated as amount of time the bitcoin mining software was running (e.g. WoW monthly price = 200 hours of bitcoin mining/month).

As long as it was done in an open and honest manner, it could provide a revenue source to support f2p games.

turtsmcgurt · May 2013

the drama on the ESEA/other comp forums was amazing. people were, yet again, actually suggesting that they drop ESEA and make a community league, because that wouldn't totally kill the scene instantly.

the last time I had that much fun on a forum was the good ol' gr1zz shenanigans on these forums, followed by people thinking SMNC was a decent game.

ScardyBob · May 2013

They have a video tutorial on how to register on their forums....

tschumann · May 2013

ScardyBob wrote: »

Obviously, what ESEA did was wrong, but it does provide an interesting alternative payment source for subscription based services. What if instead of paying a monthly subscription for WoW, you allowed Blizzard to mine bitcoins on your GPU when its idle? The 'price' would be negotiated as amount of time the bitcoin mining software was running (e.g. WoW monthly price = 200 hours of bitcoin mining/month).

As long as it was done in an open and honest manner, it could provide a revenue source to support f2p games.

Interesting idea, though given its volatility the monthly price could see a lot fluctuation in the space of a month.

Xyth · May 2013

Yes, build your business income around investments into a new-age ponzi scheme, what could go wrong?

ScardyBob · May 2013

Xyth said:

Yes, build your business income around investments into a new-age ponzi scheme, what could go wrong?

To some degree, so are online multiplayer games. Some times you need to find creative ways to make money from games and this could be a viable method.

WhiteWeasel · May 2013

TB coverage (8:25)

SquishpokePOOPFACE · May 2013

Xyth said:

Yes, build your business income around investments into a new-age ponzi scheme, what could go wrong?

I don't see how this can be labeled a Ponzi scheme, unless you are taking the farmed money and giving it to the new members.

Rich_ · May 2013

Didnt ESEA fire the guy that wrote the mining code then double what he made out of their own pocket to a cancer charity and prize pot?

GISP · May 2013

Rich_ said:

Didnt ESEA fire the guy that wrote the mining code then double what he made out of their own pocket to a cancer charity and prize pot?

They did, but the damage is allrady done. Instead of of being open about it, and say - Hey we found X had been bad. They lied, changed the thier story, and tryed to cover it up whit more lies.
Now trust is easiely given in the gaming world, regaining lost trust takes alot of effort. - And they realy have to up the ante, and work hard, if they want to be seen as a respectible service again.

Xyth · May 2013

Squishpoke said:
I don't see how this can be labeled a Ponzi scheme, unless you are taking the farmed money and giving it to the new members.

You're right, it's probably closer to being a Pyramid:

Bitcoins have, practically, no inherent value (except as currency in a very low volume black market, but this is negligible). The primary source of their 'value' is simply the fact that people keep buying them causing the price to increase.

Put in a different way:

I have some buttcoins. I convince friends and coworkers to also buy buttcoins which causes the BTC market value to climb, meaning my buttcoin is now worth more. They in turn convince others to buy more buttcoins meaning the value climbs even higher and now both mine and my friends butts are worth more. BTC reaches critical mass and I cash out making a profit which causes the price to plummet, all the late joiners paid $200 for a buttcoin that's only worth $60 now. Spend some of my profit to buy back in at the deflated price and go back to convincing people to join, rinse, repeat.

I guess what I'm saying is anybody who bought in a significant amount when the price was super low now wields a tremendous amount of power to continually milk profits from late joiners by manipulating the market.

Nordic · May 2013

Bitcoins are just as much ponzi scheme as the great american dollar. The only real difference is that the dollar is backed by the full faith and credit of the US Government, who happens to be massively in debt. Insert quantitative easing complaint here.

ScardyBob · May 2013

Xyth said:

Squishpoke said:
I don't see how this can be labeled a Ponzi scheme, unless you are taking the farmed money and giving it to the new members.

You're right, it's probably closer to being a Pyramid:

Bitcoins have, practically, no inherent value (except as currency in a very low volume black market, but this is negligible). The primary source of their 'value' is simply the fact that people keep buying them causing the price to increase.
Put in a different way:
I have some buttcoins. I convince friends and coworkers to also buy buttcoins which causes the BTC market value to climb, meaning my buttcoin is now worth more. They in turn convince others to buy more buttcoins meaning the value climbs even higher and now both mine and my friends butts are worth more. BTC reaches critical mass and I cash out making a profit which causes the price to plummet, all the late joiners paid $200 for a buttcoin that's only worth $60 now. Spend some of my profit to buy back in at the deflated price and go back to convincing people to join, rinse, repeat.
I guess what I'm saying is anybody who bought in a significant amount when the price was super low now wields a tremendous amount of power to continually milk profits from late joiners by manipulating the market.

You do know that is how all forms of currency work, right? You can't eat gold or build a house with dollar bills...

Xyth · May 2013

The major difference would be that established currencies can actually be used for something other than speculation which is not at all what can be claimed by the bitcoin. Unless we are really going to count buying drugs and child pornography as a legitimate market.

ezekel · May 2013

The guys involved in the scam were lpkane and jaguar (jaguar is the developer of the client, and lpkane is co-owner of the company)

Apparently he activated it for his own profits but got caught, I'm sure he's in trouble but definitely not fired. They're keeping quiet until it blows over

The code was removed from the client, and to see if you've been mined you can make a dump file of the client itself and open it in notepad and search for opencl miner

As for anything else, in your %TEMP% folder it extracted a .zip called library.zip, you can safely delete this entire thing as it is some of the tools required for mining. Just because they are there doesn't mean it was used

The mining apparently only activated if the client was running and idle for ten minutes, me personally close the client everytime i used it so I fortunately was not mined

ritualsacrifice · May 2013

Xyth said:

Squishpoke said:
I don't see how this can be labeled a Ponzi scheme, unless you are taking the farmed money and giving it to the new members.

You're right, it's probably closer to being a Pyramid:

Bitcoins have, practically, no inherent value (except as currency in a very low volume black market, but this is negligible). The primary source of their 'value' is simply the fact that people keep buying them causing the price to increase.

Welome to the wonderful world of fiat currency. You've been living in it your whole life.

Nordic · May 2013

Xyth said:

The major difference would be that established currencies can actually be used for something other than speculation which is not at all what can be claimed by the bitcoin.

Give them time. Let them mature. Some say the technology behind bitcoins is the third era of currency.

“Three eras of currency,” Chris Dixon, a partner at Andreesen Horowitz and well-known technology investor, recently wrote on a personal Web site. “Commodity based, e.g., gold; politically based, e.g., dollar; and math based, e.g., bitcoin.”

“People say it’s a Ponzi scheme, it’s a bubble,” said Cameron Winklevoss. “People really don’t want to take it seriously. At some point that narrative will shift to ‘virtual currencies are here to stay.’ We’re in the early days.

http://dealbook.nytimes.com/2013/04/11/as-big-investors-emerge-bitcoin-gets-ready-for-its-close-up/

“

Monkfish · May 2013

Bitcoins aren't going to age like a fine cheese.

Xyth · May 2013

http://dealbook.nytimes.com/2013/04/11/as-big-investors-emerge-bitcoin-gets-ready-for-its-close-up/

"say they own nearly $11 million worth."

The people who stand to gain most from the proliferation of an idea are supporting it? Amazing...

Nordic · May 2013

Xyth said:

http://dealbook.nytimes.com/2013/04/11/as-big-investors-emerge-bitcoin-gets-ready-for-its-close-up/
"say they own nearly $11 million worth."

The people who stand to gain most from the proliferation of an idea are supporting it? Amazing...

First of all I ask, who supports an idea if they do not gain from it?

To respond to your statement directly, that the people who stand to gain the most are the ones supporting it. The small and growing infrastructure that bitcoins has today has been made by those who were there first. Those early adopters were only there because they could make money. Since they were making money, and they wanted to make more, they needed to build an infrastructure. These people are pioneers of a new idea. For bitcoins to grow it needs more money put in and more infrastructure built by people just like the winkle... twins. For every new idea ever there has always needed to be someone to fund it.

The people at the beginning have the potential to have substantial gains but ONLY if they do their job well. If bitcoins fails they will also lose substantially.

Bitcoins have benefits that even you may use. Need to send money electronically? There is no cheaper way than bitcoins. Some people, maybe not you, desire to try making money by speculating on a volatile market. Bitcoins fill that desire. There are some other ways that bitcoins can benefit you specifically and you very well might disagree with. Bitcoins are deflationary which means a few things. In the long run, bitcoins are bound to become more valuable. The dollar is inflationary which means it gets less valuable over time. The maker of the dollar is the US government which can use inflation as a means of taxation. They can make 40 billion dollars, keep it and be 40 million richer, and make every dollar holder poorer. I don't know if virtual currencies will ever get there but bitcoins can not be inflated by a third party. Not being controlled by some single entity is debatable if it is good or bad. I can go on an on about this. I don't want to make tooooo big of a wall of text today though.

My only goal with my posts here is not to make you think bitcoins are good in anyway. My goal is to try to remove some false assumptions.

Bitcoins may fail, buttcoins may succeed. It is the idea behind them. Virtual currencies are here to stay.

Burdock · May 2013

TychoCelchuuu said:

Bitcoins come from solving complex math equations - that's just an artificial means of making them scarce, because you can't have any sort of currency without some kind of scarcity.

FYI, Bitcoin mining Is used as the method to safely move, keep track, sell, buy, trade, and encrypt other bit-coins~
Its kinda cool that both the way of regulating the flow of bitcoin's, and the creation of bitcoins are one in the same.....

The easiest way to think of it is: That Bitcoin miners are the servers that bitcoins use for everything.... Like solving complex encryption math....

Burdock · May 2013

ritualsacrifice said:

Xyth said:

Squishpoke said:
I don't see how this can be labeled a Ponzi scheme, unless you are taking the farmed money and giving it to the new members.

You're right, it's probably closer to being a Pyramid:

Bitcoins have, practically, no inherent value (except as currency in a very low volume black market, but this is negligible). The primary source of their 'value' is simply the fact that people keep buying them causing the price to increase.

Welome to the wonderful world of fiat currency. You've been living in it your whole life.
I it just me.... Or does most people on earth need some economic's major to slap them in the face and say "Value is 100% made up by people, things don't have value unless people give it value, nothing has inherent value because *Value* is a 100% subjective term"? .... I just hear way to much crap about people thinking something has a *REAL VALUE*

ScardyBob · May 2013

james888 said:
Bitcoins are deflationary

I think this will largely be the cause of the eventual downfall of bitcoins. An inherently deflationary currency will ultimately lead to hoarding (as you don't want to spend your increasingly valuable money). The inflationary aspect of most modern currencies strongly incentivizes people to convert their cash into actual real world objects, such as material goods, investments, etc.

Xyth · May 2013

I wrote a whole bunch of words here then realized it was silly. Instead consider this:

Both Beany Babies and Furbys were deflationary assets that were hugely popular at one point. Why have they not retained their value?

What do you call a currency that can not be spent on things?

Answers to these questions and more on our next episode

Nordic · May 2013

@scardybob, Nobody knows what bitcoins, or virtual currencies in general, will become. At this point and time I doubt we will see bitcoins take over the dollar in general use. I talked about that only as a possibility. It is disruptive technology and I have popcorn.

I still think virtual currencies are here to stay. For example Canada was so impressed they made their own.

Whether deflationary is good or bad is not something I am too knowledgeable on. By what few things I have read and talks I have listened too I lean towards it is good but that is just opinion. If you really read into it is really a difference in economic theories such as Keynesian and "Austrian" economics. On the bitcoin wikipedia, they have a explanation here.

@xyth, Beany baies and furbies have a lot less utility, as in near none, compared to bitcoins. Not a valid comparison.

Bitcoins can be spent on things... unlike furbies. This here is just a small organized list. It has everything from bars to doctors all willing to accept bitcoins. This is just the beginning. These people accepting bitcoins are some of the pioneers I mentioned.

ScardyBob · May 2013

james888 said:

Whether deflationary is good or bad is not something I am too knowledgeable on. By what few things I have read and talks I have listened too I lean towards it is good but that is just opinion. If you really read into it is really a difference in economic theories such as Keynesian and "Austrian" economics. On the bitcoin wikipedia, they have a explanation here.

Typically, its bad for currency.

Humans have been doing different types and forms of currency for a very long time and bitcoin is no different. Just because its a series of 1s and 0s instead of a shiny metal doesn't change anything.

Monkfish · May 2013

lol I love how the buttcoin defence force suddenly shows up i this thread. They're nothing but a bad joke.

Interesting new scam from ESEA: farm clients for bitcoins

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