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New malware ferrets out and steals Bitcoins

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You know your virtual currency has hit the big leagues when criminals develop trojans that infect computers for the sole purpose of stealing it. Bitcoin, the open-source project launched two years ago, reached that turning point Thursday.

That's when researchers from Symantec discovered Infostealer.Coinbit, a piece of Windows malware that ferrets out the digital wallet stashed on Bitcoin users' hard drives and uploads it to an SMTP server that's probably located in Poland. It's the first report of a trojan in the wild that targets the digital cash, but Symantec researchers said its only a matter of time until the feature is found in other pieces of malware.

“If you use Bitcoins, you have the option to encrypt your wallet and we recommend that you choose a strong password for this in the event that an attacker is attempting to brute-force your wallet open,” Symantec's Stephen Doherty wrote in a blog post.

The advice makes sense, since Bitcoins are just like cash in the sense that they lack any sort of intrinsic method of tracking the thief. The digital currency's peer-to-peer architecture was designed from the ground up to foster transactions that can't be reversed and to allow users to remain anonymous. A Bitcoin user calling himself Allinvain claims to have learned that lesson the hard way when, he said, someone stole coins theoretically valued at $500,000.

But this irreversibility points to a potential risk of following Symantec's advice to encrypt the wallet: Lose the key and your coins will be lost forever.

A separate Symantec researcher, Peter Coogan, has theorized a separate way online crooks could profit handsomely from a Bitcoin feature that allows users to “mine” coins by contributing CPU cycles to solving a cryptographic problem. Criminals wielding a botnet of 100,000 infected machines, for example, could generate $97,000 per month, assuming all nodes worked on the problem continuously. ®

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