There's a £60m Bitcoin heist going down right now, and you can watch in real-time

Sheep Marketplace closed down over the weekend after someone got away with 96,000 bitcoins - and angry users are chasing him around the internet.

One of the largest heists in bitcoin history is happening right now. 96,000 bitcoins - that’s roughly £60m as of the time of writing - was taken from the accounts of customers, vendors and administrators of the Sheep Marketplace over the weekend.

Sheep was one of the main sites that came to replace the Silk Road when it closed in October, but it too has now closed as a result of this theft. It’s a little hard to work out exactly what’s happened, but Sheep customers have been piecing it together on reddit’s r/sheepmarketplace.

Here's what happened: someone (or some group) managed to fake the balances in peoples’ accounts on the site, showing that they had their bitcoins in their wallets when they’d actually been transferred out. Over the course of a week the whole site was drained, until the weekend when the site's administrators realised what was happening and shut everything down.

Originally it was thought that only 5,200BTC - or £3m - was taken, with a message posted on Sheep's homepage blaming a vendor called "EBOOK101" for finding and exploiting a bug. However, over the weekend it became clear that the amount stolen was much, much larger.

In a normal robbery that money would be gone by now, but it isn't. Bitcoin is pseudonymous, not anonymous, and bitcoins can’t just disappear. It works because each and every transaction is public and visible to each and every other person using the Bitcoin network, and a person is only as anonymous as their link to their wallet.

A couple of reddit users realised that the sheer size of the heist makes “tumbling” the coins - the normal method of laundering bitcoins - impossible, as long as they kept on their toes. Someone with bitcoin can send some to a tumbler like bitcoinfog, where it will be split into smaller subdivisions and mixed with other bitcoins from other places, recombining and splitting again several times over until the whole amount eventually comes out the other end, theoretically in such a way that it’s impossible to track. Silk Road’s in-built tumbler successfully foiled the FBI, allegedly.

However, reddit user TheNodManOut managed to track where the first bunch of transfers out of Sheep went, and from there and silkroadreloaded2 worked out which tumbler that the thief was using. Here’s how silkroadreloaded2 describes what’s happened since (“Tomas” is the alleged owner of Sheep, and one of the suspects for many users):

All day, we've been chasing the scoundrel with our stolen bitcoins through the blockchain. Around lunchtime (UK), I was chasing him across the roof of a moving train, (metaphorically). I was less than 20 minutes, or 2 blockchain confirmations, behind "Tomas".

He was desperately creating new wallet addresses and moving his 49 retirement wallets through them, but having to wait for 3 or 4 confirmations each time before moving them again. Each time I caught up, I "666"ed him - sent 0.00666 bitcoins to mess up his lovely round numbers like 4,000. Then,all of a sudden, decimal places started appearing, and fractions of bitcoins were jumping from wallet to wallet like grasshoppers on a hotplate without stopping for confirmations.


He was tumbling our stolen bitcoins a second time, and a tumbler is unbeatable....

Unless you guess which one it is, nearly all the coins belong to the person you're tracking, jump in with him, and get jumbled up through the same wallets using the same algorithm. I was hopping from foot to foot shouting "come on!" at my laptop, waiting an age for 6 blockchain confirmations to get 0.5 btc into "bitcoin fog". My half a bitcoin got sliced and diced through loads of wallets and I followed the biggest chunk with - along with 96,000 stolen ones!

Or, in other words:

He gathered 96,000 in one pot, then split it into about 50 smaller ones. then he saw me 666ing them all. Imagine a sports stadium with 96,000 people in it, each with $1000.

He sent them all via different routes all over the world, but the same 96,000 people then arrived at a different stadium and he went to bed.

Now there are 96,001, and I just phoned you on my mobile to tell you where the stadium is.

A major problem with tumblers is that they only work with lots of bitcoins coming and going from a lot of different sources - if a tumbler is taking in 96,000 bitcoins, those will massively outnumber all other bitcoins being tumbled and it’ll be easy to spot them coming out the other end. Mix in a little of your own with all those other ones and you'll find out the wallet addresses that the tumbler uses, and it should be easy to spot large transactions splitting off from there.

The fascinating consequence of this is that you can see the stolen bitcoins on the public blockchain, and as long as there are people keeping tabs on it there’s going to be no way for the thief to cash in on their haul. Considering how people rely on tumblers to maintain anonymity when buying illegal stuff online, this unusual loophole is something of a revelation.

Right now, as you’re reading this, you can watch as the the thief starts trying to move their bitcoins on again - it’s currently down to 92,000 bitcoins and dropping as smaller chunks begin going out. Selling those bitcoins and turning them into cash is going to be extremely difficult, as the major Bitcoin exchanges all demand proof of identity (specifically to avoid charges that they're involved in money laundering), and if they're broken down into smaller quantities to sell via a site like a paper trail will still be generated. As soon as it's possible to link one real-life bank account or identity to any bitcoins from that stash, it will be possible to work out their real-life identity.

This counts as one of the largest robberies in history at Bitcoin's current market value, ranking in the same company as real-life thefts like the $108m diamond theft at the Harry Winston store in Paris in 2008. 96,000 bitcoins also places the thief as one of the wealthiest Bitcoin millionaires on the current rich list (but bear in mind that few serious Bitcoin players keep their currency in just one wallet) - and all without having to go to the trouble of wearing balaclavas or threatening someone with a gun.

Let's watch and see what happens next.

Some fan-made physical bitcoins. (Photo: antanacoins/Flickr)

Ian Steadman is a staff science and technology writer at the New Statesman. He is on Twitter as @iansteadman.

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An Amazonian tribe is challenging scientific assumptions about our musical preferences

The Tsimane’ – a population of people in a rural village in Bolivia – are overturning scientists' understanding of why humans prefer consonant sounds over dissonant ones.

It was 29 May 1913. Hoards of Parisians packed out the newly-opened Théâtre des Champs-Élysées. Messrs Proust, Picasso and Debussy were in attendance. Billed for the evening was the premiere of Le Sacre du PrintempsThe Rite of Spring, a ballet and orchestral work debuted by Russian composer Igor Stravinsky.

The attention and conjecture focused on the theatre that day meant expectations were high. However, within moments of the piece beginning, all preconceived notions held by the audience were shattered, as what was unfolding in front of them was a musical tragedy unlike anything they had ever witnessed.

A bassoon hummed into the ether before ballet dancers stomped on stage; the music, unpredictable with its experimental edge, drove forth the onstage narrative of a young girl whose selection during a pagan ritual saw her sacrificially dance towards death. Stravinsky’s composition and the ensemble of the night caused the room to descend from laughter and disruption to chaos and uproar.

The employment of dissonance – sharp, unstable chords – largely contributed to the audience’s disturbed reaction. Dissonant chords create a tension, one which seeks to be resolved by transitioning to a consonant chord – for example an octave or perfect fifth. These musical intervals sound far calmer than the chords which riveted the audience of The Rite of Spring.

Dissonant and consonant intervals find themselves as binary opposites; the frequencies at which notes played together vibrate determine whether an interval is consonant or dissonant. Consonant intervals have simple mathematical relationships between them, but greater digression from that simplicity makes an interval increasingly dissonant.

It’s long been believed  both experimentally and anecdotally – that the preference among Westerners for consonant chords highlights a universal, perhaps biologically-rooted, leaning among all humans towards consonant sounds. If you were present at the introduction of Stravinsky’s The Rite of Spring on that night of furore in Paris, you’d find it hard to disagree.

There is, however, a growing movement against this consensus. Ethnomusicologists and composers alike argue that favouring consonance may just be a phenomenon that has evolved from Western musical culture. And following the visit of a group of researchers to a remote Amazonian society, these claims could well be grounded in scientific evidence.

Led by Josh McDermott, an MIT researcher who studies how people hear, the group travelled to a village in the Amazon rainforest called Santa Maria. It’s populated by the Tsimane’ – a group of native Amazonians whose rural abode is inaccessible by road and foot, and can be reached only by canoe. There are no televisions in Santa Maria and its inhabitants have little access to radio, meaning exposure to Western cultural influences is minimal.

The researchers were curious to see how the Tsimane’ would respond to music, in order to determine whether they too had a preference for consonant sounds over dissonant ones. To everyone’s surprise, the Tsimane’ showed no preference for consonance; the two different sounds, to the Tsimane’ at least, were equally pleasant.

Detailing their research in a paper published by Nature, the group explains how the Tsimane’ people’s indifference to dissonance is a product of their distance from Western culture and music, removing any purported notion that humans are hard-wired to praise perfect fifths and fourths.

McDermott tells me that the Western preference for consonance may just be based on familiarity. “The music we hear typically has more consonant chords than dissonant chords, and we may like what we are most exposed to,” he says. “Another possibility is that we are conditioned by all the instances in which we hear consonant and dissonant chords when something good or bad is happening, for example in films and on TV. Music is so ubiquitous in modern entertainment that I think this could be a huge effect. But it could also be mere exposure.”

To fully gauge the Tsimane’ responses to the music, 64 participants, listening via headphones, were asked to rate the pleasantness of chords composed of synthetic tones, and chords composed of recorded notes sung by a vocalist. At a later date, another 50 took part in the experiment. They had their responses compared to Bolivian residents in a town called San Borja, the capital city La Paz, and residents in the United States – locations selected based on their varying exposures to Western music.

What made the Tsimane’ particularly interesting to McDermott and his group was the absence of harmony, polyphony and group performances in their music. It was something the researchers initially thought may prevent an aesthetic response from forming, but the worry was quickly diminished given the Tsimane’ participants’ measure of pleasantness on the four-point scale they were provided.

Unsurprisingly, the US residents showed a strong preference for consonance – an expected preference given the overrunning of Western music with consonant chords. Meanwhile, the San Borja and La Paz residents demonstrated inclinations towards consonant sounds similar to the US residents. The implication of these results – that consonance preferences are absent in cultures “sufficiently isolated” from Western music – are huge. We most probably aren’t as polarised by consonance and dissonance as we assume; cultural prevalence is far more likely to have shaped the consonant-dominant sounds of Western music.

McDermott raised the question about why Western music may feature certain intervals over others to begin with:

“One possibility is that biology and physics conspire to make conventionally consonant and dissonant chords easy to distinguish, and so that distinction becomes a natural one on which to set up an aesthetic contrast even if the preference is not obligatory. We have a little evidence for this in that the Tsimane' could discriminate harmonic from inharmonic frequencies, which we believe form the basis of the Western consonance/dissonance distinction, even though they did not prefer harmonic to inharmonic frequencies.”

There has been some criticism of this. Speaking to The Atlantic, Daniel Bowling from the University of Vienna said:

“The claim that the human perception of tonal beauty is free from biological constraint on the basis of a lack of full-blown Western consonance preferences in one Amazonian tribe is misleading.”

Though the results from the Amazonian tribe demonstrate a complete refutation of previous assumptions, people's musical preferences from other cultures and places will need to be analysed to cement the idea.

With research beginning to expand beyond WEIRD people – those from a Western, Educated, Industrialised, Rich and Democratic background – the tastes in music of people the world over may continue to surprise, just as the Tsimane’ did.

The Rite of Spring, which was met with ridiculing reviews has now been canonised and is considered to be one of the most important pieces of music of the twentieth century. A Tsimane’ crowd on that tender night a century ago in Paris may have responded with instant praise and elation. With further research, the imagined Bolivian adoration of a Russian composer’s piece in the French city of love may prove music to be the universal language after all.