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.

Shit!

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 blockchain.info - 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 localbitcoins.com 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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Understanding anxiety – my inside view of a debilitating disorder and how to control it

Following a number of recent anxiety attacks, I set out to learn why this happens to me.

As I stepped out of the office one evening after a routine day at work, I found myself glued to the floor. Legs bolted, knees quivering, heart racing – I was cemented into the ground by something paralysing.

I had to work out what was happening, and fast. Was a looming deadline holding me back from leaving? Was an unread message on my phone stopping me in my tracks? Perhaps fatigue had set me on edge. Or that passerby with an unsettling stare caught me off-guard. Maybe it was something more surreal; maybe a sense of dread had taken over, as I started to perceive each onlooker as a potential source of fear. Whether it was all of those things or none of those things, I eventually realised that the sticky situation I had found myself in was the onset of an anxiety attack.

Anxiety is a disorder of varying forms. People may be affected by generalised anxiety disorder – characterised by excessive worrying (often without an identifiable trigger), a specific phobia or panic disorder, in which terror can overwhelm a person without warning. The sufferer experiences physical and mental symptoms of distress that include a feeling of restlessness, shortness of breath, and agitation, exacerbated by the uncontrollable spiralling of their thoughts, which can often be self-deprecating and debilitating.

I had been in this situation before. The rising tension makes for an overwhelming and often paranoid experience, but my awareness of the fact that I was indeed having an anxiety attack was enough to know that this feeling wouldn’t persist for an indefinite amount of time; it would eventually pass, as all anxiety attacks do.

After roughly half an hour of concentrated breathing, conscious changes in thought patterns and eventually moving to a quieter spot, I had managed to calm down.

Though I had managed my anxiety attacks before via similar means, I was curious to know – what exactly was happening during my attacks? What can specifically be done while they’re happening? And could the panic and jitters of anxiety ever be beneficial?

The biology of an anxiety attack

The biological basis of an anxiety attack is tied to the actions of the body’s autonomic nervous system – a division of our nervous system that, without conscious control, regulates our bodily organs and systems.

When stimulated, the autonomic nervous system kicks into gear, causing the release of adrenaline into the bloodstream. And that’s when things flare up.

Pulses of adrenaline are produced in response to a stimulus  one that causes the body to kick into a defensive fight-or-flight mode. With anxiety, these stressful stimuli include excessive thoughts, heightened worries, trauma triggers and objects posing as threats. Even subconscious phenomena have been proposed as provokers; it is known that sufferers may wake up from a night’s sleep in a bout of panic. The stimuli add to the existing level of distress, making a person’s breath shallower, often inducing profuse sweating, and initiating a dark foreboding, all in the space of a moment.

Combating anxiety

According to the NHS, there are a number of techniques that can be employed to manage the distressing symptoms of an attack. Staying in a fixed spot, deep breathing and actively issuing a challenge in your mind to the fears on which you may be fixating are crucial things to do in the immediate stages. I wasn’t sure whether in my latest case I had done this instinctively or out of habit from past struggles. Either way, the methods were relieving.

The end of an attack is reached through an eventual depletion of adrenaline, which tells the body that it no longer needs to be on high alert. It brings with it tiredness but a welcome passing of the crisis. However, without a longer-term, pragmatic approach to tackling the disorder, it’s almost certain that an individual will face another intense period of anxiousness. So how should anxiety sufferers manage the issue over a longer period of time?

This is where therapy can be an extremely useful form of intervention. Cognitive behavioural therapy (CBT) is the most common form of therapy for the disorder, with research demonstrating its effectiveness in treating the closely related disorders under the umbrella of anxiety. CBT focuses on a reconfiguring of thought patterns, shifting perceptions and a redefining of negative sources of fear.

Recently, I spoke to David Potts, a CBT therapist, to discuss how therapy can be of benefit. He said: “In therapy we'd work on specifics. It would involve telling yourself what the triggers are. Often people have very negative views about what's happening to them [during an attack]; they'll think I'm having a heart attack or I'm going to die and those kinds of thoughts form a vicious cycle and the panic gets worse.”

According to Potts, being attuned to the occurrence of an anxiety attack is essential in taking active steps to overcome it. It can facilitate the process of calming down, allowing the person in the midst of an attack to separate the thoughts in their mind from the reality of a particular situation.

Therapy can also offer an individualised approach to understanding a person’s anxiety. Potts told me: “Often, from a therapy perspective, we are considering what’s happening to them [the patient] in their lives that lead them to be more anxious than other people. It could include things they’ve experienced in childhood, it could be ways that families are, or it could involve ways that they’ve learnt to manage different emotions.”

Beyond therapy, medication is available to aid anxiety. Appropriate to a disorder that can affect people in various ways, there are different types of medication. Selective serotonin reuptake inhibitors (SSRIs) are the most common form of medication. SSRIs are antidepressants that seek to increase levels of serotonin in our brains – a neurotransmitter thought to be central to the maintenance of mood. Other drugs available (in case of side effects from SSRIs) include serotonin and noradrenaline reuptake inhibitors (SNRIs), pregabalin and benzodiazepines. Though alleviating, medication is something that should supplement forms of therapy, as the pills themselves won’t solve the social triggers and problems that cause anxiety.

As people have increasingly moved towards holistic lifestyles, emphasis on exercise and dietary intake has been elevated. Eating healthier has been linked to reduced symptoms of anxiety, while exercise has been proven to reduce levels of stress in the long run. Reduced stress equates to a reduced risk of an anxiety attack.

Changes to the brain from exercise have been documented too. Researchers at Princeton University found that physical exercise generates excitable new brain cells in the hippocampus – an area of the brain involved in emotional responses. Though the excitability of the neurons would generally be unfavourable (priming the brain for anxiety), researchers found that the impact of exercise was one which had a calming effect, as the exercise was able to switch off the newly-generated, excitable neurons at times when they weren’t required.

When just a ten-minute walk has been shown to offer benefit, there seems to be very little to oppose the implementation of exercise as a form of therapy for anxiety.

Living with anxiety

Perhaps surprisingly, anxiety can be harnessed as a tool of empowerment for some. When it occurs at a smaller scale, it can serve as an informative warning against stressors, and help an individual focus and pinpoint their attention.

As a sufferer, acknowledgement of anxiety seems to be the key to unlocking the resources that can dull its impact. With carefully paid attention, responsibility and mindfulness, the waves of anxiety threatening to drench you can be reduced to smaller, more manageable ebbs and flows.