This week, an internal FBI report was leaked, detailing the Bureau's concern about the virtual currency Bitcoin and its potential to be exploited by criminals for money laundering and other scams.

Bitcoin is unique because it is the only decentralized, P2P network-based virtual currency. The way itcreates, operates, and distributes bitcoins makes it distinctively susceptible to illicit moneytransfers, and manipulation through the use of malware and botnets.

The anonymous transfer of virtual currency Bitcoin's payment network allows means two people can complete an exchange of goods without ever having to know anything more about each other than a 36-character string of numbers and letters, a Bitcoin address or account.

This means, then, that it is relatively easy to use Bitcoin anonymously for the purchase of illegal goods, like narcotics or kiddie porn, as long as a proxy is used to anonymize the IP address. To that end, Bitcoin may also prove a favorable network to terrorists, human traffickers and the like. And, of course, like so much else, it is not immune to hackers.

Curiously, further down in that same report, a bullet-point list advises how a Bitcoin criminal might best protect his or her anonymity?! Ah, well. They didn't anticipate the document leaking, I suppose.

In any event, this is really most interesting because of its potential implication in a case of self-produced and distributed kiddie-porn, should any of those stripping-for-Bitcoins babes turn out to be underage.
[Wired]

Bitcoin-FBI

Since so much has been made over the past year of World of Warcraft's declining subscriber numbers, it's only fair to point out that at last count yesterday morning, the game's playerbase had stalled at 10.2 million, exactly where it was at last count. With an expansion to come later this year, that number may well go up again!

A GameStop source has told Kotaku that, given the relative failure of the company's push into online PC sales via its purchase of Impulse, it's now trying something a little more practical. Namely, selling Steam vouchers in its bricks-and-mortar stores.

After all, if you can't beat 'em, skim a little of their money off the top instead.

The vouchers will apparently go on sale on May 15, and are reportedly a "kind of a sensitive issue" between GameStop and Valve owing to the fact it's an awkward way for either party to be making money.

We've contacted Valve to confirm, and will update if we hear back.

Expo Fighter is a 2D fighting game in development that leaves dojos, headbands and scantily-dressed Japanese women at the door, instead focusing on combat between...video game company executives. On the stage at E3.

That's the good news. The bad news? It's asking for $18,000 as a crowd-sourced project, which for a browser-based, free-to-play title seems a bit much. That said, creator and sole developer Justin Meagher is going to make the thing anyway; how much money he gets will impact the final quality, and he promises to contact each backer should he fall short to confirm whether they still want to pay him or not.

Still, it's a fun premise, and the teaser trailer above looks great. Now all it needs is a massive crab, bored translator and one mirrion troops.

EXPO FIGHTER - E3 Inspired Fighting Game [indiegogo]

Look at the detail on this statue of Alduin, the badass villain of Elder Scrolls V: Skyrim. The plated scales, the individual teeth, the glowing red eyes, the curled tongue. It's insane.

Now, know that the inscription on the base reads "Happy Birthday Tim".

Yup. This is a cake.

It wasn't meant for looking. It was meant for eating. Which means this thing doesn't even exist anymore. There's these photos, Tim's memory of the most amazing cake he'll ever see, let alone eat, and...that's it.

I should be sad, but at least we have the photographic record.

It was made of four 13″x18″ sheets of chocolate cake, soaked in strawberry syrup, and sandwiched with bittersweet strawberry ganache (5 lbs of chocolate). Alduin's core is made of modeling chocolate. His scales, horns, and spikes are made from gum paste. The double-sided wings are half-and-half (fondant/gum paste).

Alduin the World Eater Dragon Cake [Baking OBsession]

Of all the teen movies that crawled out of the 1980s, High School USA was far from the finest. And yet here we are, watching a scene of it, right here on Kotaku.

Why? Because Michael J Fox is in it, looking divine. And because it reminds us Crispin Glover has always been a little creepy.

The word "arcade" is these days synonymous with video games, but it wasn't always that way.

In 1968, there was no such thing as a consumer video game. So arcades had to make do the old-fashioned way. With pinball machines, novelty amusement machines and lightgun games. There was even room for a fortune teller.

These amazing photos were taken in 1968 at Kansas City's Wonderland Arcade ("The World's Finest Arcade!"), and show what such a place looked like not only before video games, but before video games made everyone turn out the damn lights.

Also, $0.40 cheeseburgers? Yes please.

Wonderland Arcade, Kansas City, MO - 1968 [imgur, via Arcade Heroes]

Hello Kotaku. We're at that midway point again, where the beginning of the week becomes the end of the week, and round and round we go.

Welcome to the open thread. Here, as always, are some things that you might enjoy

• "Teacher vs. Bieber" - You mean you're not the least bit curious about what this is?
• These are the steps involved in writing an email - Yep.
• You may have heard that Obama came out in support of Gay marriage - So that seems like something worth talking about in an open-thread-type post...
• 10 Kentucky bands you should listen to now - We're always posting about NY and SF in here, so here's to you, Kentucky.
• Simon Pegg and Edgar Wright are getting going on their third film in the "trilogy" they started with Shaun of the Dead and Hot Fuzz. Okay!
• Joss Whedon writes a funny missive about the accolades he's been receiving - As one who has been giving more than a few accolades to the man myself, this made me laugh.
• Warzone robot makes for a super cute wedding - I wonder if any of the mechs from Black Ops II could get in on this.
• Watch this awesome 60-year-old woman tear up a drag strip - Man, this is great.
• The Harvard Baseball team lip-dubs "Call Me Maybe" - The unabashed love of this song is one more thing they have in common with Jason.

And that's that. Have good chatting!

Perhaps you heard today that Ken Levine and Irrational's much-hyped, ambitious Bioshock Infinite has been delayed until 2013.

Why was it delayed? Was it because it's a really ambitious-looking game that needs more time to be completed? Was it because they decided to add multiplayer? Or was it because the game is actually a flaming train-wreck that has been limping along for years, losing team members like they're going out of style while careening towards the release of a lackluster product that will disappoint the entire world?

In other words, has Bioshock Infinite become… Duke Nukem Forever?

That may seem unlikely, but people certainly had no trouble running to twitter to make the comparison. Partly because, as you may have noticed, the games' two names have something in common.

(I like that one. So straightforward!)

(Because someone had to change things up!)

I like that that one came from a twitter-user named "When it's done."

And now, my personal favorite...

WAKE UP, SHEEPLE!

Maybe the Pandaren race coming to World of Warcraft isn't cute enough for you. Or maybe they're too cute already. Wherever you fall on this crucial issue, there's one thing you need to know.

Those pandas? They can dance now.

According to MMO Champion, the latest beta patch enabled the male and female Pandaren warrior monks to get down with their funky selves.

The guy Pandaren appears to be hot-footing it in the style of "Party Rock Anthem" while the lady panda hops in the unmistakable choreography of the Caramelldansen. Seems goofy that she makes bunny ears on top her already ample panda ears, but such are the demands of art.

Pandaren Dances [MMO Champion]