With a number of high-profile cases of fraud, theft, and technical incompetence against the bitcoins, it seems like cyber criminals are looking to scam unsuspecting customers.
Blockchain is Bitcoin's most popular bitcoin wallet and block explorer. It is a central part of the Bitcoin system that includes a log file in which all bitcoin transactions are recorded. It stores the wallet data in encrypted form and runs on privately owned dedicated hardware.
In an discussion on the Microsoft discussion boards, a user go by the name 'edc678' claimed that Microsoft's Security Essentials is showing alerts of the signature of the STONED virus in the Bitcoin BlockChain, which could only allow an attacker to write small chunk of text to accompany user transactions with bitcoin.
The virus does nothing but popped- up a boot message telling users "YOUR COMPUTER HAS BEEN STONED" and the users of Microsoft Security Essentials who are using blockchain are getting a large number of false-positive warnings from their software. MSE inevitably recognizes the signature for a virus continuously reporting it to the user as a threat.
25 years ago, "DOS / STONED" was a rather harmless fellow, but not as complex as today's viruses are. It is a boot sector computer virus believed to developed in New Zealand in 1987. The infected computer will show a boot message "Your PC is now Stoned!" It was one of the very first viruses largely spread.
Every time the blockchain is deleted by the virus scanner, the Bitcoin client begins re-download the missing blockchain again.
The user who began the discussion remarks only on the inconvenience of getting Microsoft Security Essentials continuous virus warnings, "as its constant alerts of finding threats in the blockchain is (sic) not only worrisome, but can create panic and negative perception of bitcoin as a whole, damaging its reputation and annoying users."
Update: Microsoft replied on the same discussion, 'Thanks for your message. We are aware of the issue and have made changes to the signature that should prevent this from happening.'
Since its only the virus signature which is identified by Microsoft's Security Essentials (MSE) and not the virus itself, so there is reportedly no threat to the users of blockchain from this particular malware sample.
But the incident highlights the potential threat related to Bitcoin, i.e. For every Bitcoin transaction, users can send a small bunch of data to Blockchain which can never be removed, and this feature has been exploited apparently to accommodate a virus in the blockchain.