Keep big tech out of finance? Seriously!

As Off the Chain writes, this week is a big one for crypto. It may even become a defining week, when at some point we look back at its events.

The Facebook hearings in Congress play a major role in this. David Marcus has faced two different committees, neither of them over-informed about cryptocurrency in general. He sat like one man alone holding back the tide of ill-informed views held by America’s lawmakers. For example, they (and the President) are still convinced that crypto is primarily used for criminal activity, when by now we all know that cash is king in the drug world for starters.

However, while Elizabeth Warren probed the issues of privacy and trust, ever implying that it would be almost impossible to trust Facebook after the Cambridge Analytica scandal, the hearing that most concerned crypto’s supporters was that with the Banking Committee.

Old men backed by banks

As numerous journalists have noted, the average age of a US Senator is 61.8 years old, and most of them are not open-minded enough to grasp the innovations that blockchain and crypto can bring to the United States. Most of them have benefitted financially from the old system, so why change it. Who cares about the future when ‘I’m alright Jack’.

Keep Big Tech Out

These hearings were significant, but even more noteworthy was information leaked over the weekend regarding a bill that has been drafted by Congressional representatives aimed at preventing large technology companies from becoming financial institutions. It is literally titled “Keep Big Tech Out of Finance Act” and contains a number of extremely worrying statements, with potentially dangerous ramifications.

The Act targets companies like Facebook, Amazon and Uber, but totally ignores the fact that Goldman Sachs and JP Morgan are engaged in the same blockchain-related projects as the Silicon Valley boys.

And consider this: the same lawmakers who are participating in the Senate Banking Committee hearing, are some of the lawmakers who have received significant donations from the banking industry. These guys are hardly going to make changes that have a negative effect on banking.

The cost of prohibition — America loses

They are also proposing to prohibit digital currencies and this would put the United States and US-based technology companies at a significant disadvantage. There was some irony in Marcus being asked as to why Calibra had registered in Switzerland rather than the USA. There’s your answer, although Marcus simply said they were already an American company.

Several journalists have also noted that this Act proposes a daily penalty of $1 million for any tech company flouting its rules. Significantly, most observers agree that Facebook can afford to pay that fine with ease, and that they will probably just see it as the cost of doing business.

If the United States cannot get behind digital currencies it will lose out to Southeast Asia where there is widespread adoption: instead of Facebook’s Libra becoming a leader, AliPay and WeChat Pay will be the platforms used internationally.

It looks like the Big Tech companies in the US are going to have to play ball with Wall Street, something they have managed to avoid in the past. Will they abandon their attachment to liberal principles and embrace those of the less principled occupants of the Street? Let’s see. But I doubt it will be possible to keep them out of finance in the long term.

Apple’s iPhone 11 gets the thumbs down

The new iPhone isn’t even available yet, but leaks have revealed that Apple fans aren’t happy with the “new, ugly iPhone,” but they are trying to talk it up by claiming that once you use the phone, you’ll forget the aesthetics.

Who would ever have thoguth that Apple could produce a product that anyone would describe as ‘ugly’. The company has built its reputation on being ‘beautiful’.

Gordon Kelly writing for Forbes gets to the crux of the story. He revealed that Ben Gaskin, a popular tech designer, was able to build physical models of Apple’s iPhone 11 and iPhone 11 Max based on leaked details of the schematics and the renders.

When Gaskin revealed what they looked like, he asked, “Did you get used to this design already?” The response was quite remarkable, with almost 900 comments and the vast majority of them were overwhelmingly negative with the highest ranked responses including: “Horrible design… it looks soo awkward” and “Steve Jobs would’ve fired everyone.”

What is the problem?

It’s the camera! It is like a carbuncle on the back of the phone, yet as Kelley says, “the irony is this most hated feature is likely to be the iPhone 11’s headline upgrade.” Basically, Apple is sidelining style for substance with both new iPhones, which have the potential to shoot both models back to the top of the smartphone camera charts. This is a position that Apple lost a while back.

The new phones will also have better batteries, which is a plus for many users. But, it is abandoning its leading 3D Touch technology, which means the iPhone 11 and 11 Max will deliver an inferior experience to that of every iPhone since the iPhone 6S. That is a strange state of affairs for the trailblazers in smartphone tech. Furthermore, the front of Apple’s new iPhones will remain unchanged for the third generation in a row.

Kelly suggests you wait until 2020 for the more exciting iPhone and forget this year’s iPhone and XR2 — it sounds like sensible advice.

What’s up with Whatsapp?

Image result for whats app

You may have seen the numerous press articles this week advising you to update your Whatsapp. The advice came from Whatsapp, which has 1.5 billion users and is owned by Facebook.

The reason for asking people to update the app on their smartphones was the discovery that hackers had been able to remotely install surveillance software on phones via a “major vulnerability” in the app. According to the BBC, WhatsApp said the attack targeted a “select number” of users and was orchestrated by “an advanced cyber-actor”.

Facebook discovered the flaw in the technology earlier this month. It threatened to break Whatsapp’s promise to its users of being a secure” communications app with messages that are end-to-end encrypted. This means they should only be displayed in a legible form on the sender or recipient’s device. However, the surveillance software would have let an attacker read the messages on the target’s device.

The Whatsapp team found a fix for the problem last Friday, after which people could download the new app without the ‘bug’, although some users appeared to be disgruntled that Facebook hadn’t published any notes about the fix itself.

It is likely that those whose phones may have been targeted by the hackers are “Journalists, lawyers, activists and human rights defenders,” Ahmed Zidan of the Committee to Protect Journalists told the BBC.

How did hackers use the security flaw?

One thing they did was use Whatsapp’s voice call function to ring a target’s phone. Even if the target didn’t answer the call, the surveillance software was installed on their phone. Furthermore, the call was removed from the call log, so the person who didn’t answer it, wouldn’t even see that they had missed a call from an unknown number.

Facebook and Whatsapp told the press on Monday: “The attack has all the hallmarks of a private company reportedly that works with governments to deliver spyware that takes over the functions of mobile phone operating systems.”

It also issued a briefing to security specialists stating, “”A buffer overflow vulnerability in WhatsApp VOIP [voice over internet protocol] stack allowed remote code execution via specially crafted series of SRTCP [secure real-time transport protocol] packets sent to a target phone number.”

The attack was old-fashioned

As Professor Alan Woodward pointed out, this is a “pretty old-fashioned” method of attack. He explained what happened: “A buffer overflow is where a program runs into memory it should not have access to. It overflows the memory it should have and hence has access to memory in which malicious code can potentially be run. If you are able to pass some code through the app, you can run your own code in that area. In VOIP there is an initial process that dials up and establishes the call, and the flaw was in that bit. Consequently you did not need to answer the call for the attack to work.”

We don’t know how many people were targeted in this attack, and there are some questions that remain to be answered about whether updating the app on your phone effectively removes the spyware in its entirety. Furthermore, WhatsApp has not said whether the attack could extend beyond WhatsApp and reach other personal data on the phone.

But, even if you are not a journalist, a lawyer or a human rights activist, download the new version of the app, because as always it is better to be safe than sorry.

 

 

 

 

 

 

 

Tech innovation needs to find a balance in 2019

2018 put the spotlight on technological innovation, much of it venturing into uncharted territory where regulations will be needed before long. Amidst all the newcomers and startups, one old friend stands out as becoming more and more integral to our way of life, and that is the Internet.

Its reach into every industry is unstoppable, and as we move on from an app-centred era, there is going to be more engagement between policymakers and the technology innovators.

Steve Case, in his excellent thought piece at Medium, sums up the scenario:

“Investors will need to understand policy as well. In the Internet’s First Wave, the focus was on technology risk — can they build it. In the Second Wave, the key risk factor became market risk — there was little doubt it could be built, but considerable concern over which of the many app competitors would break through. In the Third Wave, policy risk will be front and center — can the entrepreneurs navigate the complex regulatory waters to successfully bring their product or service to market.”

Indeed, investors, entrepreneurs and governments will all be trying to find the right balance between regulation and innovation, as Case points out. This is necessary for the protection of society whilst also being open-minded about the potential of technology to improve life.

But what happened in the tech world during 2018 that has brought the issue of regulation versus innovation into focus? First there were the revelations about Facebook’s use of user data, which brought down on it the wrath of governments, as well as users. This is likely to mean the emergence of regulations to rein Facebook in.

There were also some serious data breaches affecting consumers. Privacy and security are no longer a given, which means consumers are no longer as confident when using online service providers.

Self-driving cars were a great story until a pedestrian got killed. They are still on the agenda for development, but now “innovators and policymakers need to work together to establish practices for safety and security (including cybersecurity),” Case suggests.

Space exploration got more interesting as it suddenly broke out of being controlled by NASA and other government-related agencies. This sector went commercial with SpaceX, and it is an exciting opportunity for innovation, but again we will need regulations for commercial ventures that protect the sector without stifling innovation.

2019 will be a year of finding the balance in these and other tech sectors.