Lecturer Argues Cryptocurrency Should ‘Die in a Fire’, Predicts Implosion

Nicholas Weaver is a senior staff researcher at the International Computer Science Institute and lecturer in the computer science department at UC Berkeley. But he’s also a raging cryptocurrency skeptic, arguing that cryptocurrency is useless and destructive, and should “die in a fire.”

In a recent interview in Current Affairs he promulgates what he calls Weaver’s Iron Law of Blockchain. “When somebody says you can solve X with blockchain, they don’t understand X, and you can ignore them.” So for those pushing cryptocurrency for “Banking the unbanked,” Weaver points to M-Pesa, a payment system Vodafone started in Kenya in 2007 “about the same time as Bitcoin…”
It has eaten the Third World. It’s huge. Because it just basically attaches a balance to your phone account. And you can text to somebody else to transfer money that way…. So even with the most basic dumb phone you have easy-to-use electronic money. And this has taken over multiple countries and become a huge primary payment system. [Whereas] the cryptocurrency doesn’t work.”
Weaver also contends that when companies say they accept payments in Bitcoin, “They’re lying.” (They’re using a service which pays them in “actual money” after performing conversions on any Bitcoin proferred-up by a customer.) He believes cryptocurrency is only seriously used for payments for ransomware and drug deals — the things that non-decentralized currencies are legally obligated to block.

The reason I’ve gotten so sour on the cryptocurrency space is the ransomware. It’s doing tens to hundreds of billions of dollars worth of damage to the global economy. And it only exists because people can pay in Bitcoin.

Weaver also believes cryptocurrency lets venture capitalists “carry out securities fraud as a business model” when they sell one of their startup’s tokens to retail investors.
This is blatantly an unlicensed security. This is blatant securities fraud, but they didn’t commit the securities fraud. It was just the companies they invested in that did the securities fraud, and the SEC has not been proactively enforcing this. They only retroactively enforce against the initial coin offerings after they fail…. and when things fail, the only people to prosecute are the companies, not Andreessen Horowitz itself. So they’ve been able to make securities fraud a business in such a way that they are legally remote, so you will not be able to throw them in jail….
The SEC has the authority to stop those proactively rather than reactively. They choose not to…. Basically, there’s a fear among regulators — that I think started in the ’80s — of being accused of “stifling innovation.” There’s no innovation to stifle. So regulate away.

He’s also skeptical of cryptocurrency’s other supposed advantages. Weaver argues cryptocurrency incentivizes green power “the same way that a whole bunch of random shootings would incentivize bulletproof vests.” And even as an investment vehicle, Weaver sees it as “a self-created pyramid scheme.”
[Y]ou have to keep getting new suckers in. As soon as the number of suckers dries up, it collapses. And because it’s not zero-sum, but deeply negative-sum, there are actually a lot of mechanisms that can cause it to collapse suddenly to zero. We saw this just the other day with the Terra stablecoin and the Luna side token.
So when asked for the future of cryptocurrency, Weaver predicts “It will implode spectacularly.” (By which he means it will “collapse greatly.”)

The only question is when. I thought it would have actually imploded a year ago. But basically, what we saw with Terra and Luna, where it collapsed suddenly due to these downward positive feedback loops — situations where basically the system is designed to collapse utterly and quickly — those will happen to the larger cryptocurrency space….
[T]he Washington Nationals just the other day started doing a lot of tweets for their business relationship with Terra. That was $5 million for five years prepaid in advance in cash. So for the next five years, the Washington Nationals are obliged to hype a cryptocurrency that failed spectacularly already.

Thanks to Slashdot reader sdinfoserv for sharing the article…

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Avoiding Sanctions with Cryptocurrency? US Govt Files First Criminal Charges

Last week America’s Justice Department “launched its first criminal prosecution involving the alleged use of cryptocurrency to evade U.S. economic sanctions,” reports the Washington Post. They cite a nine-page opinion from a federal judge approving the government’s criminal complaint against an American “accused of transmitting more than $10 million worth of bitcoin to a virtual currency exchange in one of a handful of countries comprehensively sanctioned by the U.S. government: Cuba, Iran, North Korea, Syria or Russia.

“In the ruling, the judge called cryptocurrency’s reputation for providing anonymity to users a myth.”
He added that while some legal experts argue that virtual moneys such as bitcoin, ethereum or Tether are not subject to U.S. sanctions laws because they are created and move outside the traditional financial system, recent action taken by the Treasury Department’s Office of Foreign Assets Control [OFAC] require federal courts to find otherwise.

“Issue One: virtual currency is untraceable? WRONG … Issue Two: sanctions do not apply to virtual currency? WRONG,” Faruqui wrote…

“The Department of Justice can and will criminally prosecute individuals and entities for failure to comply with OFAC’s regulations, including as to virtual currency,” Faruqui said. In the opinion, Faruqui wrote that he adopted guidance issued in October by OFAC, which stated that sanctions regulations apply equally to transactions involving virtual currencies as those involving the U.S. dollar or other traditional fiat currencies.

Ari Redbord, who served in 2019 and 2020 as a senior adviser to the Treasury Department’s undersecretary for terrorism and financial intelligence, called the case the first U.S. criminal prosecution targeting solely the use of cryptocurrency in a sanctions case. He said the ruling made clear such conduct is traceable and “immutable — in other words, transactions using cryptocurrency are forever…. What we are seeing is that the Department of Justice is going to actively go after actors that attempt to use cryptocurrency, but also that it is hard to use cryptocurrency to evade sanctions,” Redbord said. “It shows, in many respects, cryptocurrency is not a good tool for sanctions evasion or money laundering.”

In this case, The Register reports, “An unnamed American citizen allegedly used a US-based IP address to run an online payments platform” in a sanctioned country.

The service advertised itself as being “designed to evade US sanctions” and claimed its transactions were untraceable, it was alleged. We’re told the defendant bought and sold Bitcoin using a US-based online currency exchange using fiat currency from a US bank account.

The Post argues that this prosecution represents “a new U.S. criminal sanctions enforcement push targeting cryptocurrency transactions at a time of rising concern over the extent to which illicit actors can use or are using such methods to launder money or do business with countries the United States has cut off from the dollar…”

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Is Social Media Training Us to Please a Machine?

A remarkably literary critique of the internet appeared recently in Damage magazine — a project of the nonprofit Society for Psychoanalytic Inquiry funded by the American Psychoanalytic Foundation. “There are ways in which the internet really does seem to work like a possessing demon…” argues writer Sam Kriss.

“We tend to think that the internet is a communications network we use to speak to one another — but in a sense, we’re not doing anything of the sort. Instead, we are the ones being spoken through.”

Teens on TikTok all talk in the exact same tone, identical singsong smugness. Millennials on Twitter use the same shrinking vocabulary. My guy! Having a normal one! Even when you actually meet them in the sunlit world, they’ll say valid or based, or say y’all despite being British….

Everything you say online is subject to an instant system of rewards. Every platform comes with metrics; you can precisely quantify how well-received your thoughts are by how many likes or shares or retweets they receive. For almost everyone, the game is difficult to resist: they end up trying to say the things that the machine will like. For all the panic over online censorship, this stuff is far more destructive. You have no free speech — not because someone might ban your account, but because there’s a vast incentive structure in place that constantly channels your speech in certain directions. And unlike overt censorship, it’s not a policy that could ever be changed, but a pure function of the connectivity of the internet itself. This might be why so much writing that comes out of the internet is so unbearably dull, cycling between outrage and mockery, begging for clicks, speaking the machine back into its own bowels….

The internet is not a communications system. Instead of delivering messages between people, it simulates the experience of being among people, in a way that books or shopping lists or even the telephone do not. And there are things that a simulation will always fail to capture. In the philosophy of Emmanuel Lévinas, your ethical responsibility to other people emerges out of their face, the experience of looking directly into the face of another living subject. “The face is what prohibits us from killing….” But Facebook is a world without faces. Only images of faces; selfies, avatars: dead things. Or the moving image in a FaceTime chat: a haunted puppet. There is always something in the way. You are not talking to a person: the machine is talking, through you, to itself.

As more and more of your social life takes place online, you’re training yourself to believe that other people are not really people, and you have no duty towards them whatsoever. These effects don’t vanish once you look away from the screen…. many of the big conflicts within institutions in the last few years seem to be rooted in the expectation that the world should work like the internet. If you don’t like a person, you should be able to block them: simply push a button, and have them disappear forever.

The article revisits a 2011 meta-analysis that found massive declines in young people’s capacity for empathy, which the authors directly associated with the spread of social media. But then Kriss argues that “We are becoming less and less capable of actual intersubjective communication; more unhappy; more alone. Every year, surveys find that people have fewer and fewer friends; among millennials, 22% say they have none at all.

“For the first time in history, we can simply do without each other entirely. The machine supplies an approximation of everything you need for a bare biological existence: strangers come to deliver your food; AI chatbots deliver cognitive-behavioral therapy; social media simulates people to love and people to hate; and hidden inside the microcircuitry, the demons swarm…”

So while recent books look for historical antecedents, “I still think that the internet is a serious break from what we had before,” Kriss argues. “And as nice as Wikipedia is, as nice as it is to be able to walk around foreign cities on Google Maps or read early modern grimoires without a library card, I still think the internet is a poison.”

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Wells Fargo Now Accused of Also Conducting Fake Job Interviews

2016: “Wells Fargo Fires 5,300 Employees For Creating Millions of Phony Accounts”
2017: “Up To 1.4M More Fake Wells Fargo Accounts Possible”

The headlines kept coming…. (“Wells Fargo Hit With ‘Unprecedented’ Punishment Over Fake Accounts…” “Wells Fargo Employee Informed the Bank of Fake Customer Accounts in 2006”)

But this week the New York Times reported a new allegation — involving fake job interviews:

Joe Bruno, a former executive in the wealth management division of Wells Fargo, had long been troubled by the way his unit handled certain job interviews. For many open positions, employees would interview a “diverse” candidate — the bank’s term for a woman or person of color — in keeping with the bank’s yearslong informal policy. But Mr. Bruno noticed that often, the so-called diverse candidate would be interviewed for a job that had already been promised to someone else. He complained to his bosses. They dismissed his claims. Last August, Mr. Bruno, 58, was fired. In an interview, he said Wells Fargo retaliated against him for telling his superiors that the “fake interviews” were “inappropriate, morally wrong, ethically wrong.” Wells Fargo said Mr. Bruno was dismissed for retaliating against a fellow employee.

Mr. Bruno is one of seven current and former Wells Fargo employees who said that they were instructed by their direct bosses or human resources managers in the bank’s wealth management unit to interview “diverse” candidates — even though the decision had already been made to give the job to another candidate.

Five others said they were aware of the practice, or helped to arrange it…

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China Is 3D Printing a Massive 590-Foot-Tall Dam, And Constructing It With Without Humans

Chinese engineers will take the ideas of a research paper and turn it into the world’s largest 3D-printed project. Popular Mechanics: Within two years, officials behind this project want to fully automate the unmanned construction of a 590-foot-tall dam on the Tibetan Plateau to build the Yangqu hydropower plant — completely with robots. The paper, published last month in the Journal of Tsinghua University (Science and Technology), laid out the plans for the dam, as first reported in the South China Morning Post. Researchers from the State Key Laboratory of Hydroscience and Engineering at Tsinghua University in Beijing explain the backbone of automation for the planned Yellow River dam that will eventually offer nearly five billion kilowatt-hours of electricity annually. (It’s worth noting that China’s Three Gorges Dam — a hydroelectric gravity dam spanning the Yangtze River — is the world’s largest power station in terms of energy output.) But it’s hard to tell what’s more ambitious: the fact that the researchers plan to turn a dam site into effectively a massive 3D-printing project, or that through every step of the process the project eliminates human workers as they go fully robotic.

In the dam-“printing” process, machinery will deliver construction materials to the worksite — the exact location needed, eliminating human error, they say — and then unmanned bulldozers, pavers, and rollers will form the dam layer by layer. Sensors on the rollers will keep the artificial intelligence (AI) system informed about the firmness and stability of each of the 3D-printed layers until it reaches 590 feet in height, about the same height as the Shasta Dam in California and shorter than the Hoover Dam’s 726 feet. With the largest existing 3D-printed structures rising about 20 feet tall — from houses in China to an office building in Dubai — the exploration of 3D-printed projects continues to expand. Already we’ve seen a 1,640-foot-long retention wall in China, housing and office buildings across the globe, and now the U.S. Army has plans for barracks at Fort Bliss in Texas.

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Foreign Torrent Site Operator Can Be Sued in the US, Court Says

iFixit On Right To Repair’s Remaining Obstacles, Hope

iFixit CEO Kyle Wiens sat down with Ars Technica to discuss the fight for the right to repair. Here’s an excerpt from their report: Tech repairs got complicated in 1998 when Congress passed the Digital Millennium Copyright Act [PDF]. Section 1201 of the copyright law essentially made it illegal to distribute tools for, or to break encryption on, manufactured products. Created with DVD piracy in mind, it made fixing things like computers and tractors significantly harder, if not illegal, without manufacturer permission. It also represented “a total sea change from what historic property rights have been,” Wiens said. This makes Washington, DC, the primary battleground for the fight for the right to repair. “Because this law was passed at the federal level, the states can’t preempt. Congress at the federal level reset copyright policy. This fix has to happen at the US federal level,” Wiens told Ars Technica during the Road to Frontiers talk.

The good news is that every three years, the US Copyright Office holds hearings to discuss potential exemptions. Right to repair advocates are hoping Congress will schedule this year’s hearing soon. Wiens also highlighted the passing of the Freedom to Repair Act [PDF] introduced earlier this year as critical for addressing Section 1201 and creating a permanent exemption for repairing tech products.

Apple’s self-service repair program launched last month marked a huge step forward for the right to repair initiated by a company that has shown long-standing resistance. Wiens applauded the program, which provides repair manuals for the iPhone 12, 13, and newest SE and will eventually extend to computers. He emphasized how hard it is for iFixit to reverse-engineer such products to determine important repair details, like whether a specific screw is 1 or 1.1 mm. […]

Wiens envisioned a world where gadgets not only last longer but where you may also build relationships with local businesses to keep your products functioning. He lamented the loss of businesses like local camera and TV repair shops extinguished by vendors no longer supplying parts and tools. […] He also discussed the idea of giving gadgets second and even third lives: An aged smartphone could become a baby monitor or a smart thermostat. “I think we should be talking about lifespans of smartphones in terms of 20, 25 years,” Wiens said.
The livestream of the discussion can be viewed here.

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Twitter Will Hide Tweets That Share False Info During a Crisis

On Thursday, Twitter announced a new policy for dealing with misinformation during a period of crisis, establishing new standards for gating or blocking the promotion of certain tweets if they are seen as spreading misinformation. The Verge reports: “Content moderation is more than just leaving up or taking down content,” explained Yoel Roth, Twitter’s head of safety and integrity, in a blog post detailing the new policy, “and we’ve expanded the range of actions we may take to ensure they’re proportionate to the severity of the potential harm.” The new policy puts particular scrutiny on false reporting of events, false allegations involving weapons or use of force, or broader misinformation regarding atrocities or international response.

Hoax tweets and other misinformation regularly go viral during emergencies, as users rush to share unverified information. The sheer speed of events makes it difficult to implement normal verification or fact-checking systems, creating a significant challenge for moderators. Under the new policy, tweets classified as misinformation will not necessarily be deleted or banned; instead, Twitter will add a warning label requiring users to click a button before the tweet can be displayed (similar to the existing labels for explicit imagery). The tweets will also be blocked from algorithmic promotion. The stronger standards are meant to be limited to specific events. Twitter will initially apply the policy to content concerning the ongoing Russian invasion of Ukraine, but the company expects to apply the rules to all emerging crises going forward. For the purposes of the policy, crisis is defined as “situations in which there is a widespread threat to life, physical safety, health, or basic subsistence.”

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Canada Set To Ban Chinese Tech Giant Huawei From 5G Network

Canada is planning to ban Huawei from working on Canada’s fifth-generation networks. CBC.ca reports: The move puts Canada in line with key intelligence allies like the United States which have expressed concerns about the national security implications of giving the Chinese tech giant access to key infrastructure. […] Critics have warned that Huawei’s participation in Canada’s 5G networks could give the company an inside look at how, when and where Canadians use internet-connected devices — and that the Chinese government could force the company to hand over that personal information. China’s National Intelligence Law says Chinese organizations and citizens must support, assist and co-operate with state intelligence work. […] Huawei insists it is a fiercely independent company that does not engage in espionage for anyone, including Beijing.

Huawei already supplies some Canadian telecommunications firms with 4G equipment. As Global News has reported, telecommunication companies spent hundreds of millions of dollars on Huawei equipment while the federal government’s review of 5G was ongoing — although that number has waned over the years. It’s not clear whether Ottawa’s decision to bar Huawei from 5G will require those companies to rip out existing Huawei equipment, or whether compensation would be provided.

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