Archive for the ‘cybersecurity’ Category

300 million dollars out of thin air: Bitcoin turns four and approaches $30 value.

Money is a delusion – but a delusion that works as long as it’s shared. The value of a U.S. dollar was once tied to a government guarantee that you could, at any time, exchange it for a quantity of precious metal – but since America officially abandoned the gold standard in 1971, its value is now more or less rooted in its ubiquity. If large swathes of people decided they would no longer accept it, it would suddenly be worth a lot less.

The Bitcoin - global anarchist financial revolution, giant scam, great investment or some ...

Government currencies like the American dollar are also a bit odd, in that a government can decide to print more money at any time to serve its own purposes. This is very handy for the government, but through inflation it causes each individual dollar to be worth a bit less each time.

It’s a problem that will persist with pretty much any currency that’s managed by one central organization. And distrust of these organizations is one of the strongest driving forces behind alternative currencies like Bitcoin. The idea is to create an entirely new currency that’s widely accepted, fairly stable, and more or less inflation-proof because the money supply can’t be increased at the whim of some central figure.

So how do you create a new currency?

The answer, more or less, seems to be that you simply build it, convince people it’s worth something, and give them an incentive to get on board.

Bitcoin was first proposed in 2008 – a fortunate time, since faith in the global banking hegemony and government control of money was crashing as the global financial crisis kicked in.

It was designed by “Satoshi Nakamoto” – a pseudonym, possibly for a group of anonymous designers who have never revealed themselves. Bitcoin’s key selling points from day one were solid, trustworthy and transparent technology, a controlled money supply and a built-in early adopter bonus that made them very cheap to produce while the currency got off the ground.

The third point is probably the most important; Bitcoins are produced by getting a computer to crunch complex algorithms. Once a certain amount of work is done, you create a brand new bitcoin. That amount of work was very quick and easy early in the piece, so early adopters were able to churn out large numbers of coins. But the algorithms are designed to become progressively more difficult over time, until a point some time around 2040 when the supply will be capped forever at around 21 million bitcoins.

Effectively, if you got in early, you could use your personal computer to churn out thousands of bitcoins – giving early adopters a heavy incentive to find things to do with them. But now, the Bitcoin mining process is already so difficult that you need a specialized rig bristling with dozens of graphics cards to make any decent progress.

This gradual restriction of supply is what Bitcoin advocates maintain makes the currency inflation-proof. There’s no such thing as “quantitative easing” in the Bitcoin world. In fact, as the money supply crawls to a stop, the currency should deflate over time, making each bitcoin increase in value.

Of course, it also makes the Bitcoin system look a lot like a pump and dump scam as well – early adopters mined huge amounts of bitcoins early on for very little effort, and stood to gain huge amounts of cold, hard, non-virtual cash if they could convince other people the bitcoin was worth something. But let’s backtrack a little before we explore that.

How bitcoins work

The most important feature of a digital unit of currency is that ownership can be authenticated, and the money can’t be spent twice. You can ensure this by keeping a central ledger somewhere of who owns exactly which bitcoins – but the genius of the Bitcoin system is that this ledger is completely decentralized and run as a peer-to-peer system like the BitTorrent network.

When you make a transaction, the Bitcoin network sends out a notice and a confirmation process takes place. In this confirmation process, the transaction history of the particular bitcoin being moved is checked against the records of a number of different nodes in the system. Only when several nodes “agree” that the bitcoin is authentic does the actual transfer occur.

A bitcoin itself is just a string of letters and numbers – the system would be vulnerable to all sorts of hacks if it wasn’t for this peer-to-peer tracking system. And although the bitcoin’s entire transaction history is sent around the network for checking, it’s only a series of bitcoin wallet addresses that are used, rather than account names – making it virtually impossible to work out exactly who owned the coin in the real world.

This also makes it virtually impossible to prove you owned a bitcoin if you misplace its alphanumeric code. If you delete your wallet file or forget your passwords, your money is gone forever.

Getting money in and out of the Bitcoin system

First off, you need a wallet. You can either download the original Bitcoin client and run it on your own computer, or you can trust a third party online service like MyWallet to take care of it for you.

From there, there’s a number of ways to buy bitcoins with regular cash. You can strike a deal directly with another bitcoin owner over at Bitcoin OTC, use a big-time currency exchange like Mt.Gox or any number of others.

If you want to keep your identity as far away from the transaction as possible, you can use a cash deposit service like bitinstant – you notify the service that you want to buy X dollars worth of bitcoins, they give you some deposit details, and you simply walk into a bank (or another deposit location like a 7-11 or Walmart store) and drop off the cash with a given account and reference number. Once the transaction is verified, the bitcoins are transferred to your ownership. The process takes less than an hour and costs you a four percent fee.

To get money out of the system, you’ve got to effectively sell your bitcoins. The easiest method is probably to register with a big exchange, sell your coins and have them transfer the money to your local bank account.

There’s other services that will pay you back through Paypal, vouchers and all sorts of other options – and if you want to keep things totally anonymous, you can always strike a deal directly with somebody who wants to buy the bitcoins, and dodge the transaction fee in the process.

What’s a bitcoin worth?

Graph showing the value of 1 Bitcoin from 2009-2013. Created at bitcoincharts.com.

As I write this, close to US$30. Here’s a live update. The currency is still pretty volatile, its value changes constantly. If you’d bought yourself a bitcoin in December last year, you’d have doubled your money in the last 50 days.

That’s nothing compared to the gains the early adopters have made, though – bitcoins were worth literally nothing back when the system went online in January 2009. They were trading for less than US$0.10 back in September 2010, and only broke the US$1 mark in February 2011. They spiked up to US$27 in May 2011, then crashed down to US$3.50 within a couple of months when Mt.Gox and MyBitcoin were hacked, resulting in a leaking of user information and some straight-up bitcoin theft.

Right now, it’s riding higher than it ever has and spiking upwards like crazy, and there’s every chance you can still make money as a speculator – as well as every chance that it’ll crash again before 2014.

Read more…300 million dollars out of thin air: Bitcoin turns four and approaches $30 value.

Watch out for identity theft

Identity theft has become one of the fastest growing crimes in North America. There are a number of ways identity theft can happen:

  1. Card theft: theft of credit cards from wallets or purses or even newly issued cards from your mailbox.
  2. Shoulder surfing: looking over your shoulder for your Personal Identification Number and using a fake ATM device to read your debit card’s data.
  3. Skimming: using a special device to swipe your credit card at a restaurant or gas station which records the personal information from your card.
  4. Spoofing: creating fake websites or emails that ask for credit card information.
  5. Theft from databases: identity thieves stealing large databases of personal information.

There are steps you can take to protect yourself:

  • Sign all credit cards when you receive them and never lend them to anyone.
  • Cancel and destroy credit cards you do not use and keep a list of the ones you use regularly.
  • Carefully check each of your monthly credit card statements and your bank statements. Immediately report lost or stolen credit cards and any discrepancies in your monthly statements to the issuing credit card company or bank.
  • Shred or destroy paperwork you no longer need.
  • Do not give personal information out over the phone, through the mail, or over the Internet unless you are the one who initiated the contact and know the person or organization with whom you are dealing.

If you are a victim of identity theft, immediately contact your bank or credit card company, your local police and the OPP/RCMP Phonebusters Unit at 1-888-495-8501, E-mail: info@phonebusters.com

http://www.dynamic.ca/eng/learning/Personal-Finances/Consumer-Watch-Out-For-Identity-Theft.asp

The RSA leak exposes the dirty under-belly of the commercial security industry, it’s a story that sounds like it’s straight out of Hollywood.

Then – We’ve packed this episode full of Audience questions, and our answers. Find out how to plan for failure, start building a website….

All that and more, on this week’s TechSNAP!

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Tonight I was asked “Why do I hate microsoft so much?”Well it isn’t that I hate microsoft per say, it wasn’t all that long ago I was a MS shareholder. And for a long time I was a frequent attendee at any and all MS events I could get into. For the longest time I would always be using (and pushing the) the latest and greatest for MS.

Then three things came together to change everything! First, even with the latest and greatest from MS, I was having increasing computer problems….crashes, viruses, malware, popups, etc… And more and more I was discovering features would not work. Sometimes they weren’t even features, just the claimed (by MS) benefits that I (as a user) would reap and make my computer usage new and exciting!

In the end it didn’t happen. I would discover that some additional (and expensive) piece of software was needed. Like Exchange to use the best features of Outlook. Or the feature sounded great but would have little use to an individual. Like Document Collaboration in Word, best used in a Fortune 500 environment.

The second thing was programming. I tried very much to program and web development using MS technology and tools. However I kept finding they had overly complicated everything. Look at embedding an ActiveX component in a web page vs embedding flash. Or connecting a database in ASP vs PHP.

PHP and javascript opened my eyes to the world of open source…

The third thing. Once I took a look at the open source world I realized there is a better way. Not only have I found the software to be better. The philosophy of open source makes way more sense then the MS way.

No one ever buys MS software. You effectively rent it. And under VERY restrict terms. The way MS uses EULAs, copyrights, and patents just isn’t right.

Just image what the world would be like if we used the same model for applying intellectual property rights that we use for software to everything else. Taking in to consideration the statutory life of a patent relative to the life cycle of a piece of software.

Ford Motor Co. wouldn’t bother building cars, they’d just be licensing the assembly line. Only GM cars would have seat-belts. All telephones would be made by Bell.

Libraries couldn’t exist. How dare someone think of buying just one copy of a piece of copyrighted work. And then sharing amongst a community! And what about schools and their textbooks? Oh well! Schools and libraries haven’t contributed much to society! Who needs them as long as Bill Gates gets his royalties.

Just look at how MS treats users

The philosophy of open source, may be great from an academic view point, but what about the reality? Well the software is just simply better.

In the twenty or so machines I either own or am the sole tech support for… When all was MS based I had to deal with an average of 1000 infections per week! Most didn’t cause any damage because I religiously ran virus/malware/spyware scanners. It was happening with multiple firewalls in place. Then I made one small simple change…. I locked down two programs from being used, Internet Explorer and MSN Messanger. Replaced them with alternatives, Opera and Gaim. From that point on I have NEVER had to deal with more the two infections in one single week!

Most tech-savy computer users I know have half their task bar filled with notification icons for different security/virus scanning/firewall software. I saw one once were with no open/running apps, just the desktop… 18 out of 40 processes were security related! That’s a HUGE allotment of system resources allocated just to security!

It’s late, and this post is long. Another day I will rant why Vista is the best marketing Linux could have ever asked for. Cheers cheers

  

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“Windows [n.]
A thirty-two bit extension and GUI shell to a sixteen bit patch to an eight bit operating system originally coded for a four bit microprocessor and sold by a two-bit company that can’t stand one bit of competition.”

  

To contact me, check out my Contact Me page.

To Learn more about me, check out my About Me page.

Are you practicing safe web surfing?  Probably not, most people don’t.  Many ‘think’ they are safe.  “I have virus filters and spam filters, and I don’t go to websites I don’t know.”, paraphrases the response I get from most people.  I hope you don’t consider a bug screen over an open window as contributing to your home security.  Bug screens keep bugs out of your house, not crooks!.  And a bug screen doesn’t stop the mosquitoes from bitting when you’re outside.  Viruses and spam can be used to steal your identity or personal information, but they are not the only threats to your cybersecurity.

The single largest cybersecurity threat is DOS.  Not the very old operating system that is still at the heart of Windows.  DOS, Deficit Operator Syndrome.  Computer users behaving badly.  Sorry, but I have never found any fix, patch, or work around for this issue.  Best just to keep your distance and hope it isn’t contagious.

The second largest, is Internet Explorer,  Microsoft’s web browser.  This you can’t fix, but you can replace.  And it’s not just Internet Explorer (IE), but any program that uses / accesses IE’s libraries for rendering web content.  This would included: Outlook, Outlook Express, and Windows Messenger (aka MSN Messenger, aka Windows Live Messenger).

First let me explain my reasoning.  Microsoft made two conscious choices that have opened and left open huge security holes in IE.  First, instead of having code to render web content included in every program that needs it, they have all the different programs simply start a background mini session of IE.  The idea being why have the essentially same code included into a whole lot of programs.  Two problems: One, any bugs or holes in IE are automatically in everything; Two IE is huge bulky inefficient code in the first place.  This is like saying “Let car pool! To be more efficient”, then doing so in a Freight-liner pulling a full trailer.  The second problem is ActiveX.  which are mini compiled programs that run inside web pages and IE.  Microsoft allows ActiveX code to have direct access to your computer.  This is unlike other similar technology (Java, Javascript, Flash, Shockwave, Quicktime plug-in) which are effectively restricted to the browser space.

The solution is to stop using IE and programs that utilize IE libraries.  There are numerous other web browsers: Firefox, Chrome, Opera, Safari, SeaMonkey, etc….   Just don’t switch to one that uses IE as it’s core, like Avant, Bento, Enigma, Maxthon, Realplayer, MSN Explorer.  These are effectively re-skinned versions of IE.  I often use multiple browsers simultaneous (Don’t ask why, that’s a whole other post!), but Firefox tends to always be one that is open.

Switch to Firefox (any other browser, that doesn’t use IE to render web content).  Sometime in the near future I’ll write part 2.  Were I will explain how to make Firefox ALOT more secure then it comes standard.