Ransomware and Bitcoin

Bitcoin is a “cryptocurrency” invented in 2009. It is an alternative to hard currency that exists only in the form of computer data stored in digital “wallets” that can be exchanged for goods and services (i.e. transferred to someone else’s wallet) with any party that accepts it as a form of payment.

Bitcoin has gained significant traction and acceptance in the last few years, and given rise to hundreds of competitors, collectively known as “altcoin”. Bitcoin is now legal in most countries, with these exceptions: Ecuador, Bangladesh, Bolivia & Kyrgyzstan.

Cryptocurrency has the advantages of anonymity, speed, and de-centralized control. It is very attractive to criminals as a great new way to launder money and avoid prosecution.

The value of a Bitcoin fluctuates and many have speculated in the currency, most notably the Winkelvoss twins, who have by far the largest hoard, and who recently filed S.E.C. papers to create an Exchange Traded Fund in Bitcoin, with an initial offering of $100 million.  The S.E.C denied the offering, giving Bitcoin and the Winkelvii a major headache. They said they thought it was too susceptible to fraud because of the unregulated nature of Bitcoin.


The value of a Bitcoin today is $1820, up from $75 less than four years ago. Gains in the value of Bitcoin holdings are taxed in the U.S. like any other Capital Gain.


The huge “ransomware” attacks experienced in over 150 countries this week, in which victims had all the files on their computers encrypted by attackers, relied on Bitcoin for payment. The hospitals, utilities, government offices, and all kinds of other industries that were victimized could not use their computer systems until they paid a ransom in Bitcoin.

Some people think the only reason Bitcoin has any value at all is its use in criminal activity. From the link:

If we could flip a switch and eliminate all illegal uses of Bitcoin, there would be nothing left of the cybercurrency.

It may be possible to eventually track down the source of the attacks by following the money, as some tracing of transactions is possible, but it seems unlikely that this will result in the prosecution or even identification of particular individuals.

This week’s ransomware code had three hard-coded bitcoin wallets specified that would receive payments.  An up-to-the minute record of Bitcoin transactions in the three accounts can be found on Twitter by following @actual_ransom. So far, not all that much has been paid into these accounts – less than $85,000 as of this morning. It’s not yet clear whether anyone who has paid the ransom has gotten their files back.

The Guardian had a nice explanation of the whole phenomenon this week, so to learn some more background, check it out.

The GOML summary: Bitcoin is a great innovation for criminals and Winkelvii.



Manning, Obama, Assange, Trump

So President Obama commuted Chelsea Manning’s 35-year sentence for leaking a huge trove of classified information to Wikileaks in 2010. She will get out of jail this May, rather than in 2045.

Of course Republicans criticized the move, despite the fact that the Obama administration has been much tougher in prosecuting cases of leaking information than any other. They have brought ten such actions, more than all previous presidencies combined. John McCain noted that the leaks were espionage that put our country in jeopardy.

Obama displayed his usual thoughtfulness and courage in making this move, citing the facts that Manning’s sentence was vastly longer than the 1-3 year sentences that other such cases yielded, that she has already served seven years, that the information leaked was not, in fact, the most highly classified, and so on.

He also cited the problems Manning’s gender dysphoria created for the prison system and her two suicide attempts in prison. These issues are neither here nor there as far as I’m concerned. Chelsea should have thought of them when she was Bradley. But the commutation does, at least for the moment, spare us the debate over whether the rest of us should be required to pay for the poor dear’s gender re-assignment surgery.

I have no problem releasing Manning at this point for two reasons. The first is that, unlike that Hero of the Left, Edward Snowden, Manning acknowledged her wrong-doing, expressed remorse, submitted to the military justice system, and has served a lengthy sentence for the crimes. Spy.

Snowden, on the other hand, is noted for fleeing into the comforting arms of the enemy which benefited most from his crimes, while refusing to acknowledge any wrongdoing at all. Hero.

The second reason I’m interested in this commutation is that Julian Assange, the WikiLeaks operator to whom Manning leaked the documents and who has been holed up in the Ecuadorian embassy in London for five years now, has always said he will face extradition to the U.S. on espionage charges if Manning were to be released. Well, Julie, the ball’s in your court.

At first I thought, “Yeah, right. Assange will submit to extradition around the same time we see Trump’s tax returns, i.e. never.” Then I realized my mistake. This is actually going to work out very well for Assange. Being extradited to an Obama-led Department of Justice would have been a very different thing than facing the “wrath” of the Trump administration.

As we have recently learned, Trump takes Assange’s version of the Russian interference in the election as the truth, while complaining about and criticizing the work and the abundant documentation to the contrary produced by our own intelligence organizations. Trump chooses to believe those who flatter him, those who benefit him, and those who play him like a fucking fiddle.

And then there’s the fact that no extradition or other charges have actually been filed against Assange by the U.S. Only Sweden has filed for his extradition to try him for rapes committed there.

It will be interesting to see what Assange does here. I’m predicting that whatever it is will be preceded by a highly sympathetic media blitz on FoxNews.

It will be even more interesting to see whether Trump can demonstrate anything like the impartiality and wisdom of Obama in dealing with him. I suspect, dear readers, that you already know what I think about this.

The greater threat: NSA or Alexa?

So let me start by saying that, in my view, Edward Snowden is not any kind of hero, didn’t provide any great service to the country, not even “start a national discussion”, and barely qualifies as a whistleblower. I think he’s a self-involved, cowardly little piss-ant who broke some laws and then fled to countries where government conducts far more pervasive and intrusive surveillance than he was accusing the NSA of doing. The fact that he chose Glenn Greenwald to “leak” to really says it all.

The Justice Department claims he compromised our national security efforts and put agents at risk by revealing the techniques and extent of NSA eavesdropping, which Snowden claims was illegal.  They want him to return for trial or to try to negotiate a plea, which, for a less cowardly individual, would be the perfect platform to make his heroic case to the public.

The whole thing seems silly to me at this point. It’s hard for me to imagine that the NSA is learning anything about us that we aren’t already happily giving away in exchange for some “conveniences”. We’re even paying for the privilege.

Say you use Gmail to send a message to your friend asking if he has an outdoor wifi camera.  You will see ads popping up for wifi camera deals the next time you use Google for searching. Every email you send or receive is being viewed, saved, and analyzed by Google. You opted in to this by using Gmail (and by not encrypting your messages).

The Uber app wants you to agree to let it know your location for a time before they pick you up and after they let you off. In other words, you’ll be giving them permission to know where you are all the time. Do I think that anyone who now relies on Uber  is going to refuse this and lose the convenience? Of course not.

I got an Echo from Amazon recently. You talk to it and it plays music, adjusts your thermostat, buys stuff, orders a Pizza or a ride, searches the web, and does a lot of other tricks.  When you say the word “Alexa”, it wakes up and does what you ask.  Of course this means it’s always listening for you to say the word.

Always listening and always recording everything said in your household, if that’s what Amazon, or some rogue employee, chooses for it to do. Or if the government wants Amazon to help it solve crimes or prevent terrorism. To make you feel a little better,  Alexa turns itself off if you ask whether the NSA is listening right now, or at least that’s what it appears to do.

And of course, there’s hacking. The information is out there in the cloud, waiting for our government, some other government, or some fourteen year old kid to come for it, even if Amazon or Google or Yahoo or Microsoft or Uber or whoever refuses to hand it over. And corporations care a lot less about securing their data (i.e. your data) than you might think – security is not a profit center and no one can really tell them for sure if they’re doing it right anyway. Yahoo let credentials for a billion accounts go out the door while trying not to. The game is already over. We lost.

My thesis here is that we’ve already given up virtually all privacy, so it really doesn’t matter much what the NSA does by way of legal or illegal eavesdropping.

I totally understand that there is a distinction between voluntarily giving information to a corporation that wants to sell us stuff and has no power to put us in jail, versus being secretly surveilled by a government agency that can ruin our lives. I’m arguing that in the world of total connectivity, lax security, and highly motivated governments and private parties, it’s a distinction without a difference.