Quotulatiousness

April 23, 2013

Seller of fake bomb detectors found guilty of fraud

Filed under: Britain, Law, Middle East, Technology — Tags: , , , , — Nicholas @ 11:01

Back in 2010, I said “There should be a special hell for this scam artist” who mocked up bomb detector kits and sold them for thousands of dollars in Iraq and other areas with a real need for protection against IEDs. It’s taken more than three years, but he’s finally been found guilty:

A Somerset-based businessman has been convicted of three counts of fraud over the sale of bogus bomb detectors after his operation was exposed in a BBC Newsnight investigation in 2010.

This was a scam of global dimensions. James McCormick marketed his fake bomb detectors around the world, selling them in Georgia, Romania, Niger, Thailand, Saudi Arabia and beyond.

But his main market was Iraq, where lives depended on bomb detection and where the bogus devices were, and still are, used at virtually every checkpoint in the capital.

Between 2008 and 2009 alone, more than 1,000 Iraqis were killed in explosions in Baghdad.

ADE-651 fake bomb detector

How the device was meant to work:

  1. A small amount of the substance the user wished to detect — such as explosives — was put in a Kilner jar along with a sticker that was intended to absorb the “vapours” of the substance
  2. The sticker was then placed on a credit-card sized card, which was read by a card reader and inserted into the device
  3. The user would then hold the device, which had no working electronics, and the swivelling antenna was meant to indicate the location of the sought substance

In other words, a magical dowsing stick that depended on the user to “detect” whatever the device was supposedly seeking. This wasn’t a case of a device that didn’t do what it was designed to do: it was a deliberate fraud with just enough “technological” mumbo-jumbo to appear to be a solution to a real problem:

The court heard that McCormick began his business by buying a batch of novelty “golf ball detectors” from the USA for less than $20 each. In fact they were simply radio aerials, attached by a hinge to a handle. He put the labels of his company, ATSC, on them and sold them as bomb detectors for $5,000 each.

He then made a more advanced-looking version which he was to sell for up to $55,000. The ADE-651 came with cards which he claimed were “programmed” to detect everything from explosives to ivory and even $100 bills. Police say the only genuine part of the kit — and the most expensive — was the carrying case.

To their credit, the police moved to investigate the same day the BBC’s original story broke. Strategy Page explained why the scam had been so easy to sell. Later it was reported that British civil servants and military personnel had been implicated in the fraud.

What we know (so far) about the would-be Via bombers

Filed under: Cancon, Law, Railways — Tags: , , , , , , , — Nicholas @ 09:18

Maclean’s has a summary pulling together files from Nicholas Köhler, Charlie Gillis, Michael Friscolanti and Martin Patriquin on what is known about the two men arrested yesterday in a plot to commit an act of terror on a Canadian passenger train:

One of the men, Raed Jaser, is believed to have grown up in a Palestinian family with Jordanian roots. Court records seem to indicate he went on to a troubled history in Toronto, where authorities arrested him after a months’-long investigation they say ultimately leads back to al-Qaeda elements in Iran.

Although he is not a Canadian citizen, Jaser, 35, appears to have been in Ontario for at least two decades.

In October 1995, a man with the same name and year of birth was criminally charged in Newmarket, Ont., with fraud under $5,000 (the charge was withdrawn a year later). In December 2000, a week after his 24th birthday, Jaser was arrested and charged again, this time with uttering threats. Although court records show he was convicted of that charge, it’s not clear what sentence he received.

[. . .]

Details about the other man police say was involved in the plot, [Chiheb] Esseghaier, a resident of Montreal, are also coming into focus. A highly trained engineer, he had the resumé of an academic poised to go places.

As recently as last month he was publishing research papers.

The March 2013 edition of journal Biosensors and Bioelectronics published a paper on advanced HIV detection by Esseghaier, Mohammed Zourob and a fellow PhD student named Andy Ng.

According to his CV, Esseghaier was born in Tunisia. He received an engineering degree from Institut Tunisia’s National des Sciences Appliquées et de Technologie in 2007, with his masters degree following in 2008. He then moved to Université de Sherbrooke to research “SPR biosensor and gallium arsenide semi-conductor biofunctionnalization.” In November 2010, he joined Institut National de la Recherche Scientifique (INRS), a graduate institution associated with the Université du Québec.

April 22, 2013

The “public safety exception” to Miranda is a really bad idea

Filed under: Law, Liberty, USA — Tags: , , , , — Nicholas @ 09:33

In Techdirt, Mike Masnick explains why this Obama administration innovation should not be perpetuated:

  1. Suspending basic rights and due process out of fear is exactly the kind of thing that people attacking the US want to see. Showing that we can’t live up to our most basic rights and principles in the face of a terrorist attack gives those who hate us that much more incentive to keep going. It’s not just a sign of weakness, but an encouragement for those who seek to undermine our society. In fact, it takes a step in that very direction by showing that the government is willing to throw out the rules and principles when it gets a little scared by a teenager.
  2. The slippery slope here is steep and extremely slick. There are no rules on when the DOJ can suddenly ignore Miranda. It gets to decide by itself. This is an organization with a long history of abusing its power, now allowed to wipe out one of the key protections for those they’re arresting, whenever it sees fit. The whole point of the ruling in Miranda is that it should not be up to law enforcement. A person’s rights are their rights.
  3. The part that really gets me: if anything, this opens up a really, really stupid line of defense for Dzokhar Tsarnaev if he ever faces a criminal trial. His lawyers will undoubtedly claim that the arrest and interrogation was unconstitutional due to the lack of (or delay in) Miranda rights. Why even open up that possibility of a defense for him?
  4. The guy has lived in the US for many years — chances are he actually knows the fact that he has the right to refuse to speak. So, we’re violating our principles, basic Constitutional due process, and opening up a massive opening for a defense, to avoid telling him something he likely already knows.

It’s been said before and it’ll be said again, but turning ourselves into a paranoid police state without basic rights means that those who attack us are winning. We should be better than that, and it’s a shame that our leaders have no problem confirming for the rest of the world that we’re not. What a shame.

April 21, 2013

Gary Johnson on legalizing marijuana

Filed under: Law, Liberty, USA — Tags: , , , , — Nicholas @ 09:03

Former New Mexico governor and Libertarian presidential candidate Gary Johnson explains why he bucked conventional wisdom and became the first serving governor to call for the legalization of marijuana:

In 1999, as the Republican Governor of New Mexico, I made some waves by becoming the highest ranking elected official in the nation to call for the legalization of marijuana use and to publicly state the obvious: The War on Drugs is an “expensive bust.”

At that time, advocating the legalization of marijuana was considered an outrageous — and ill-advised — position to take. Polls clearly showed the public wasn’t yet ready to accept marijuana legalization, and there was absolutely no conventional political wisdom to support my decision.

So, why did I jump off that political cliff? The answer is simpler than you might think, and it applies even more today than it did more than 20 years ago. As I tried to do with virtually every policy issue the State of New Mexico faced, I looked at our drug laws through the lens of costs versus benefits. And the picture became very clear very quickly.

From the policeman on the street to the courts, prosecutors, and prisons, our legal system was overwhelmed by the task of enforcing a modern-day Prohibition that frankly made no more sense than the one that was repealed almost 80 years ago. Were we safer? Was drug abuse being reduced? Were we benefiting in any measurable way from laws that criminalize personal choices that are certainly no more harmful to society than alcohol use? The answer to all those questions was a pretty resounding “NO.”

“Fatally flawed” CISPA bill passed by US congress

Filed under: Law, Liberty, Media, Technology — Tags: , , , , , , — Nicholas @ 08:57

The BBC reports on the unwelcome CISPA bill and its progress through the legislative machinery:

The US House of Representatives has passed the controversial Cyber Information Sharing and Protection Act.

Cispa is designed to help combat cyberthreats by making it easier for law enforcers to get at web data.

This is the second time Cispa has been passed by the House. Senators threw out the first draft, saying it did not do enough to protect privacy.

Cispa could fail again in the Senate after threats from President Obama to veto it over privacy concerns.

[. . .]

The bill could fail again in the Senate after the Obama administration’s threat to use its veto unless changes were made. The White House wants amendments so more is done to ensure the minimum amount of data is handed over in investigations.

The American Civil Liberties Union has also opposed Cispa, saying the bill was “fatally flawed”. The Electronic Frontier Foundation, Reporters Without Borders and the American Library Association have all voiced similar worries.

April 20, 2013

The problematic crowd-sourcing of justice

Filed under: Law, Liberty, Media — Tags: , , , , , , — Nicholas @ 11:35

In the Globe and Mail, Tabatha Southey is uncomfortable with the way members of Anonymous, Reddit, 4chan, and other online quasi-organizations leaped into the fray:

The Internet is brimming with people who want to help. To help you prune an orchid, perfect the shape of your gnocchi. Shortly after the bombings this week, hundreds of Bostonians posted offers of accommodations, spare rooms and couches.

Most assistance is graciously received, yet I was surprised last week to see how many people embraced the announcement by the self-appointed public conscience Anonymous that it had investigated the unbearably sad Nova Scotia case of 17-year-old Rehtaeh Parsons, who killed herself after she was allegedly gang-raped at a summer party, then was tormented over the incident.

[. . .]

Anonymous as an organization doesn’t really exist. It’s more of a meme — a concept, or behaviour that spreads within a community — than an agency. Anyone who says they’re Anonymous is Anonymous, which makes the groundswell of support its actions received so understandable.

I think a lot of us, upon learning of Rehtaeh’s death, wanted to go to Nova Scotia and shake those kids until something that looked closer to truth came out. Anonymous’s motivations are much like ours, and it can be difficult to remember that the presumption of innocence should be given more weight, not less, the more heinous the crime; the part that is almost the best in us screams otherwise.

Anonymous is not composed of superheroes, nor is it evil. Anonymous is just your nephew, or your neighbour, or you. We cede our pursuit of justice to that highly distractable quarter to our peril.

One only had to see that massive game of Where’s Waldo? taking place on Reddit this week to witness both the good intention, the potential and the problems inherent in crowd-sourced jurisprudence.

Boston’s security theatre performance

Filed under: Law, Liberty, Media, USA — Tags: , , , — Nicholas @ 11:20

At Popehat, Clark explains why the security theatre response to the Marathon bombers was a lot of show, but not proportional to the actual threat posed by the two fugitives:

First, just in case it’s not utterly obvious, I’m glad that the two murderous cowards who attacked civilians in Boston recently are off the streets. One dead and one in custody is a great outcome.

That said, a large percent of the reaction in Boston has been security theater. “Four victims brutally killed” goes by other names in other cities.

In Detroit, for example, they call it “Tuesday”.

…and Detroit does not shut down every time there are a few murders.

“But Clark,” I hear you say, “this is different. This was a terrorist attack.”

Washington DC, during ongoing sniper terrorist attacks in 2002 that killed twice as many people, was not shut down.

Kileen Texas, after the Fort Hood terrorist attack in 2009 that killed three times as many people, was not shut down.

London, after the bombing terrorist attack in 2005 that killed more than ten times as many people, was not shut down.

Counting the cost of the city-wide lockdown:

First, the unprecedented shutdown of a major American city may have increased safety some small bit, but it was not without a cost: keeping somewhere between 2 and 5 million people from work, shopping, and school destroyed a nearly unimaginable amount of value. If we call it just three million people, and we peg the cost at a mere $15 per person per hour, the destroyed value runs to a significant fraction of a billion dollars.

[. . .]

Third, keeping citizens off the street meant that 99% of the eyes and brains that might solve a crime were being wasted. Eric S Raymond famously said that “given enough eyeballs, all bugs are shallow“. It was thousands of citizen photographs that helped break this case, and it was a citizen who found the second bomber. Yes, that’s right — it wasn’t until the stupid lock-down was ended that a citizen found the second murderer:

    boston.com

    The boat’s owners, a couple, spent Friday hunkered down under the stay-at-home order. When it was lifted early in the evening, they ventured outside for some fresh air and the man noticed the tarp on his boat blowing in the wind, according to their his son, Robert Duffy.

    The cords securing it had been cut and there was blood near the straps.

We had thousands of police going door-to-door, searching houses…and yet not one of them saw the evidence that a citizen did just minutes after the lock-down ended.

Come for the takedown of security theatre on a city-wide level, stay for the ultimate cops-and-donuts story.

April 18, 2013

Slowing down the urge to “do something” is a feature, not a bug

Filed under: Law, Liberty, Politics, USA — Tags: , , , , , — Nicholas @ 09:23

David Harsanyi discusses the (limited) mechanisms the US constitution put in place to prevent the whims of temporary majorities being imposed on the country:

To begin with, whether Democrats like it or not, this issue concerns the Constitution — where stuff was written down for a reason. That’s not to say that expanding background checks or banning “assault rifles” would be unconstitutional (though you may believe they both should be). It’s to say that when you begin meddling with protections explicitly laid out in the founding document, a 60-vote threshold that slows down stampeding legislators is the least we deserve.

The Founding Fathers worried that “some common impulse of passion” might lead many to subvert the rights of the few. It’s a rational fear, one that is played out endlessly. Obama, who understands how to utilize public passion better than most, flew some of the Newtown families to Washington for a rally, imploring Americans to put “politics” aside and stop engaging in “political stunts.”

[. . .]

I’m not operating under the delusion that any of this is good national politics for Republicans — though the arguments about obstructionism’s dooming the GOP are probably overblown. No doubt, when the next disaster hits — and it will — Democrats will blame the overlords at the National Rifle Association and Republicans for the act of a madman. That’s life.

But generally speaking, it’d be nice if Congress occasionally challenged the vagaries of American majority “instinct.” Though it might seem antithetical to their very existence, politicians should be less susceptible to the temporary whims, ideological currents and fears of the majority. Theoretically, at least, elected officials’ first concern is the Constitution. And if the need for gun control is predicated chiefly on the polls taken immediately after a traumatic national event, they have a perfectly reasonable justification to slow things down. In fact, if Washington internalizes the 60-vote threshold as a matter of routine, voters should be grateful. Considering Washington’s propensity to politicize everything and its increasingly centralized power (what your health care looks like is now up for national referendums, for instance), this might be the only way left to diffuse democracy.

April 16, 2013

Andy Baio: Copyright is the new Prohibition

Filed under: Business, Law, Media, Technology — Tags: , , , , — Nicholas @ 13:58

Techdirt‘s Mike Masnick explains:

Andy Baio has an absolutely fantastic video presentation that he did recently for Creative Mornings/Portland on what he’s calling The New Prohibition. It’s half an hour long, but absolutely worth watching.

[. . .]

This video lets him talk a bit about the aftermath — to explain the true chilling effects of the threat and the eventual settlement. Baio is a creator. It’s in his blood. It’s what he’s always done, but after this he was afraid to create. Being threatened with a lawsuit, even if you believe you’re right, is a scary and possibly life-altering moment. Lots of people who have not been in those shoes think it’s nothing and that they could handle it. You don’t know.

As he notes in the talk, copyright law is probably the most violated law in the US after speeding and jaywalking (and I’m not even sure copyright infringement is really in third place in that list). But getting rung up for one of those gives you a “bad day” situation, not a ruined life. Copyright, on the other hand, can ruin your life. And chill your speech and creativity.

And this is the worst part: so many people, especially kids, are at risk. Baio also famously highlighted the prevalence of the phrase “no copyright intended” on YouTube. Tons of kids uploading videos use clips of music and videos with a phrase like that. Or with statements about fair use. Or with copyright law quotes. All, as he notes, to try to find that magic voodoo that wards off a possible lawsuit. Most of those people aren’t being sued.

But they could be.

The anti-libertarian legacy of Margaret Thatcher

Filed under: Britain, Government, Law, Liberty — Tags: , , , , , , — Nicholas @ 09:31

Sean Gabb explains why Thatcher should not be considered in any way “libertarian”:

She started the transformation of this country into a politically correct police state. Her Government behaved with an almost gloating disregard for constitutional norms. She brought in money laundering laws that have now been extended to a general supervision over our financial dealings. She relaxed the conditions for searches and seizure by the police. She increased the numbers and powers of the police. She weakened trial by jury. She weakened the due process protections of the accused. She gave executive agencies the power to fine and punish without due process. She began the first steps towards total criminalisation of gun possession.

She did not cut government spending. Instead, she allowed the conversion of local government and the lower administration into a system of sinecures for the Enemy Class. She allowed political correctness to take hold in local government. When she did oppose this, it involved giving central government powers of supervision and control useful to a future politically correct government. She extended and tightened the laws constraining free speech about race and immigration.

Her encouragement of enterprise never amounted to more than a liking for big business corporatism. Genuine enterprise was progressively heaped with taxes and regulations that made it hard to do business. Big business, on the other hand, was showered with praise and legal indulgences. Indeed, her privatisation policies were less about introducing competition and choice into public services than in turning public monopolies into corporate monsters pampered by the State with subsidies and favourable regulations — corporate monsters that were expected in return to lavish financial rewards on the political class.

April 12, 2013

Conor Friedersdorf: “Why Dr. Kermit Gosnell’s Trial Should Be a Front-Page Story”

Filed under: Health, Law, Media, USA — Tags: , , , , — Nicholas @ 11:34

In The Atlantic, Conor Friedersdorf explains why the Philadelphia horror story should be front-page news, but isn’t:

The grand jury report in the case of Dr. Kermit Gosnell, 72, is among the most horrifying I’ve read. “This case is about a doctor who killed babies and endangered women. What we mean is that he regularly and illegally delivered live, viable babies in the third trimester of pregnancy — and then murdered these newborns by severing their spinal cords with scissors,” it states. “The medical practice by which he carried out this business was a filthy fraud in which he overdosed his patients with dangerous drugs, spread venereal disease among them with infected instruments, perforated their wombs and bowels — and, on at least two occasions, caused their deaths.”

Charged with seven counts of first-degree murder, Dr. Gosnell is now standing trial in a Philadelphia courtroom. An NBC affiliate’s coverage includes testimony as grisly as you’d expect. “An unlicensed medical school graduate delivered graphic testimony about the chaos at a Philadelphia clinic where he helped perform late-term abortions,” the channel reports. “Stephen Massof described how he snipped the spinal cords of babies, calling it, ‘literally a beheading. It is separating the brain from the body.’ He testified that at times, when women were given medicine to speed up their deliveries, ‘it would rain fetuses. Fetuses and blood all over the place.'”

One former employee described hearing a baby screaming after it was delivered during an abortion procedure. “I can’t describe it. It sounded like a little alien,” she testified. Said the Philadelphia Inquirer in its coverage, “Prosecutors have cited the dozens of jars of severed baby feet as an example of Gosnell’s idiosyncratic and illegal practice of providing abortions for cash to poor women pregnant longer than the 24-week cutoff for legal abortions in Pennsylvania.”

The nasty phenomenon of “revenge porn” websites

Filed under: Business, Law, Liberty, Technology — Tags: , , — Nicholas @ 11:19

In the Guardian, Adam Steinbaugh looks at the legal side of fighting against “revenge porn”:

A jilted ex-paramour seeks vengeance on a former lover. His trump card is a nude photo he acquired in happier times. In the dark corners of the internet, revenge porn sites are happy to help out, posting these photos alongside the subject’s full name, address and even phone number. The result for the victim can be anything from terrible embarrassment to potential job loss, and all accompanied by threats and harassment from people whose greatest contribution to society is usually surpassed by the average YouTube comment.

While ex-lovers act out of malice, the site operators act with sociopathic greed. With embarrassing photos often featuring prominently in Google results, the sites often advertise “independent” takedown services charging upwards of $300 (£195) to quickly remove photos — cheaper and faster than hiring a lawyer. Those extortionate services usually turn out to be fronts run by the site owners themselves. One even concocted a fake lawyer (“David Blade III, Esq”) to give his business a more legitimate face.

While the people who upload the photos can almost certainly risk significant civil liability, revenge porn sites are protected in the United States by the Communications Decency Act. The CDA requires that responsibility for tortious acts online (like defamation or invasion of privacy) lie with whoever created the content, not those who facilitate its dissemination.

April 11, 2013

“Elite Panic” and the media gatekeepers

Filed under: Health, Law, Media — Tags: , , , , — Nicholas @ 15:57

There’s a pretty horrific tale unfolding in a Philadelphia court room, but most people won’t have heard about it because — while it’s bloody and otherwise eminently newsworthy — it will “send the wrong message” if it gets the traditional full-court press of media attention. At Ace of Spades H.Q., this is noted and explained by Ace:

I think this is how those who imagine themselves to be elite justify their complete embargo on the Kermit Gosnell serial-murder trial.

People who do evil generally don’t imagine they’re doing evil. In fact, some of the worst evils are perpetrated by those who’ve convinced themselves they’re doing good. One’s conscience tends to restrain one from evil; but if one can trick one’s conscience into thinking one’s doing good by doing evil, well. Then you’ve really got something.

I imagine the media believes it’s “doing good” by being so cautious about What Truths the Public Is Capable of Hearing. After all, if this Gosnell trial were publicized, people would Get Angry, and come to All the Wrong Conclusions, and put the allies of those in the media (such as NARAL and Planned Parenthood) on the defensive.

Hell, these maniacs might even get in into their skulls to hurt people!

Well, we can’t have that. We can’t let the Wrong Kind of Information — true information, but the sort of information the non-enlightened may be confused about — passing into the Wrong Kinds of Brains.

Thus, this embargo on the Gosnell story is not just partisan bias, fronting for the Democrats by refusing to mention anything that might be used as a wedge issue against them.

No, this embargo is done for the Public Good, even if the public is too stupid to understand that. If the public heard about these things … Well, that’s not gonna happen. Not on our watch.

It’s been occurring to me lately that much media behavior is explainable by this prism. They don’t want to report certain facts, not because the facts aren’t true (they’re facts by definition), but because they’re Concerned About The Capacity of Non-Journalists to Successfully Interpret These Facts.

April 10, 2013

The former players’ class-action suit against the NFL

Filed under: Football, Health, Law — Tags: , , — Nicholas @ 11:05

John Holler opines that the players are morally right, but that the legal system probably won’t give them the vindication they hope for:

Inaccurately known as the City of Brotherly Love – a more appropriate definition would be the City of Unholy Beat-Downs In the 600 Level – Philadelphia was the site Tuesday of the first big meeting on men in $5,000 suits and matching ties and pocket splash.

Judge Anita Brody heard arguments Tuesday from the NFL and a class-action group of more than 4,000 NFL players concerning the NFL’s culpability for not diagnosing concussions in the formative years of the NFL becoming the financial juggernaut it is today.

It’s a complicated and sometimes emotional battle. From a personal perspective, I teared up (that’s a generous description of it) after interviewing Brent Boyd at a time when he was a lone candle in the wind seeking justice for his injuries at a time when the NFL denied any connection to playing the game and post-concussion symptoms. Boyd was in an a cappella group at that time. Now he has a loud chorus of backup singers in the choir. Boyd was right when he told Congress that the NFL’s policy toward worker’s compensation claims were characterized – in his words – as, “Delay, deny and hope they die.”

On the other side of the coin is the legal question. It’s not a coincidence that Lady Justice, the sculpture of a woman holding the scales of justice, is blindfolded. The intent of that symbolism is that a jury can only render a verdict on the facts presented. A former NFL player from the 1970s once posed the question to me, “Does Boeing owe former employees more benefits now because the company became successful?” That was a hard pill to swallow considering that, even in the 1970s and 1980s, there were enough former players suffering from dementia and game-related debilitation that an impartial juror could see the connection between playing NFL football and the results that have followed in post-football life for thousands of former players. Yet, what does the current NFL owe them?

April 9, 2013

Bitcoins as Tulips or viable virtual gold?

Filed under: Economics, Law, Liberty — Tags: , , , , — Nicholas @ 10:27

In the New Yorker, Maria Bustillos reviews the history of bitcoins:

In many ways, bitcoins function essentially like any other currency, and are accepted as payment by a growing number of merchants, both online and in the real world. But they are generated at a predetermined rate by an open-source computer program, which was set in motion in January of 2009. This program produced each one of the nearly eleven million bitcoins in circulation (with a total value just over a billion dollars at the current rate of exchange), and it runs on a massive peer-to-peer network of some twenty thousand independent nodes, which are generally very powerful (and expensive) G.P.U. or ASIC computer systems optimized to compete for new bitcoins. (Standards vary, but there seems to be a consensus forming around Bitcoin, capitalized, for the system, the software, and the network it runs on, and bitcoin, lowercase, for the currency itself.)

[. . .]

There is an upper limit of twenty-one million new coins built into the software; the last one is projected to be mined in 2140. After that, it is presumed that there will be enough traffic to keep rewards flowing in the form of transaction fees rather than mining new coins. For now, the bitcoins are initially issued to the miners, but are distributed when miners buy things with them or sell them to non-miners (such as jumpy Spanish bank depositors) who desire an alternative currency. The chain of ownership of every bitcoin in circulation is verified and registered with a timestamp on all twenty thousand network nodes. This prevents double spending, since no coin can be exchanged without the authentication of some twenty thousand independent cyber-witnesses. In order to hack the network, you would have to deceive over half of these computers at the same time, a progressively more difficult task and, even today, a very formidable one.

[. . .]

A casual review of Nakamoto’s various blog posts and bulletin-board comments also confirms that, from the first, Bitcoin was devised as a system for removing the possibility of corruption from the issuance and exchange of currency. Or, to put it another way: rather than trusting in governments, central banks, or other third-party institutions to secure the value of the currency and guarantee transactions, Bitcoin would place its trust in mathematics. At the P2P Foundation, Nakamoto wrote a blog post describing the difference between bitcoin and fiat currency:

    [Bitcoin is] completely decentralized, with no central server or trusted parties, because everything is based on crypto proof instead of trust. The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts… With e-currency based on cryptographic proof, without the need to trust a third party middleman, money can be secure and transactions effortless.

* * *

Much of what has been written so far about bitcoins has centered on the perceived dangers of their relative anonymity, the irreversibility of transactions, and on the fact that they can be used for money laundering and for criminal dealings, such as buying drugs on the encrypted Web site Silk Road. This fearmongering is a red herring, and has so far prevented the rational evaluation of the potential benefits and shortcomings of crypto-currency.

Cash is also anonymous; it is also used in money laundering and illegal transactions. Like bitcoins, stolen cash is difficult to recover, and a cash transaction can’t readily be traced back to the source. Nor is there immediate recourse for the reversal of transactions, as with credit-card chargebacks or bank refunds when one’s identity has been stolen. However, I find it difficult to believe that anyone who has written critically of the dangers of bitcoin would prefer an economy where private cash transactions are illegal.

Update: Meet the $2 Million Bitcoin Pizza.

Floridian Laszlo Hanyecz thought it would be “interesting” to be able to say he paid for a pizza in bitcoins. He worked out a deal where he transferred 10,000 of his bitcoins to a guy in England, who ordered him two pizzas from Papa Johns.

Today, one Redditor notes, those 10,000 bitcoins would be worth about $2.3 million, thanks (in part) to folks fleeing unstable and politically risky state currencies in Cyprus and elsewhere.

Some news outlets are covering this as a “doh!” story. But these pizzas were a huge publicity boon for Bitcoin, contributing to the success of the currency today. If Lazslo had been a hoarder, perhaps his bitcoins would be worth very little now. Cashing in bitcoins for pizza when they were worth a fraction of a cent each is not obviously smarter or stupider than selling now would be, with bitcoins trading at $234. It’s a bet on which way the market is headed, that’s all.

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