ISSUE 18.21.F • 2021-06-07

ADVERTISEMENT

Get DVD/Video Converter, iPhone Manager for Only $19.95 – WinXDVD Anniversary Deals WinXDVD is enjoying its 15th year with up to 70% discounts on its top products WinX DVD Ripper Platinum, WinX HD Video Converter Deluxe, WinX DVD Copy Pro, and WinX MediaTrans. For only $19.95, the first 50 buyers can get any of products you want. After that, it’s $29.95 for the next 150 and $39.95 for the next 200. The earlier you buy the higher the savings. Hurry up to grab your deals now!

PUBLIC DEFENDER

By Brian Livingston

People in the tech industry tend to find cryptocurrency very attractive as a concept. After all, crypto coins are totally digital — there are no paper bills or metallic coins to handle — and you can transfer these “digicoins” to anyone in the world, instantly (in theory).

The reality is that digital money is prey to all kinds of hacks and cons. Many people have lost their life savings because they converted their hard currency into crypto and got hacked. Bad actors used one security flaw or another to transfer the victims’ funds to themselves.

Allow me to give you some guidance that can hopefully help you avoid scams while you hold crypto, if you have a specific reason to do so.

Talking about cryptocurrencies always gets around to the concept of a blockchain, so we might as well get clear on what that means. (See Figure 1.)

Figure 1. A public blockchain is an uneditable, digital record of every transaction (block of data) that has ever occurred. A private, redactable blockchain might have virtual “padlocks” to allow the removal of certain transactions.  Source: Accenture

A public blockchain is an unchangeable, widely distributed digital ledger that preserves all transactions (blocks) in the order in which they occurred. Different blockchains have been set up for bitcoin, ether, dogecoin, and many other crypto coins.

A private blockchain might be limited to authorized users, such as the employees of a company or a nonprofit organization. Such a blockchain could be redactable, allowing authorized admins to correct errors or reverse transactions. A technique for editable ledgers with digital “padlocks” between data blocks has been proposed by consulting firm Accenture and Stevens Institute of Technology professor Giuseppe Ateniese in a PDF.

A blockchain being uneditable doesn’t mean it’s secure. For example, a Swiss-registered investment pool called The DAO (Decentralized Autonomous Organization) raised $160 million through ether in May 2016. On June 17 of that year, a hacker transferred $50 million to himself. To steal that much ether, he wrote code that avoided sending messages to the system about the number of tokens he was moving (see Phil Daian’s analysis of the code):

if (p.splitData[0].newDAO.createTokenProxy.value(fundsToBeMoved)(msg.sender) == false)

Because of The DAO’s 28-day waiting period, the theft could be mostly reversed, but only by a so-called hard fork: an entirely new blockchain that excluded the hacked transactions. Under The DAO’s “consensus” model, however, approximately 15% of the voting stakeholders refused to accept the fork. This created two separate blockchains, each with its own coins: the reborn Ethereum and Ethereum Classic, as explained by the Brave New Coin blog.

The split allowed the thief to keep a few million dollars’ worth of ether, at least temporarily. By the end of 2016, DAO tokens had been delisted by major crypto exchanges. The US Securities & Exchange Commission (SEC) ruled in July 2017 that DAO’s offering was an illegal, unregistered security. The effort folded soon thereafter, as described in a Medium article.

As far as corporate ledger chains go, “Private blockchains are completely uninteresting,” says Bruce Schneier, a noted cryptographer and a board member of the Electronic Frontier Foundation. “Consensus protocols have been studied in distributed systems for more than 60 years,” he adds. “The only reason to operate one is to ride on the blockchain hype.”

Most people will never set up a blockchain. But millions of people are using cash and credit cards to transfer their hard currencies, such as dollars and euros, into crypto coins. Do those digital currencies have problems? I’m glad you asked.

Cryptocurrencies do serve at least one legitimate need. Individuals sent $715 billion across international boundaries to relations in other countries in 2019, according to World Bank estimates. But the old-line service is dominated by Western Union, MoneyGram, and RIA. Remittances can take up to five business days, and the average transaction fee is 7.45%. The fee can be 15 points higher for remittances to some African countries, a 2018 EU report says.

Crypto remittance services can be faster and charge lower fees. Local offices routinely convert coins into the recipient’s local currency. But whether or not you make cross-border transfers, it’s important to know that holding crypto for long exposes you to certain risks.

Steve Wozniak (left), a co-founder of Apple — and a tech-savvy individual, by all accounts — recently had seven bitcoins stolen from him, at a time when his coin collection was worth approximately $70,000.

What super-sophisticated hack was capable of separating Wozniak from his valuable digital assets?

Nothing sophisticated at all. “Somebody bought them from me online through a credit card, and they cancelled the credit-card payment,” he said at the 2018 Global Business Summit in New Delhi, sponsored by The Economic Times of India.

“It was that easy! And it was from a stolen credit-card number, so you can never get it back,” he added. Just try telling a credit-card telephone rep that you sent virtual currency to someone, somewhere, and you want it returned.

(Department of Happy Endings: On December 4, 2020, Woz used the Singapore-based HBTC crypto exchange to sell his own token, WOZX. The offering raised $950 million in the first 13 minutes of trading, a huge increase from its $80 million starting valuation. To avoid SEC regulation, buyers couldn’t use US crypto exchanges, according to a Yahoo Finance story.)

You don’t have to be an Apple legend to get your crypto coins stolen, of course:

“For every legitimate business online, there are probably five scammers out there trying to act like they are someone they are not,” says David Johnson, CEO of crypto startup Latium.

The most outrageous scams involve companies that set up a new blockchain, create a website to promote the related coin, hire social-media celebrities to flog it, collect millions of dollars of hard currency from excited buyers — and then disappear with the money.

Crypto bloggers call these vanishing acts rug pulls. That’s shorthand for “having the rug pulled out from under you.” But coin boosters avoid using a much simpler term: rip-offs.

Figure 2. This FAKE website, which is NOT authorized by the Gemini Trust or the Winklevoss brothers, looks real. But the site instructs you to send crypto coins to a hacker’s wallet, and the Gemini Trust will supposedly transmit DOUBLE that amount back to your account. Yeah, right.  Source: Bolster

I wish I could say there’s a foolproof method to ensure that a purchase of cryptocurrency is legitimate and safe. But I can’t. There are simply too many ways that promoters of a virtual currency can — to coin a phrase — pull the rug out from under you. If I told you, “XYZ is fine,” some scandal or rip-off would quickly make a liar out of me. Sorry.

We’re in the snake-oil, Wild West days of virtual currencies. In the late 1990s, companies could add “dot-com” to the end of their names, and their shares would immediately rise 100% on a stock exchange. Today, social-media celebrities just saying “our new coin is going to the moon” is enough to get starry-eyed true believers to pour their hard-earned hard currencies into the latest shiny bauble. (At least gold coins, which are also shiny, actually exist and will always retain some value.)

There are several legitimate crypto exchanges, of course. But if you find one that you feel sure of, please follow the same rule that you’d use with any other speculative investment: risk only a small amount of “play money” that you wouldn’t really mind losing.

Join the conversation! Your questions, comments, and feedback about this topic are always welcome in the AskWoody Lounge!

The PUBLIC DEFENDER column is Brian Livingston’s campaign to give you consumer protection from tech. If it’s irritating you, and it has an “on” switch, he’ll take the case! Brian is a successful dot-com entrepreneur, author or co-author of 11 Windows Secrets books, and author of the new book Muscular Portfolios. Get his free monthly newsletter.

MICROSOFT NEWS

By Will Fastie

What is it? We don’t really know.

By now, the news is out that Microsoft will host a livestream event on Thursday, June 24, 2021, at 11 a.m. Eastern Time. The event does not have a title; the livestream page on Microsoft’s site just says, “Join us to see what’s next for Windows.”

Speculation about this event is already starting to ramp up, and it’s just that — speculation. Microsoft isn’t talking. Is it Windows 11? Microsoft didn’t say that, and there doesn’t seem to be any leak suggesting it — only a video in which the shadow from a window is missing the
horizontal muntin, allowing the shadow to suggest “11.” Strong evidence, indeed.

From what I can tell so far, most of the speculation comes from the keynote address given by Satya Nadella, Microsoft’s CEO, at the Build Conference held May 25 to 27. The theme of Nadella’s speech was multi-everything — multi-cloud, multi-edge, multi-sense, multi-device — all infused with AI. Part of that message boiled down to collaboration, the ability to use any device to engage with any project, person, or team. The Teams app was given special mention, with Nadella touting “145 million daily active users.”

He also mentioned 1.3 billion Windows 10 users.

His address targeted developers (it was the Build Conference, after all) and the enormous opportunities they would have over the next ten years. He said that in digital companies, “developer workflow influences how the entire company works.” And he talked about something he called “tech intensity.” He also repeatedly mentioned trust, going so far as to remind developers about “responsible AI.”

You can watch the entire keynote on Microsoft’s Build site.

I’d love to speculate about the content of the June 24 event. The only thing that springs to mind is collaboration. I say this because the 2020 lockdown, not quite over yet, resulted in a digital transformation. The trend since Apple released the iPhone in 2007 has been away from traditional PCs and toward small devices. But the pandemic shifted that; sales of desktops and laptops were up last year, considerably. People couldn’t work from home with just a smartphone — they needed more power, more elbow room, more oomph in general. Windows is at the core of “more,” so it stands to reason it would get some attention.

Tune in to the livestream on June 24 to find out if I’m even in the ballpark. And then we’ll talk again.

By the way, if you are interested in the Build Conference, you can watch any of the sessions on demand and at no cost.

Join the conversation! Your questions, comments, and feedback about this topic are always welcome in the AskWoody Lounge!

Will Fastie is editor in chief of the AskWoody Plus Newsletter.

You’re welcome to share! Do you know someone who would benefit from the information in this newsletter? Feel free to forward it to them. And encourage them to subscribe via our online signup form — it’s completely free!

Like what you see in the AskWoody FREE newsletter? Become a PLUS member! As a Plus member, you’ll receive the full newsletter, including all our great content about Windows, Microsoft, Office, 365, PCs, MS-DEFCON Alert notifications, useful and safe freeware, and Susan Bradley’s sought-after patch advice. Plus membership also allows continuous access to the complete archive of nearly two decades of Windows Secrets and AskWoody Newsletters. Naturally, Plus members have all the benefits of free membership, including access to the popular AskWoody forums. The cost? We’re supported by donations — choose any amount for a one-year membership. Every little bit helps.  Join AskWoody PLUS Today!