Music is a powerful force in life. Not only is it a dominant art form, a form of entertainment that goes back to the beginnings of human history, it has also been used as a form of communication. The reason it is so effective as a communication tool is because it drives emotions and it is emotions that play a large part in our decision making process.
Wherever you encounter a form of sales or commercialism of a product you are bound to find some kind of catchy music attached. There is a long history of branding campaigns that have become successful mainly because of the emotion and message communicated through the music.
We make decisions everyday but some decisions have a greater impact than others. One of the most powerful decisions you make as a citizen is your power to vote. For this reason music has been an integral part of political campaigns and elections for years. The problem is that quite often the politicians prefer to choose music that conveys their message by just using popular music that has already created an impact in order to play it safe. The music is more often than not used without the consent or knowledge of the copyright holder. When they do this they ironically disregard copyright law (a law they are supposed to be upholding).
The true artist creates for the sake of creation. The work is the focal point. This is why whenever you find a piece of music or artistic expression used for any other purpose other than that for what it was conceived, a work of art, the artist becomes incensed. The artist knows that there is a danger that the use of their work for commercial purposes can forever change the association of that music with the listening public.
Rihanna recently sent a cease-and-desist letter to Donald Trump, with the Anti singer deploying legal action after her “Don’t Stop the Music” was played at the president’s rally Sunday in Chattanooga, Tennessee. Trump is also experiencing a backlash from the likes of Axel Rose for his use of Sweet Child o’ Mine. Over the weekend, the controversial Guns N’ Roses frontman complained on Twitter that Trump had used the hit against the band’s wishes. He explained that a legal loophole allowed the president, whose administration he referred to as “s***bags,” to do it.
This is not isolated to the midterm elections or the Trump campaigns. The unlawful use of the popular song goes back much further.
When Independent billionaire Ross Perot ran in 1992 in a three way race against Bill Clinton and George H. Bush. He was one of the most unconventional presidential candidates in American political history, so his choice of campaign song was Patsy Cline’s 1961 love song “Crazy.” It attracted attention because his critics dismissed him as such.
During his successful 2000 presidential campaign, George W. Bush picked Tom Petty’s 1989 hit “I Won’t Back Down,” to be played during his events. Petty threatened to sue the campaign for its unauthorised use of the tune, and Bush stopped playing it.
When Sarah Palin ran as John McCain’s 2008 Republican presidential running mate she chose to play Heart’s 1970s hit “Barracuda” at campaign events. The band objected to the use of the song and got the campaign to stop playing it. Ann and Nancy Wilson didn’t want the song to be associated with the views of Sarah Palin. During the same campaign, Jackson Browne won a suit against John McCain when the Republican presidential candidate played “Running on Empty” in an ad bashing Barack Obama on gas conservation.
Ex-Talking Head frontman David Byrne successfully sued Florida Republican Charlie Crist for using “Road to Nowhere” in a video to attack opponent Marco Rubio during a 2010 U.S. Senate campaign.
Of course, the opposite effect can happen. Mick Fleetwood, from the group Fleetwood Mac, recently said Bill Clinton’s campaign never requested permission for what became his iconic 1992 campaign anthem, “Don’t Stop,” but the band generally voted Democratic and didn’t object to the exposure.
Legally speaking, copyright laws allow political candidates to use just about any song they want, as long as they’re played at a stadium, arena or other venue that already has a public-performance license through a songwriters’ association such as ASCAP or BMI. However, the law contains plenty of gray area and the artist does have the ability to protect their “right of publicity.”
Over the years there have been a chain of events that have led us to where we are now. This is true not only for the US but for the rest of the world. In a previous article we tried to determine when the US was at its strongest, to maybe shed some light on where the US went off track. It seemed clear that when the US middle class was the largest portion of the population domestic production was also at its greatest. Simply put, people were working and had money to spend. More demand created more production and more jobs.
Looking at the non-farm payroll reports you would think that everything is booming yet we see from a number of sources that low unemployment numbers do not tell the whole story. There are a large number of facts and arguments that support that point of view. Things are not well and getting worse but the subject of this article is what to do about it?
We know from the financial crisis of 2007 that very little was done. The New York Times highlighted the differences between the Savings and Loans Crisis of 1983 and the Financial Crisis of 2007 where following the S&L crisis there were 1,100 prosecutions, compared to 2007 where only one banker went to jail.
The population that was affected by the crisis tried to vent their frustration in anyway they could. So the protest movement, Occupy Wall Street was born The main issues raised by Occupy Wall Street were social and economic inequality, greed, corruption and the perceived undue influence of corporations on government—particularly from the financial services sector. The OWS slogan, “We are the 99%,” referred to income inequality and wealth distribution in the US between the wealthiest 1% and the rest of the population. That was 2007 and now it is worst.
How did the financial media cover this?
“SERIOUSLY?” CNN’s Erin Burnett asked mockingly after finding one protester who didn’t know the government made money on the Wall Street bailout.
Fox News largely mocked them as “whackos” and “communists,” and took pains to compare Occupy Wall Street unfavourably to the Tea Party.
At the time, CNBC’s Lawrence Kudlow suggested the protests were unpatriotic (currently President Trump’s chief economic adviser).
Most financial media criticised the protests for not supplying any concrete solutions and to stop playing the “Blame Game,” and here lies one of the main issues. The levels of greed and corruption are through the roof yet fewer and fewer are being punished, in spite of the fact that these so called white collar crimes have had serious repercussions in the greater economy and do affect peoples lives indirectly. Today the motivation behind greed to steal and harm others seems to be stronger than the deterrents from the risks involved. We should therefore be playing the blame game even more and bring people to justice. Here we look to the Code of Hammurabi for some insight.
The Code of Hammurabi is a well preserved Babylonian law code of ancient Mesopotamia, dating back to about 1754 BC. It is one of the oldest deciphered writings of significant length in the world. The sixth Babylonian king, Hammurabi, enacted the code, and partial copies exist on a man sized stone stele and various clay tablets. The Code consists of 282 laws, with scaled punishments, adjusting an eye for an eye, tooth for a tooth as graded depending on social status, or slave versus free man. Nearly one half of the Code deals with matters of contract, establishing, for example the wages to be paid to an ox driver or a surgeon. Other provisions set the terms of a transaction, establishing the liability of a builder for a house that collapses.
If an architect was hired to construct a bridge, he and his family would be forced to sleep under the bridge. If a captain was hired to sail a ship and he was responsible for wrecking it, he would be personally liable for the damages. If a builder built a house for someone and did not build it properly, and the house that he built fell and killed the owner of the house, then the builder would be put to death. These are examples of clear and direct irresponsibility. If the builder purchased crappy materials at a cut rate, he would still be responsible. The principle concept is to hold people responsible for their actions.
If an accuser brought an accusation of a crime but could not prove it, the accuser would be put to death. Or, thieves would have their fingers cut off. We are supposed to be living in a more civilised society and are not advocating such exaggerated drastic measures, although one of the closest allies to the US employs them.
The main idea here is holding those in power accountable for their actions to the point where should their actions harm others, they would be “personally” liable, or as Nassim Taleb advocates having “skin in the game.”
How could the code be applied to today’s incidents? Think about how many investment manager market forecasters would change their tune if what they pushed their clients into was taken out of their personal accounts. You would most likely begin to see the most conservative portfolios you have ever seen. It would probably cut Goldman Sachs business by 60%. How would Jim Cramer react if his “Buy Buy Buy” rants held him personally liable for any losses he may incur?
Wells Fargo used improper accounting techniques to hide losses in order to borrow money from the Federal Reserve at lower interest rates — effectively defrauding the government by hiding the true scope of the bank’s financial problems. According to Hammurabi’s code, if the line of management responsible for such actions were forced to pay damages, not under the guise of an incorporated company, but from their personal net worth it is doubtful that those responsible would have ever authorised such actions. The result of the present judicial system is that the bank continues to replicate such actions and at worst the CEO is dismissed with a massive bonus.
Before economic activity can be developed to where the middle class becomes stronger once again, putting the greater economy on a stable footing for all, regulations have to be enforced and more crimes need to be punished. Crimes need to be punished accordingly. To do this requires political will, but those politicians need to be also held personally accountable. However, we need to start somewhere so the financial industry seems like a good place to start. As Billy Ray Valentine said in the movie Trading Places, “You know, it occurs to me that the best way you hurt rich people is by turning them into poor people.” The movie Trading Places was essentially an example of an eye for an eye. You may remember that the Winthorp’s bet was for $1, no skin in the game.
Getting 5 years in prison for stealing a few packs of gum compared with ripping off billions from tax payers and getting a slap on the wrist is an economy on the edge of chaos, not stability. As trend forecaster Gerald Celente likes to say, “When people lose everything, they lose it.”
As consumers we love to purchase goods. We purchase basic needs and necessities and we purchase any item that renders our lives more comfortable or interesting. Companies love to sell us these goods and profit from it. To sell as much as they can, they want to know as much as they can about their customers, so they compile masses of data about them. However, there is a point when we need to ask, “Is all this marketing data eroding the right to privacy?”
Consumerism is defined as a social and economic order and ideology that encourages the acquisition of goods and services in ever-increasing amounts. It states that a progressively greater level of consumption is beneficial to consumers.
It was during the Industrial Revolution in the 1800s that allowed products to be available in large quantities for the first time in history. Because of the decreased cost of production and lower prices, products became available to all. This has led to an ever increasing rate of consumption among the masses, or better known as the era of mass consumption.
This era has also seen the psychology of the consumer shift over the years and a change behind the motivation of purchasing decisions. Although they may believe they are thinking independently when making a purchasing decision, consumers have been greatly influenced by the producers of the products they buy. The manner in which companies manipulate consumers has changed over the years and continues to become more and more sophisticated.
Companies have employed a number of strategies over the years in order to provoke consumers to purchase in greater and greater quantities. They design products so that people will need or want to throw them out soon after they buy them, also known as planned obsolescense. They make use of advertisements and newer models with additional gadgets to convince customers that he/she needs an updated product, even though his/her existing product is working well, also known as perceived obsolescence. The evolution of the iPhone is an excellent example. Slight changes in the newest models has driven the almost fanatical Apple evangelists to rush out and replace their current perfectly functioning iPhone for those few additional functions. They have even done their best to market “water” in every way imaginable. All for the sake of the purchasing thirst of the consumer.
The marketing tactics used on consumers have been even more diverse. We have seen the development of database marketing, CRM (customer relationship management), telemarketing, the emergence of computer oriented spam (see here), viral marketing, and the overall emergence of social media and a connected world like we have never seen before. The common denominator underlying all these tactics and strategies has been that of information. Information about the consumer. The more a company knows about a consumer the greater control they have over the consumer’s purchasing decision.
The chain store Target provides an excellent example. Target assigns every customer a Guest ID number, tied to their credit card, name, or email address. This information makes up a database that stores a history of everything that the customer has purchased. It stores any demographic information Target has collected from them or bought from other sources. To understand how it is used, Target’s data science team looked at the historical buying data for all the ladies who had signed up for Target baby registries in the past and correlated them with information in their present database of ladies consumption habits.
From Charles Duhigg’s article in the NYT:
“[Pole] ran test after test, analyzing the data, and before long some useful patterns emerged. Lotions, for example. Lots of people buy lotion, but one of Pole’s colleagues noticed that women on the baby registry were buying larger quantities of unscented lotion around the beginning of their second trimester. Another analyst noted that sometime in the first 20 weeks, pregnant women loaded up on supplements like calcium, magnesium and zinc. Many shoppers purchase soap and cotton balls, but when someone suddenly starts buying lots of scent-free soap and extra-big bags of cotton balls, in addition to hand sanitizers and washcloths, it signals they could be getting close to their delivery date.”
Once Target has this information in hand, they are able to deliver advertisements that address the exact needs of that consumer at that particular time. They are more likely to know that someone is pregnant before anybody else in their family becomes aware of it!
These huge databases know a lot about us, more than we are aware of. Companies reason that they want to know as much as possible about their client base in order to service them in the best and most efficient manner. However, should this information fall into the wrong hands, it could provide a large number of opportunities for the innovative criminal.
As we have seen time and time again, the information is not always as secure as you would think in spite of tougher and tougher security measures. The following chart illustrates the largest data breaches of the 21st century (it does not include the most recent Facebook database breach).
The lure of greater and greater profits is driving companies to dig deeper and deeper into our habits, daily lives and psyches in order to know what we want and what they can sell us. Their motivation is clear. On the other hand, having such a large repository of information on a nations consumers in itself has huge value also, as companies such as Google, Amazon and Facebook have shown. It is no wonder these information repositories are the target of criminals.
As consumers we may be enjoying the luxury of more refined products that provide us value in all different ways throughout our daily lives and at lower costs. Yet what we are often unaware of is to what extent we are sacrificing our independence and privacy as individuals in order to have it.
Stay tuned! We will soon highlight 5 companies that are using new powerful artificial intelligence technology in order to know everything about you!
Whether we speak about the new economy; the old economy or any economy, fraud is still fraud. It is the wrongful or criminal deception intended to result in financial or personal gain. Yet even though there has been a large amount of publicity surrounding some very high profile cases of fraud nothing seems to change. Auditors and accounting professionals seem to remain impotent when it comes to fraud detection.
The truth is, the audit of traditional financial statements were never designed to detect fraud. The audit is simply a process of checking a company’s math and application of accounting rules. This is probably why it has been so prevalent in large corporations in spite of the fact that they have an army of accountants from the largest auditing firms scouring their books yet no cases of deception to show for it.
According to the findings in the “Report to the Nations on Occupational Fraud and Abuse” study released by the Association of Certified Fraud Examiners in 2014, the higher-ranking the fraudster was, the greater the losses. In addition, financial fraud is more difficult to uncover because the perpetrators have less of an emotional connection to what they are doing than they do for other types of crime. The fact that they are not actually touching money as opposed to fudging documents, they feel less guilty of committing a crime.
There seems to be less leniency towards drug dealers and petty criminals as opposed to, say bankers, but the truth is financial fraud has destroyed just as many or more lives through the theft of millions taken from shareholders and pensions plans.
The report estimated that the typical organisation loses five percent of its revenues each year to fraud. That would work out to a global impact of $3.7 trillion, however, it is also believed that there are so many more cases that are not discovered.
So now we find ourselves living in a digital world with the increasing development of the Internet and our dependence on it. We have seen the introduction of the blockchain with which has come the proliferation of a number of crypto-currencies chief among those being Bitcoin.
With the advent of a new technology that has the capacity to disrupt our financial system, it is not surprising that with it comes a new breed of criminals. Cybercrime is already costing the U.S. economy as much as $120 billion a year and as much as $1 trillion globally, according to a study released in 2013 by McAfee and the Centre for Strategic and International Studies. Seeing that it is so difficult to regulate Bitcoin, it has been the tool of choice for these cybercriminals.
It is not surprising to see so many come out and chastise this new technology, especially those with a weak understanding of its merits. Equally not surprising is the large number of financial industry participants at the forfront of these critisisms. Ironically it is those same participants who have already been responsible for billions of dollars of fraud in our financial system.
The truth is, it doesn’t matter what the weapon is. If you kill somebody using a gun, knife, poison or your own hand, the end result is that they are still dead. If you steal money from someones purse, removed the funds from their bank accounts, knowingly overcharged them for services never rendered or expropriated funds via Bitcoin, the result is the same.
Liberty Reserve was founded in Costa Rica by Arthur Budovsky. Through his website it was possible for anyone to transfer money with very little regulation. The only required details were name, e-mail address, and birthday. Liberty Reserve never actually handled the funds, as it converted the fiat deposits into Liberty Reserve Dollars or Liberty Reserve Euros, whose values were pegged to the value of the US dollar and euro respectively. This made it ideal for funneling criminal funds. The authorities eventually closed in on Budovsky’soperation and shut it down. In January 2016, Budovsky pleaded guilty to money laundering and admitted that he had secretly moved at least $122 million.
When it comes to Bitcoin, the case that is cited the most is that of the Silk Road bust. In the Silk Road case the federal government had seized more than $33 million worth of bitcoin from the computers of the site’s alleged founder, Ross William Ulbricht. It is believed that the operation generated roughly $1.2 billion in sales over three years. Tracing that money and recouperating it would be deemed as next to impossible.
We can compare these two “digital” cases with that of Enron. Enron Corp. was essentially an energy trading company that reached dramatic heights, only to face a dramatic collapse. The story ended with the bankruptcy of one of America’s largest corporations. Enron’s collapse affected the lives of thousands of employees and shook Wall Street to its core. At Enron’s peak, its shares were worth $90.75, but after the company declared bankruptcy on December 2, 2001, they plummeted to $0.67 by January 2002. Enron shareholders filed a $40 billion lawsuit although only ended up receiving limited returns from the lawsuits, despite losing billions in pensions and stock prices. This was the largest bankruptcy in US history until Worldcom a few years later.
The means and methods were different in these cases but the results were the same. Fraud is fraud.
Earlier this year there was a lot of press about whether or not Donald Trump asked FBI Director James Comey not to fire Michael Flynn, who was forced to resign in February. According to James Comey’s testimony before congress Trump said, “I hope you can see your way clear to letting this go, to letting Flynn go. He is a good guy. I hope you can let this go.”
One of the keys to that statement from a legal point of view lies in that word “hope.” It is a common word, employable as both a noun and a verb, and it boasts an extraordinary breadth. We may say, “I hope to catch the 6:42 a.m.,” or “I hope the kids don’t catch a cold.” So where do the hopes that Comey cited, in his own words and in his reports of others’ speech, belong?
This example is not meant to refer to contractual law, but it is intended to present the important part that language plays in law, and lawyers can be very clever about how they use their words and frame their sentences. So what does this have to do with smart contracts and the blockchain? Probably everything because the law is made of words and the interpretation of those words. Coders and Lawyers don’t speak the same language so if a certain language is coded into a smart contract that is not coherent with legalise, that contract could be tested.
So what is a smart contract?
Smart contract is a term used to describe computer program code that is capable of facilitating, executing, and enforcing the negotiation or performance of an agreement (i.e. contract) using blockchain technology. The entire process is automated can act as a complement, or substitute, for legal contracts, where the terms of the smart contract are recorded in a computer language as a set of instructions.
As explained by Ethereum Founder, Vitalik Buterin, at the DC Blockchain Summit 2016:
Suppose you rent an apartment from me. You can do this through the blockchain by paying in cryptocurrency. You get a receipt which is held in our virtual contract; I give you the digital entry key which comes to you by a specified date. If the key doesn’t come on time, the blockchain releases a refund. If I send the key before the rental date, the function holds it releasing both the fee and key to you and me respectively when the date arrives. The system works on the If-Then premise and is witnessed by hundreds of people, so you can expect a faultless delivery. If I give you the key, I’m sure to be paid. If you send a certain amount in bitcoins, you receive the key. The document is automatically cancelled after the time, and the code cannot be interfered by either of us without the other knowing, since all participants are simultaneously alerted.
A Smart Contract Example
Here is the code for a basic smart contract that was written on the Ethereum blockchain. Contracts can be encoded on any blockchain, but Ethereum is mostly used since it gives unlimited processing capability.
On March 10, 2017, Yale Law School put together a panel for a discussion on the Blockchain: Smart Contracts which included Scott O’Malia, Chief Executive Officer, International Swaps and Derivatives Association who explained that these contracts are all fine when everything is working but when there is a conflict that arises then you need to fall back on traditional legal documents, which are based on many different legal statutes.
Buterin proposed some ideas that appeared in an FT Alphaville article:
Buterin envisages the use cases as follows:
- Using smart contracts for events that are potentially highly subjective
- Arbitration in decentralized crowdsourcing and on-demand economy applications
- Storage or distribution of funds (eg. one use case is a will where you do not want to force the recipient to set up a private key or learn about ethereum unless they actually need to)
- As an emergency backstop measure to get funds out of a smart contract if they are stuck for a long time
Scott O’Malia took issue with Buterin’s idea that any conflicts that arose could be arbitrated by decentralized crowdsourcing. O’Malia said, “Too much has gone into all of this to really just turn it over to a coder’s dream world.” “There are established standards and codes.”
There is an assumption that the blockchain and smart contracts will replace many legal participants but this is, for the moment, far from the truth. There are already governing bodies, including that of O’Malia’s, that are already looking at solving the problems of how to take legal agreements and turning them into executable code and what the standards around that will be, which documents do you work with first, how to establish common domain standards, protocols etc. The legal community sees the value in smart contracts as being a tool to capture evidence, however they are seen as being valuable for executing only certain points and forms of contracts and therefore limited in their scope.
The idea that programmers and coders will essentially plug a bunch of these smart contracts into the blockchain and do away with a large part of the legal system is not very realistic. A current problem is the fact that contracts and all legal documents are written by people. Computer code is also written by people. It becomes a technological problem when you don’t have a lawyer who has the ability to code, or vice versa. Therefore it will be necessary for lawyers to learn how to code or coders to be trained as lawyers. There is no current effort to accomplish this.
The blockchain is a decentralized entity. It doesn’t recognize borders. How would a smart contract between geographical locations, that abide by different legal systems, be managed? It will take time to fix these things.
There are still very clear advantages to smart contracts. When something needs to be verified you have the cost of verification. This requires an audit which requires resources and can be very costly. The blockchain has the ability to track attributes and data integrity at a very low cost.
In spite of all these issues, the hype cycle often assumes that technology will radically change things overnight, yet they rarely do. Software has bugs and needs to adapt, and although that is not a reason to not adopt the technology it does often take more time than anybody expects. The first email was sent in 1971 and needed 25 years before there was widespread adoption. Now it is an afterthought.
Laws are complex and probably many times more complex than they need to be yet that is how the system has evolved. Technologies like the blockchain and cryptography will hopefully help to simplify many parts of it yet it is hard to imagine how this industry can be easily disrupted.
At the first sign of trouble the place you are most likely to run to is the lawyer’s office!
Governments do not react well to threats to their center of control. As of November 2017 there are roughly 1340 cryptocurrencies with a market capitalisation of roughly $450 Billion (when we first published this piece in June it was $114 Billion) of which Bitcoin makes up about 62%. So, it is no surprise that governments are becoming more vocal and putting together tasks forces on how to deal with it.
The bankers seem to be even more worried. They don’t take kindly to non centralised competitors moving in on their turf. After all, they wield an enormous amount of influence and make staggering amounts of profits.
As cryptocurrencies are now gaining more exposure and interest among the general public, bankers are now becoming more fond of government regulators. It is the hope of the bankers that the government will try and regulate the cryptocurrencies out of existence should they become too menacing.
So, should the US government, or any other government attempt to take on Bitcoin, Monero, Steemit or any of the large number of cryptocurrencies, what could they actually do?
- Any cryptocurrency is at risk of being made illegal by any government. Owning and operating a money transmitter service in the U.S. is “illegal” unless it is registered with State agencies. This is also true if one uses Bitcoin or any other cryptocurrency to exchange for fiat currency. Bitcoin is not immune from State or Federal laws regulating the flow of money, and agents can track bitcoin transfers over the blockchain.
- Regulation to date has been minimal, but history tells us that governments rarely preference light regulation — it just takes them a while to catch up with technology. There are a large number of issues that any government could regulate when it comes to cryptocurrency use among the public. In 2013, the U.S. Senate held the first hearings on Bitcoin. In that same year, FinCEN released the first announcement by any government agency related to the technology. The IRS was also the first tax agency in the world to clarify the tax treatment of Bitcoin and other digital currencies. Additionally, BitLicense in New York was the first licensing regime in the world directed at digital currencies.
- Cryptocurrencies do work with an exchange rate, therefore, governments could manipulate the exchange rate of bitcoin, ethereum or other. This is by no means unfamiliar territory for most.
- It’s not difficult to imagine the US or the European Union coming up with a new definition for cryptocurrencies as, say, an investment, with all net gains taxed at 30 per cent. For example, the U.S. tax authority, the IRS, has classified cryptocurrencies as “property” for the purpose of federal taxation, whereas the Treasury Department’s FinCEN has classified cryptocurrencies as “value” for the purpose of AML/CFT (Anti-Money Laundering and Countering Financing of Terrorism Act) obligations.Other jurisdictions have taken a different approach, avoiding a formal classification and focusing instead on the nature or type of transaction being conducted.
- Governments could exploit the transparency of the blockchain and punish people for holding cryptocurrencies at all. This has been seen in the past as in the case of Gold.
- The NSA or some other entity with both the budget and experience create a VLSI (Very Large Scale Integration) project to both develop and deploy an ASIC (application-specific integrated circuit) design that would result in a 51% attack.
- International regulation could be developed that significantly inhibits one’s ability to exchange Bitcoins, or other, for local currencies. Essentially forcing the cryptocurrencies underground like a drug cartel thereby adding to de-legitimisation.
- It is possible for a mathematician to gain government support in finding a way to break ECDSA (Elliptic Curve Digital Signature Algorithm or ECDSA is a cryptographic algorithm used by Bitcoin to ensure that funds can only be spent by their rightful owners). However, it is very unlikely that this would happen.
- The media alongside a covert multi-government effort could conduct several propaganda campaigns to sway public opinion that the cryptocurrencies are either a massive scam or somehow bad. This has already been seen in the example of IMF, government and banking representatives conditioning the public to equate cryptocurrencies with fraud, terrorism financing, money laundering etc.
- Regulations could be adopted to monitor and control the crypto exchanges. A government has the purchasing power to buy up large quantities, drive the price up then sell and collapse it, thereby massively increasing volatility. These market fluctuations could be aggravated by a covert government programme of destructive funding and public disinformation. This would make doing business in any cryptocurrency more difficult.
The Treasury Inspector General for Tax Administration commissioned a report last year to study their options. The overall objective of the review was to evaluate the IRS’s strategy for addressing income produced through virtual currencies. It included the following recommendations:
- IRS management needs to develop an overall strategy to address taxpayer use of virtual currencies as property and as currency.
- The Deputy Commissioner for Services and Enforcement should request the Large Business and International Division, the Small Business/Self-Employed Division, and Criminal Investigation to develop a coordinated virtual currency strategy that includes outcome goals, a description of how the agency intends to achieve those goals, and an action plan with a timeline for implementation. In addition, the strategy should use the tools available to the IRS and identify how the IRS is going to meet its BSA, criminal investigation, and tax enforcement obligations as related to virtual currencies as well as identify how actions will be monitored and the methodologies used to measure the actions taken.
- The Deputy Commissioner for Services and Enforcement should take action to provide updated guidance to reflect the documentation requirements and tax treatments needed for the various uses of virtual currencies.
- The Deputy Commissioner for Services and Enforcement should revise third-party information reporting documents to identify the amounts of virtual currency used in taxable transactions.
So the US IRS is now on the prowl, as I imagine many other international government bodies. Nobody should forget that Bitcoin and all cryptocurrencies are still an experiment. Nobody really knows how this will play out in the future. Stay tuned!
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It was around 10pm last night when I heard a knock at my door. I could suddenly see the police lights flashing through the window as I got up to answer it. As I opened the door I began to get that sick feeling in my stomach like something had gone terribly wrong.
“Are you the owner of a rhenium based robot that anwers to the name of Kurt?”, the police officer asked. “Yes I am,” I answered. “Is there a problem?”
The police officer explained, “apparently your robot lost control and went on a rampage over by Valley Mills Mall.” “There are currently 15 dead and 35 serious injuries.” “We were able to disarm and neutralise it before it was able to do any additional damage.”
I was in shock. I knew what this meant but I just couldn’t believe it. I had been working with that robot for 5 years and never had any problems at all. “I don’t understand, how could this have happened?”
The officer continued, “we have reason to believe that your robot was hacked by a Libyan technology terrorist organization.” “Would you please come with us, we are placing you under arrest.”
He proceeded to read me my rights, “as an owner of a rhenium based singularity cast robot, you are under full responsiblitiy for any malfunctions that may cause due harm to any citizen of said municipalty and will be held in contempt for any damages that said robot should inflect. All security flaws and infiltrations are under your responsiblity should they happen to be breached.” I collapsed at their feet, my life was ruined.
It got me to wondering as I contemplated this scenario. What will robots actually be like in a world of advanced artificial intelligence? The race is on and some think we may imagine a similar scenario much sooner than later.
Robots are getting “smarter” and in some cases, with more human-like qualities such as facial recognition features, all of which is helping propel their popularity and usability. IDC estimates that in 2020, worldwide spending on robotics will be at $188 billion. Robots today are mostly in the manufacturing industry, but the consumer and healthcare sectors are up-and-coming in their robotics adoption, according to IDC.
Robots will soon be cleaning our homes, performing surgery and even building skyscrapers. But a top security firm claims that robots – including those currently on the market – could attack humans, burgle homes and wreak havoc on a factory floor. Researchers claim that robots could ‘poison family members and pets by mixing toxic substances with food or drinks’.
It all sounds a bit fartetched and belonging in an episode of the Xfiles yet new research is showing that robots and their control software are full of critical and painfully obvious security flaws that make them easily hackable and take control of a robot’s movements and operations for spying or causing physical damage – and even posing a danger to humans.
Even today, robots integrated with home automation systems could unlock and open doors and deactivate home alarms and even if robots are not integrated, they could still interact with voice assistants, such as Alexa or Siri, which integrate with home automation and alarm systems. “If the robot can talk or allow an attacker to talk through its speaker, it could tell voice-activated assistants to unlock doors and disable home security.
A number of organizations already make use of smart robotic technology and according to IOActive researcher’s Lucas Apa, “It’s very difficult to distinguish between a robot that’s been hacked” and one that’s not, he says. According to IOActive, once a robot has been hacked it is very difficult to restore the robot back to its original state. The customer would therefore be stuck with a hacked robot.
Dan Baily, founder and CEO of Lab Mouse Security says that a serious concern today is way in which a robot associates itself with its owner, and what happens when that owner hands it over to another owner or user. This could pose security and privacy risks. If you happen to have a robot with a previous owner it is unclear how you could be protected if the previous owner still had access to the robot.
The following list provides a number of way that a robot could be hacked and infiltrated:
- Microphones and cameras: Microphones and cameras can be used for spying and surveillance, enabling an attacker to listen to conversations, identify people through face recognition, and even record videos.
- Network connectivity: Some robot services are vulnerable to attack from home, corporate, industrial networks or the Internet.
- External services interaction: The robot owner’s social networks, application stores, and cloud systems could be exposed by a hacked robot.
- Remote control applications: Mobile applications or microcomputer boards can be used to send malicious commands to robots.
- Modular extensibility: When a robot allows installation of applications, it can also allow installation of custom malware.
- Safety features: Human safety protections and collision avoidance detection mechanisms can be disabled by hacking the robot’s control services, such as autonomous cars.
- Main software: When a robot’s firmware integrity is not verified, it is possible to replace the robot’s core software and change its behavior in a malicious way by installing malware or ransomware.
- Autonomous robots: A hacked autonomous robot can move around as long as its battery continues to provide power.
- Known operating systems: Many robots use the same operating systems as computers, many of the same attacks and vulnerabilities in those operating systems apply to the robots as well.
- Network advertisement: It is common for robots to advertise their presence on a network using known discovery protocols.
- Fast installation/deployment: Many vendors do not highlight the importance of changing the administrator’s password in their documentation, a user may not change it during fast deployment. This means that any services protected by this password can be hacked easily.
- Backups: Configuration files and other information may be backed up on the robot vendor’s cloud or the administrator’s computer.
- Connection ports everywhere: Physical connectivity ports lacking restriction or protection, could allow anyone to connect external devices to the robots.
Ray Kurzweil, the famed American author, computer scientist, inventor and futurist, predicts that by 2045 computers will be a billion times more powerful than all of the human brains on Earth. Bill Gates calls him “the best person I know at predicting the future of artificial intelligence.”
Kurzweil believes that once the computers can read their own instructions, well… gaining domination over the rest of the universe will surely be easy pickings. One can imagine what this will mean for the development of robots. However, he doesn’t seem to worry about reprecussions of his own forecasts or being enslaved by a master robot race. He believes technology will make us better, smarter, and fitter, unless of course a robot of his own making liquidates him first!