Saturday, 30 November 2013
Friday 29 November 2013
You'll need a ripe vocabulary, an ear for cadence - and respect for your opponent
Today I write on “Sledging Considered As One of the Fine Arts”. Sledging, for those not familiar with the term, is the practice of on-field verbal intimidation much favoured by Australian cricketers though by no means confined to them. Every cricket team sledges, though some do it with more aplomb than others.
As with all aspects of sport, national character is the first determinant of success. The more refined and well-mannered the culture, the less accomplished its sledgers. I don’t say the corollary follows – I am too fond of Australia to put its love of vilification down to something primitive in the country’s psyche – but you only have to read Australia’s national poem, “The Bastard from the Bush” (“Fuck me dead, I’m Foreskin Fred, the Bastard from the Bush”), to see an essential connection between verbal violence and a remote colonial lifestyle.
That said, it’s important to place sledging in a tradition of insult-flinging to which even the most sophisticated literature owes a debt. Drama, we are told, originates in the sacrificial, propitiatory rituals of ancient communities. We put on a show for the gods and hope they applaud. Poetry originates in the impulse to exchange insults with fellow mortals. “Get back to where you come from, that’s somewhere in the bush” is how the Captain of the Push responds to the challenge to his authority thrown down by Foreskin Fred. “May the itching piles torment you, may corns grow on your feet,/ May crabs as big as spiders attack your balls a treat./ Then, when you’re down and out, and a hopeless bloody wreck,/ May you slip back through your arsehole, and break your bloody neck.”
Indistinguishable from the satisfaction of getting your own back, hurling abuse and imagining someone else’s suffering is the joy of deploying rhyme and rhythm. We never curse better than we curse in verse. Primary school playgrounds resound with the scurrilous ditties small children make up about one another. My best friend Martin Cartwright couldn’t leave the classroom without hearing “Farty Marty/ Spoils the party”. For years I had to put up with “Howardy Cowardy Custard/ Thinks his pants have rusted”. And a poor religious boy called Manny was yoked with such tireless invention and horrid ingenuity to fanny that his parents had finally to remove him from the school.
Flyting, it’s called in Scotland – where poets would formalise the loathing they felt for each other into a contest of invective strictly governed by the laws of poesy. “Come kiss my Erse,” was how the 16th-century poet Montgomerie began his assault on the poet Polwart. “Kiss the Cunt of the Cow,” Polwart retorted in kind. We can perhaps look forward to a resumption of such well-honed hostilities when the campaign for Scottish independence begins in earnest.
At carnival time in Trinidad, some of the country’s smartest poets, singers and comedians take to the stage to compete in Extempo War, an off-the-cuff battle of wits in which the grosser they are to one another, the more the audience likes it. Whether the Dozens – the game of dissing, snapping and toasting played on the streets of Harlem and St Louis – is an offspring of Extempo War I don’t know, but it seems likely. It values the same qualities of quickness of wit and coarse discourtesy.
Another name for it is Ya Mama – unmannerliness to one another’s mothers being part of the fun. “You wanna play the dozens, well the dozens is a game,” rhymed the comedian George Carlin, “But the way I fuck your mother is a goddam shame.”
Which is a bit ripe even for the Gabba where the Australian captain, Michael Clarke, was heard to say to say to an English player, “Get ready for a f****** broken arm.” I resort to asterisks, not because Clarke did, but because that was how most of the papers reported it. Myself, I think asterisks make what he said even worse. Clarke himself has a baby face, so his outburst appeared doubly shocking, but some among his team look as though they were born with asterisks in their mouths.
What concerns me most about this incident, however, is the placing of the expletive. What Flyters, Extempo Warriors and kids in the school playground all know is that word order matters. Put a fucking where a fucking shouldn’t be and you take fatally from the affront. “Get ready for a fucking broken arm,” doesn’t work for two reasons. 1: It doesn’t scan. And 2: The epithet’s misaligned; it’s not the “broken” you’re meant to be cursing but the “arm”.
I haven’t played much cricket myself. Table tennis was my game. But I was always careful at the table to be precise when I swore. Attentive to both the music and the meaning, I’d have said to my opponent, “Get ready for a broken fucking arm.” Except that I wouldn’t, of course, have said that because it’s pretty difficult to break someone’s arm with a celluloid ball measuring 40mm in diameter and weighing 2.7g.
This could be the reason so few words are exchanged between players in the course of a game of ping-pong. You look ridiculous issuing threats when you don’t have the equipment to carry them out. Or the will, come to that. Somewhere at the back of every table tennis player’s mind is the knowledge that your opponent is as sad as you are. Why compound the lack of self-esteem that made him a table tennis player in the first place?
So humanity comes into the equation after all. To sledge with style requires a ripe vocabulary, an ear for cadence, a fastidiousness as to the positioning of epithets and respect for your opponent. You want to topple him from high estate to low. You don’t want him down and out to start with. Australians don’t always get that.
Thursday, 28 November 2013
The bubble. It's a buzzword in sport today. This morning I attended the media launch of a new book called Bubble Boys, by Michael Blucher, a prominent Brisbane identity in the sports media community and a respected mentor to many elite athletes, especially when it comes to the matter of brand perception and image management. The author ruefully claimed that the book was seven years in the making and out of date within ten minutes! He was referring, of course, to the Michael Clarke sledging incident and its impact on the Clarke brand. (Incidentally Clarke's previous manager Chris White was also at this book launch, a wise, decent man whose advice might serve Clarke well right now.)
Picking up the Australian, I then read Gideon Haigh's excellent piece, which also refers to the bubble, this time in reference to Jonathan Trott, and is proof that the best cricket writers need not necessarily have played Test cricket. A quality writer who has distinguished himself in the Test arena, Michael Atherton, added to my enjoyment of the morning newspaper with his erudite and informed perspective, made more poignant by his first-hand experience of playing (and being sledged) at this level. He cautiously chided all parties involved, reminding them that at the end of the day, this is still sport and it behooves us all to not lose sight of that amidst all the trash talk.
Bubble Boys takes a balanced look at the pressures, both internal and external, perceived or real, that elite athletes have to now contend with. My professional life is centred firmly in this space, so I have some insights into bubble boys and it is with some caution that I offer my opinions on the fall-out from the Brisbane Test, conscious of my own personal leanings but not oblivious to the hard-nosed realities of modern warfare, which is what this Ashes series threatens to descend into unless both teams and the media change the mood.
For some, the series has come alive. For me, some of the joie de vivre has died. The cricket was high-quality but I prefer my sport, no matter what the stakes are, to be served in more genteel fashion. I expect the inevitable vitriol from some bloggers, but the tone of their response may just underscore the point I'm making - that sometimes players, media and fans lose sight of the raison d'etre of sport. If this is sport, it doesn't push my buttons, despite my proximity to and familiarity with the bubble boys.
The fact that England have now withdrawn into their shell and refuse to engage with the media is a sad indictment of where things are at. The media played its part in creating this siege mentality, especially the Brisbane tabloid that refused to name Stuart Broad in its reports. The players' behaviour in refusing to talk to the press makes a lie of their claims that sledging never affects them. Clearly words hurt. Or are they only impervious to on-field sledging? That the Ashes media coverage has descended into a race to the bottom, with players hiding behind headphones, is schoolboy stuff. It's like being sent to Coventry in some Enid Blyton boarding-school story.
Clarke is the ultimate bubble boy. Often misunderstood, carefully image-managed, groomed for the captaincy at a young age, living in a goldfish bowl (replete with supermodel female partners), reputation damaged by some team-mates, and now suddenly facing a new reality that is both ambrosia and arsenic. On one hand, his behaviour at the Gabba has been described as unbecoming of an Australian captain; on the other hand, his much-maligned reputation as a pretty boy, a metrosexual (whatever that is supposed to connote, presumably negative, as described in yesterday's Australian), a brand that hasn't resonated with the VB-swilling public - unlike how those of AB, Tubby, Tugga and Punter did - has now apparently been transformed: from pup to mongrel. And according to many, this is apparently the best thing for his image. It took a threatening expletive and a sanction from the ICC to get him into that club! His fantastic batting wasn't enough for us?
It's a concept that I struggle with personally, but I daresay I'm in the minority. I find it disturbing that we equate manhood and toughness with what we've just seen from the captain. The captain no less.
I've always been a Clarke supporter thus far, but not this time. The other main protagonists, Jimmy Anderson and David Warner, splendid cricketers both of them, played their part in the drama, but does that surprise anybody? Brand consistency they call it.
One of the programmes I run is called A Few Good Men, and it is aimed at getting the good men of sport (and there are many) to take a leadership role in confronting the growing problem of violence in society, specifically violence against women. To think that the national cricket captain is being praised in some quarters for enhancing his brand with a threat to someone to expect a "broken f***ing arm" just speaks to the hopelessness of trying to start a counter-revolution that flies in the face of what our sporting leaders are promoting, even if only in the context of a sporting sledge. It's hard to compete with messages that say real men don't walk away from a fight (the Australian rugby league coach implied as much recently when his star player was involved in a punch-up at the World Cup in Manchester).
Michael Vaughan was quoted today as saying that the Lillee-Thomson era was much worse, so there's nothing to worry about. That doesn't really address the core issue of whether we think it is edifying to watch our cricket stars behave like hooligans or not. Just because it has been worse in times gone by doesn't necessarily make it right. The penalties may vary but a wrong doesn't become a right because it's less bad.
Many people not familiar with the environment of professional sport shake their heads and wonder how this sort of behaviour can occur in what is effectively a workplace. Some of the invective hurled by both teams would constitute workplace harassment in most cases. At best, it would be seen as abysmal etiquette to colleagues or competitors. Yet in sport these bubble boys proudly sing the national anthem, represent their countries, are heroes to kids (and cash in handsomely for that), and then reckon that the rest of their behaviour can exist in a moral vacuum. Maybe sport does live in a bubble after all, and so do all those who work in this special industry
My ten-year-old son posed a question to which I had no definitive answer. It was in relation to a Powerpoint slide I use in my work on respect for women that goes something like this: A male librarian says, "We've agreed to put the magazines which are degrading to women out of the reach of children", to which the female librarian says, "I see. And how old do they have to be before degrading women is all right?" In the context of recent events involving verbal and physical violence, my son wanted to know about the shift from being told not to sledge, not to use foul language, not to threaten opponents, to these things suddenly being perceived as a positive sign of manhood. In junior sport, all of these are frowned on. Judging by the endorsement of the new, more masculine, Michael Clarke, my son wants to know when you go from being boy to man, where the sins of boyhood become the proud tattoos of manhood. The only answer I could offer him was that in our family there was no invisible line.
Leadership is turned upside down when grown men are excused for behaviour that would earn a young cricketer a suspension. We expect so much of our boys but should they display those same decent qualities in adulthood, society demands we burst that bubble. Bubble boys indeed!
Often what we see of cricketers on the field is not their real selves. It's just a facade that hides the confusion that resides within
November 28, 2013
I admire the quote from Mark Twain where he said, "The two most important days in your life are the day you were born and the day you find out why."
It's a deep, thought-provoking observation. Why are we here and who are we?
The more fortunate ones have an inbuilt belief as to why they exist. They flow through life. Then there are the masses who ebb and flow, searching and evolving. There are also many who discover that for much of their lives they are unsure. Then one day they realise that, in fact, who they are is masked. They reach the point when enough frustration is enough. Only at that point does the real truth surface; the mask must be removed.
Jonathan Trott has reached a point. This is the point or the day he will find out why he was born, what his life is truly about. When I heard the news I felt I knew where he was in his mind. I have been in similar territory too. Many times.
If you are to choose one word to describe what he is feeling it is "confusion". Confusion is the opposite of clarity. The mind, and thoughts that come thick and fast at you, are muddled, twisted and distorted. You search for clues as to how to go forward at any moment, and as you decipher it all, you can become untrusting, unsure, and uncertain as to the clues you find. The higher the expectation of life, the harder it is to work out. Confusion is a killer.
Where does the core of this confusion grow? My feeling is that it grows in the first decade or so of your life. Then it becomes cemented between the ages of 15 to 20. From there you learn ways to wear the mask. As your body and mind reach maturity you realise the mask is necessary. The higher you expose your confusion, the more the mask becomes permanent.
My mask was firmly in position by the age of 22. I had tasted Test cricket for two years, played 13 Tests, averaging 21. I was supposed to be one of the best young players in the world. Expectations were high and I wasn't meeting them. I cried a lot, moods ebbed and flowed, emotions ran hot. My dream as a boy of scoring a hundred at Lord's was fading fast.
Then I found a mask, and I began to fake it until I made it. Part of the mask was to copy great players to hide my own inadequacies. The other part was: I was created from a fast-tracking system and had no emotional stability, so I had to make up time fast. As time went by I completely lost touch with that warm-hearted kid from Titirangi. Instead I became an aloof, intense, moody son of a bitch from New Zealand. Darth Vader, playing top-level cricket.
I made it, just. I scored the hundred at Lord's, I notched up hundreds around the world as my dream world wanted me to. I loved batting. But I grew to hate myself and the mask I wore. Off the field I was totally lost. As the expectations of a nation climbed, I knew the mask was not going anywhere. It had to stay on until the job was done.
|England need to see Australia for who they are as a team and a nation right now: fully masked and in stage mode, well prepared and united|
Then the body started to bend and break. The feet stopped moving smoothly. The failures arrived. In my last seven Tests I averaged 19. I broke down completely and retired depressed. To get back up on my feet the mask remained on, for television. Last year, when cancer knocked loudly, I had no choice anymore but to face the truth and start again. I unmasked in public and I surrendered to help. It was the only way.
Today, while some confusion exists, the mask has gone and I am happy to look at the real me for the first time in a long time. I accept who I am. When folks ask me what the meaning of success is, I reply that it's accepting who you are.
At this difficult moment in his life, Jonathan Trott is a very important story. It is about the courage and honesty that are driving his desire to remove the confusion and frustration and find his true fulfilment. And he will, slowly, he will. He has shown his resilience at certain points as a batsman, and he will do so again as he identifies that beyond the often boring expectations of being an international sportsman, he is an authentic, loving man.
On the other side of the pitch, wearing another mask, is David Warner. His recent behaviour of lashing out at people tells the story of a man also confused and frustrated, despite his talent. And he continues to lash out, with bat and mouth. That he wears the macho bravado mask, the loud arrogance that is more ego-driven, there is no doubt. His batting has hit a golden run and it's actually pleasant to watch. It's what he is good at. Yet his story has only just begun. Hopefully he will see that life isn't about beating up others but about accepting who you are. I'm sure deep down in Warner there is a genuine spirit.
Which makes me consider the Ashes. While one or two masks are being shed, there is no doubt that the gloves are off for Australia. Failure has forced them to secure the mask once and for all until the last ball is bowled; no drinks with the opposition, no warmth shared, and only a minimum respect. Australia have donned battle garb, to mask their frailties, and it has surprisingly caught England off guard.
Alas, it is not real. If we are honest, it's just a façade. It's not really Michael Clarke's true self, or Darren Lehmann's. Clarke, up until five minutes to go in the Brisbane Test, displayed a real face and spirit to the challenge in front of him. Then, on the stroke of the kill, his face changed and the mask was there for all to see, ugly and not authentic.
The finger-pointing rant was a performance to lead into the next battle in Adelaide. He did not need to act the way he did. That he did is indeed the Australian way, given they have been humiliated so much recently and had smelled blood. At this point, for such a proud cricketing nation, failure is not an option.
It's all put on to frighten away the demons of the last three series. That is what the Ashes has become, a gladiator sport, fuelled by drama and controversy. As cricket entertainment goes, it's riveting and compelling. After it is done, they will all go home, try and take off the false ego, and try and be human again, especially in front of family and friends. The lucky ones will take the masks off easily, knowing they are fake, while for those who conceal it, confusion will continue to hit bumps in the road.
England need to see Australia for who they are as a team and a nation right now; fully masked and in stage mode, well prepared and united. Even sections of the media are on show, as the Broad ban showed. Nevertheless, if England see through the acting and ignore it, and instead focus on the energy, and on being true to themselves, then they can and will compete closely.
If Jimmy Anderson can pull his head in and concentrate on late swing, he will be doing his job for his country. He is not getting better as his body slows down, especially while acting a clown, so his efforts should be on hitting the top of off stump. Additionally KP and Prior could do with simply playing straight as a button for a while.
Whether they are good enough across the park right now in these "rather hot" foreign conditions, is another matter. What they must insist upon and lay down as their true intent is that they will not be fooled into noticing the act. Cook is the perfect man to lead this honest endeavour. He is truly grounded and real, with the fortitude to grind down the macho manoeuvring.
Wednesday, 27 November 2013
- BY ROBERT MCMILLAN AND CADE METZ
- 6:30 AM
The price of a bitcoin topped $900 last week, an enormous surge in value that arrived amidst Congressional hearings where top U.S. financial regulators took a surprisingly rosy view of digital currency. Just 10 months ago, a bitcoin sold for a measly $13.
The spike was big news across the globe, from Washington to Tokyo to China, and it left many asking themselves: “What the hell is a bitcoin?” It’s a good question — not only for those with little understanding of the modern financial system and how it intersects with modern technology, but also for those steeped in the new internet-driven economy that has so quickly remade our world over the last 20 years.
Bitcoin is a digital currency, meaning it’s money controlled and stored entirely by computers spread across the internet, and this money is finding its way to more and more people and businesses around the world. But it’s much more than that, and many people — including the sharpest of internet pioneers as well as seasoned economists — are still struggling to come to terms with its many identities.
With that in mind, we give you this: an idiot’s guide to bitcoin. And there’s no shame in reading. Nowadays, as bitcoin is just beginning to show what it’s capable of, we’re all neophytes.
Bitcoin isn’t just a currency, like dollars or euros or yen. It’s a way of making payments, like PayPal or the Visa credit card network. It lets you hold money, but it also lets you spend it and trade it and move it from place to place, almost as cheaply and easily as you’d send an email.
As the press so often points out, Bitcoin lets you do all this without revealing your identity, a phenomenon that drove its use on The Silk Road, an online marketplace for illegal drugs. But at the same time, it’s a system that operates completely in the public view. All Bitcoin transactions are recorded online for anyone to see, lending a certain transparency to the system, a transparency that can drive a new trust in the economy and subvert the anonymity sought by those on The Silk Road, which the feds shut down last month.
Bitcoin is much more than a money service for illegal operations. It’s a re-imagining of international finance, something that breaks down barriers between countries and frees currency from the control of federal governments. Bitcoin is controlled by open source software that operates according to the laws of mathematics — and by the people who collectively oversee this software. The software runs on thousands of machines across the globe, but it can be changed. It’s just that a majority of those overseeing the software must agree to the change.
In short, Bitcoin is kind of like the internet, but for money.
Birth of the Bitcoin
What does that mean, specifically?
About five years ago, using the pseudonym Satoshi Nakamoto, an anonymous computer programmer or group of programmers built the Bitcoin software system and released it onto the internet. This was something that was designed to run across a large network of machines — called bitcoin miners — and anyone on earth could operate one of these machines.
This distributed software seeded the new currency, creating a small number of bitcoins. Basically, bitcoins are just long digital addresses and balances, stored in an online ledger called the “blockchain.” But the system was also designed so that the currency would slowly expand, and so that people would be encouraged to operate bitcoin miners and keep the system itself growing.
When the system creates new bitcoins, you see, it gives them to the miners. Miners keep track of all the bitcoin transactions and add them to the blockchain ledger, and in exchange, they get the privilege of, every so often, awarding themselves a few extra bitcoins. Right now, 25 bitcoins are paid out to the world’s miners about six times per hour, but that rate changes over time.
Why do these bitcoins have value? It’s pretty simple. They’ve evolved into something that a lot of people want — like a dollar or a yen or the cowry shells swapped for goods on the coast of Africa over 3,000 years ago — and they’re in limited supply. Though the system continues to crank out bitcoins, this will stop when it reaches 21 million, which was designed to happen in about the year 2140.
The idea was to create a currency whose value couldn’t be watered down by some central authority, like the Federal Reserve.
When the system quits making new money, the value of each bitcoin will necessarily rise as demand rises — it’s what’s called a deflationary currency — but although the supply of coins will stop expanding, it will be still be relatively easy to spend. Bitcoins can be broken into tiny pieces. Each bitcoin can be divided into one hundred million units, called Satoshis, after the currency’s founder.
The Key to the System
How do you spend bitcoins? Trade them? Keep people from stealing them? Bitcoin is a math-based currency. That means that the rules that govern bitcoin’s accounting are controlled by cryptography. Basically, if you own some bitcoins, you own a private cryptography key that’s associated with an address on the internet that contains a balance in the public ledger. The address and the private key let you make transactions.
The internet address is something everyone can see. Think of it like a really complicated email address for online payments. Something like this: 1DTAXPKS1Sz7a5hL2Skp8bykwGaEL5JyrZ. If someone wants to send you bitcoins, they need your address.
If you want to send your bitcoins to someone else, you need your address and their address — but you also need your private cryptography key. This is an even more complicated string that you use to authorize a payment.
Using the math associated with these keys and addresses, the system’s public network of peer-to-peer computers — the bitcoin miners — check every transaction that happens on the network. If the math doesn’t add up, the transaction is rejected.
Crypto systems like this do get cracked, and the software behind Bitcoin could have flaws in it. But at this point, Bitcoin has been tested pretty thoroughly, and it seems to be pretty darned secure.
For the ordinary people who use this network — the people who do the buying and the selling and the transferring — managing addresses and keys can be a bit of a hassle. But there are many different types of programs — called wallets — that keep track of these numbers for you. You can install a wallet on your computer or your mobile phone, or use one that sits on a website.
With these wallets, you can easily send and receive bitcoins via the net. You can, say, buy a pizza on a site that’s set up to take bitcoin payments. You can donate money to a church. You can even pay for plastic surgery. The number of online merchants accepting bitcoins grows with each passing day.
But you can also make transactions here in the real world. That’s what a mobile wallet is good for. The Pink Cow, a restaurant in Tokyo, plugs into the Bitcoin system via a tablet PC sitting beside its cash register. If you want to pay for your dinner in bitcoins, you hold up your phone and scan a QR code — a kind of bar code — that pops up on the tablet.
How to Get a Bitcoin
If all that makes sense and you wanna give it try, the first thing you do is get a wallet. We like blockchain.info, which offers an app that you can download to your phone. Then, once you have a wallet, you need some bitcoins.
In the U.S., the easiest way to buy and sell bitcoins is via a website called Coinbase. For a one percent fee, Coinbase links to your bank account and then acts as a proxy for you, buying and selling bitcoins on an exchange. Coinbase also offers an easy-to-use wallet. You can also make much larger bitcoin purchases on big exchanges like Mt. Gox or Bitstamp, but to trade on these exchanges, you need to first send them cash using costly and time-consuming international wire transfers.
Yes, you can keep your purchases anonymous — or at least mostly anonymous. If you use a service like Coinbase or Mt. Gox, you’ll have to provide a bank account and identification. But other services, such as LocalBitcoins, let you buy bitcoins without providing personal information. Ironically, the best way to do this is to meet up with someone here in the real world and make the trade in-person.
LocalBitcoins will facilitate such meetups, where one person provides cash and the other then sends bitcoins over the net. Or you can attend a regular Bitcoin meetup in your part the world. Because credit card and bank transactions are reversible and bitcoin transactions are not, you need to be very careful if you’re ever selling bitcoins to an individual. That’s one reason why many sellers like to trade bitcoins for cash.
The old-school way of getting new bitcoins is mining. That means turning your computer into a bitcoin miner, one of those nodes on Bitcoin’s peer-to-peer network. Your machine would run the open source Bitcoin software.
Back in the day, you could do bitcoin mining on your home PC. But as the price of bitcoins has shot up, the mining game has morphed into a bit of a space-race — with professional players, custom-designed hardware, and rapidly expanding processing power.
Today, all of the computers vying for those 25 bitcoins perform 5 quintillion mathematical calculations per second. To put it in perspective, that’s about 150 times as many mathematical operations as the world’s most powerful supercomputer.
And mining can be pretty risky. Companies that build these custom machines typically charge you for the hardware upfront, and every day you wait for delivery is a day when it becomes harder to mine bitcoins. That reduces the amount of money you can earn.
This spring, WIRED tested out a custom-designed system built by a Kansas City, Missouri company called Butterfly Labs. We were lucky enough to receive one of the first 50 units of a $275 machine built by the company.
We hooked it up to a network of mining computers that pool together computing resources and share bitcoin profits. And in six months, it has earned more than 13 bitcoins. That’s more than $10,000 at today’s bitcoin prices. But people who got the machine later than we did (and there were plenty of them) didn’t make quite so much money.
Once you get your hands on some bitcoins, be careful. If somebody gets access to your Bitcoin wallet or that private key, they can take your money. And in the Bitcoin world, when money is gone, it’s gone for good.
This can be a problem whether you’re running a wallet on your own machine or on a website run by a third party. Recently, hackers busted into a site called inputs.io — which stores bitcoins in digital wallets for people across the globe — and they made off with about $1.2 million in bitcoins.
So, as their bitcoins start to add up, many pros move their wallets off of their computers. For instance, they’ll save them on a thumb drive that’s not connected to the internet.
Some people will even move their bitcoins into a real physical wallet or onto something else that’s completely separate from the computer world. How is that possible? Basically, they’ll write their private key on a piece of paper. Others will engrave their crypto key on a ring or even on a metal coin.
Sure, you could lose this. But the same goes for a $100 bill.
The good news is that the public nature of the bitcoin ledger may make it theoretically possible to figure out who has stolen your bitcoins. You can always see the address that they were shipped off to, and if you ever link that address to a specific person, then you’ve found your thief.
But don’t count on it. This is an extremely complex process, and researchers are only just beginning to explore the possibilities.
Bitcoin vs. the U.S.A.
Bitcoin is starting to work as a currency, but because of the way it’s built, it also operates as an extremely low-cost money-moving platform. In theory, it could be a threat to PayPal, to Western Union, even to Visa and Mastercard. With Bitcoin, you can move money anywhere in the world without paying the fees.
The process isn’t instant. The miners bundle up those transactions every 10 minutes or so. But today, payment processors like BitPay have stepped in to smooth things out and speed them up.
The trouble is that federal regulators still haven’t quite figured out how to deal with Bitcoin.
The currency is doing OK in China, Japan, parts of Europe, and Canada, but it’s getting its bumpiest ride in the U.S., where authorities are worried about the very features that make Bitcoin so exciting to merchants and entrepreneurs. Here, the feds have stopped short of trying to kill Bitcoin, but they’ve created an atmosphere where anybody who wants to link the U.S. financial system to Bitcoin is going to have to proceed with extreme caution.
Earlier this year, the U.S. Department of Homeland Security closed the U.S. bank accounts belonging to Mt. Gox, which has generally been the world’s largest Bitcoin exchange. Mt. Gox, based in Japan, let U.S. residents trade bitcoins for cash, but it hadn’t registered with the federal government as a money transmitter, and it hadn’t registered in the nearly 50 U.S. states that also require this.
The Homeland Security action against Mt. Gox had an immediate chilling effect in the U.S. Soon, American Bitcoin companies started reporting that their banks were dropping them, but not because they had done anything illegal. The banks simply don’t want the risk.
Now, other Bitcoin companies that have moved fast to operate within the U.S. are facing the possibility of being shut down if they’re not following state and federal guidelines.
Even if the feds were interested in shutting down Bitcoin, they probably couldn’t if they tried, and now, they seem to understand its promise. In testimony on Capitol hill earlier this week, Jennifer Shasky Calvery, the director of the Treasury Department’s Financial Crimes Enforcement Network, said that Bitcoin poses problems, but she also said that it’s a bit like the internet in its earliest days.
“So often, when there is a new type of financial service or a new player in the financial industry, the first reaction by those of us who are concerned about money laundering or terrorist finance is to think about the gaps and the vulnerabilities that it creates in the financial system,” she said. “But it’s also important that we step back and recognize that innovation is a very important part of our economy.”
It is. And Bitcoin richly provides that innovation. It just may take a while for the world to completely catch on.
Once You Use Bitcoin You Can’t Go ‘Back’ — And That’s Its Fatal Flaw
- BY NICHOLAS WEAVER
- 9:27 AM
Bitcoin is the world’s most popular digital currency — not just a form of money, but a way of moving money around — and the darling topic du jour of the tech industry right now. [WIRED has its primer on what bitcoin is and how it works here.]
As a security researcher, I admire bitcoin-the-protocol. It’s an incredibly clever piece of cryptographic engineering, especially the proof-of-work as a way of maintaining an indelible history and a signature scheme which, when properly used, can limit the damage that might be done by an adversary with a quantum computer. But I believe bitcoin-the-currency contains a fatal flaw, one that ensures that bitcoin won’t ever achieve widespread adoption as a currency.
The flaw? That bitcoin transactions are irreversible. That is, they can never be undone: Once committed, there is no “oops”, no “takeback”, no “control-Z”. Combined with bitcoin’s independence — it is a separate currency with a floating exchange rate — this flaw is arguably lethal to money systems.
Bitcoin advocates will argue that both its irreversibility and independence are benefits. That they were explicit design decisions to defy control by governments or banks. But to me these features are flaws, because a tenet of modern finance asserts that anything electronic must be reversible. If bitcoin really is the internet applied to money … then it, too, should have a “back” button.
Without an undo/ back button, it’s only possible to prevent fraud. With an undo, it would also be possible to detect and mitigatefraud; to see that something bad happened and then actually do something about it. Credit cards, bank account transfers, and all other electronic transactions involving a bank all have an “undo” button.
Banks rely on the reversibility feature every day to stop fraudulent activities. Bitcoin robbery casesaren’t just rising because of interest in the currency — the most recent is a European bitcoin payment processor losing $1M after a DDoS attack — they’re rising because robbing a bank online involves much less friction than doing so in person.
Nicholas Weaver is a researcher at the International Computer Science Institute in Berkeley and U.C. San Diego (though this opinion is his own). He focuses on network security as well as network intrusion detection, defenses for DNS resolvers, and tools for detecting ISP-introduced manipulations of a user’s network connection. Weaver received his Ph.D. in Computer Science from U.C. Berkeley.
In the current financial system, the only major irreversible transactions involve withdrawing cash. This is a process that must happen in person and therefore naturally imposes substantial limits; in-person requirements provide attribution, keep an attacker from automating the process, and limit the “attack surface”. For example:
- To steal a million dollars hidden under mattresses, a thief needs to break into thousands of homes.
- To steal a million dollars from a typical business’s bank account, thieves need to transfer it to a network of roughly 100 money mules.
- Each mule must then withdraw less than $10,000 from their account within a short period of time, take the cash to Western Union, and wire the money to the thieves. (This is why those running the mules can claim up to 40-50 percent of the take!)
To steal a million dollars worth of bitcoins stored by a business, however, a thief only needs the private key. Likewise, to steal $1000 worth of bitcoins each from 1000 people, the thief only needs to have his or her bot software running on enough victims with enough bitcoins to automate the process.
This means bitcoins should never be “stored” on an internet-connected device. That includes our computers and our smartphones. (And have you heard the one about the guy who keeps his key on his finger?) Let’s pause for a moment to reflect on that: What sort of online currency requires using offline computers and objects for all storage?
Now, it is theoretically true that stolen coins could be blocked. If a portion of the network blocks stolen bitcoins today, then the same mechanism could block bitcoins that passed through black markets or offshore exchanges (such as BTC-e) that don’t implement anti-money-laundering protections. Yet the bitcoin community strongly resists the idea of blacklists, because it eliminates fungibility — the notion that all bitcoins are identical — which is essential for a currency. If every dollar used in a drug deal couldn’t be used again, would dollars work as currency? Especially if, sometime after acceptance, a dollar becomes void and blacklisted after the fact because of its previous involvement in a crime?
Bitcoin advocates insist that the theft problem is solvable. For the sake of argument, let’s assume that some bitcoin-centric hardware company deploys completely secure and free hardware bitcoin wallets for anyone to use. And let’s also assume consumers are happy with such an unregulatable model and don’t care that merchants can now rip them off with near impunity. Immunity from theft is not enough. Irreversibility, combined with volatility, ensures that bitcoin still will never see wide adoption.
Bitcoin’s irreversibility means that a bitcoin exchange can never accept credit cards or wire transfers to quickly provide bitcoins in significant quantities. These agencies must carefully audit customers, wait on any large purchases, and assign blame when attackers breach accounts. Any exchange that does not follow such precautions would be a magnet for fraud, and cease to exist once they start receiving chargebacks.
As a consequence, the only ways to quickly buy bitcoins require cash — again, I’m talking about convenience here which surely should be a feature of internet applied to money. This convenience can happen via a cash drop at a drugstore; a cash deposit into the exchange’s bank account; a face-to-face meetup; or at an actual ATM, complete with cameras and withdrawal limits. (The world’s first bitcoin ATM just went live a month ago in Canada. Incidentally, it takes cash, not ATM cards.)
And almost every bitcoin purchase needs to start with such a consuming, hastle-prone step if the buyer is unwilling to risk the wild swings in value that bitcoin experiences on a day-to-day basis. Since bitcoin has no stable value, the recipient should immediately go the other way. After all, if bitcoin’s volatility is desired by the merchant, they can just buy bitcoins independently. Instead, any sensible merchant receiving them will immediately turn them back into Dollars, Euros, or whatever local currency they need at a cost of roughly 1 percent. Which means the buyer first had to go the other way, turning dollars into bitcoins. Otherwise, the system would be out of balance.
Thus to actually buy something with the “digital currency of the future” — without having to wait, have funds predeposited at an exchange, or risk that one’s bitcoins drop in value — the buyer has to go to the bank, withdraw cash, turn it into bitcoins, and then spend it quickly.
The need to go in person and withdraw cash conservatively costs the buyer 2 percent, as gas stations can charge over 2 percent to accept credit cards (and yet, people regularly use credit over cash). For reference, compare this to Square, which charges 2.75 percent to process credit cards. So even if you canconveniently get bitcoins from your local ATM — though we’re nowhere near there yet — a bitcoin transaction will cost the buyer and seller a combined 3 percent or more.
Even the much-vaunted international transfer use case doesn’t make sense here: A bitcoin transaction may be cheaper than a SWIFT wire transfer, but the cash requirement means it is not necessarily cheaper than Western Union. (To Mexico, it’s $8 plus a currency exchange fee. Europe is far more expensive, but that’s due to a lack of competition rather than something intrinsic.) If Western Union charges nearly double the currency conversion fee of a bitcoin exchange, it still comes out approximately the same since a foreign bitcoin transaction involves two currency exchanges rather than one.
Bitcoin therefore only works for merchants who face substantial chargebacks but who can’t say “pay cash”, are selling to bitcoin believers willing to pay the premium price to use bitcoins, or want to conduct business that the credit card system blocks. Yet many of the transactions blocked by the credit card system — namely gambling, drugs, and crypto-extortion — are themselves illegal. In those cases, does it really make sense to use such an innately traceable currency with a permanent record? I think not. (You can bet that redandwhite, the “hitman” Dread Pirate Roberts allegedly hired, is going to be asking himself that question over the coming months.)
This is not to say that bitcoin won’t retain its price. After all, the greater-sucker theory of speculation can ensure a large price for a long period. As long as bitcoin believers can recruit enough new money to balance the newly mined-for-sale coins, the price may sustain itself indefinitely. And, in the greater scheme of things, bitcoin is small: even at a roughly 10 billion dollar market capitalization it is almost irrelevant in financial terms. This is probably roughly the peak market capitalization achieved by Beanie Babies in 1999.
There are indeed important and valuable ideas that exist in bitcoin’s design. But bitcoin itself? Its volatility and built-in irreversibility will doom it to the ash-heap of history.