The term decentralized finance, or DeFi, goes back to a Telegram chat in 2018. Thats when a group of software developers and entrepreneurs were trying to decide what to call their movement of new-breed financial services that would be automated, built on a blockchain, and capable of stripping out traditional banks.

Three years later and DeFi is big business. A user with a crypto wallet can trade digital assets, get loans, or take out insurance, among many other things. Some $90 billion of collateral is locked up in these services, and more than 10 million people have downloaded MetaMask, one of the most popular digital wallets used to open up access to these networks.

The roots of decentralized finance come from the 2008 bitcoin whitepaper that set out the framework for a novel system for digital cash; those creation exploded into something bigger when Ethereum was invented a few years later. Bitcoin wanted to be peer-to-peer money, Camila Russo, founder of the crypto news service The Defiant, wrote in her book The Infinite Machine. Etherum wanted to be peer-to-peer everything.

DeFi is an amalgam of cryptography, finance, and software development, and it tends to be shrouded with its own lexicon and jargon. Lets take it one piece at a time.

One of the core tenants of decentralized finance is that its, well, decentralized. Take bitcoin, for example: The original crypto asset is basically a ledger (its blockchain) that is decentralized because the transactions are recorded in databases on many different computers. That single record (stored across many databases) is secured with cryptography and the computers keep tabs on each other to make sure it hasnt been tampered with.

Decentralization is part of what makes bitcoin hard to kill. No single party is in charge, so its nearly impossible for someone to go rogue and change the rules that govern the virtual coin. Likewise, even if a government manages to prevent a bunch of computers from supporting bitcoin, the digital asset can continue functioning because other computers on the network retain a full record of transactions and can carry on running the show.

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DeFi takes this concept a step further. Decentralized exchanges and lending systems use blockchains like the Ethereum network, which was proposed by Canadian-Russian programmer Vitalik Buterin in 2013. Whereas the bitcoin blockchain was designed to keep track of bitcoin transactions, Ethereums blockchain was created to host programs. Think of Ethereum as a decentralized computer that software developers can make applications (dApps) for. The computers that provide processing power for Ethereum are rewarded with ether, which is now the second-most valuable crypto asset behind bitcoin.

Like bitcoin, the Ethereum network is hard to shut down or corrupt. Anyone with an internet connection can access it.

The decision making, or governance, at DeFi organizationsfrom the fees they charge users to the products they offeris often meant to be decentralized. (If the US political system is a representative democracy, think of DeFi as direct democracy.) A single person or a small group of people might be driving a decentralized application at inception, but they often seek to step away as the project gains momentum, handing control to the community that uses it. That transition could be in the form of a decentralized autonomous organization (DAO), which has its rules and regulations embedded in programming code and may issue governance tokens, which gives holders of those coins say in decisions.

One of bitcoin's key innovations was the capacity for two users to make digital payments directly with one another. This is easy to do in the physical world using paper or metal money. But until bitcoin came along, the only way to do so electronically was through a bank or payment company like PayPal.

Going through these third parties leaves a digital footprint that can be surveilled, and those companies could potentially be "censored" by the governmenti.e. pressured to prevent transactions for political or other reasons. Bitcoin was envisioned to get around this, as a digital form of cash for peer-to-peer payments.

DeFi apps can also be peer-to-peer. In a traditional stock-trading transaction, an order might be processed through a series of intermediariesa broker and an exchange, among otherswhile the shares themselves are held at a custody bank, which is expected to keep the securities from getting lost or stolen.

By contrast, a DeFi exchange (DEX) doesn't have those intermediaries. If you use Uniswap, a decentralized exchange built on the Ethereum platform, to trade crypto tokens, those assets will end up right in your crypto wallet, facilitated by Uniswap's automated programs known as smart contracts. That means there are fewer parties taking a cut of your transaction.

Blockchain has enabled a series of digital gold rushes since it was invented 13 years ago. Two of them are initial coin offerings (ICOs) and nonfungible tokens (NFTs):

ICOs are a type of crowdfunding, and they're often used to raise money for open-source software projects. In exchange for capital, ICO investors get a unique token that might give them access to the software's special features... or might not give them access to much at all.

ICOs can sound a little bit like a stock offeringtoo much like stock offerings, in fact, for the US Securities and Exchange Commission; coin offerings may lack guardrails like disclosure and auditing that an initial public offering (IPO) would be expected to provide in the regulated stock market.

ICOs raised more than $7 billion in 2018, before plunging around 95% to $371 million in 2019, the latest year data was available, as regulators cracked down, according to CB Insights.

NFTs are kind of like a limited-edition trading cardonly online. Just as blockchain enables users to prove ownership of their bitcoin holdings, so too does it enable people to make unique digital assets like collectibles and art. One of the best known NFT sales was a work by Beeplethe artist also known as Mike Winkelmannwho sold a collage through an auction at Christie's for $69 million. Unlike a music MP3, which can be copy-and-pasted to infinity, NFTs are designed to be one of a kind, and to have one owner at a time.

A digital art fair in Hong Kong with works by Andy Warhol and Mike Winkelmann.

These acronyms are more than just a gold rush, says Matthew Leising, author of Out of the Ether. ICOs gave startups and software developers a way to raise money without the help of an investment bank or the backing of a venture capital firm. Likewise, NFTs can give musicians and visual artists a new way to monetize their work. "NFTs are really interesting because they've proven that a digital item can be scarce," Leising says.

DeFi's strength can also be its weakness:

Decentralization makes DeFi difficult to censor or stamp out, but it requires some heavy-duty computing. Maintaining a database and records across a network of many computers slows things down and can make transactions more expensive. Ethereum is the most popular blockchain for DeFi applications, but the sheer amount of computing now taking place is driving up fees and bogging down the network. As Ethereum developers try to find ways to make it more scalable, other chains like Solana and Avalanche are picking up momentum. "It's genuinely hard to get performance out of blockchains," says Emin Gn Sirer, a computer scientist at Cornell University and an advisor to Avalanche.

DeFi strips out intermediaries like custody banks, which are expected to keep assets (usually digital tokens) safe. That means you don't have to worry about a financial institution failing and taking your holdings with itor a government seizing your tokens and confiscating them. On the other hand, the only thing keeping your holdings safe is you and your passcode. If you lose that passcode (or someone steals it), your assets are gone for good.

The DeFi upstarts often purport to be available to anyone. You may be able to get a loan or trade virtual coins without traditional financial credentials like identification or a credit score. That freedom promises to extend financial services to parts of the world that haven't always had them, or where the services are expensive or prone to fraud or confiscation. But you can easily see the downside: If there's no entity keeping track of who is using a service or where they are located, the systems could be used by criminals or run counter to sanctions. The regulatory crackdown has already begun.

Blockchains have proven pretty tough to crackbut the smart contracts and apps that run on top of those chains are only as smart as the people who designed them. The code is typically open-source, which means it's there for everyone to see and to innovate with, but that also makes it easier for hackers to attack. Much more programming code these days is audited for bugs and vulnerabilities, and a growing number of people understand the need for formal verification (a process that uses algorithms to analyze other algorithms for glitches), but plenty of money is still going into code that hasn't been shored up in that way, Cornell's Sirer said.

Uniswap, a decentralized exchange (DEX), was created by Hayden Adams, a mechanical engineer from New York. The idea sprung from posts written by Ethereum founder Buterin about developing an automated market maker and decentralized exchange. These days, Uniswap facilitates $1 billion or more in daily crypto trading, and its governance tokens, UNI, have a market value of about $12 billion according to CoinGecko, a crypto-data website.

Aave was founded by law student Stani Kulechov in 2017 (originally called ETHLend). The platform lets users lend and borrow crypto tokens; users have put about $14 billion worth of collateral for loans on the network, according to Defi Pulse.

MakerDAO is a lending and borrowing platform that uses Dai, a stablecoin linked to the US dollar. MakerDAO was started in 2014 and co-founded by Rune Christensen. On its website, MakerDao says it's one of the largest decentralized applications on the Ethereum blockchain and the first DeFi application to get serious adoption. Users have put up about $6 billion of collateral on the system.

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Banks have cryptocurrency issues. Insider trading desks and a wide range of clients are pressing senior executives at large banks to launch cryptocurrency services.

Compliance departments and boards are less enthusiastic, but there is a growing desire to do something to avoid being left behind. It is not clear what to do and how to do it.

The rise of companies built around Bitcoin and other digital assets can make dealers look like Wall Street executives are anxious to look at the hackathon.

And, apart from the potential danger of dragging a good crypto name into the mud at some point, banks face very real challenges in their digital efforts. They cant move fast. You need to comply with regulations that are currently unclear or have not yet been enforced. Finding and maintaining talent is becoming increasingly difficult. And what if it all turns out to be a big scam?

Despite the potential challenges, big banks can no longer shrug digital coins. The market has grown to a scale of $ 1.8 trillion.

The world of digital assets is too big to ignore. We believe that crypto-based digital assets have the potential to form a whole new asset class, said Bank of America, the first research dedicated to crypto. It is stated in the note.

Several major US banks have announced their involvement in or planned ventures in the digital market, but many European dealers have quietly followed suit.

Some, like Goldman Sachs, have chosen to make a splash with the effort around cryptography. Intentionally create a lot of noise about that babys steps. European banks are more tortured and, as a result, messaging is mixed.

In February, a research team at Commerzbank, a German lender, sent a note explaining why analysts do not cover Bitcoin. . By September, the lender had set up a digital asset team.

Its hard to decide where the traditional financial giant fits in the crypto world. A complex, highly technology-driven process of preserving digital assets, custody is risky and extremely difficult to insure.

Currently, banks can only buy and sell futures and other non-cash contracts, and transactions are similarly suspicious, making it difficult to generate the returns that crypto-speaking trading companies can. Rental is off-limits for now. And companies operating in the digital asset market are never afraid.

Cryptography is expanding into The traditional financial services market, said David Kinitsky, CEO of Kraken Bank. Companies [native to crypto] It will beat the existing companies in this new media, as seen in other industries when the Internet was introduced.

Part of the problem is that everything related to cryptography is related to cutting-edge technology far from the kind of kits that traditional financial advocates are usually associated with. After years of consolidation and mergers, the technology underlying the banking giant is awkward, fragmented, and often esoteric.

Banks arent really advances in technology, said Diogo Monica, co-founder of banks and cryptocurrency technology provider Anchorage Digital.

Banks arent as cool as they used to be, so talent is also an issue. Investment banks are looking for retired coders to run esoteric and intertwined computer systems because young people are no longer learning the language needed to run some of Wall Streets largest institutions. Recruiters say they are forced to do so.

Banks definitely have problems, said a financial market expert recruiter, saying young coders are enjoying better wages and more flexibility in companies focused on cryptocurrencies and technology. I did. And in many cases, the job is simply more interesting.

However, not everything is lost. Reputation and the significant customer base they already have are valuable, especially when more conservative investors such as insurance companies are involved. Lending and borrowing may also be opened in the future.

Christine Trent Parker, a partner in the financial industry group at law firm Reed Smith, said: And if their technology doesnt support it, banks can buy it at any time.

eva.szalay@ft.com

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Artificial intelligence, quantum computing, deep fakes and unfortunately ransomware are the future cybersecurity threats according to a panel of experts at IT World Canadas second online MapleSec conference.

The predictions were made during Tuesdays opening session entitled, The Threatscape 2023 and Beyond.

AI-generated malware will be one of the emerging threats in the near future, said Hadis Karimpour, associate professor and chair in secure and reliable networked engineering systems at the University of Calgary.

Unlike conventional malware, she said, AI-generated threats will use intelligence to infect computers or deploy malicious applications faster than happens now.

As organizations deploy AI applications, infosec pros will face more of these threats, she added.

Quantum computing and the transition to post-quantum cryptography will be the biggest challenge organizations will have to face in the next five years, said Jennifer Fernick, New York City-based senior vice president and global head of research at NCC Group.

Cryptography is fundamental to the security and privacy of everything we do online, she pointed out. But quantum computing will crack current algorithms. Fortunately, she added, researchers are now creating and testing quantum-resistant algorithms that can run on conventional computers.

Initially, quantum computers will be available to a select few, she said, but will spread more widely once quantum-safe cryptography is established.

For her part Cara Wolf, CEO of Calgary-based Ammolite Analytx, said having a CISO or CSO in the C-suite is an emerging priority at many organizations and not just large firms.

As cyber threats get more sophisticated and the number of ransomware attacks increase cybersecurity must have its own corporate entity with enough governance and authority to make a difference in decisions made by business units, she said.

On ransomware, Karimpour said its a failure of both awareness training and credentials management. Online training is not enough, she added. Organizations need to develop an effective training program to make sure employees are engaged and aware of the threat of ransomware.

Wolf said statistics she sees on successful ransomware attacks are quite alarming: Sixty per cent of small businesses that are hit go under, she said. Meanwhile some firms cant get cyber insurance because they have been victimized.

Prevention, she added, is key to blunting ransomware attacks.

Looking into the future, Fernick said ransomware doesnt need to evolve much further to keep doing tremendous damage. Ransomware attacks happen most commonly on networks with unpatched vulnerabilities, she added, However, she also noted that organizations arent installing patches fast enough.

Until we as an industry can radically improve vulnerability triage and remediation I think ransomware actors will continue to count their bitcoins, she said.

In the short term, government sanctions against ransomware payment operators like cryptocurrency exchanges will have more of an effect on checking the spread of ransomware than anything else, she said.

The trio agreed that so-called deep fake content the manipulation of video, audio or other digital material designed to impersonate people will rise.

Fernick warned that AI-based deep fake detection models could spawn content that will be undetectable in a never-ending cycle: Deep fakes get better, detection gets better, and it never ends.

Awareness training is key, responded Wolf. Employees have to be taught to look for things that are suspicious, such as a message from the CEO late on a Friday asking that millions of dollars be transferred to a foreign account.

The session wrapped up with the trio being asked to predict what cyber mistake people will still make five years from now:

Clicking on phishing links from unverified sources, said Karimpour.

Application developers still treating security as something to be done at the end of product development, said Fernick.

Gullibility of humans, said Wolf.

I think were going to see the trusting nature of people diminish, she added, which is unfortunate because you need trust to do business with others.

MapleSec continues Wednesday and Thursday starting at noon Eastern time. The theme of Wednesdays sessions is Building Resilience, while Thursdays sessions are around Privacy and Governance.

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The future of cybersecurity is AI, deep fakes and ransomware, MapleSec conference told - IT World Canada

Last month, when digging through a library of Satoshis writings, I found an email thread that piqued my interest.

Anonymous Writer: You will not find a solution to political problems in cryptography.

Satoshi: Yes, but we can win a major battle in the arms race and gain a new territory of freedom for several years. Governments are good at cutting off the heads of centrally controlled networks like Napster, but pure P2P networks like Gnutella and Tor seem to be holding their own.

To this day, Satoshi remains anonymous as the founder of Bitcoin. His anonymity is the key feature of Bitcoins design and, presumably, a crucial piece in the assets decentralization. Satoshis continued anonymity has prevented governments from truly controlling the supply of Bitcoin, making it akin to a commodity rather than a financial instrument. Even with China continuously making efforts to regulate and ban Bitcoin, the asset continues to come back stronger.

But can anonymity benefit other crypto currencies and even stablecoins?

In the same way we are all Satoshi, we are all John, Paul, George and Ringo, says John L. of Float Protocol.

I first met with the founders of the decentralized stablecoin protocol FLOAT, over Zoom to ask a few questions about their project. During our conversation about team development, it became apparent that John and Paul were not their real names. After a brief inquiry, they explained to me that the team drew inspiration from the Beatles, using their names as pseudonyms.

As the project outlives us, there may be another John and another Paul. What matters is that they step in the same role and continue to serve the project in a similar way, says John L. of Float Protocol.

Over the last year we have seen a meteoric rise in the popularity of stablecoins. From USDT, with a market cap of $70 billion, and USDC, with a market cap of $32 billion, to other exchange-specific coins such as Binance-USD and the Gemini Dollar, it seems stablecoins are becoming increasingly more integral as DeFi outpaces the legacy financial system. Even central governments have started taking note, rolling out their own government-sponsored digital currencies - most notably, Chinas Digital Renminbi.

These digitized alternatives, however, are still pegged to fiat, and with it, carry the flaws of the centralized financial legacy system. First, anything tied to the dollar will face increasing regulatory scrutiny. Just this week, the SEC subpoenaed Circles records, the company behind USDC. Second, most stablecoins are U.S. centric in a time when much of the world is looking for opportunities to avoid the pitfalls of hyper-dollarization. Third, the value of the dollar is at the mercy of the decision-making capabilities of just a few individuals leading the Federal Reserve. Since the dollar was unpegged from gold in 1971, the expansionary monetary policies implemented by the Federal Reserve has steadily eroded its value.

In answer to this, many new stablecoins are displaying a design paradigm shift. Algorithmic stablecoins are unpegged, and collateralized by a diverse collection of assets. Several notable projects have been deployed over the last two years including RSR by Reserve, XST by SORA, OHM by Olympus, RAI by Reflexer Labs, and most recently, FLOAT by Float Protocol.

Float recently completed a $1.2 million raise, aptly referred to as a treasury diversification round. Participants included Eden Block, AAVE founder Stani Kulechov, Akropolis founder Ana Andrianova, and popular DeFi investor Santiago Santos, along with several DAOs, including MCV and the LAO. According to the team, Float is designed to be a native internet currency, functioning in a way that satisfies the three major properties of legitimate money - as a medium of exchange, a store of value, and a unit of account, and is designed to provide a decentralized alternative to inflationary, dollar-pegged stablecoins.

Float Protocol answers the problems of USD inflation, crypto volatility, and regulator scrutiny of stablecoins with groundbreaking elegance and simplicity, says Dermot ORiordan of Eden Block.

The protocol utilizes a two-token system - FLOAT, the stablecoin that ties its value to a collection of digital assets, and BANK, the protocols governance token. BANK can fluctuate in price, absorbing volatility, while FLOAT aims to be relatively stable while still reflecting market conditions. The starting price during issuance was set, very cleverly, at $1.618 - the golden ratio in mathematics. Notably, the protocol reached a record total value locked of $1.5 billion, one of the highest of its peers. Since then, the price has floated, as its collateral is ETH, expanding in a bull market and contracting during bearish periods, but with smoothness and low-volatility.

The protocol utilizes Dutch Auctions, which are not only efficient due to their game-theoretical nature but they are also flash-loanable. This allows for a capital efficient and profitable opportunity for traders and arbitrageurs alike, says Paul M, lead developer at Float Protocol.

In an increasingly heightened regulatory climate, it seems that anonymous teams are onto something. Stablecoins have been drawing the attention of the Biden administration, due to the perceived risks for consumers and the traditional financial system. As U.S. officials continue to make stablecoins the focal point of regulatory control over crypto markets, many predict that stablecoins will soon be the first to face comprehensive regulation. And with the wounds of the 2008 financial crisis still fresh in the minds of many officials, it seems likely that stablecoins will be declared systemically important and, therefore, placed under strict regulation.

If DeFi hopes to avoid the pitfalls of the traditional financial system, it is important that stablecoins move away from being tied to those same traditional systems. Collateral diversification, algorithmic design and anonymous founding teams might just make the perfect combination to make decentralized finance a reality.

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Meet Float Protocol - The Algorithmic Stablecoin Built By An Anonymous Team - Forbes

According to law enforcement agencies, the Zodiac case is still unresolved, but new theories are refocusing on the cold case decades ago.

A group of former law enforcement members, intelligence agents, and others, called Casebreakers, nominated a man who was seen by the media on Wednesday, the so-called Zodiac Killer.

The group states that physical and forensic evidence and recovered photographs and other information have identified recently dead suspects.

This theory has not been approved by the authorities as of Thursday night.

The FBIs investigation into the Zodiac case remains unresolved, the FBIs San Francisco office said in a statement to USA TODAY on Thursday.

Due to the ongoing nature of the investigation and in respect of the victims and their families, we do not provide any further comments at this time, the agency added.

The FBI previously confirmed on Wednesday that investigations into historic incidents remained open.

The San Francisco Chronicle reports that law enforcement is skeptical of the groups theory. In particular, the groups suspects were involved in the killings in Riverside, California.

Is it possible that (Casebreakers) killed Sheri Joe Bates? No, Chronicle quotes Riverside police officer Ryan Reynoldsback. If you read what they (case breakers) put out, its all circumstantial evidence. Not much.

Casebreakers said in a statement Wednesday that they would like to share the results with the riverside police.

Fact check:False claim that the FBI ranked the most dangerous constellations

2020:Zodiac Cryptography settled in 50 years after serial killers terrorized Northern California

Authorities across California have been trying to hunt down the Zodiac Killer for decades. The murderers who hunted down the inhabitants in the 1960s are clearly associated with the killings of five.

However, the murderer claimed responsibility for more than 30 murders and sent a series of strange and detailed letters containing ciphertext to the press, where he called himself the Zodiac. During his feast, the murderer also left behind two survivors who helped provide the explanation.

The disturbing and embarrassing incident was a staple of pop culture and influenced David Finchers 2007 film Zodiac. Cases regularly make national headlines, especially as amateur detectives are making progress in resolving cryptography related to the case.

The irony that Zodiac might have lived to see Zodiac become famous was not lost to social media commentators who responded to the latest theory.

Contribution: Christal Hayes, USA TODAY

Source link The FBI says the case is unresolved after the group has identified the suspect

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The FBI says the case is unresolved after the group has identified the suspect - Texasnewstoday.com

Telecommunication network above city, wireless mobile internet technology for smart grid or 5G LTE ... [+] data connection, concept about IoT, global business, fintech, blockchain

In 2015 The Economist magazine hailed blockchain as the trust machine, capable of replacing governance structures, displacing institutions, and bringing a new level of transparency to transactions and information, with implications across public life.

In the years since, the technology has produced trillion-dollar decentralized financial markets and a slew of innovation over blockchains especially in financial services, with the rise of bitcoin, stabelcoins, decentralized finance or DeFi, Central Bank Digital Currencies (CBDCs), and other industries such as shipping, logistics and supply chains are starting to scale use cases.

OECD research, however, shows little breakthrough in blockchain innovation in government and minimal impact in the public sector - the technology is often described as a solution in search of a problem. While the technology is rapidly maturing, we are starting to see governments take an interest in blockchain and distributed ledger technology (DLT) in areas such as tax, standards and certification, digital identity, and data privacy.

For governments, assessing blockchains disruptive potential is both a practical challenge and a philosophical one. The raison detre of many public institutions is the provision of public goods, and the underwriting of rights and the social contract functions that blockchains pioneers sought to replace with cryptography, networks, and protocols. Whether this technology will be used to displace or complement traditional governance models is an open question, as is its ability to deliver such transformation.

This years opening discussion at the OECDs 4th Annual Blockchain Policy Forum addressed several the main opportunities and challenges at the intersection of technology and governance to disentangle blockchains promise from reality and explored the extent to which the technology can and should be guided by governments towards better models of social and economic connection.

In global trade, the leaders in blockchain technologies are the Indo-Pacific based governments like China and Singapore. Trade is the lifeblood of this region which is considered the global trading hub. China and Singapore have been early to understand the benefits of the blockchain for supply chain management, not just for the provenance and tracking of goods, but for tax, customs, and digital rights.

Blockchain has dramatically scaled the 14th century Venetian innovation of the double-ledger into a theoretically infinite multidimensional ledger which is public, open, transparent, and immutable, and secures access using cryptography. Its like another layer of the Internet, with greater resilience against cybercrime, and integrates multiple stakeholders in much better management of the economy, says Alex Sandy Pentland, MIT professor and director of MIT Connection Science.

In a world with geo-political turbulence and trade headwinds, digital leadership in sectors like central bank digital currencies and supply chains using new digital technologies really matter welcome to the digital space race. The intellectual property, technologies, and standards in blockchain are now being used to gain a global foothold in trade. Importantly, this is helping to drive rapid adoption with low friction use cases and easy to access services.

Blockchain is helping counties that are early movers and leaders in this space to position themselves to generate decades of industrial, societal, and economic growth.

Governments need to learn how to adopt and adapt to polycentric governance models to better engage the broad range of actors and stakeholders required to compete in the digital world without having to create new overarching bureaucratic institutions, says Primavera De Filippi, permanent researcher at the National Center of Scientific Research in Paris (CNRS) and faculty associate at the Berkman Klein Center for Internet & Society at Harvard University.

Most of the blockchain DLT technologies are developed in open source with large pools of developers participating by voting through digital protocol governance models which extend in many protocols to other entities becoming governance nodes. This is akin to a large mutual society and is risk adjusted both by the volume of experienced participants and stakeholders and its polycentric nature.

There are two big benefits for governments building out their programs on the blockchain; the first is COLLABORATION governments can attract a larger and more diverse range of stakeholders to build out and adopt the digital infrastructure for trade, tax, identity, financial services, etc., and use the power of the crowd this is markedly different to large enterprise software projects which have significant concentration risks including the number of commercial stakeholders that can engage. The second is CERTIFICATION governments can move away from using sticks by offering carrots to stakeholders that exhibit measurable compliant behaviors this could dramatically change the way we look at regulation and compliance.

This is all achievable through smart contracts on the blockchain and can be accomplished now without new contract law if we adopt functional equivalence for smart contracts, just as we adopted it moving from paper to electronic contracts. The only big decision that governments need to make upfront is whether to use public or private blockchains, or a mix, and this decision merits significant consideration of the specific use case, says De Filippi.

Adds Pentland, there is a great transfer of soft power taking place with blockchain technologies, and when it comes to trade, it is Indo-Pacific led. It is important as the systems grow that they focus on a level of interoperability with each other through standards, to ultimately deliver the benefits that distributed ledger technologies offer multi-dimensional participation. If countries seek to go down the walled garden route, interoperability will go down the drain and the global trade system will be open to further arbitrage opportunities by those that seek to exploit this situation.

Governments and industry must recognize that blockchain is now mature, here to stay, and ready to use, today. The technology is more than a decade old and the underlying technologies of distributed databases, cryptography, and peer to peer networking have been with us since the dawn of computing.

Software developers are delivering blockchain use cases to market quicker than most industries, governments, and regulators can keep up with that is the power of the polycentric networked crowd. There is more innovation going on outside your four walls than inside, and you need to know how to plug into it.

As is often the case, it is the systematic factors coupled with institutional bias that are barriers to governments and managers understanding how and when to mobilize new innovative technologies and methods for society, and in many instances, few are really incentivized to make it happen.

The blockchain revolution provides the platform to engage large numbers and dimensions of stakeholders in the economy through shared mutual governance the major incentive is already there, it is baked into the governance model greater and more efficient economic participation in the economy.

Governments would be wise to be serious about prioritizing the digital space race. If the revolution is tokenized, it will be because large public blockchain consensus protocols are tokenizing it, and large swathes of global business and consumers are using it.

You can watch this panel and learn more about this and much more from the OECDs 4th Annual Blockchain Policy Forum.

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Will The Revolution Be Tokenized: Governments, Blockchain, And The Digital Space Race - Forbes

WASHINGTON On July 28, Diana Toebbe posted a Facebook message looking for a babysitter to take care of her children early on the coming Saturday morning for five to six hours.

Later the post, visible only to friends, was updated with the word *FOUND*. And on that Saturday, Ms. Toebbe accompanied her husband, Jonathan, to south-central Pennsylvania.

Unbeknown to Ms. Toebbe, she and her husband were being watched by the F.B.I. as they left their home in Annapolis, Md. And the bureaus agents continued to watch in Pennsylvania as Jonathan Toebbe removed from his shorts pocket a 32-gigabyte memory card hidden in a sealed Band-Aid wrapper, which he then, according to court papers, placed in a container set up by an undercover F.B.I. operative.

The Toebbes, accused by the U.S. government of trying to sell some of Americas most closely guarded submarine propulsion secrets to a foreign government, are scheduled to appear in federal court in West Virginia on Tuesday. They will face charges related to violating the Atomic Energy Acts prohibition on sharing nuclear know-how.

For now, the big questions surrounding the couple what country they are accused of trying to sell the nuclear secrets to, and what motivated them to take the risk remain unanswered.

Mr. Toebbe was described by acquaintances as a diligent and organized grad student in nuclear physics who was commissioned in the Navy as an officer and expert in submarine propulsion. He continued as a civilian in the Navy after finishing his military service, considered by some a plum assignment for the most talented nuclear physicists.

Ms. Toebbe was a 10-year veteran of the Key School, a progressive private school in Annapolis, where she taught history and English. There, according to parents, she was prone to talking about her Ph.D. in anthropology from Emory University and her love of knitting. She was a respected adviser, both formally and informally, at the school.

You could just tell she was insanely smart, said Craig Martien, 20, a 2019 graduate of Key School who worked closely with Ms. Toebbe on the yearbook and an after-school anthropology club. She was very friendly and down-to-earth, and I got along with her very well.

When Mr. Martien went off to Williams College, he brought along a toy squid that Ms. Toebbe had knitted. Like other Key graduates, Mr. Martien described her as a strong feminist and very liberal.

She was taken aback by President Donald J. Trumps 2016 election, he said, and mentioned several times that she was considering moving to Australia.

She said she couldnt stand the current state of politics and actually had found some job opportunities over there, he said.

On social media platforms, Ms. Toebbe shared photographs of her dogs, her children, meals cooking on the stove, a family vacation and selfies ordinary scenes of an ordinary life, one far different than the amateur cloak-and-dagger act portrayed in the F.B.I. affidavit.

Having made contact with the as-yet undisclosed other country about providing submarine secrets, the Toebbes were reluctant to expose themselves in an in-person meeting, according to the narrative laid out in court documents by the F.B.I. But their apparent desire for cryptocurrency payments led them to agree to the undercover operatives demand they deposit information in a dead drop location a decision that ultimately exposed their identity to the F.B.I.

Evidence in the court documents suggests the foreign country the Toebbes allegedly tried to sell the information to was an ally, or at least something of a partner, since it cooperated with the F.B.I. as the sting operation unfolded. While some experts speculated France could have been the target, French officials said they were not involved in the incident.

The hearing on Tuesday will be short. So far as the government knows, neither Jonathan nor Diana Toebbe has a lawyer. Prosecutors asked the court on Monday to hold Mr. Toebbe rather than granting him bail, saying he could face life in prison and was a flight threat. The magistrate judge could also set a hearing date for the couples continued detention.

Public records searches turned up no signs of financial distress that could provide a motivation for them to try to sell American secrets.

Yet the F.B.I. affidavit portrayed the couple as willing to take risks for the promise of payments in a cryptocurrency called Monero.

In February, F.B.I. agents, posing as a representative of the foreign country, proposed an in-person meeting. The response, which was signed Alice, a common placeholder name in military cryptography, wrote that face to face meetings are very risky for me, as I am sure you understand, according to the affidavit. The writer then proposed passing information electronically in exchange for $100,000 in the cryptocurrency.

Please remember I am risking my life for your benefit and I have taken the first step. Please help me trust you fully, the note to the undercover F.B.I. agents read.

The F.B.I. agents then pressed for a neutral drop location. The response came a few days later: I am concerned that using a dead drop location your friend prepares makes me very vulnerable, the note from Alice said, according to the affidavit. If other interested parties are observing the location, I will be unable to detect them. I am not a professional, and do not have a team supporting me.

The note went on to propose that the writer would choose a drop location for the encrypted files. The F.B.I. agents responded that they would give first $10,000 then $20,000 in cryptocurrency at a drop location of their choosing.

I am sorry to be so stubborn and untrusting, but I cannot agree to go to a location of your choosing, the response from Alice said. I must consider the possibility that I am communicating with an adversary who has intercepted my first message and is attempting to expose me.

The writer next proposed that the country provide reassurance by sending a signal from its complex in Washington over Memorial Day weekend.

Writing from an encrypted Proton mail account, Alice said the signal had been received, and agreed to drop the material at the location chosen by the undercover operative a mistake in tradecraft, some experts said.

It was somewhat surprising that someone who has studied submarine warfare follows the F.B.I.s direction to surface for these supposedly clandestine drop offs, said Michael Atkinson, a former inspector general for the intelligence community.

The willingness on the part of the country to convey the unspecified signal suggests its cooperation with the United States throughout the investigation. Mr. Atkinson said it was very unusual for a foreign country to allow its embassy or other facility to be used to send a signal to a suspect being pursued by the F.B.I.

Mr. Atkinson, now a partner at the law firm Crowell & Moring, said a similar false flag operation by the F.B.I. involving a government scientist trying to sell secrets to an ally resulted in a prison sentence of 13 years after a plea bargain.

At the Key School, where Ms. Toebbe taught, and in their Annapolis neighborhood, colleagues, students and neighbors tried to process the arrest of the couple and the accusations against them.

Luke Koerschner, 20, a 2019 Key School graduate now at Michigan State University, was in Ms. Toebbes advisory group for four years. He described her as very friendly and welcoming, an outgoing teacher who loved to cheer on her students in the schools cornhole tournaments.

Matthew Nespole, the head of the Key School, said he was shocked and appalled to learn of the charges against the Toebbes and that the school supports the administration of justice by the F.B.I. and NCIS, and will cooperate with the investigation. The Key School placed Ms. Toebbe on leave indefinitely.

Julian E. Barnes reported from Washington, and Brenda Wintrode and JoAnna Daemmrich from Annapolis, Md. Kitty Bennett contributed research. David E. Sanger contributed reporting from Washington.

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Submarine Spy Case Involved a Babysitter and a Band-Aid Wrapper - The New York Times

This is one of the drawbacks of apps that make it easy to order food, buy stocks and cryptocurrencies, and more. What if something goes wrong?

Tapping a menu after a menu in the hope of contacting someone to solve the problem is often a frustrating chase. It is also increasingly acknowledged by start-ups that ruin the investment and trading industry.

Robin Hood, an app that helps more than 22 million people trade stocks and cryptocurrencies, announced on Tuesday that it will provide customers with 24/7 phone support to cover almost any issue. ..Follow-up of announcements Coinbase A cryptocurrency trading platform that announced last month that it will launch a 24/7 telephone service for many customers by the end of the year.

Robin Hood cites limited customer support concerns as one of the challenges before the stock first opened on the open market. Earlier this year, Robin Hood also settled a tort proceeding in a 20-year-old family. He claims to have committed suicide after receiving only an automatically generated reply to an email about the negative balance of about $ 730,000 in his account.

Reaching Robin Hoods early customer support meant communicating primarily via email, but more live phone support has been added in recent months.

Gretchen Howard, Chief Operating Officer of Robinhood Market Inc., said: From March 2020 to June 2021, the number of customer support workers is close to 2,700.

With so many first-time investors forming its foundation, many of Robin Hoods customer questions are about setting up a bank account or filing a first tax return. However, demand can fluctuate significantly from day to day.

If someone makes a famous tweet about cryptography, our cryptographic volume can grow tenfold instantly, Howard said.

Customers logged into the Robin Hood app can now request a callback from their contacts. Through this process, the app will also try to help customers solve the problem themselves, if possible.Based in Menlo Park California Were still working on how to provide live phone services to customers who cant log in to their account.

William Van Horn II, 30 years old Pensacola Florida Robin Hoods customer service has already been experienced several times. He is not always happy.

He once said he had mistakenly deposited $ 1,000 instead of $ 100 in his account. Shortly thereafter, he sent an email to customer service hoping to cancel the deposit. He finally greeted a representative over the phone who tried to guide him through some steps. But Van Horn said he couldnt cancel the $ 1,000 deposit, or at least get back an additional $ 900.

Van Horn has other complaints about Robinhoods customer service, but it wasnt enough to stop using the app.

There is a lack of customer service, he said. But the interface is still pretty good when it comes to mobile use.

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Trading apps work to get living people to hear your problem - Floridanewstimes.com

image:Cover for "Blockchain and Distributed Ledgers: Mathematics, Technology, and Economics" view more

Credit: World Scientific

The Global Financial Crisis (GFC) has demonstrated that the existing banking and payment system, while still working, is outdated and struggling to support the continually changing requirements of the modern world. It would be an understatement to say that the GFC turned into a wasted opportunity to reorganize the world financial ecosystem. In their new book, Blockchain and Distributed Ledgers: Mathematics, Technology, and Economics, Alexander Lipton (co-founder and CIO of Sila) and Adrien Trecanni (founder and CEO of Metaco) argue that the seemingly squandered opportunities to reshape the financial system are not all lost. More specifically, they show that, if used deliberately, new technologies, including blockchains and distributed ledgers, can create new business models. New technologies will put pressure on the incumbents. More importantly, they will allow newly formed fintech companies to enter the market in earnest, thus providing considerable benefits to the general public.

This book concentrates on distributed ledger technology (DLT) and its potential impact on society. This technology, which became extremely popular over the last decade, allows us to solve many complicated problems arising in economics, banking, and finance, industry, trade, and many other fields. DLT develops new mechanisms for distributed consensus, using advanced tools from cryptography, game theory, economics, finance, scientific computing, etc. It offers an optimal and elegant solution in many situations, provided that it can overcome some of its inherent limitations and is used appropriately.

While strong mathematical skills are not required, readers should learn the necessary background materials from the book itself. The book clearly and accessibly explains and articulates rather sophisticated ideas underpinning DLT, so that it is accessible to anyone with a modicum of understanding of computer science, mathematics, and economics.

Throughout the book, the authors use their considerable practical experience to skilfully guide the reader through complexities, nuances, achievements, and promises of blockchains and distributed ledgers. The book is self-contained and provides all the necessary theoretical background for the reader to understand how DLT operates in both theory and practice and, if the need occurs, build a simple distributed ledger from scratch. It can serve as a primary textbook for a course on DLT and crypto-economics and a supplementary text for courses on economics, finance, cryptography, and others.

Blockchain and Distributed Ledgers: Mathematics, Technology, and Economics retails for US$68 / 60 (paperback) and US$138 / 120 (hardcover) and is also available in electronic formats. To order or know more about the book, visit http://www.worldscientific.com/worldscibooks/10.1142/11857. ###

About the Authors

Alexander Lipton is Co-Founder and Chief Information Officer of Sila, Partner at Numeraire, Visiting Professor and Deans Fellow at the Hebrew University of Jerusalem, and Connection Science Fellow at MIT. Alex is a board member of Sila and an advisory board member of several fintech companies worldwide. In 20062016, Alex was Co- Head of the Global Quantitative Group and Quantitative Solutions Executive at Bank of America. Earlier, he was a senior manager at Citadel, Credit Suisse, Deutsche Bank, and Bankers Trust. At the same time, Alex held visiting professorships at EPFL, NYU, Oxford University, Imperial College, and the University of Illinois. Before becoming a banker, Alex was a Full Professor of Mathematics at the University of Illinois and a Consultant at Los Alamos National Laboratory. In 2000 Alex was awarded the Inaugural Quant of the Year Award and in 2021 the Buy-side Quant of the Year Award by Risk Magazine. Alex authored/edited 10 other books and more than a hundred scientific papers. Alex is an Associate Editor of several journals, including Finance and Stochastics, Journal of FinTech, International Journal of Theoretical and Applied Finance, and Quantitative Finance. He is a frequent keynote speaker at Quantitative Finance and FinTech conferences and forums worldwide.

Adrian Treccani is founder and CEO of METACO, a leading provider of security infrastructure for digital assets, and a software engineer specialized in high performance computing and financial engineering. He has been an active member of the fintech community since 2012 and advised numerous banks and financial institutions globally on distributed ledger technology, cryptocurrencies and decentralized finance. Adrien lectures at University of Lausanne and Ecole Polytechnique Fdrale de Lausanne and has published in top peer-reviewed journals including Management Science and the Journal of Financial Econometrics. Adrian holds a Bachelor degree in computer science and a Master degree in financial engineering at the Ecole Polytechnique Fdrale de Lausanne. He obtained a PhD in mathematical finance at the Swiss Finance Institute and completed a post doctorate in high performance computing at University of Zrich. He worked in the hedge fund industry as a quantitative analyst before founding METACO in 2015.

About World Scientific Publishing Co.

World Scientific Publishing is a leading international independent publisher of books and journals for the scholarly, research and professional communities. World Scientific collaborates with prestigious organisations like the Nobel Foundation and US National Academies Press to bring high quality academic and professional content to researchers and academics worldwide. The company publishes about 600 books and over 140 journals in various fields annually. To find out more about World Scientific, please visit http://www.worldscientific.com.

For more information, contact WSPC Communications at communications@wspc.com.

Disclaimer: AAAS and EurekAlert! are not responsible for the accuracy of news releases posted to EurekAlert! by contributing institutions or for the use of any information through the EurekAlert system.

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Mathematics, Technology, and Economics - EurekAlert

If you've read anything about technology in the last few years, you may have seen the term encryption floating around. It's a simple concept, but the realities of its use are enormously complicated. If you need a quick 101 on what encryption is and how it's used on modern devices, you've come to the right place. But first, we have to start at the beginning.

At the most simple, basic level, encryption is a way to mask information so that it can't be immediately accessed. Encryption has been used for thousands of years, long before the rise of the information age, to protect sensitive or valuable knowledge. The use and study of encryption, codes, and other means of protecting or hiding information is called cryptography.

The most simple version of encryption is a basic replacement cipher. If you use numbers to indicate letters in the Latin alphabet, A=1, B=2, et cetera, you can send a message as that code. It isn't immediately recognizable, but anyone who knows the code can quickly decipher the message. So, a seemingly random string of numbers:

20 8 5 16 1 19 19 23 15 18 4 9 19 19 23 15 18 4 6 9 19 8

can become vital information, to someone who knows how to read it.

t he p a s s w o r d i s s w o r d f i s h

That's an incredibly basic example, the kind of thing you might find in the classic decoder ring toy. Archaeologists have found examples of people encrypting written information that are thousands of years old: Mesopotamian potters sent each other coded messages in clay, telling their friends how to make a new glaze without letting their competitors know. A set of Greek substitutions called the Polybus square is another example, requiring a key to unlock the message. It was still being used in the Middle Ages.

Cryptography is used to protect information, and there's no more vital application than warfare. Militaries have encrypted their messages to make sure that enemies won't know their plans if communication is intercepted. Likewise, militaries also try to break encryption, discover the pattern to a code without having the original key. Both have greatly advanced the field of cryptography.

Take a look at World War II for two illustrative examples of practical encryption. The German military used a physical electronic device called an Enigma machine which could encode and decode messages with incredible complexity, allowing for fast and secret communication. But through a combination of finding rotating daily codes and advanced analysis, the Allies were able to break the encryption of the Enigma machines. They gained a decisive military advantage, listening to encrypted German radio messages and accessing their true contents.

But an encryption code doesn't necessarily have to be based on complex mathematics. For their own secret radio communications, the American military would use Native American code talkers, soldiers who used their native languages like Comanche and Navajo. Speaking to each other in these languages, both in plain speech and in basic word-to-letter cipher codes, the code talkers could communicate orders and other information via radio. The German, Italian, and Japanese militaries could easily intercept these transmissions, but having no access to any Native American speakers, this relatively simple method of encryption was unbreakable.

In the modern world, encryption is done almost exclusively via computers. Instead of encrypting each word or letter with another, or even following a pattern to do so, electronic encryption scrambles individual bits of data in a randomized fashion and scrambles the key as well. Decrypting just a tiny bit of this information by hand, even if you had the correct key, would take more than a lifetime.

With the rapid computation available in the electronic world, data encrypted digitally is more or less impossible to crack by conventional means. For example, the ones and zeros (bits) that make up the digital contents of a file encoded on the common 128-bit Advanced Encryption Standard are scrambled around ten different times in a semi-random pattern. For another computer to rearrange them back in the correct order, without the key, it would take so long that the sun would burn out before it was cracked. And that's the weakest version of AES: it also comes in 192- and 256-bit key sizes!

Every major modern operating system includes at least some tools for encrypting your data: Windows, MacOS, iOS, Android, and Linux. The Bitlocker system in Windows is one example. To a greater or lesser degree, you can encrypt all of your data so it requires a key to unlock. The same is true for online file storage, and your personal information stored in other secure locations, like your bank.

To access encrypted information, you can use one of three different types of keys. In computer security, these are referred to as something you know, (a password or PIN), something you have, (a physical encryption key like Yubico), and something you are (biometric authentication, like a fingerprint or face scan).

Encrypting the storage of your devices protects them in purely electronic terms: without one of those unlock methods, it's incredibly difficult bordering on impossible for anyone to access your data. The extra processing it takes to encrypt and decrypt data can make computer storage perform more slowly, but modern software can help minimize this speed reduction.

Of course if your password, or your physical key, or your fingerprint can be accessed by someone else, they can get to that data. That's why it's a good idea to use extra security methods. A common two-factor authentication system (2FA) uses both a password (something you know) and a text message sent to your phone (something you have) to log in. That gives an extra layer of security to any information stored in that system. Using a password manager to create unique passwords for each site or service you use adds even more protection, preventing hackers from reusing your login information if they do manage to pilfer your credentials for a given service.

Encrypting data doesn't mean it's absolutely impossible to access improperly. There are always weaknesses and ways around security. But using even basic encryption tools can help protect your data far beyond what's available by default.

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What is encryption? - PC World New Zealand