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Identity is the New Money -- new book from Dave Birch

Financial Cryptography - Thu, 03/27/2014 - 03:53
As many know, I'm in the business of building a new Identity framework wrapped around a cryptocurrency issuance infrastructure for social networks (in geek terms). Because I'm in this space directly, Dave Birch's new book entitled Identity is the New Money can be copied without hesitation! The only disagreement we might both agree on is why has it taken so long for people to understand the role of identity and money? Read on: Identity is the New Money £7.99 (including free P&P within the UK) This book will be published in late April 2014. Please click “Add to cart” above to pre-order a copy. David G.W. Birch is an internationally recognised thought leader in digital money and digital identity. In 2013 he was named one of WIRED magazine’s global top 15 favourite sources of news from the world of business and finance and was ranked the number 1 influencer in European emerging payments by Total Payments magazine. He is a Director of Consult Hyperion, the technical and strategic consultancy that specialises in electronic transactions. This book – which will be published in late April 2014 – argues that identity is changing profoundly and that money is changing equally profoundly. Because of technological change the two trends are converging so that all that we need for transacting will be our identities captured in the unique record of our online social contacts. Social networks and mobile phones are the key technologies. They will enable the building of an identity infrastructure that can enhance both privacy and security – there is no trade-off. The long-term consequences of these changes are impossible to predict, partly because how they take shape will depend on how companies (probably not banks) take advantage of business opportunities to deliver transaction services. But one prediction made here is that cash will soon be redundant – and a good thing too. In its place we will see a proliferation of new digital currencies. Dave Birch gives one of the best accounts available today on how we’ll navigate the challenges of the emerging payments landscape, and how traditional data points on identity don’t really make sense in a digital world. An outstanding piece of work which may well define our journey moving forward. — Brett King, Founder and CEO of Moven.com Dave Birch’s thoughts on digital identity were seminal to the UK’s Identity Assurance Scheme. Anyone entering the field of digital identity should take this book with them. — David Rennie, Identity Assurance Programme, Government Digital Service, Cabinet Office...

Smarter People are More Trusting

Bruce Schneier - Thu, 03/27/2014 - 03:52
Interesting research. Both vocabulary and question comprehension were positively correlated with generalized trust. Those with the highest vocab scores were 34 percent more likely to trust others than those with the lowest scores, and someone who had a good perceived understanding of the survey questions was 11 percent more likely to trust others than someone with a perceived poor understanding....

Geolocating Twitter Users

Bruce Schneier - Wed, 03/26/2014 - 10:10
Interesting research into figuring out where Twitter users are located, based on similar tweets from other users: While geotags are the most definitive location information a tweet can have, tweets can also have plenty more salient information: hashtags, FourSquare check-ins, or text references to certain cities or states, to name a few. The authors of the paper created their algorithm...

Chilean Drug Trafficker Pencil-and-Paper Code

Bruce Schneier - Wed, 03/26/2014 - 03:16
Interesting....

Password Hashing Competition

Bruce Schneier - Tue, 03/25/2014 - 02:58
There's a private competition to identify new password hashing schemes. Submissions are due at the end of the month....

NSA Hacks Huawei

Bruce Schneier - Mon, 03/24/2014 - 09:51
Both Der Spiegel and the New York Times are reporting that the NSA has hacked Huawei pretty extensively, getting copies of the company's products' source code and most of the e-mail from the company. Aside from being a pretty interesting story about the operational capabilities of the NSA, it exposes some pretty blatant US government hypocrisy on this issue. As...

An Open Letter to IBM's Open Letter

Bruce Schneier - Mon, 03/24/2014 - 03:58
Last week, IBM published an "open letter" about "government access to data," where it tried to assure its customers that it's not handing everything over to the NSA. Unfortunately, the letter (quoted in part below) leaves open more questions than it answers. At the outset, we think it is important for IBM to clearly state some simple facts: IBM has...

Giant Squid as an Omen

Bruce Schneier - Fri, 03/21/2014 - 13:31
An omen of what? An increase in the number of giant squid being caught along the Sea of Japan coast is leading puzzled fishermen to fear their presence may be some kind of 'omen' -- although experts think the invertebrate are simply a bit cold....

New Book on Data and Power

Bruce Schneier - Fri, 03/21/2014 - 09:19
I'm writing a new book, with the tentative title of Data and Power. While it's obvious that the proliferation of data affects power, it's less clear how it does so. Corporations are collecting vast dossiers on our activities on- and off-line -- initially to personalize marketing efforts, but increasingly to control their customer relationships. Governments are using surveillance, censorship, and...

Liveblogging the Financial Cryptography Conference

Bruce Schneier - Fri, 03/21/2014 - 04:42
Ross Anderson liveblogged Financial Cryptography 2014. Interesting stuff....

Automatic Face-Recognition Software Getting Better

Bruce Schneier - Thu, 03/20/2014 - 04:12
Facebook has developed a face-recognition system that works almost as well as the human brain: Asked whether two unfamiliar photos of faces show the same person, a human being will get it right 97.53 percent of the time. New software developed by researchers at Facebook can score 97.25 percent on the same challenge, regardless of variations in lighting or whether...

Schneier Talks and Interviews

Bruce Schneier - Sat, 03/15/2014 - 05:55
Here is my talk on the NSA from the RSA Conference, although this version, from MIT a few weeks earlier, is better. I was interviewed on stage by Joe Menn at TrustyCon about the NSA; here's the video. Various text, audio, and video interviews from the RSA Conference. Interviews about the iOS flaw, security and power, and incident response....

Update on password management -- how to choose good ones

Financial Cryptography - Sat, 03/15/2014 - 05:25
Spotted in the Cryptogram is something called "the Schneier Method." So if you want your password to be hard to guess, you should choose something that this process will miss. My advice is to take a sentence and turn it into a password. Something like "This little piggy went to market" might become "tlpWENT2m". That nine-character password won't be in anyone's dictionary. Of course, don't use this one, because I've written about it. Choose your own sentence -- something personal. Here are some examples: WIw7,mstmsritt... ⇒ When I was seven, my sister threw my stuffed rabbit in the toilet. Wow...doestcst ⇒ Wow, does that couch smell terrible. Ltime@go-inag~faaa! ⇒ Long time ago in a galaxy not far away at all. uTVM,TPw55:utvm,tpwstillsecure ⇒ Until this very moment, these passwords were still secure. You get the idea. Combine a personally memorable sentence with some personally memorable tricks to modify that sentence into a password to create a lengthy password. This is something which I've also recently taken to using more and more, but I still *write passwords down*. This isn't a complete solution, as we still have various threats such as losing the paper, forgetting the phrase, or being Miranda'd as we cross the border. The task here is to evolve to a system where we are reducing our risks, not increasing them. On the whole we need to improve our password creation ability quite dramatically if password crunching is a threat to us personally, and it seems to be the case as more and more sites fall to the NSA-preferred syndrome of systemic security ineptness....

Friday Squid Blogging: Squid Ring

Bruce Schneier - Fri, 03/14/2014 - 13:14
It's a nice design, even if you aren't a squid person....

Nicholas Weaver Explains how QUANTUM Works

Bruce Schneier - Fri, 03/14/2014 - 11:01
An excellent essay. For the non-technical, his conclusion is the most important: Everything we've seen about QUANTUM and other internet activity can be replicated with a surprisingly moderate budget, using existing tools with just a little modification. The biggest limitation on QUANTUM is location: The attacker must be able to see a request which identifies the target. Since the same...

Good news: Belize is working to improve its popular residency program

Sovereign Man - Fri, 03/14/2014 - 10:01

March 14, 2014
Ambergris Caye, Belize

One of the great things about being a foreigner in developing countries is how easy it is to get access to influential decision-makers.

If you’re in the UK or US, for example, the chances of sitting down with the President or Treasury Secretary are almost nil.
In developing countries, this access is much easier to obtain. I often start with a country’s biggest law firm—top lawyers are typically very well-connected… as are real estate agents and property developers.

Through this approach, I’ve routinely been able to meet with Prime Ministers, Presidents, Ambassadors, government ministers, etc. around the world to gain unique insights into who exactly is running the country, and what their next moves are.

Here in Belize it’s no different. And I just had the chance to sit down for a nice chat with Jose Manuel Heredia, Jr., the country’s Minister of Tourism.

In our conversation, we talked investment opportunities in Belize, residency, and what the government is doing to make things easier and more streamlined for foreigners.

He gave me some really insightful data, including a sneak peak at how they are planning on vastly improving Belize’s popular retiree program.

Once these improvements are made, I would rank residency in Belize quite favorably relative to other options. So this country should definitely be on people’s radars if they’re looking for a potential escape hatch.

You can read excerpts of the interview below:

Simon Black: It’s no secret that Belize certainly has a lot of great things going for it. This isn’t some hidden paradise nobody has ever heard of—the word is definitely out. Beautiful Caribbean setting. English language. And so close to the US and Canada—as you point out, at 2.5 hours, it’s quicker to fly from Dallas to Belize than from Dallas to Washington, DC.

And it’s really been growing, changing, improving… it certainly has since I was last here.

Minister of Tourism: I would love to say that even though my hometown is right here in San Pedro, Belize, I believe this is one of the best destinations in the world.

If you had asked me six years ago about Belize, I would have felt that it was just another place to be. But today, learning to appreciate what we have and seeing what Belize has and having traveled so much now, I can see that we have a complete package.

Simon: Speaking of a complete package, let’s talk about a popular package here that Belize offers for foreigners—a sort of ‘residency’ package you call the QRP.

MoT: The QRP (Qualified Retired Persons) program was founded and initiated several years ago. We are always trying to make it more attractive.

To qualify, someone has to be able to demonstrate $2,000 in monthly income, and be at least 45 years old.

Simon: Is it a really bureaucratic process?

MoT: Being the minister, I try to make sure that I can expedite this process to get it done as soon as possible, so that people feel like they can get things done in Belize.

I mean, I actually get involved personally to make sure that people have confidence that when they’re applying, they will be able to have their QRP and residency within the shortest possible time.

Once through the process, people have residency to live in the country and can bring anything that they want to bring into the country– household goods, a car, a boat, an airplane, all free of duties. And any income is not taxable as well.

Simon: In the past, there have been some issues with this program—that the QRP does not lead to Belizean citizenship. But you mentioned that this is probably changing.

MoT: Yeah. In the past, if you wanted to become a citizen of the country, even though you might be living ten years over here on the QRP, and you wanted to become a citizen, you would have to give up your QRP and start from scratch [with a different residency program].

We want to change this. The attorney general and myself, we talk to [the other ministers and leaders in government], and say that if you have lived legally for five years in Belize, even under the QRP, you can qualify for citizenship.

Simon: That’s fantastic, it’ll fix a major flaw in the program, thanks for that information.

So, one of the other very interesting things about this place is that there is some interesting investment opportunity in the tourism space. Here in Ambergris Caye, the island definitely goes through periods where some of the hotels have an occupancy rate of practically 100%.

MoT: Yes. As I mentioned before, forty percent of tourists to Belize come here to the island.

Simon: And those tourist numbers are growing rapidly.

MoT: Yes- we embarked three years ago on an aggressive marketing campaign, and it has started to pay off fruitfully. Two years ago, our tourism growth was 10.5%. Last year it was another 7.5%. Based on the numbers we saw in January, we are projecting similar growth this year.

Simon: Belize has a lot of islands, but this is definitely one of the nicest and most developed. But being an island, it is constrained by size, and that limits supply. Do you know how many hotel rooms are on the island now?

MoT: If I am not mistaken, then I am sure we have about two thousand rooms.

Simon: Two thousand rooms. Okay. Not really a ton of space, then.

MoT: No. Thirty years ago, back when San Pedro was a small fishing village with probably no more than two thousand residents, we had one hotel with just 7 or 8-rooms.

Simon: And you mentioned earlier, you’ve worked with a few other major airless to establish new service to Belize, including Copa in Panama… so that will really open the South American market to you.

So, with two thousand rooms, do you know, more or less, what the occupancy rates are right now across all those rooms on the island?

MoT: At this moment, I think we are doing better than sixty percent.

Simon: What was it like back in 2008, 2009 in the early days of the recession?

MoT: At that point, it was no more than forty percent. Slow season was terrible. A number of the hotels had to close during that time because it was just not sustainable.

Simon: And the slow season is getting shorter and shorter now.

MoT: Yes. Slow season used be the end of July. August. September. October. November. Today, the peak season runs all the way to September.

Simon: That’s really interesting. Some friends of mine are getting involved in the hotel business here, and they’ve shown me the numbers. It matches exactly what you’re saying—the growth rates are very interesting, and they’re projecting to be able to return 20% or better to investors, even under a rather conservative scenario. And they’re very confident in making the investment here.
MoT: The investment confidence here is strong; it has to do with a government’s credibility. Belize used to be perceived as one of the most corrupt countries in the region. And when we took over a few years ago, the credibility of the previous government was zero.

Simon: Yeah, Belize was pretty famous for scandal and corruption.

MoT: Today, the credibility of government is higher. And with the confidence so great now, I am seeing more and more nationwide development starting to happen. The potential is great.

Simon: Excellent, thanks so much for the insights.

The world is SCREAMING for a new financial system

Sovereign Man - Fri, 03/14/2014 - 09:54

March 14, 2014
Ambergris Caye, Belize

One of the key lessons we can take away from history is that the global financial system changes… frequently.

In ancient times, Roman coins were used across the region by Romans and non-Romans alike who engaged in trade and commerce.

Given how destructively successive Roman governments debased their coins, however, the reserve burden eventually fell to the Byzantine Empire, whose gold solidus coin became the dominant currency in world trade.

Over the centuries, this standard changed several more times. The Venetians, Florentines, Spanish, French, British, etc. each issued the world’s dominant currency at one point or another.

But the fundamentals of those currencies changed. Governments engaged in wanton debasement, mismanaged their economies, and accumulated massive debt levels. And eventually the world shifted to new currencies.

Since the end of World War II, the US dollar has been the dominant currency in the world.

And even though Richard Nixon ended the dollar’s convertability to gold and unilaterally abandoned the US government’s obligations under the Bretton Woods system back in 1971, the world has still clung to the dollar for the past 43-years.

But this is changing rapidly.

The Chinese, which have their own economic issues to deal with, are starting to dump Treasuries in record numbers.

Central banks are buying up more gold. Foreign countries are entering into bilateral currency swap arrangements with one another. And world governments are starting to (rather embarrassingly) demand that the US get its budget and fiscal house in order.

Most tellingly, though, member nations of the International Monetary Fund are starting to revolt.

As one of the major organizations spawned from the post-war financial structure, the IMF’s original goal was to ensure the smooth development of a new global financial system.

Over 180 countries have since become members of the IMF. But the organization runs on a quota system, with each member nation having a certain percentage of the IMF’s overall votes.

The US, for example, has the most power by far with a 16.75% share of the vote. Japan is a distant second with a 6.23% share.

This puts the US in the driver’s seat. And it’s been that way for decades.

But most of the other 180+ nations have had enough. And they’re pushing the United States to massively overhaul the current quota system.

Even typical allies are breaking ranks. Australian Treasurer Joe Hockey recently told reporters at a financial conference that they will “actively lobby” the US to reform the IMF quota issues, and that “Congress must understand that it is in the interest of the US to reform the IMF. . .”

India. China. Just about everyone imaginable is pushing for major IMF reform. Everyone except the Land of the Free. The US government seems to like things the way they are. And Congress has been very intransigent in adopting any planned reforms.

These people have their heads buried in the sand so deep that they can’t even hear the rest of the world SCREAMING for a new financial system.

This is going to happen, whether the US wants it to or not.

And while no foreign government wants a collapse of the dollar, they do very much want an orderly rebalancing of the financial system. This is already under way.

The US government may pretend that everything is fine and dandy. But given the overwhelming objective evidence out there, folks who aren’t on board with this major trend are ignoring it at their own peril.

This pretty much sums up the sad state of the US Constitution

Sovereign Man - Fri, 03/14/2014 - 09:49

March 14, 2014
Ambergris Caye, Belize

My research team recently passed along a piece of legislation they were looking at called the “ENFORCE the Law Act of 2014.”

It immediately piqued my interest… because anytime you see all CAPS in government documents, it signifies some absurd acronym. And the ‘ENFORCE the Law Act’ did not disappoint.

ENFORCE stands for “Executive Needs to Faithfully Observe and Respect Congressional Enactments”.

And the stated objective of the legislation is “to protect the separation of powers in the Constitution of the United States by ensuring that the President takes care that the laws be faithfully executed. . .”

The bill goes on with specific language to authorize Congress bringing civil legal action against the President of the United States, or any cabinet secretary, for implementing some rule or executive order that does not conform with Article II of the Constitution.

This pretty much sums up the sad state of affairs in the Land of the Free.

When Congress has to pass a new law just to get the President of the United States to, you know, follow the Constitution that he swore to ‘support and defend’, you can be certain that the system has become broken beyond all repair.

This isn’t a commentary on the current POTUS; the disturbing trend of rapidly expanding executive abuse has been increasing for years.

It has nothing to do with Mr. Obama, or Mr. Bush before him, or future Presidents that will continue to expand their offices.

It’s the system itself that is fundamentally flawed. The model is simply no longer valid. Having an election and voting in a new commander-in-chief won’t fix the problem. All you’re doing is changing the players. It’s time to change the game.

Security as a Public Health Issue

Bruce Schneier - Fri, 03/14/2014 - 03:01
Cory Doctorow argues that computer security is analogous to public health: I think there's a good case to be made for security as an exercise in public health. It sounds weird at first, but the parallels are fascinating and deep and instructive. Last year, when I finished that talk in Seattle, a talk about all the ways that insecure computers...

Metadata = Surveillance

Bruce Schneier - Thu, 03/13/2014 - 09:13
Ever since reporters began publishing stories about NSA activities, based on documents provided by Edward Snowden, we've been repeatedly assured by government officials that it's "only metadata." This might fool the average person, but it shouldn't fool those of us in the security field. Metadata equals surveillance data, and collecting metadata on people means putting them under surveillance. An easy...