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Should Media Endorse Political Candidates?
There seems to be a trend where fewer newspapers are endorsing political candidates. This is partly driven by financial pressures within the newspaper industry, as well as a desire to avoid alienating subscribers during politically polarized times.
Tensions have flared up between editorial independence, the influence of big media ownership, and the role of newspapers in political discourse, sparking debates on media ethics, the impact of billionaire ownership on journalism, and the diminishing tradition of newspaper endorsements in U.S. elections.
The decisions by the influential newspapers Los Angeles Times and Washington Post not to endorse a presidential candidate for the 2024 election in the U.S. have resulted in controversies.
The owner of the Los Angeles Times, Patrick Soon-Shiong, blocked the editorial board from endorsing one of the two main candidates, leading to some internal turmoil. He “feared that picking one candidate would only exacerbate the already deep divisions in the country”. The editorial page editor and two other editorial board members resigned in response to this decision by the owner.
“I have no regrets whatsoever,” said Soon-Shiong. “In fact, I think it was exactly the right decision.” It is only with clear and non-partisan information side-by-side,” he added, that “our readers could decide who would be worthy of being President for the next four years.”
Similarly, the Washington Post also chose not to endorse a presidential candidate, which was seen as a shift in their editorial policy. This move was ostensibly to return to being an independent voice, but it led to controversy and critique.
Jeff Bezos’ op-ed
Washington Post owner Jeff Bezos has written an op-ed titled The hard truth: Americans don’t trust the news media.
Bezos addresses the controversy surrounding the newspaper’s decision to stop endorsing presidential candidates. He defends this choice by arguing that such endorsements do not significantly sway election results, and that the Washington Post should instead concentrate on delivering factual, non-partisan content to aid readers in making informed decisions.
Bezos emphasizes his dedication to preventing the newspaper from slipping into irrelevance in an era where less rigorous information sources like podcasts and social media are on the rise.
Lack of credibility
“Most people believe the media is biased,” says Bezos. “Anyone who doesn’t see this is paying scant attention to reality, and those who fight reality lose.”
The perception of bias leads to a loss of credibility, which is not unique to the Washington Post.
“Our brethren newspapers have the same issue,” adds Bezos. “And it’s a problem not only for media, but also for the nation. Many people are turning to off-the-cuff podcasts, inaccurate social media posts and other unverified news sources, which can quickly spread misinformation and deepen divisions. The Washington Post and the New York Times win prizes, but increasingly we talk only to a certain elite. More and more, we talk to ourselves.”
Media and partisan media
In my opinion, the question of whether media should take political positions and endorse political candidates depends on the nature of the media.
There are media, and there are partisan media. That partisan media take political positions and endorse political candidates is perfectly fine with me: this is the very raison d’être of partisan media. But then, media that publish partisan political propaganda and endorse political candidates should not present themselves as objective non-partisan media.
So, do the Los Angeles Times and Washington Post want to be partisan media? I think this is the question, and the owners of both newspapers have answered with a loud and clear ‘no’.
Some readers have canceled their subscriptions in outrage. To me, this means that they don’t want information but partisan propaganda. But it is their choice to make, and there is plenty of openly partisan media outlets that offer the propaganda they crave.
And what about science and technology media like Mindplex?
Last month, Scientific American endorsed one of the two main candidates, leading to steamy debates about whether a scientific magazine should engage in political endorsements. This was the second time in the magazine’s history it endorsed a political candidate (the other was Joe Biden in 2020.)
Critics argue that this could undermine the magazine’s credibility as an objective source of scientific information. Many commentators think that this could alienate readers who expect scientific objectivity over political opinion.
While scientists can be political beings, the institutions of science like journals and magazines should ideally uphold a standard of objectivity to maintain trust in science as an impartial pursuit of truth.
By openly taking a political position and endorsing a political candidate, Scientific American and other scientific media that follow the same route might be perceived as aligning science with a particular political ideology, and lose credibility as a result. The words of Jeff Bezos quoted above come to mind.
But I think there’s an even deeper and more serious danger. If scientific media are perceived as partisan political propaganda outlets, then it is science itself the loses credibility, and the public at large loses trust in science.
After the incident, I’ve stopped reading and paying any attention to Scientific American. What I want from scientific media is, guess what, science. When I want to read political commentaries, I know perfectly well where to find them. And if I want to have some fun laughing at the stupidity of partisan propaganda, I know perfectly well where to find that too.
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NASA and SpaceX must continue to work together for the common good
Michael Bloomberg argues that NASA’s Artemis moon mission is a huge waste of money. The Artemis program was supposed to send astronauts back to the moon, but it has already spent nearly $100 billion without achieving this goal. Bloomberg believes that the program’s complexity and costs are out of control, and he suggests that the next U.S. president should reconsider the entire project.
Bloomberg points out that more than fifty years after Neil Armstrong’s famous moon landing, the Artemis mission has not made significant progress. Despite the enormous budget, no astronauts have yet been sent to the moon.
Bloomberg also highlights the opportunity cost of the Artemis mission. He suggests that the money spent on this program could be better used for other important projects, such as addressing climate change or improving healthcare. By redirecting funds from Artemis to these areas, the government could achieve more tangible and immediate benefits for society.
These are, if you ask me, empty and boring platitudes. But between one platitude and the next, Bloomberg makes some good points.
Starship would be a better option
Bloomberg criticizes the Artemis program for being inefficient and overly complicated, leading to continuous delays and escalating expenses. He argues that the program has become bogged down in bureaucracy and technical challenges. This has resulted in a project that is both expensive and ineffective.
And here comes the bomb:
“A celestial irony is that none of this is necessary,” says Bloomberg. “A reusable SpaceX Starship will very likely be able to carry cargo and robots directly to the moon – no SLS, Orion, Gateway, Block 1B or ML-2 required – at a small fraction of the cost.”
What are these projects Bloomberg mentions?
- SLS (Space Launch System) is NASA’s powerful rocket designed for deep space exploration.
- Orion is NASA’s spacecraft designed to carry astronauts beyond low Earth orbit.
- The Gateway is a planned space station that will orbit the Moon serving as a communication hub, science laboratory, and living quarters for astronauts.
Bloomberg admits that the successful catch of the Starship booster was a breakthrough that demonstrated that Starship is moving far beyond NASA.
Bloomberg praising SpaceX? Really?
Conflict between NASA and SpaceX?
Bloomberg’s article has re-ignited the endless flame wars between the faithful supporters of NASA and the fans of Elon Musk’s SpaceX.
There has been one and only mission of the SLS so far: the Artemis 1 mission carried an uncrewed Orion spacecraft around the Moon in November 2022. Before the launch of Artemis 1, I wrote a SpaceNews op-ed titled “SpaceX fans should stand behind NASA and support Artemis.”
I argued that we don’t need a conflict between the supporters of NASA and the fans of SpaceX. In particular, I argued that the fans of Elon Musk and SpaceX should enthusiastically support NASA’s Artemis program for a permanent and sustainable return to the Moon. Why? Because if Artemis is successful, it seems inevitable that Starship and SpaceX will play a more and more important role in the program. In other words, Artemis could be a powerful tide that lifts all rockets.
Yes, some parts of the current Artemis program seem too inefficient and costly, just like Bloomberg says. But I thought that we should be patient and let NASA and the government save face and have their moment of glory. Then, I thought, the U.S. administration would likely reconsider costs and wastes, and rely on SpaceX more.
Politics gets in the way
I still think this would be the best way forward. But politics gets in the way as usual.
SpaceX has had a great year so far, and the spectacular catch of Starship’s Super Heavy booster has been a milestone of spaceflight engineering. But the booster has returned to a political storm centered on Elon Musk’s cultural and political positions: Musk has endorsed Donald Trump and is using his control of Twitter in a way that has upset some people.
If Trump wins the forthcoming presidential elections, the U.S. government will likely support SpaceX.
But Musk’s bet on Trump is a risky one. if Harris wins the elections, it seems likely that the U.S. government will be very hostile to Musk and all his companies and projects for the next four years. This would damage the Artemis program, the prestige of the U.S. space program, and the very future of humanity. But often politicians put their greed for power and their ideological biases before the common good.
At this moment, the election seems to me a coin toss; Harris could win, or Trump could win. The only thing that seems certain is that, after the elections, the U.S. will likely be even more divided than before, and political polarization will likely reach even more toxic levels.
The need for bipartisan spaceflight
But perhaps spaceflight can help overcome toxic political polarization.
There’s a long history of bipartisan support for the space program in the U.S., and politicians of both main parties have been enthusiastic spaceflight supporters.
Spaceflight, space exploration, and the prospect of human space expansion can inspire people (and especially the young) across partisan borders and give everyone a powerful sense of drive that transcends identity politics and dogmatic ideologies. Achieving bipartisan support for Artemis and future space programs will, I hope, show that we can work together for the common good and incite us to do the same for other common goals.
And China?
Meanwhile, The Economist has recognized that there is a new race to the Moon between the West and China, and that Elon Musk’s Starship is the best hope of the West for winning that race.
“The recent test flight of SpaceX’s Starship brought the world one step closer to a host of new possibilities beyond Earth (not least the colonisation of Mars),” notes The Economist, adding that Starship is expected to play an important role in NASA’s plans to return to the Moon.
“But China has its own lunar ambitions, and a much simpler plan than America’s,” warns The Economist. “Who will win this new space race?”
My simple prediction is that, if Harris wins the elections, China will win the new space race. If Trump wins the elections, the USA will have a fighting chance.
Let The Economist worry which nation wins the new space race; my concern is that humanity gets started on the long way to the stars with permanent bases on the Moon, Mars, and beyond. If China has to lead the way, so be it.
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Lee Felsenstein, who Started The Digital Revolution (I’m Exaggerating a Little); Declares the Golden Age of Engineering
Yes, I exaggerate. No one person started the Digital Revolution. But Lee Felsenstein was (and is) a key figure in the evolution of personal computers and social networking. His book Me and My Big Ideas: Counterculture, Social Media and the Future is a cross between a conventional autobiography and a historic discourse about digital culture: where it’s been, where it’s going, and what is to be done.
Felsenstein’s roots are in the Free Speech movement in Berkeley, California, where, among other things, he wrote for the radical left counterculture underground newspapers Berkeley Barb and Berkeley Tribe. As a means of increasing communication and community in Berkeley, in 1973, Felsenstein developed Community Memory, an early social networking system that existed on computers located in public places around the town. He was also one of the main progenitors of the Homebrew Computer Club, which started in Menlo Park California in 1975.
This is the scene where many important early computer hobbyists met up and started working and playing with, and around, the first reasonably priced microcomputer, the Altair 8800.
The Homebrew Computer Club might be most famous for being the club wherein Steve Wozniak and Steve Jobs showed off their early work on what would become the Apple. Felsenstein was not very impressed, finding developments by other tinkerers more exciting. This is the sort of deep history of the digital revolution you will find in this revealing, personal, technical, and highly entertaining and informative book. I urge you to run out (or log on) and get it immediately.
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What are Web3 Oracles? An Introduction
Introduction
OK Computer… let’s imagine you’re a developer who’s created a smart contract that’s living on a blockchain like Ethereum or Cardano. It’s really good at executing pre-programmed instructions on-chain, but it’s sandboxed and can only react to conditions that occur on-chain, and has no idea what’s happening in the outside world.
So you need real-world data to make its way on-chain and into Web3 in real-time: that’s where crypto oracles come in – they are your eyes and ears to the real world, feeding you the information you need to make decisions and take actions.
Crypto oracles, also known as blockchain oracles, are a vital component in the blockchain machinery. They solve a critical problem: how do you get real-world data into a closed blockchain system? Without oracles, smart contracts would be like computers without an internet connection – functional, but severely limited in what they can do.
What Exactly are Blockchain Oracles?
At their core, blockchain oracles are simply data feeds. They act as bridges between blockchains and the outside world, allowing smart contracts to access and respond to real-world information. But oracles aren’t just simple data pipelines – they’re responsible for querying, verifying, and authenticating external data before delivering it to smart contracts.
Think of oracles as trusted messengers. When a smart contract needs to know something about the outside world – like the current price of Bitcoin, the winner of an election, or whether it rained in New York today – it sends out a request. The oracle then goes out, gathers that information from reliable sources, makes sure it’s accurate, and brings it back to the smart contract.
This might sound simple, but it’s a crucial function and very difficult to get right. Blockchains are designed to be closed systems for security reasons. This isolation is great for maintaining the integrity of the blockchain, but it also means that smart contracts can’t naturally interact with anything outside their network. Oracles solve this problem, allowing smart contracts to respond to real-world events and conditions.
The importance of oracles becomes clear when you consider the potential applications. With access to real-world data, smart contracts can:
- Execute trades based on market conditions
- Release insurance payouts when certain events occur
- Adjust supply chain operations based on real-time information
- Settle bets on real-world outcomes
By providing this vital link to external data, oracles dramatically expand what’s possible with blockchain technology. They’re a key component in creating what’s often called the ‘verifiable web’ – a system where users can understand exactly what’s happening within an application and maintain control over their assets, all while interacting with real-world data and events.
How Do Blockchain Oracles Work?
Let’s break down the process of how an oracle typically operates:
- Data Request: A smart contract says, “Hey, I need some information!”
- Oracle Activation: The oracle perks up its ears and says, “I’m on it!”
- Data Collection: The oracle goes out into the world (or the internet) to find the requested information.
- Data Verification: The oracle checks and double-checks that the information is correct.
- Data Transmission: The oracle sends the verified information back to the smart contract.
- Smart Contract Execution: The smart contract says, “Thanks! Now I can do my job,” and executes based on the received data.
Some advanced oracle systems, like Chainlink, use a more complex process involving multiple sub-contracts to ensure data reliability and security. It’s like having a team of fact-checkers instead of relying on a single source.
An Oracle For Every Occasion
Just as there are many types of information in the world, there are various types of blockchain oracles:
- Software Oracles: These pull data from online sources like websites, databases, and servers. They’re the go-to for things like price feeds, exchange rates, and digital information.
- Hardware Oracles: These are the real-world explorers. They interface with the physical world, collecting data from things like sensors, barcode scanners, or other IoT devices. Imagine a smart contract that needs to know the temperature in a shipment of vaccines – that’s where a hardware oracle would come in handy.
- Human Oracles: Sometimes, you just need a human touch. These oracles rely on human judges to provide information. They’re useful for things that require human judgment or interpretation.
- Inbound and Outbound Oracles: Inbound oracles are like importers, bringing external data onto the blockchain. Outbound oracles are exporters, capable of sending information from the blockchain to the outside world.
- Compute-Enabled Oracles: These are the brainiacs of the oracle world. They perform complex computations off-chain and deliver the results to smart contracts, enabling more advanced functionalities.
- Cross-Chain Oracles: These are the diplomats, facilitating communication and asset transfers between different blockchain networks.
Overcoming the Oracle’s Dilemma
While oracles are incredibly useful, they’re not without their challenges. The main issue is known as ‘the oracle problem’, (like crypto’s Byzantine General Problem) and it boils down to this: How can we trust that the data provided by oracles is accurate and hasn’t been tampered with?
This is a big deal because oracles are essentially reintroducing an element of trust into a system designed to be trustless and without the need for an intermediary. If an oracle is compromised, it could feed false information to a smart contract, potentially leading to significant losses or other issues.
To tackle this problem, the blockchain community has come up with several solutions:
- Decentralized Oracle Networks: Instead of relying on a single oracle, these networks use multiple independent nodes to fetch and verify data. It’s like getting a second (and third, and fourth) opinion.
- Reputation Systems: These keep track of oracles’ past performance, helping users choose reliable data providers. It’s like a Yelp for oracles.
- Crypto-Economic Incentives: These systems reward honest behavior and penalize dishonesty within the oracle network, creating a financial incentive for oracles to stay truthful.
- Hardware-Based Security: Some oracles use secure hardware components to protect the integrity of data processing, adding an extra layer of security.
Real-World Oracle Use Cases
The applications of blockchain oracles are vast and growing. Here are some areas where oracles are making a big impact:
- Decentralized Finance (DeFi): Oracles are the lifeblood of DeFi, providing price feeds and market data. Without oracles, decentralized exchanges, lending platforms, and synthetic asset protocols would be flying blind.
- Insurance: Smart contracts can use oracle data to automatically process claims. Imagine an insurance policy that pays out automatically if your flight is delayed – that’s the power of oracles in insurance.
- Gaming and NFTs: Oracles enable the creation of dynamic NFTs that can change based on real-world events. They also provide verifiable randomness for blockchain-based games, ensuring fair play.
- Supply Chain Management: Oracles can feed IoT sensor data into blockchain systems, enabling real-time tracking and verification of goods. This can help in everything from ensuring the food is fresh to verifying luxury handbags are authentic.
- Prediction Markets: Crypto betting platforms rely on oracles to determine the outcomes of events and settle bets accordingly. Whether it’s predicting election outcomes or sports results, oracles play a crucial role (and hacking or duping the oracle could make a cybercriminal millions!)
- Cross-Chain Interoperability: Oracles facilitate communication and asset transfers between different blockchain networks, helping to create a more interconnected blockchain ecosystem.
The Oracle All-Stars: Leading Projects
Let’s look at the projects that lead the pack among blockchain oracle solutions:
- Chainlink (LINK): The heavyweight champion of the oracle world, Chainlink is widely adopted and provides data feeds for a vast array of blockchain applications.
- Pyth Network (PYTH): This Solana-native newcomer specializes in high-fidelity, real-time financial market data. It markets itself as a next-gen version of LINK and has been getting a lot of adoption
- UMA (UMA): UMA offers oracle solutions for DeFi products and synthetic assets. They’ve introduced the concept of ‘optimistic oracles’, which assume data are correct unless challenged.
- API3 (API3): This project focuses on direct API integration with smart contracts, aiming to cut out the middleman in the data delivery process.
- Band Protocol (BAND): A cross-chain data oracle platform, BAND has been around as long as Chainlink has. It enables smart contracts to interact with real-world data across different blockchains.
Honorable mention: Supra Oracle
The Future is Bright (and Data-Rich)
As blockchain technology continues to evolve, oracles will become even more critical. Here’s what we might see in the future:
- More sophisticated decentralized oracle networks with enhanced security and reliability. Some new chains like Sui and Aptos are already moving away from the industry-leading oracles and instead are building their own chain-specific oracles.
- Increased integration with IoT devices and real-world sensors, bringing more of the physical world onto the blockchain.
- Advanced cross-chain communication protocols enabled by oracles, creating a more interconnected blockchain ecosystem.
- The development of industry-specific oracle solutions tailored to particular use cases, from healthcare to real estate.
Wrapping Up
Blockchains compute on pure logic and mathematics, existing in the Platonic world of forms. Oracles bridge the gap to the big bad world of real data. They enable smart contracts to break free from their blockchain boundaries and interact with the world in many meaningful ways.
The oracle problem isn’t going away. As more money flows through systems that depend on oracles, more hackers will put more effort into duping the oracle to pay out on a losing horse. Ongoing innovation in oracle technology will be needed to address these issues. As we move towards a more interconnected and decentralized future, oracles will play a pivotal role in expanding the capabilities of blockchain systems, and fostering the growth of decentralized applications across various industries.
So the next time you use a DeFi application, play a blockchain game, use a Crypto AI product or interact with any smart contract that seems to magically know what’s happening in the real world, remember to tip your hat to the humble blockchain oracle. They’re the ones making the magic happen behind the scenes.
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Artificial Superintelligence Alliance | Mindplex Podcast S2EP24
Starship’s reentry sonic boom in a political storm
A few days ago I watched the epic fifth flight test of Starship, the giant SpaceX rocket that, Elon Musk’s hopes, will one day take human colonists to Mars.
I watched the flight test live via X, including its most critical moment: the catch of the Super Heavy booster. Commentator Katherine Boyle called it “The Fall of the Century” and said that it “restored faith in the American Dream.”
Liv Boeree has captured the last seconds of the return of the Super Heavy booster in this video. The video shows a visible (and audible!) reentry sonic boom.
This was a very ambitious and perhaps risky test. In fact, SpaceX made the final decision to try and catch the booster only minutes before the actual catch. Any number of small technical glitches could have turned success into failure. It’s difficult to escape the impression that the universe loves Elon Musk and wants us to advance rapidly on the road to the planets and the stars.
The stunning achievement of SpaceX has been hailed as a major spaceflight milestone and praised by space experts, public figures, and politicians from all over the world. With one very notable exception though: the President and Vice President (and presidential candidate) of the United States.
Boom over troubled waters
The waters that we can see in the video are calm. But Elon Musk’s giant rocket returned to the troubled waters of a political storm centered on Musk’s cultural and political positions.
“Musk mania in the media this month has reached a level of uncontrollable hysteria,” legal and political commentator Jonathan Turley posted to X.
Turley has written a scathing indictment of the pundits and politicians who are unleashing unhinged attacks on Elon Musk.
Turley reports that California Coastal Commission has rejected a request from the Air Force for additional launches from Vandenberg Air Force Base because they don’t like the political positions of Musk.
The incident was covered by The Los Angeles Times. The California Coastal Commission has an environmental mission, but there isn’t much about the environment in the LA Times story. Rather, the story reports one after another personal attack on Elon Musk by representatives of the Commission, such as:
“We’re dealing with a company, the head of which has aggressively injected himself into the presidential race… Just last week that person was talking about political retribution… Elon Musk is hopping about the country, spewing and tweeting political falsehoods…”
These remarks by several Commission officials, video recorded and ridiculed by Greg Gutfeld, seem to reflect personal animosity based on partisan politics rather than anything even remotely related to the environment.
Turley reports many other rabid attacks on Elon Musk by well-known public figures, some even calling for his arrest and deportation.
Where does all this hatred come from?
Free speech and Donald Trump
Elon Musk has become a major topic of discussion because he’s allowing more free speech on X and he’s vocally supporting Donald Trump.
“I describe Musk as arguably the single most important figure in this generation in defense of free speech,” says Turley. “The left will now kill jobs, cancel national security programs and gut the Constitution in its unrelenting campaign to get Musk. His very existence undermines the power of the anti-free speech movement. In a culture of groupthink, Musk is viewed as a type of free-thought contagion that must be eliminated.”
I totally agree with Turley (and Musk) on the paramount importance of free speech. Turley has written a book titled “The Indispensable Right: Free Speech in an Age of Rage” (2024).
Musk’s bet on Trump seems a dangerous one: if Trump doesn’t win the upcoming elections in the U.S., it seems inevitable that the government will be very hostile to Musk and all his companies and projects for the next four years.
At this moment, the upcoming elections in the U.S. seem a very tight race.
The polls slightly favor one of the two main candidates, and the betting markets slightly favor the other. Of course, this could change next week, or tomorrow, or anytime before the elections. I don’t rule out the possibility that one of the two main candidates could win in a landslide. Neither do I rule out the possibility that the winner could win with only a very small margin, so small that half of the U.S. population will dispute the results of the elections.
Possible political outcomes
Elon Musk has more than 200M followers on X. Probably half of them are bots and a very large fraction of the rest are casual followers who don’t pay attention to him or wouldn’t be influenced by what he says. But he can likely direct a few tens of thousands of votes to Trump, and this could be a decisive factor in some swing states.
There were indications that the FAA wouldn’t have authorized this flight test before the elections. Some commentators interpreted this an indication that the U.S. current administration didn’t want to risk a success of the flight test that would have given unwanted publicity to Musk before the election.
Then the FAA authorization came all of a sudden. I thought of a little conspiracy theory: perhaps the administration green-lighted the flight test hoping for a catastrophic failure that would, they hoped, reduce the public appeal of Elon Musk. But if so, their move backfired catastrophically! If anything, the spectacular sonic boom of Starship is likely to bring a few more votes to Trump.
Whatever the result of the elections, the U.S. will still be a very divided country afterward.
But spaceflight is an endless source of pride and hope that transcends petty partisan politics. I hope the next U.S. administration, whichever it is, will stay on the path followed by the Trump and Biden administrations.
NASA administrator Bill Nelson praised SpaceX after the booster catch, affirming the plan to go “to the South Pole region of the Moon and then on to Mars.”
This is the right spirit! And I hope the U.S. space program will have bipartisan support. This would show that, even today, honest politicians of different camps can work together and negotiate viable paths to the common good.
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AI Deepfake Tool ProKYC Cracks Crypto Exchange Authentication
Two AI tools were showcased last week: Elon Musk unveiled his vision of self-driving cars, space rockets and strange robots for every occasion, and hackers countered with their own tools for creating the new world order.
Cybersecurity firm Cato Networks has uncovered ProKYC, an AI-powered deepfake tool sold on criminal forums that bypasses the Know Your Customer (KYC) checks on cryptocurrency exchanges.
This AI software represents a new leap in fraudsters’ ability to create fake identities, potentially undermining a key security measure in centralized crypto exchanges. This comes after five years of close collaboration between crypto exchanges and the authorities. The exchanges have been forced to crack down on anonymity, after U.S. authorities jailed exchange bosses like Changpeng CZ Zhao (Binance) and Arthur Hayes (BitMex) for failing to follow Anti-Money Laundering (AML) regulations. These AI advances are therefore bad news for parties trying to fight terrorism funding (TF) and blacklisted countries like North Korea’s state-funded Lazarus hacker group.
How ProKYC’s deepfake AI KYC works
ProKYC uses advanced AI to generate two crucial elements:
1. Fake government-issued ID documents (e.g., passports)
2. Deepfake videos matching these fake IDs
In a demonstration, ProKYC created a fake Australian passport and an accompanying deepfake video. This synthetic identity successfully passed the KYC protocols of Bybit, one of the world’s largest cryptocurrency exchanges.
The tool casually offers a comprehensive package including:
- Camera emulation
- Virtual emulator
- Facial animation
- Fingerprint generation
- Verification photo creation
Priced at $629 for an annual subscription, ProKYC claims to work on major platforms beyond crypto exchanges, including payment processors like Stripe and Revolut.
The role of KYC in Crypto
While most crypto folks hate it and the doxxing that it brings, KYC processes serve several critical functions in the cryptocurrency ecosystem:
- Fraud Prevention: Verifying user identities reduces the risk of fraudulent activities.
- Anti-Money Laundering (AML): KYC helps track the sources of funds, making it harder for criminals to launder dirty money through crypto platforms.
- Regulatory Compliance: Most countries are mandated by the Financial Action Task Force (FATF) to require crypto exchanges to implement KYC measures. It’s part of operating legally. If these countries don’t comply, they can be graylisted or blacklisted, opening them up for sanctions.
- Trust Building: Robust KYC processes enhance the credibility of exchanges for both users and regulators. It shows proper due diligence has been done by the exchanges, and users have less fear they will get shut down or abscond with users’ funds.
Typical KYC procedures can be tiresome, but have improved over the years to become more intuitive. Now they usually involve submitting government-issued identification documents and often include facial recognition checks.
ProKYC threatens to render these safeguards obsolete, and throw the current best practices out the window. This could have a catastrophic effect on the crypto sector, with regulators in the USA constantly seemingly seeking any reason to tie it down with heavy legislation such as the Crypto Travel Rule, and the covert Operation Choke Point 2.0.
The Broader Threat Landscape
The emergence of tools like ProKYC has far-reaching implications:
1. New Account Fraud (NAF): With ProKYC, people can create fake but verified accounts, and use them to commit various forms of fraud. These accounts can launder dirty money and be used as ‘mule accounts’ to make transfers around sanctions.
2. Financial Losses: According to AARP, new account fraud resulted in over $5.3 billion in losses in 2023, up from $3.9 billion in 2022. Tools like ProKYC could exacerbate this trend.
3. Challenge to Security Measures: The sophistication of ProKYC poses a significant challenge to existing security protocols, potentially necessitating the development of new, more robust verification methods.
4. Wider Financial Sector Impact: Tools like ProKYC currently target crypto exchanges, but similar tools could potentially be used to bypass KYC measures in traditional financial institutions.
Detection and Prevention Challenges
Identifying and thwarting fraud attempts using tools like ProKYC presents a complex challenge. Etay Maor, Chief Security Strategist at Cato Networks, points out the delicate balance required: “Creating biometric authentication systems that are super restrictive can result in many false-positive alerts. On the other hand, lax controls can result in fraud.”
Potential detection methods include:
- Manual Verification: Human oversight to identify unusually high-quality images or videos.
- AI-Powered Analysis: Developing AI systems to detect inconsistencies in facial movements or image quality that might be imperceptible to the human eye.
- Multi-Layered Authentication: Implementing additional verification steps beyond document and facial recognition checks.
The effectiveness of these methods remains to be seen, as the AI technology behind deepfakes continues to advance rapidly.
Industry Response: Binance founders’ CZ’s Warning
The threat posed by AI-generated deepfakes has drawn the attention of prominent figures in the cryptocurrency world. CZ Zhao, released last week from prison, has issued a stark warning about the proliferation of AI-generated deepfake videos promoting cryptocurrency scams on social media.
Zhao cautioned on X (formerly Twitter):
There are deepfake videos of me on other social media platforms. Please beware!
Changpeng Zhao, former CEO and co-founder of Binance
CZ’s warning comes at a time when several high-profile individuals, including political figures and business leaders, have been impersonated using deepfake technology to promote fraudulent crypto schemes.
The use of deepfakes in crypto scams typically follows a familiar pattern: scammers create videos of well-known figures seemingly endorsing get-rich-quick crypto schemes, luring unsuspecting victims into transferring funds to specific wallet addresses. The promised rewards, of course, never materialize.
Of course, anyone that’s been using Crypto Twitter or Crypto YouTube over the last 18 months will be well familiar with them by now. Usually they come with some kind of countdown mechanism to pressure viewers into making a FOMO-induced mistake.
Legal and Regulatory Implications
The rise of tools like ProKYC poses significant challenges for regulators and law enforcement agencies. In the USA, identity fraud can carry severe penalties, including up to 15 years imprisonment. However, the borderless nature of cryptocurrency and the anonymity provided by advanced AI tools make enforcement particularly challenging.
Regulators may need to reassess current KYC requirements and work closely with cryptocurrency exchanges to develop more robust verification methods. This could potentially lead to stricter regulations and increased compliance costs for exchanges.
Can AI KYC Crackers Be Stopped?
As AI technology continues to mutate, both crypto exchanges and users must remain vigilant and adaptable. For exchanges, this may mean investing in more sophisticated AI-driven security measures and potentially rethinking traditional KYC processes. Some possible strategies include:
- Behavioral Analysis: Monitoring user behavior patterns to detect anomalies that might indicate fraudulent activity
- Blockchain Analysis: Leveraging the transparent nature of blockchain technology to track and analyze transaction patterns.
- Continuous Authentication: Implementing ongoing verification processes throughout a user’s account lifecycle, rather than relying solely on initial KYC checks.
For users, awareness of these threats and a healthy skepticism towards too-good-to-be-true offers remain crucial. Education about the risks of deepfake scams and how to identify them will be increasingly important.
Collaboration between technology experts, security professionals, and regulators will be essential in developing robust defenses against these mushrooming threats.
As the battle between security measures and fraudulent techniques continues, the integrity and legality of the cryptocurrency ecosystem – and even the legality of certain artificial intelligence methods – can come under closer scrutiny, especially as U.S. authorities are devising AI safety frameworks. Pro-anonymity crypto users might welcome this latest crypto malware, but the authorities won’t. ProKYC presents a new threat to crypto’s legality that must be treated with the utmost of urgency.
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HBO’s ‘Money Electric’ Shocker Claims This Guy is Satoshi
HBO’s documentary “Money Electric: The Bitcoin Mystery” claims Peter Todd is Satoshi Nakamoto, Bitcoin’s mysterious creator. The film presents circumstantial evidence, including forum posts and coding similarities. However, Todd firmly denies being Satoshi, and criticizes the documentary’s methods. The crypto community remains skeptical, preferring the creator’s anonymity.
Introduction
HBO last week released a much-anticipated reveal-all documentary that promised to finally solve one of the biggest mysteries in the crypto world: who is Satoshi Nakamoto, the mysterious creator of Bitcoin? Titled ‘Money Electric: The Bitcoin Mystery’, the documentary was directed by Cullen Hoback, the filmmaker known for ‘Q Into the Storm’, a documentary on QAnon.
The documentary came at a time when Satoshi-era wallets that lay dormant for nearly 16 years showed some activity. About 250 Bitcoins dating from January to February 2009 were moved in September 2024, reigniting interest and speculation about the early days of crypto. Bitcoin OGs like Samson Mow and Adam Back took to Twitter to either stir the pot or to deny everything.
The build-up to the documentary sparked interest in the identity of the Bitcoin creator. But principled Bitcoiners had a different take: they prefer Satoshi Nakamoto‘s mystery to his definitive unmasking. It also reminded the crypto world that there have been many other highly-publicized ‘Satoshi reveals’ that turned out to be nothingburgers.
This, in their eyes, is one of those documentaries filled with nothing but circumstantial evidence that would leave us where we started: Satoshi Nakamoto remains an enigma. The only irrefutable evidence of who Satoshi Nakamoto is is the transfer of Bitcoins from Satoshi’s public wallets. The industry’s proponents have endured crypto’s four seasons without knowing the person who started it all. Could the documentary change it?
In the build-up to the documentary’s release, Len Sassaman’s name came forward, with prediction site punters betting heavily on him being the programmer behind Satoshi.
Prediction Markets Bet on Len Sassaman
The trailer for the documentary left people guessing who it would claim as the real Satoshi. After the trailer gave nothing but ambiguous hints, about $44 million in bets were placed on Polymarket ahead of the documentary’s release on who it would name as Satoshi Nakamoto. 45% of opinions on Polymarket, which is the largest crypto prediction market for betting on real-world events, favored Len Sassaman as the man the documentary would identify as Satoshi.
Sassaman’s background makes him a plausible candidate for Satoshi, and others have written convincingly about his case.
Sassaman was born on April 9, 1980, and died on July 3, 2011 at the age of 31. He was a cypherpunk, cryptographer, and privacy advocate. Bitcoin and its underlying technology are built on the principles of cryptography and privacy, and the cypherpunks were its first true supporters. Sassaman studied under David Chaum, who is regarded by many as the godfather of crypto.
One of the reasons why Sassaman could be a potential Satoshi candidate is the correlation of the dates between Satoshi’s final messages and Sassaman’s tragic death. Two months after Satoshi’s final communication with the Bitcoin community on April 23, 2011, Sassaman died of suicide.
This correlation was not enough to convince the documentary makers that Sassaman was Satoshi. Instead, they pointed to another name as Satoshi Nakamoto: Peter Todd.
Why did Todd join the long list of names such as Dorian Nakamoto, Hal Finney, Nick Szabo, Adam Back, and Paul Le Roux who have been identified as Satoshi? (Not to mention those who controversially claimed to be the Bitcoin creator?)
Peter Todd: The Satoshi That Never Was
The filmmaker behind the documentary ‘Money Electric: The Bitcoin Mystery’ is convinced Todd is Satoshi Nakamoto. Just who is Peter Todd? Todd is a Canadian programmer and early Bitcoin developer. He founded OpenTimestamps, an open-source project for timestamping on blockchains.
Todd worked on several cryptocurrency projects, including Counterparty, Mastercoin, and Colored Coins. He worked alongside NSA whistleblower Edward Snowden in launching the privacy-focused cryptocurrency ZCash in 2016.
The documentary’s claim that Todd is Satoshi is circumstantial. The strongest claim hinges on a 2010 public forum post in which Todd offers a response to Satoshi’s post. Hoback argues that Todd continues Satoshi’s train of thought using his account instead of Satoshi’s. This has been debunked as a correction to Satoshi’s post. Observers say the documentary was trying to make a meal out of it.
Other circumstantial evidence includes Todd’s interest in cryptography at a tender age, and his being Canadian (Satoshi used British/Canadian spelling). Another piece of evidence used by Hoback is a blog post in which Todd claimed he could ‘sacrifice coins.’ This, according to Hoback, meant that Todd could destroy the 1.1 million (valued at roughly $66 billion) held by Satoshi. Hoback acknowledges that this was stretching it, and too far from being a confession.
There are several pieces of evidence against HBO’s claim that Todd is Satoshi. Todd’s code’s structure and style from 2008 has a different style from the one used in Bitcoin’s original release.
Todd was 23 when Satoshi published the Bitcoin whitepaper in 2008. Critics may argue that Todd was too young to build something as complex as Bitcoin. Then again Vitalik Buterin proposed Ethereum in 2013 at the age of 19.
Does the HBO Documentary Solve the Satoshi Mystery?
Over the years, the media has tried to reveal Satoshi’s true identity. This has been an elusive task, with several potential candidates denying being the Bitcoin creator. After the Dorian Nakamoto disaster which saw Newsweek track the wrong person down and cause him to get hounded by the media for weeks, it’s no surprise.
Todd is now the latest candidate to deny this honor. He told CNN that “I am not Satoshi” and accused the film of “putting his life in danger.” Although Hoback is confident that Todd is Satoshi, the Canadian developer said the filmmaker was “grasping at straws.”
The documentary ‘Money Electric: The Bitcoin Mystery’ does not give conclusive evidence on the true identity of Satoshi Nakamoto. It further cements the notion that Satoshi may have vanished for good, with the crypto community content with not knowing the true person or group of persons behind the cryptocurrency valued at more than $1.2 trillion.
The lack of a well-known leader seems appealing to the Bitcoin community. This documentary may have brought back one uncomfortable question – what would happen if the true identity of Satoshi Nakamoto is unmasked?
The biggest takeaway from the HBO documentary is that it’s best to let sleeping dogs lie, and that the identity of Satoshi Nakamoto shouldn’t and doesn’t matter. It’s his work, not his name, that matters most. It has yielded a network of code and a community of activity more important than one man. But, hey, it makes for fun television.
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Howard Bloom Repeals Entropy In a Sexy Cosmic Way
Howard Bloom Repeals Entropy In a Sexy Cosmic Way
When I was in college studying creative writing, I had a professor who said I was trying to cram the entire zeitgeist into every sentence. Turns out I was thinking small; Howard Bloom tends to bite off the entire history of cosmic evolution in his books. Bloom’s forthcoming book is titled ‘The Case of the Sexual Cosmos: Everything You Know About Nature Is Wrong’. The book is a tour-de-force that tracks the continuing audacious spread of life from the Big Bang to this age of wild human created technological change.
Earlier books have included ‘Global Brain: Evolution of the Mass Mind from the Big Bang to the 21st Century’, and ‘The Lucifer Principle: A Scientific Expedition into the Forces of History’. Bloom, now 81 years old, has had a long and interesting life that has included everything from doing public relations for innumerable musical acts to suffering from Chronic Fatigue System which left him almost housebound for approximately 15 years. And of course, many controversial and speculative books.
Bloom, known for provocative texts, hits the reader right up front in this one. He praises the “common sins” of materialism, consumerism, waste and vain display, calling them drivers in evolution that add to the “toolkit of the cosmos.” Some of those are not among my favorite vices, but you shouldn’t let that stop you. This is a fascinating book. It drew my attention away from everything else I thought I wanted to read for many weeks. And I hope you will find this conversation as interesting as I found the book.
The Case of the Sexual Cosmos: Everything You Know About Nature Is Wrong comes out January 1st, 2025. from World Philosophy & Religion Press.
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