Monthly Archives: March 2017

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Vault 7: What it Means for You

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The -foot ( m) diameter granite CIA seal in th...
CIA seal in the lobby of the original headquarters building. (Photo credit: Wikipedia)

On March 7, the transparency/disclosure activists at Wikileaks began releasing a series of documents titled “Vault 7.” According to the New York Times, Vault 7 consists of “thousands of pages describing sophisticated software tools and techniques used by the [US Central Intelligence Agency] to break into smartphones, computers and even Internet-connected televisions.”

If the documents are authentic — and WikiLeaks has a sterling reputation when it comes to document authenticity — every paranoid thriller you’ve ever watched or read was too timid in describing a hypothetical surveillance state. Even the telescreens and random audio bugs of George Orwell’s 1984 don’t come close to the reality of the CIA’s surveillance operations.

In theory, the CIA doesn’t spy on Americans in America. In fact, digital traffic pays no heed to national borders, and the tools and tactics described have almost certainly been made available to, or independently developed by, other US surveillance agencies, not to mention foreign governments and non-government actors.

Bottom line: You should accept the possibility that for the last several years anything you’ve done on, or in the presence of, a device that can connect to the Internet was observed, monitored, and archived as accessible data.

Paranoid? Yes. But the paranoia is justified.

Even if “they”  — the CIA, the NSA, the FBI, some random group of credit card thieves or voyeurs or whatever — aren’t out to get you in particular, they consider your personal privacy a technical obstacle to overcome, not a value to respect.

If you’ve got nothing to hide you’ve got nothing to fear? Everyone has something to hide. Somewhere, some time, you’ve said or done something you regret or wouldn’t want the world to know. And you probably said or did it within a few feet of your smartphone, your laptop, or your Internet-connected television. Maybe nobody was listening or watching. Or maybe someone was. The only plausible conclusion from the Vault 7 disclosures is that you should assume the latter.

Vault 7 confirms that as a state entity, the CIA answers to philosopher Anthony de Jasay’s description of the state as such. Just as a firm acts to maximize profits, the state and its arms act to maximize their own discretionary power. Even if it doesn’t do some particular thing, it requires the option, the ability to do that thing. It seeks omnipotence.

The abuses of our privacy implied by the WikiLeaks dump aren’t an aberration. They’re the norm. They’re what government does.

Thomas L. Knapp (Twitter: @thomaslknapp) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.

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Cryptocurrency Will Survive And Thrive, But Will Bitcoin?

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The bitcoin logo
The Bitcoin logo (Photo credit: Wikipedia)

March 2017 came in like a lion for Bitcoin as, for the first time ever, one Bitcoin sold for more than one ounce of gold. As I write this, the Bitcoin currently in circulation, if sold at current prices, would bring in more than $20 billion US (that’s nearly 12 times the market capitalization of its closest competitor cryptocurrency, Ethereum). As it enters its ninth year,  the future looks very bright for an idea that many have spent the previous eight years scoffing at and predicting the imminent demise of.

But this time they may be right. Bitcoin is in crisis, and the crisis could kill it.

A few days ago, I confided into my CFD trader friend, who advised me to spend a small amount of Bitcoin (in the range of $5 US in value). The transaction took nearly 30 hours to confirm. This was because I elected to pay only the minimal “miner fee” (about 25 cents, or about 5% of the amount I wanted to spend — 1% would be a better target in my opinion).

To survive and thrive over the long term, a cryptocurrency is going to have to be used as a medium of exchange by regular people buying regular things at regular stores. This means that transactions have to be confirmed quickly and that the fees involved have to be attractive versus PayPal and credit cards.

Recently, transactions on the Bitcoin blockchain have slowed waaaaaaaay down for people who are unwilling to pay fairly high “miner fees.” The (as non-technical as possible) explanation of that term:

Bitcoin is created (“mined”) by people (“miners”) who run computer software that keeps track of Bitcoin transactions (“updates the blockchain ledger”). The miners are rewarded with a bit of the newly created Bitcoin and with miner fees.

As more and more people use Bitcoin, more and more computer power is required to update the blockchain ledger. Transactions with the minimum fees included go to the back of the line and are taking longer and longer to process.

If this isn’t fixed, Bitcoin will become nothing more than a store of value for people who move it around in quantities big enough to justify large fees and long waits. If that happens, the value of Bitcoin will plummet back toward a famous early transaction in which someone paid 10,000 Bitcoins for two pizzas. No customer or shopkeeper is going to pay a dollar in fees and wait 30 hours for confirmation to buy or sell a can of cola.

Two proposals for improving the system, “Bitcoin Unlimited” and “Segregated Witness,” are under consideration by the Bitcoin developer and miner communities.  I’m not the guy to ask about the technical virtues of each proposal, but my sense is that Roger Ver, the main evangelist for Bitcoin Unlimited, has a better understanding of what needs to happen and why. That is, he sees that small, fast, low-fee transactions are the future of cryptocurrency.

If Bitcoin developers and miners don’t get that fact through their heads, and soon, cryptocurrency as such won’t die — but Bitcoin will cease to be people’s cryptocurrency of choice.

Thomas L. Knapp (Twitter: @thomaslknapp) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.

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Budgets, Taxes, Deficits and Debt; or, Mulvaney Versus the Math

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English: South Carolina State Senator Mick Mul...
South Carolina State Senator (now director of the US Office of Management and Budget) Mick Mulvaney speaking in front of a crowd in Newberry, SC, in August of 2010 during his run for the U.S. House of Representatives. (Photo credit: Wikipedia)

“What you see in this budget is exactly what the president ran on,” US Office of Management and Budget director Mick Mulvaney told George Stephanopoulos on ABC’s “Good Morning America” in late February.

The president’s overall budget proposal is still under wraps and hasn’t been sent to Congress yet, but Mulvaney was making the media rounds to flack for its first big component: A $54 billion increase in military spending.

Mulvaney’s claim is true as far as it goes. Donald Trump ran for president on a promise to “rebuild” the most expensive war machine in the world, a “defense” establishment that hasn’t missed a meal since World War Two and that, if cut by 90%, would still be the first or second largest in the world (depending on what China spends from year to year).

Mulvaney didn’t look very happy about it. I don’t blame him. As Stephanopoulos pointed out, Trump made a few other promises, too — and those promises represent an insoluble math problem for the numbers guy.

On one hand, in addition to the increased defense spending, Trump wants a $1 trillion infrastructure program and he’s pledged not to touch Social Security or Medicare spending.

On the other hand, he’s promised to cut taxes.

Even if his hands weren’t so famously small, they’d have trouble holding on to both sets of promises while juggling two more in the air: He’s promised to reduce the federal government’s annual spending deficit and pay down its gigantic debt.

Yes, the “Laffer Curve” predicts the possibility of increased government revenues from general economic growth after tax cuts,  but those numbers still just don’t add up. It’s not possible to spend more, and tax less, and pay down crippling debt, and bring a runaway budget into balance.

Unless Trump and Republicans in Congress are willing to buckle down and get serious about spending cuts (if you’re not serious about cutting military spending, you’re not serious about cutting spending) Mulvaney’s real job for the next four years won’t be balancing budgets, it  will be making excuses.

Fortunately for Trump, he has considerable relevant business experience that he can bring to bear on the problem.

Unfortunately for the rest of us, that experience is in the casino industry where, no fewer than four times, he spent enterprises into insolvency then left his partners holding the bankruptcy bag.

I predict that his presidency will bring that number to five.

Thomas L. Knapp (Twitter: @thomaslknapp) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.

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