January 2014

The promises of a decentralized currency: Think Locally and Buy Globally? Jon Mon, 01/27/2014 - 10:58

I once rented a part of a house that had been, well, not fully cleaned out from the previous occupants. It was a house full of hackers that had been variously occupied by friends and friends-of-friends for almost a decade as they passed through Austin on their way from or to new lives, which is to say, it had, well, "character".

One of the odder things left behind by the previous inhabitants was a literal pile of Final Fantasy boxes, completely intact save for the all-important registration codes. A bit of digging uncovered a fascinating tale of cross-border, tax- and fee-free value transfer. The former occupant, let's call him "Bob" was engaged in a business proposition with a colleague based in South Korea, let's call her "Alice." Whatever version of the RPG Final Fantasy had just been released in the States (only). This had proved very difficult to pirate, causing a huge untapped demand in Korea. Koreans, however, had been happily hacking away at another RPG game which was only just now catching on Stateside. So, Bob would tear off and destroy these registration codes, emailing the codes themselves to Alice in Korea. Alice, in exchange, would provide Bob powerful and rare in-game items for the newly-popular game - these were of less value to the Korean market, as it was saturated with players and therefore items, but there was no arbitrage market into the States -- before Alice and Bob, at least. Bob could then sell these on online grey markets for such items, effectively creating a way for both Alice and Bob to profit (rather lucratively, from my understanding) from local markets, and transfer value across borders without incurring bank costs, wire fees, or, for that matter, taxes. This setup lasted for as long as both were able to extract value from the arbitrage process, but obviously wasn't able to scale or even easily re-adapt to new opportunities.

With the rise and increasing stability of bitcoin as an actual contender for a digital currency, the global market suddenly starts looking a lot more local.

Kiev on #Jan25
404: Human Rights Not found?
Jon Sat, 01/25/2014 - 04:51

I spent this past week in Kiev. You may have heard something about the protests, and possibly even about some of the policy changes and new laws that sparked them. I was working with colleagues, journalists and human rights activists, supporting and training them as quickly as possible on digital security basics, and making sure they had contacts to reach out to for timely support.

It was a trip that was scheduled many months ago, when Ukraine was on the cusp of joining the EU. Things, to put it mildly, changed. Obviously, the violent protests have been featured widely in the news, but those capture only the most visible challenges the country is facing. Legislation pushed through with no regard for legal proceedings last Thursday promise to have a chilling effect on free speech, tight limits on media, even citizen journalists, and will devastate the civil society organizations, labeling them as "foreign agents" and taxing them as for-profit corporations if they take any international aid funding.

In the few days I was there, we experienced a "test" of new censorship capabilities as twitter and facebook -- critical messaging and coordination channels for activists -- went dark in Kiev for almost half an hour. People near the protest areas received ominous SMS messages on their phones telling them that they had been registered as present at the (illegal, under the new law) protest.

One note of import - there are two main areas of the protest - EuroMaidan is the months-long, Occupy-on-steroids encampment in Maidan Square. Though well barricaded off, it is a peaceful protest, with daily concerts and speeches on a well-equipped stage, a huge jumbotron, laser-light projections and more. Businesses - from a Nike storefront to a local brewpub to a carousel - are going on with business as normal within the barricaded-off area. The scenes of burning tires, tear gas and molotov cocktails is from the nearby Grushevsky St, where protesters gathered to confront Parliament after their "passage" of this Black Thursday law.

It is inspiring to see the passion and focus of people working to protect and expand their rights, and it is humbling to be able to lend support in any form. However, the challenges aren't getting any easier. The digital tools which provide the most security are also difficult to use, and more difficult to use correctly. They still "stick out" as unusual, and face an uphill battle against popular systems with little if any security.

This has to change. Privacy is not some abstract concept in these situations, it is the economic well-being, and too often, the pure survival of activists, journalists, and their contacts. When we allow policies and practices that undermine security and privacy, we're not just revealing embarrassing factoids about our call history, or even the three felonies a day you're probably committing as a US citizen - we are undermining our global dream of a world of nations with democratic rule, where their citizens can enjoy basic human rights without fear.

The world is ready for this, but when the current Ukrainian government points at American domestic policies as models of their newly crafted censorship and surveillance laws, it's a sign that we as Americans are not drinking our own koolaid (with a hat-tip to the many dedicated civil servants who are working hard to further human rights).