Category: Internet

First Tor News Site

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Rather unsurprisingly, it’s the not-for-profit news organization ProPublica:

The so-called dark web, for all its notoriety as a haven for criminals and drug dealers, is slowly starting to look more and more like a more privacy-preserving mirror of the web as a whole. Now it’s gained one more upstanding member: the non-profit news organization ProPublica.

On Wednesday, ProPublica became the first known major media outlet to launch a version of its site that runs as a “hidden service” on the Tor network, the anonymity system that powers the thousands of untraceable websites that are sometimes known as the darknet or dark web. The move, ProPublica says, is designed to offer the best possible privacy protections for its visitors seeking to read the site’s news with their anonymity fully intact. Unlike mere SSL encryption, which hides the content of the site a web visitor is accessing, the Tor hidden service would ensure that even the fact that the reader visited ProPublica’s website would be hidden from an eavesdropper or Internet service provider.

“Everyone should have the ability to decide what types of metadata they leave behind,” says Mike Tigas, ProPublica’s developer who worked on the Tor hidden service. “We don’t want anyone to know that you came to us or what you read.”

Of course, any privacy-conscious user can achieve a very similar level of anonymity by simply visiting ProPublica’s regular site through their Tor Browser. But as Tigas points out, that approach does leave the reader open to the risk of a malicious “exit node,” the computer in Tor’s network of volunteer proxies that makes the final connection to the destination site. If the anonymous user connects to a part of ProPublica that isn’t SSL-encrypted—most of the site runs SSL, but not yet every page—then the malicious relay could read what the user is viewing. Or even on SSL-encrypted pages, the exit node could simply see that the user was visiting ProPublica. When a Tor user visits ProPublica’s Tor hidden service, by contrast—and the hidden service can only be accessed when the visitor runs Tor—the traffic stays under the cloak of Tor’s anonymity all the way to ProPublica’s server.

I don’t think that this is the start of a trend, as near as I can figure out, there is no way to monetize a Tor node through advertising, though I imagine that the classified ad section would be ……… different ……… and I am sure that the FBI would find this very interesting.

How the Internet of Things Will Actually Be Used

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It will be invading our privacy and discrimination, all while presenting it as a benefit to the consumer.

You might want to check out this bit of propaganda from the insurance industry courtesy of the Washington Post, and imagine what they would do if they knew what food was in your fridge, or how often you drink, or what you set your thermostat to.

The term to describe this is “dystopian”:

For years, insurance companies have used estimates of your annual mileage to determine your car insurance rates. But with recent changes in technology, insurers now have an unprecedented ability to judge your actual driving habits. Armed with detailed data on how often you slam on the brakes and what times of day you’re on the road, insurance companies are increasingly relying on precise, technological means of assessing risk — and using that information to set your monthly premiums.

Liberty Mutual, the country’s third-largest property-and-casualty insurer, took the latest step in that direction Monday when it announced a partnership with Subaru. Beginning later this year, Subaru drivers who have paid for the automaker’s Starlink infotainment system will be able to download an app to their cars that notifies them when they are accelerating too aggressively or braking too hard.

The app is part of Liberty Mutual’s RightTrack program, which gives drivers a 5 percent discount on their rates for enrolling and additional discounts up to 30 percent for heeding the app’s guidance on driving safely.

Liberty Mutual, which began offering RightTrack in 2012, isn’t the only insurer to embrace usage-based insurance — a tactic that draws on a person’s real-world driving behavior to gauge his accident risk. Progressive, Allstate and State Farm operate similar programs, too.


.………

But as more Americans begin buying high-tech, connected cars that can talk to the Internet, other analysts say the rise of usage-based insurance raises uncomfortable questions for consumers and insurance companies alike.

“Don’t assume this is always going to be a way to lower your rates,” said Karl Brauer, an analyst at Kelley Blue Book. “It could be used against you to raise your rates long before you ever have an accident.”

Although many insurance companies say that agreeing to be tracked can only result in a discount, not a rate hike, those terms could always change in the future, Brauer and other analysts say. And people who drive safely one year but more riskily the next could effectively see their rates rise when an insurer decides to grant a smaller discount than before.

Then there’s the matter of consumer privacy. How long insurance companies can hold onto your data, and whom they can share it with, depends on each firm’s policies as well as state or local regulations. Insurers would also have to obey court orders for user data.But as more Americans begin buying high-tech, connected cars that can talk to the Internet, other analysts say the rise of usage-based insurance raises uncomfortable questions for consumers and insurance companies alike.

“Don’t assume this is always going to be a way to lower your rates,” said Karl Brauer, an analyst at Kelley Blue Book. “It could be used against you to raise your rates long before you ever have an accident.”

Although many insurance companies say that agreeing to be tracked can only result in a discount, not a rate hike, those terms could always change in the future, Brauer and other analysts say. And people who drive safely one year but more riskily the next could effectively see their rates rise when an insurer decides to grant a smaller discount than before.

Then there’s the matter of consumer privacy. How long insurance companies can hold onto your data, and whom they can share it with, depends on each firm’s policies as well as state or local regulations. Insurers would also have to obey court orders for user data.

………

Consumers who don’t want to be tracked don’t have to sign up. But when such programs become more common, opting out could serve as a “red flag” to insurance companies, according to Renee Stephens, vice president of U.S. auto quality for J.D. Power and Associates.

Insurers find behavioral monitoring attractive because it provides them with a clearer picture of the entire risk pool. By understanding better how each driver behaves, companies can design insurance plans that match a person’s risk more accurately and determine how much coverage a given driver requires.

Yes, just trust the insurance companies with your data, allow them to apply opaque algorithms to their systems, and the consumer will always benefit.

Yeah, sure, and Donald Trump does not have a comb over.

The insurance companies will use this to f%$# us like a drunk sorority girl.

A Christmas Gift for Those of You Who Celebrate Christmas

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I give you the real Old Economy Steve:

In the past several weeks, a photo meme has exploded on Reddit, Facebook, and in several other corners of the social web. The meme, called “Old Economy Steve,” is designed as wry commentary on the way today’s young people struggle with student debt, unemployment, and other recession-era economic concerns, only to be described as lazy and entitled by members of an earlier, luckier generation. The photo associated with the meme, of a seventies teen with a Partridge Family haircut, has sparked nearly a thousand Quickmeme posts and has become, as The Atlantic put it, “the official meme for embittered Millenials.”

Until now, nobody has identified the smirking teen in the photo. But with some Internet sleuthing, we tracked down the genuine Old Economy Steve and asked him what it feels like to become the face of an out-of-touch generation.

The real Old Economy Steve is Kenneth W. Kiser, a 48-year-old graphic designer and hobbyist photographer from Coshocton, Ohio. Contacted by e-mail, Kiser said he had no idea his old school photo (taken “in the late seventies,” when he was about 14 years old, he said) was being circulated as a meme until a relative brought it to his attention less than a week ago.

Good to know, huh?

Rule Number 1: Mark Zuckerberg Leaves a Trail of People Who Feel that he Cheated Them in His Wake

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Rule Number 2:  See rule number 1.

As such, I am dubious of Mark Zuckerberg’s pledge to donate 99% of his Facebook fortune to charity:

In a public post on Facebook, CEO Mark Zuckerberg and his wife Priscilla Chan announced Tuesday that they will donate 99 percent of their Facebook shares “during their lives”—an amount currently worth $45 billion—to their new charity, the Chan Zuckerberg Initiative.

 The organization, which seems to be modeled on the Gates Foundation, states its laudable albeit vague goal to “join people across the world to advance human potential and promote equality for all children in the next generation.”

 The announcement came in the form of a public letter to their newly born daughter Max. It addresses important long-term goals that are often stymied in the public sector, things like “advancing human potential and promoting equality.”

But when one dives into the details, it gets seriously hinky on closer examination:

When Mark Zuckerberg announced he would give away 99% of his Facebook shares — currently worth around $45 billion — the initial impulse from many was to assume the money would all go to charity. Indeed, very many news organizations described the donation as either going to charity, or a charitable trust.

 Not so, a Facebook spokeswoman confirmed in an email to BuzzFeed News. The spokeswoman further confirmed the initiative is structured as an LLC, and not as a charitable trust.

 While charity will certainly be one of the money’s destinations, it will be far from the only one.

It’s beginning to look more and more like a way to avoid income and inheritance taxes than anything else.

I would also argue that relying on the altruism of today’s robber barons is misguided, and  notes, so does German billionaire Peter Krämer:

SPIEGEL: Forty super wealthy Americans have just announced that they would donate half of their assets, at the very latest after their deaths. As a person who often likes to say that rich people should be asked to contribute more to society, what were your first thoughts?

Krämer: I find the US initiative highly problematic. You can write donations off in your taxes to a large degree in the USA. So the rich make a choice: Would I rather donate or pay taxes? The donors are taking the place of the state. That’s unacceptable.

SPIEGEL: But doesn’t the money that is donated serve the common good?

Krämer: It is all just a bad transfer of power from the state to billionaires. So it’s not the state that determines what is good for the people, but rather the rich want to decide. That’s a development that I find really bad. What legitimacy do these people have to decide where massive sums of money will flow?

SPIEGEL: It is their money at the end of the day.

Krämer: In this case, 40 superwealthy people want to decide what their money will be used for. That runs counter to the democratically legitimate state. In the end the billionaires are indulging in hobbies that might be in the common good, but are very personal.

 Your mouth to God’s ear, Herr Krämer.

Read This………

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A transportation expert takes Pando to task regarding their analysis of Uber, and Pando sees fit to publish his letter.

Basically, Pando has gone after Uber as being a bunch of Silicon Valley snake oil, and Hubert Horan believes that this is not true.

Specifically, notwithstanding their somewhat horrifying business practices, Amazon and eBay actually innovate, reducing the costs and increase the selection relative to brick and mortar alternatives, while Uber provides the exact same service as any taxi or limo service, while adding the “benefits” of price gouging and drivers who have not passed a background check:

The letter is fascinating, insightful, and critical. I don’t agree with his characterizations of some of my arguments; but I do agree with his own arguments and explanations in this letter, and more than that, I appreciate the time and serious effort Horan put into this letter to educate all of us. Few people in America have his decades-long industry perspective and his unique political insights on the politics of transportation, antitrust, markets, and tech. Here’s the letter in full.

-Mark Ames

………

I agree that Convoy, which appears to be closely mimicking the Uber playbook, raises major issues that fully warrant the attention you’ve given it, and I am grateful for the effort and critical thinking that you and Pando have brought to these unicorn issues over the last several years. Apologies in advance if the tone of what follows seems excessively critical, but I have four major concerns based on my background in transport and regulatory economics: (A) I think the Convoy piece (as well as most previous Pando reporting on Uber) misses the critical point that neither company has an underlying business model linked to any rational evidence of sustainable competitive advantage, and you’ve misled readers by equating the Uber/Convoy models with companies like Amazon, and EBay, which did have plans based on solid economics; (B) You correctly noted that the investors behind Convoy (and Uber) are seeking quasi-monopolistic dominance (trying to build a rent-extractive “narrow in the stream”) but you failed to lay out for your readers the critical difference between driving thousands of less-efficient existing suppliers out of business because you’ve built an overwhelmingly better mousetrap, versus driving more efficient suppliers out of business using artificial market power; (C) You correctly note the already lean conditions in trucking, and it is quite reasonable to discuss Uber-type companies in a broader historical/political context. But I think you’ve improperly equated the politics and economic thinking behind Ford/Carter transportation deregulation with much more radical finance-driven changes 20-30 years later, and I think the 1970s points you raise aren’t critical to your readers’ understanding of Uber/Convoy; (D) I imagine that Pando doesn’t get many letters attacking its failure to fully appreciate the problem of Uber and Uber-type companies, but if one fails to focus on the complete lack of competitive economics, and the huge dependence on (eventually) exploiting artificial market power, then I think you end up seriously understating the damage these companies could impose on the rest of society.

………

  1. You’ve improperly equated the Uber/Convoy and Amazon/EBay business models—one is based on legitimate /competitive economics; the other isn’t. Your post said that even if it’s not Convoy, “it’s safe to assume that sometime soon, tech will transform and restructure the $749 billion trucking sector” in a similar way to Uber and taxis, Amazon and booksellers, and EBay and newspaper classifieds. This totally misses a critical distinction– Amazon/EBay type business models were based on powerful competitive advantages over the businesses they were seeking to supplant while the Uber (and apparently Convoy) models seek to “disrupt” an industry with economics that are actually worse than existing competitors. Despite other issues, Amazon could offer consumers much wider choices than they ever had before, eliminated all of the costs of retailing, achieved huge warehousing and distribution efficiencies and clearly had scale economies that no traditional competitor could match. On the other hand, the Uber business model (software/brand company plus its “independent” contractors) fails each of these efficiency/competitive/technological tests. Uber isn’t transforming the consumer product—it offers the exact same service as traditional taxi/limo operators. Uber—even a future, more mature Uber– will have much higher driver, insurance, training, ownership and maintenance costs. The massive subsidies that create the appearance that Uber offers better/cheaper service are not sustainable. Since the mature Uber won’t be able to produce urban car service at significantly lower cost, there are no welfare gains from increased service or lower prices. There is no evidence that a reasonably well run taxi/limo company has bloated costs that cry out for new market entrants, and there’s ample evidence (dirty cars, horribly paid drivers) that industry costs are already extremely lean. Even Uber’s vaunted app is irrelevant to competitive economics. The ordering/pricing aspects of the app are a tiny piece of total costs, they don’t drive any big network economies, and apps can easily be copied. The app actually illustrates a serious Uber structural disadvantage. The economic key to any transportation company is the ability to balance supply (i.e. assets) against volatile demand in the medium/longer term. Thus profits depend on managers with long experience dealing with complex markets, and with sophisticated tools for capital planning and shorter-term price/supply adjustments. Airlines, railroads and shipping companies use some of the most advanced management systems anywhere in the private sector. Yellow Cab isn’t in the same league, but has managers with serious fleet management capabilities, and dispatchers who understand all the idiosyncrasies of local demand patterns (factory night shifts, conventions, bar/restaurant patterns). Uber has an app that ignores the both vehicle management, and market demand forecasting, has no local market knowledge and simply reacts to short-term car requests. Any urban transport operator faces much tougher economics than freight or intercity passenger operators, because there’s no way to reduce costs by smoothing demand peaks. Airline revenue management can massively reduce capital costs by getting price sensitive people to not fly on Friday afternoon. The Long Island Railroad has had peak/off-peak pricing for a hundred years, but rush hour is still rush hour, and the LIRR suffers with the cost of hundreds of cars that only get used ten hours a week. Surge pricing will not get anyone to shift their Saturday night out to fill empty cabs midday Tuesday, and there’s nothing else in the Uber model that addresses any of these fundamental problems with the economics of urban transport. Given the vastly greater complexity of trucking, the idea that a company with a software app could produce new efficiencies great enough to drive most existing trucking companies out of business seems too ludicrous to take seriously. As you clearly point out, there is lots of historical evidence that the last few decades of competition have already made existing operators pretty efficient. Unlike urban car services, trucking includes lots of companies (UPS, JB Hunt) with incredibly advanced industrial engineering capabilities. Anyone who thinks that there are tens of billions worth of trucking efficiencies out there—efficiencies that absolutely no one anywhere in the trucking industry could see—and that these billions can be generated by a scheduling app, but will be so huge that they’ll totally disrupt a$749 billion industry—is either delusional or willfully dishonest.

Uber-type companies need to be understood as a radical departure from Amazon/EBay type models. Instead of displacing competitors through actual efficiencies, or by creating entirely new markets, its model is entirely based on getting the world to believe that it will inevitably dominate the entire industry. This requires aggressively suppressing any discussion of empirical economic evidence (which would undermine its case) and emphasizing the factors driving inevitability–the brilliance of its early stage investors, the ruthlessness of management, and the raw political power of the company’s wealthy supporters. PR is a component of every start-up; at Amazon/EBay it played a supporting role and relied heavily on economic evidence of competitive strengths, but at Uber PR is the heart of the plan, and replaces the need to figure out how to provide much better service at much lower cost. As with 97% of Uber’s media coverage, the Fortune and Bloomberg pieces you cited totally avoided any discussion of competitive economics and tried to pass off its faithful repetition of Convoy’s “industry disruption is inevitable” PR theme as “news reporting”. But by equating the Amazon and Uber approaches you’ve fallen into the same trap. You’ve failed to tell your readers that there are no competitive economics behind the “inevitability” claim, and you’ve helped spread their “our valuation is legitimate because we’ll produce huge economic value just like Amazon and EBay” PR claim.

Read the rest.

While my (and Mark Ames’) point have made the point that Uber is designed to succeed by fobbing off many of its costs onto its employees and society, in doing so, we had ceded that Uber had in some way a built a better mousetrap.

He argues that it’s all an exercise in PR where the real business is to create a monopoly, or oligopoly, model where they sit astride the market extracting rents.

No wonder Wall Street loves Uber.

If Only the Ruling Included a Kick to the ‘Nads

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The 7th Circuit Court of Appeals just issued a permanent injunction against the Cook County Sheriff enjoining them from contacting credit card companies to threaten them into dropping n adult web site:

Nov 30 A federal appeals court on Monday ordered an injunction blocking the Cook County, Illinois, sheriff from pursuing any effort to stop credit card companies from handling transactions for Backpage.com, a classified ad website that the sheriff said promotes sex trafficking.

The 7th U.S. Circuit Court of Appeals in Chicago said Sheriff Thomas Dart, whose jurisdiction includes Chicago, violated Backpage’s First Amendment free speech rights by demanding that companies such as MasterCard Inc and Visa Inc ban the use of their cards to buy ads on the website.

Writing for a three-judge panel, Circuit Judge Richard Posner said Dart’s “official bullying” and “campaign of suffocation” amounted to censorship, preventing even transactions for ads touting “indisputably legal” activities from being processed.

“As a citizen or father, or in any other private capacity, Sheriff Dart can denounce Backpage to his heart’s content. He is in good company; many people are disturbed or revolted by the kind of sex ads found on Backpage’s website,” Posner wrote.

But as sheriff of a county with more than 5.2 million people, Dart cannot make “dire threats,” including of possible prosecution, in a campaign “to crush Backpage’s adult section – crush Backpage, period, it seems,” the judge added.

………

The injunction bars Dart from coercing or threatening sanctions against card companies, processors and financial companies that do business with Backpage.com, while the company pursues its lawsuit to stop his campaign.

In August, U.S. District Judge John Tharp had rejected Backpage.com’s bid for a preliminary injunction.

Posner said that was a mistake because Backpage.com would probably succeed on the merits, and suffered “irreparable injury” from its loss of First Amendment freedoms.

Dart’s office did not immediately respond to a request for comment. His office has said it has made more than 800 arrests since 2009 connected to Backpage.com ads.

800 arrests from lurking on an internet web site looking for sex workers.

How about policing those gun shops in Cook County, just over the border from Chicago who are selling to any sort of skeevy straw buyers with two nickels to rub together instead of pursuing some masseuses giving tug jobs?

I hope that Backpage.com takes him to the cleaners in a civil suit.

I also would like to see the Department of Justice go after Sheriff Dart for criminal conspiracy to deprive Backpage.com of its civil rights, but I don’t expect to see that happen.

It should happen, but it won’t.

Cuck Fomcast

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It looks like the sh%$heels that is the most detested country in the world have found a new way to f%$# with net neutrality.

Basically, they are implementing data caps, and then exempting their own services from their caps:

By now, Comcast’s strategy for fighting internet video competition is very clear. For one, the company is slowly but surely expanding usage caps into dozens of new markets. In these ever-expanding areas, Comcast imposes a 300 GB usage cap, then charges users $10 for every 50 GB of extra data they consume. Comcast’s also now testing a new wrinkle wherein users have the option of paying another $30 to $35 if they want unlimited data. In short, the option to have the same unlimited connection they had yesterday will cost these users significantly more.

But recently, Comcast’s other spoke in this strategy started to reveal itself. The company is slowly but surely expanding a creatively named streaming video service named Stream. Stream provides Comcast broadband-only users a $15 service that includes live TV, video on demand, and HBO, and it’s Comcast’s way of trying to keep would-be cord cutters in house. Here’s the kicker though: Comcast’s new streaming service doesn’t count against Comcast user usage caps:

“We asked Comcast today if Stream TV usage will count against the 300GB data plans imposed in certain parts of Comcast’s territory. “No, Stream is an IP cable service delivered over our managed network to the home,” a Comcast spokesperson replied.

Comcast also pointed Ars to an (sic) FAQ that says, “Stream TV is a cable streaming service delivered over Comcast’s cable system, not over the Internet. Therefore, Stream TV data usage will not be counted towards your Xfinity Internet monthly data usage.”

In short, Comcast’s trying to argue that this isn’t a net neutrality violation because the service spends significantly more time traveling over Comcast’s managed IP infrastructure instead of the public Internet. It’s the same excuse Comcast gave back in 2012, when it was criticized for exempting its streaming service via the Xbox 360 from usage caps. The move resulted in some pointed criticism by Netflix CEO Reed Hastings, who declared that Comcast was “no longer following net neutrality principles” and the company “should apply caps equally, or not at all.” The FCC, however, did nothing.

Seriously, what the actual f%$#?

Without monopoly rents, Comcast executives would be flipping burgers.

Blow Up One Mainframe, and Shut Down the Entire F-35 Fleet

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The US military, and Lockheed-Martin have structured the software of the F-35 so that the plane cannot fly without a direct connection to a L-M mainframe:

The unilateral decision by the United States to locate all F-35 software laboratories on its territory, and to manage the operation and sustainment of the global F-35 fleet from its territory, has introduced vulnerabilities that are only beginning to emerge.

The biggest risk is that, since the F-35 cannot operate effectively without permanent data exchanges with its software labs and logistic support computers in the United States, any disruption in the two-way flow of information would compromise its effectiveness.

All F-35 aircraft operating across the world will have to update their mission data files and their Autonomic Logistic Information System (ALIS) profiles before and after every sortie, to ensure that on-board systems are programmed with the latest available operational data and that ALIS is kept permanently informed of each aircraft’s technical status and maintenance requirements. ALIS can, and has, prevented aircraft taking off because of an incomplete data file.

Given that the United States hopes to sell hundreds of F-35s to allies in Europe, Asia and Australia, the volume of data that must travel to and from the United States is gigantic, and any disruption in Internet traffic could cripple air forces as the F-35 cannot operate unless it is logged into, and cleared by, ALIS.

For example, “Mission data load development and testing is a critical path to combat capability,” Pentagon OT&E director Michael Gilmore said in his fiscal 2014 report. “Accuracy of threat identification and location depend on how well the mission data loads are optimized to perform in ambiguous operational environments.”

Updating and uploading mission data loads depends on a functioning Internet, and as Wired.com noted in an Oct. 29 story, “undersea Internet cables are surprisingly vulnerable.” It quoted Nicole Starosielski, a media scholar at New York University, as saying that “people would be surprised to know that there are a little over 200 systems that carry all of the internet traffic across the ocean, and these are by and large concentrated in very few areas. The cables end up getting funneled through these narrow pressure points all around the globe.”

………

The fear is that an “ultimate Russian hack on the United States could involve severing the fiber-optic cables at some of their hardest-to-access locations to halt the instant communications on which the West’s governments, economies and citizens have grown dependent,” the article said.

Whatever the other repercussions, such an event would severely limit the ability of the world’s F-35 fighters to fly – due to a loss of ALIS link – and to operate effectively, as their fighting ability would disappear if their software and mission data files could not be updated.

………

Given that the ALIS mainframe is located at Fort Worth, Texas, operating the F-35 will require three very large data conduits to and from these locations, again using Internet cables as the volume of data is too great for satellite transmission.

In fact, if the F-35 performs as advertised, it should gather very argue amounts of tactical data during each mission – data that it will have to transmit to the software labs in the US so they can be used to update the mission data files, adding another large volume data flow in both directions.

They don’t need to cut internet cables.  They send some guy in with an explosives vest to the mainframe, and the fleet is grounded.

More important to our foreign “Partners” is that this also means that an F-35 fleet can shut down by Lockheed-Martin over a  billing or maintenance dispute, or by the US over a foreign policy dispute.

This is not a bug, this is a feature, and it is one that almost certainly came from L-M, because it creates a captive customer:  No one can maintain the aircraft without paying a toll to them.

Even if the aircraft performs as promised, the basic concept for its operation is untenable.

Run away from this clusterf%$#.

Shades of Razorfish

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In the late 1990s, one of the darlings of the Dotcom boom was a company called Razorfish.

It all came crashing down in 2000, when its hipster founders appeared on CBS, and they were incapable of describing what their company actually did, despite thousands of employees worldwide and a market valuation in the billions.

In a very real way, it was a seminal moment in the dotcom boom became the dotcom bust, because suddenly it became clear to those ordinary people for who the whole “Internet thing” went from a dazzling mystery to a bunch of hipster snake oil.

The Dotcom bubble, like bubbles, had run out of stupider people who would buy their crap,

Well, I just came across this profile of Famo.us, and I think that it is a clear indicator that it is time to head for the exits, because if this nothing burger can get this sort of funding, the inmates are running the asylum once again:

Famo.us’ 15 minutes of open source fame have come to an end. JavaScript rendering engine Famo.us has pivoted away from its hardcore open sourced engineering platform which had raised over $31 million. It’s now refocused on commercializing the idea of powerful mobile web apps with a content management system for branded marketing apps.

The startup changed its website to famous.co, stuffed its old open source information on famous.org, and laid off a big chunk of the team, including its VP of Engineering, Head of Open Source, and a dozen engineers. But at least now Famo.us has the runway to take another shot at the spotlight.

 ………

Famo.us’ 15 minutes of open source fame have come to an end. JavaScript rendering engine Famo.us has pivoted away from its hardcore open sourced engineering platform which had raised over $31 million. It’s now refocused on commercializing the idea of powerful mobile web apps with a content management system for branded marketing apps.

The startup changed its website to famous.co, stuffed its old open source information on famous.org, and laid off a big chunk of the team, including its VP of Engineering, Head of Open Source, and a dozen engineers. But at least now Famo.us has the runway to take another shot at the spotlight.
 ………(emphasis mine)

Though it was tough to tell if Famo.us would work, investors gave it the benefit of the doubt. That was in large part thanks to Newcomb, who had sold his last startup, natural language search engine Powerset, to Microsoft for $100 million. In early 2013, Famo.us added a $4 million Series A from Javelin Venture Partners and Samsung to its $1.1 million in seed funding from Greylock, Naval Ravikant, Roger Dickey, [and, disclosure, TechCrunch founder Michael Arrington’s CrunchFund].

But Newcomb’s quest to redefine mobile with open source threatened to make Famo.us unsustainable. He told TechCrunch when announcing the funding, “That lean startup style — I don’t believe that” and that he was purposefully trying to be a perfectionist.

Newcomb knocked down the wall between his San Francisco penthouse apartment and the one next to it to create a lavish office for Famo.us. When TechCrunch reporter Anthony Ha visited, Newcomb pointed to some desks that seemed adequate, but insisted they would be replaced soon because they weren’t the right kind of wood.

He told Ha that since Famo.us was a platform for building beautiful apps “everything we do has to represent perfection and elegance.” You can take a tour of the office in TechCrunch’s Cribs video above.

 ………

By August 2014, Famo.us had grown to 25 employees and had 90,000 sign-ups for the platform, still awaiting the finished platform’s public open source release. It managed to raise another $20 million plus $5 million of debt from New York’s Insight Venture Partners. Newcomb told VentureBeat it planned to hire up to 40 more staffers with that cash, though Fetterman departed.

Finally, in June Famo.us “launched.” From a different site Famous.org, it fully open sourced its Engine that improves performance for hardware, and its Framework for integrating Famo.us into apps with blog posts by Myles Borin and Zack Brown.
 ………

I spoke to Newcomb, who confesses that for six months the company struggled to come up with a way to actually earn money. A source close to the company tells me Newcomb pushed the engineer-heavy company into “ideation mode” that made some employees feel like the startup lacked direction. They described engineers as being “fed up.”

………

 There the company laid out an entirely new business: “Our mission at Famous is to empower digital marketing professionals to build beautiful branded apps that amplify every aspect of their digital marketing campaigns.” The product is a content management system for digital marketers. It allows them to create “micro-apps” that are basically mobile-optimized websites that can be easily shared and opened without being installed like a native app.

(emphasis mine)

Look at the highlighted portions.

Venture capitalists are throwing money at this, because they believe that there are bigger suckers willing to take a piece of this.

At some point, you always run out of pigeons, and Famo.us is an indicator that the supply is getting thin.

I’m not saying that it’s time to put your money in a mattress, I’m just saying that keeping it in San Jose might be ill advised.

This is Not a Surprise

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Even in the ethically dubious world of charter schools, online charters seem to be dicey.

Now comes a study which indicates that online charters are about as effective as not going to school at all:

A new study on the effectiveness of online charter schools is nothing short of damning — even though it was at least partly funded by a private pro-charter foundation. It effectively says that the average student who attends might as well not enroll.

 The study was done by the Center for Research on Education Outcomes, known as CREDO, and located at Stanford University, in collaboration with the Center on Reinventing Public Education at the University of Washington and Mathematica Policy Research. CREDO’s founding director, Margaret Raymond, served as project director. CREDO receives funding from the pro-charter Walton Family Foundation, which provided support for the new research.

 CREDO has released a number of reports in recent years on the effectiveness of charters — using math and reading standardized test scores as the measure — which collectively conclude that some perform better than traditional public schools and some don’t. In its newest report, released this week, CREDO evaluated online K-12 charter schools. There are 17 states with online charter students: Arizona, Arkansas, California, Colorado, Florida, Georgia, Louisiana, Michigan, Minnesota, Nevada, New Mexico, Ohio, Oregon, Pennsylvania, Texas, Utah and Wisconsin, as well as the District of Columbia.

 The study sought to answer this question: “How did enrollment in an online charter school affect the academic growth of students?” Academic growth, as mentioned before, is measured by standardized test scores for the purpose of this study, which evaluated scores from online charter students between 2008 and 2013 and compared them to students in traditional public schools (not brick-and-mortar charters). Here are some of the findings:

  • Students in online charters lost an average of about 72 days of learning in reading.
  • Students in online charters lost 180 days of learning in math during the course of a 180-day school year. Yes, you read that right. As my colleague Lyndsey Layton wrote in this story about the study, it’s as if the students did not attend school at all when it comes to math.
  • The average student in an online charter had lower reading scores than students in traditional schools everywhere except Wisconsin and Georgia, and had lower math scores everywhere except in Illinois, Michigan and Wisconsin.


 Layton quoted Raymond as saying, “There’s still some possibility that there’s positive learning, but it’s so statistically significantly different from the average, it is literally as if the kid did not go to school for an entire year.”

(emphasis mine)

Fundamentally, the problem here is that many of the supporters of things like cyber-charter schools are autodidacts, the sort of people who would literally break into computer science lab in the dead of night to teach themselves about computers. (This is an actual example from the life of Bill Gates, a big charter supporter.)

People who are that aggressively self taught are few and far between, and there are simply not enough people who fit that mold (I don’t, for example) for the rapidly expanding rolls of internet academies, and those who could succeed with these institutions don’t really need them. They could learn anywhere.

BTW, this is also an indictment of MOOCs, (Massive Open Online Courses) which seem to be the latest fad in higher education.

I will note however that there are remote learning approaches that do work, most notably Open University in the UK, but these involve to use of tutors who actually have a significant amount of face time with their students, as well as face to face evaluations.

Of course those get in the way of profits, so in the charter and the MOOC world, these things are eschewed.

Scott Adams Called This Confusopolies

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In response to improvements in information and comparison shopping made available to the consumer through the Internet, the airlines have conspired to make their fare systems Byzantinely complex.

This may be why airlines are waging a war on travel websites. The tools available on these sites make it too difficult to f%$# the customers like a drunk sorority girl:

Once upon a time, there were reasonably well-known ways to pay less for your airfare. Airlines had rules governing ticket prices, those rules were consistent across airlines, and almost everybody knew what the rules were. (If you booked further in advance, the tickets were cheaper. If you stayed a Saturday night, the ticket would be cheaper. That kind of thing.)

 Those days, however, are long gone. Airline tickets are no longer priced according to simple rules: they’re dynamically priced according to insanely complex algorithms which, to the naked eye, make no sense at all. Cheap tickets still exist, of course—the problem is that there’s no reliable way of finding them. If you managed to luck into such a ticket a few weeks or months ago, good for you—but don’t for a minute expect that if you behaved exactly the same way today, then you would get a similar result.

 A recent paper by Symeon Meichanetzoglou, Sotiris Ioannidis, and Nikolaos Laoutaris sums up the current status quo: “complexity asymmetry,” they conclude, “defeated the web.” The paper is based on a massive database of 1,449,349 flight tickets involving 63 destinations and 125 different airlines—and finds that even the most common-sense rules of airline ticket pricing are regularly violated.

For instance, let’s say you want to book a round-trip flight from Brussels to Stuttgart. The researchers studied six different airlines flying that route, with 619 different fares, and found that 24.5% of the time, it was cheaper to buy two one-way tickets (one from Brussels to Stuttgart, and one from Stuttgart to Brussels) than it was to buy a round-trip. And when they looked at airlines rather than routes, they found similar outliers: one Dutch airline was cheaper more than half the time when buying singles rather than round-trip tickets. (Especially, it seems, on the Frankfurt-Zurich route.)

 ………

A few years ago, Delta got in trouble for showing higher prices to its frequent fliers than to everybody else; it blamed a “computer glitch.” Ever since then, conspiracy theories have abounded, especially among people who search for flights, find relatively cheap ones, and then find that the fares have suddenly increased when they decide to buy. Is it a good idea to use some kind of private browsing mode when shopping for tickets, so that the airlines can’t identify you and jack their prices accordingly?

 The answer, frankly, is that although it won’t hurt if you do that, you’re going to end up outsmarted whatever you do. The airlines and flight search engines have infinitely more information than you do, and that information asymmetry is always going to work to their advantage. If you find a cheap fare, good for you; if you don’t, it’s not your fault. The system is rigged against you. The battle of consumers against the airlines is over. And the airlines have won.

There are industries that hate their customers more than the airlines ***cough*** cable companies ***cough***, but this is a veritable rogues gallery of evil that they have joined.

Makes More Sense than a Mysterious Breakthrough in Mathematics

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There have been a number of reports, some of which appear to have come from the NSA itself, that the secretive organization can decrypt what should be unbreakable codes.

It now appears that this is not some sort of mathematics breakthrough. Instead,a recent paper suggests the basic algorithm used for key exchange appear to be flawed.

They further suggest, and I agree, that the NSA is to some degree responsible for the ubiquity of this security flaw:

There have been rumors for years that the NSA can decrypt a significant fraction of encrypted Internet traffic. In 2012, James Bamford published an article quoting anonymous former NSA officials stating that the agency had achieved a “computing breakthrough” that gave them “the ability to crack current public encryption.” The Snowden documents also hint at some extraordinary capabilities: they show that NSA has built extensive infrastructure to intercept and decrypt VPN traffic and suggest that the agency can decrypt at least some HTTPS and SSH connections on demand.

However, the documents do not explain how these breakthroughs work, and speculation about possible backdoors or broken algorithms has been rampant in the technical community. Yesterday at ACM CCS, one of the leading security research venues, we and twelve coauthors presented a paper that we think solves this technical mystery.

The key is, somewhat ironically, Diffie-Hellman key exchange, an algorithm that we and many others have advocated as a defense against mass surveillance. Diffie-Hellman is a cornerstone of modern cryptography used for VPNs, HTTPS websites, email, and many other protocols. Our paper shows that, through a confluence of number theory and bad implementation choices, many real-world users of Diffie-Hellman are likely vulnerable to state-level attackers.

For the nerds in the audience, here’s what’s wrong: If a client and server are speaking Diffie-Hellman, they first need to agree on a large prime number with a particular form. There seemed to be no reason why everyone couldn’t just use the same prime, and, in fact, many applications tend to use standardized or hard-coded primes. But there was a very important detail that got lost in translation between the mathematicians and the practitioners: an adversary can perform a single enormous computation to “crack” a particular prime, then easily break any individual connection that uses that prime.

………

Based on the evidence we have, we can’t prove for certain that NSA is doing this. However, our proposed Diffie-Hellman break fits the known technical details about their large-scale decryption capabilities better than any competing explanation. For instance, the Snowden documents show that NSA’s VPN decryption infrastructure involves intercepting encrypted connections and passing certain data to supercomputers, which return the key. The design of the system goes to great lengths to collect particular data that would be necessary for an attack on Diffie-Hellman but not for alternative explanations, like a break in AES or other symmetric crypto. While the documents make it clear that NSA uses other attack techniques, like software and hardware “implants,” to break crypto on specific targets, these don’t explain the ability to passively eavesdrop on VPN traffic at a large scale.

Since weak use of Diffie-Hellman is widespread in standards and implementations, it will be many years before the problems go away, even given existing security recommendations and our new findings. In the meantime, other large governments potentially can implement similar attacks, if they haven’t already.

Our findings illuminate the tension between NSA’s two missions, gathering intelligence and defending U.S. computer security. If our hypothesis is correct, the agency has been vigorously exploiting weak Diffie-Hellman, while taking only small steps to help fix the problem. On the defensive side, NSA has recommended that implementors should transition to elliptic curve cryptography, which isn’t known to suffer from this loophole, but such recommendations tend to go unheeded absent explicit justifications or demonstrations. This problem is compounded because the security community is hesitant to take NSA recommendations at face value, following apparent efforts to backdoor cryptographic standards.

My money is on the NSA creating this problem, rather than it merely exploiting it.

Based on what I’ve read, it seems more consistent with the social norms of that organization.

What a Stupid F%$#ing Idea

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If I had a time machine, I would go back in time to find the father of whoever came up with the idea of adding copy protections to JPEG images, and kick that man in the nuts so hard that he would be rendered sterile:

So much for hopes that the tech industry would back away from copyright protection any time soon. The Joint Photographic Experts Group recently launched a Privacy & Security initiative that potentially brings digital rights management (DRM) to regular JPEG images, not just the specialized JPEG 2000 format. The proposal could protect your privacy by encrypting metadata (such as where you took a photo), but it could also prevent you from copying or opening some pictures. Needless to say, that opens up a can of worms when it comes to fair use rights. If someone slapped DRM on a photo, you couldn’t use it for news, research or remixed art — many of the internet memes you know wouldn’t be possible.

This is so unbelievably stupid.

The Ashley Madison Breach Reveals Something Interesting

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Most of the women members appear to be sock puppets:

When hacker group Impact Team released the Ashley Madison data, they asserted that “thousands” of the women’s profiles were fake. Later, this number got blown up in news stories that asserted “90-95%” of them were fake, though nobody put forth any evidence for such an enormous number. So I downloaded the data and analyzed it to find out how many actual women were using Ashley Madison, and who they were.

What I discovered was that the world of Ashley Madison was a far more dystopian place than anyone had realized. This isn’t a debauched wonderland of men cheating on their wives. It isn’t even a sadscape of 31 million men competing to attract those 5.5 million women in the database. Instead, it’s like a science fictional future where every woman on Earth is dead, and some Dilbert-like engineer has replaced them with badly-designed robots.

Those millions of Ashley Madison men were paying to hook up with women who appeared to have created profiles and then simply disappeared. Were they cobbled together by bots and bored admins, or just user debris? Whatever the answer, the more I examined those 5.5 million female profiles, the more obvious it became that none of them had ever talked to men on the site, or even used the site at all after creating a profile. Actually, scratch that. As I’ll explain below, there’s a good chance that about 12,000 of the profiles out of millions belonged to actual, real women who were active users of Ashley Madison.

………

It’s also a matter of public record that some percentage of the profiles are less than real. A few years ago, a former employee of Ashley Madison sued the company in Canada over her terrible work conditions. She claimed that she’d gotten repetitive stress injuries in her hands after the company hired her to create 1,000 fake profiles of women in three months, written in Portuguese, to attract a Brazilian audience. The case was settled out of court, and Ashley Madison claimed that the woman never made any fake profiles.

Still, there is a clause in the Ashley Madison terms of service that notes that “some” people are using the site purely “for entertainment” and that they are “not seeking in person meetings with anyone they meet on the Service, but consider their communications with users and Members to be for their amusement.” The site stops short of saying these are fake people, but does admit that many profiles are for “amusement only.”

………

But the second most popular IP address, found in 80,805 profiles, was a different story. This IP address, 127.0.0.1, is well-known to anyone who works with computer systems as a loopback interface. To the rest of us, it’s known simply as “home,” your local computer. Any account with that IP address was likely created on a “home” computer at Ashley Madison. Interestingly, 68,709 of the profiles created with that IP address were female, and the remaining 12,000 were either male or had nothing in the gender field.

………

Then, three data fields changed everything. The first field, called mail_last_time, contained a timestamp indicating the last time a member checked the messages in their Ashley Madison inbox. If a person never checked their inbox, the field was blank. But even if they’d checked their messages only once, the field contained a date and time. About two-thirds of the men, or 20.2 million of them, had checked the messages in their accounts at least once. But only 1,492 women had ever checked their messages. It was a serious anomaly.

The pattern was reflected in another data field, too. This one, called chat_last_time contained the timestamp for the last time a member had struck up a conversation using the Ashley Madison chat system. Roughly 11 million men had engaged in chat, but only 2400 women had.

Yet another field, reply_mail_last_time, showed a similar disparity. This field contained the time when a member had last replied to a message from another person on Ashley Madison. 5.9 million men had done it, and only 9700 women had.

What all these fields have in common is that they measure user activity. They show what happened after the account profile was created, and how an actual person used it by checking messages, chatting, or replying to messages. They measure what you might call signatures of real human behavior. Only a paltry number of women’s accounts actually looked human.

………

Overall, the picture is grim indeed. Out of 5.5 million female accounts, roughly zero percent had ever shown any kind of activity at all, after the day they were created.

………

Either way, we’re left with data that suggests Ashley Madison is a site where tens of millions of men write mail, chat, and spend money for women who aren’t there. 

There are two questions raised here:
The first question is whether or not Ashley Madison was a fraud from the get go.
The second question is how many other of the social networking sites out there are doing the same thing and sucking money from venture capitalists.

We need the someone to go Lisbeth Salander on all of these “Web 2.0” companies, because I think that this sort of fraud is the rule, not the exception.

H/t JR at the Stellar Parthenon BBS for the Gary Larson cartoon.