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AG Shapiro claims Uber, therefore, violated a state law that requires companies to notify consumers affected by data hacks within a reasonable time — it’s unclear what exactly that time frame is. There were 13,500 drivers whose first and last names and license numbers were accessed by hackers in 2016, Shapiro said. Uber did not disclose the breach until November 2017.
The fine for failing to notify consumers affected by a hack is $ 1,000 per person affected, which means Uber could be penalized for up to $ 13.5 million — a small sum for the ride-hail player. However, it’s a clear sign that the ghosts of the company’s past leadership are still haunting its new executive team.
Fresh off settling Alphabet’s self-driving lawsuit against the company, Uber’s new Chief Legal Officer Tony West continues to grapple with a number of legal issues that he inherited. As Uber prepares to go public in the next two years, buttoning up the many lawsuits levied against the company is more important than ever.
“Uber violated Pennsylvania law by failing to put our residents on timely notice of this massive data breach,” Shapiro said in a statement. “Instead of notifying impacted consumers of the breach within a reasonable amount of time, Uber hid the incident for over a year — and actually paid the hackers to delete the data and stay quiet. That’s just outrageous corporate misconduct, and I’m suing to hold them accountable and recover for Pennsylvanians.”
Uber failed to notify some 57 million users that their data — including names, email addresses, phone numbers and driver’s license numbers — was exposed when hackers accessed that information in 2016, CEO Dara Khosrowhshahi revealed in November 2017.
After learning about the breach, Khosrowshahi opened an investigation into how the company handled the incident and fired two people who handled the response process, including Joe Sullivan, Uber’s chief security officer.
Instead of notifying users when the company learned of the breach in 2016, Uber paid the hackers $ 100,000 to delete the data they got ahold of and keep the hack quiet. A company spokesperson said, while they’re not making excuses for the failure to disclose the data breach, the new leadership has taken steps to “respond responsibly.”
“We investigated the incident, disclosed the circumstances to state and federal regulators, and reached out to state Attorneys General, including Attorney General Shapiro, to express Uber’s desire to cooperate fully with any investigations,” the spokesperson said in a statement. “While we dispute the accuracy of some of the characterizations in the Pennsylvania Attorney General’s lawsuit, we will continue to cooperate with them and ask only that we be treated fairly.”
Uber did not yet respond to questions about what specifically the company is disputing in the lawsuit.
Chris Middleton listens to Bank of England governor Mark Carney take down cryptocurrency in a display of traditional banking logic. Then Chris challenges Carney’s argument with a very different view.
Cryptocurrencies are failing as money, claimed governor of the Bank of England Mark Carney today.
In a speech entitled ‘The Future of Money’ to the Inaugural Scottish Economics Conference at Edinburgh University, Carney questioned whether cryptocurrencies can even be considered money.
Quoting the Adam Smith definition – that money is a store of value with which to transfer purchasing power, a medium of exchange for goods and services, and a unit of account with which to measure the value of a good, service, saving, or loan – Carney said:
“[This] hierarchy points to the reality that money is a social convention. We accept that a token has value whether made of metal, polymer, or code because we expect that others will also do so readily and easily.”
Measuring cryptocurrencies such as Bitcoin and Monero against this definition, Carney said: “The answer has to be judged against the functioning of the entire cryptocurrency ecosystem, which extends beyond the currencies themselves to the exchanges on which cryptocurrencies can be bought and sold, the miners who create new coins, verify transactions, and update the ledger, and the wallet providers who offer custodian services.
“The long, charitable answer is that cryptocurrencies act as money, at best, only for some people and to a limited extent, and even then only in parallel with the traditional currencies of the users. The short answer is they are failing.”
Store of value, medium of exchange
First, cryptocurrencies are proving poor short-term stores of value, claimed Carney, referring to their extreme volatility over the past few years. “The average volatility of the top ten cryptocurrencies by market capitalisation was more than 25 times that of the US equities market in 2017.
“This extreme volatility reflects in part that cryptocurrencies have neither intrinsic value nor any external backing. Their worth rests on beliefs regarding their future supply and demand.”
Carney went on to say that cryptocurrencies are an inefficient medium of exchange, too. “The most fundamental reason to be sceptical about the longer-term value of cryptocurrencies is that it is not clear the extent to which they will ever become effective media of exchange,” he said.
“Currently, no major high street or online retailer accepts Bitcoin as payment in the UK, and only a handful of the top 500 US online retailers do.”
Carney then claimed that cryptocurrencies are simply a new form of bubble: “The prices of many cryptocurrencies have exhibited the classic hallmarks of bubbles, including new paradigm justifications, broadening retail enthusiasm, and extrapolative price expectations reliant in part on finding the greater fool.”
(The greater fool theory concerns an object’s price not being determined by its inherent value, but by the beliefs or expectations of a market’s participants – hence, you can always find someone who is a greater fool than you in terms of how much he will pay for something.)
“Far from being strengths, the fixed supply rules of cryptocurrencies such as Bitcoin are serious deficiencies. Fundamentally, they would impart a deflationary bias on the economy if such currencies were to be widely adopted. If ‘those who cannot remember the past are condemned to repeat it’, recreating a virtual global gold standard would be a criminal act of monetary amnesia.”
And yet the network effect is already a massive deflationary factor in society, by commoditising everything it touches.
Is banking dead?
Opening his speech, Carney said: “A few of you may view paper money – even the Bank of England itself – as archaic vestiges of an old centralised order of payments that will soon be swept aside by a digital, distributed future.”
Carney then countered that viewpoint by alleging a direct link between cryptocurrencies and criminal behaviour:
“Its advocates claim that a decentralised cryptocurrency, such as Bitcoin, is more trustworthy than centralised fiat money because its supply is fixed and therefore immune from the age-old temptations of debasement; its use is free from risky private banks; and those who hold it can remain anonymous and therefore free from the ravenous eyes of tax authorities, or worse still, law enforcement.”
Nevertheless, he added: “Some also argue that cryptocurrencies could be more efficient than centralised fiat money because the underlying distributed ledger technology cuts out intermediaries like central banks and financial institutions and allows payments to be made directly between payer and payee.”
And this last point, surely, is the real reason that Carney took to the stage to claim that cryptocurrencies are failing.
So is he right?
Internet of Business says
The challenge for long-established institutions such as the Bank of England – and indeed, for the global banking sector – is that the concept of a decentralised, distributed, peer-to-peer ledger system does indeed call into question the need for a traditional banking system. And that isn’t something any banker is going to take lightly.
But set aside the issue of whether cryptocurrencies and blockchain pose an existential threat to the banking sector, and the real questions at the heart of this debate become more complex and interesting.
The core challenge facing cryptocurrencies is simple, and yet was omitted by Carney in his commentary: their advocates often ignore the fact that these new digital currencies aren’t magic beans that grow in a virtual kingdom. They reside in computer hardware.
A good comparison is cloud computing – or ‘the cloud’. The claims made for the cloud being some egalitarian fog of code that floats past national borders have always been garbage.
‘The cloud’ is really about data centres built on land under national laws, and the West Coast marketing departments of hosted software companies knew this when they invented the term – quite deliberately to deceive – in the early years of this century.
As the CEO of one newly christened ‘cloud’ (previously application service) provider whispered to me in San Francisco in 2008, “We had to give the consultants something to sell”, and what they were selling was rented space on racks in US industrial parks.
The cloud was invented by marketers as a means to persuade people to stop hosting their data on premise and instead host it somewhere else – for cash.
This is relevant because cryptocurrencies also reside in computer hardware: fast, expensive computer hardware, such as the high-end GPUs made by companies such as NVIDIA, which mine for coins by cracking code. As previously reported by Internet of Business, this is the real reason why NVIDIA’s stock price and revenues have created their own mini bubble.
The question then is easily stated: what is the cost per watt of mining?This is not a simple calculation to make. But whatever the answer is lies in working out the real-world financial, environmental, and human cost of not only powering up and running a GPU – or a mining rig full of them – but also of manufacturing the hardware and shipping it across the globe.
Put another way, cryptocurrencies aren’t separate from the laws of physics, as many gamblers appear to believe, but are in fact entirely dependant on them.
In the traditional banking system, these types of processing costs have been absorbed by the banks – in theory, at least. But the financial crash of 2008-09 exposed that as a lie: the public bailed out the banks to the tune of an estimated £1 trillion – and that was just in the UK. Years of austerity then followed.
So the question then becomes rather different: has the traditional banking system been a good custodian of nations’ – and citizens’ – wealth? Carney would answer yes; but he’d be wrong.
The global banking sector has been run not by sober, trustworthy individuals in recent years, but by high-stakes gamblers and thrill-seekers. Not to mention by algorithms that value personal debt more highly than personal credit.
Just as a cancer is a normal cell that stops receiving chemical signals in a healthy body, so the banking system stopped serving the society it grew within and started devouring it. By contrast, blockchain’s advocates claim it is a system of cells that is always under control in the interests of the body’s constantly monitored health.
There are flaws in blockchain, to be sure – which we will explore in further analyses – the biggest of which is that it creates not just highly controlled environments, but also highly controlling ones. Picture a car that the driver is afraid to get out of, because he will stop being paid.
That aside, are cryptocurrencies an efficient means of exchange? Carney says no – based on a handful of years of data against centuries of traditional banking. But on that point, he will almost certainly be proved wrong in the long term.
And the reason lies in the IoT.
Over the next few years, a global IT infrastructure will be overlaid on, and woven into, the internet as we know it today. And it will include smart environments that recognise people, know their location, and will either pay them or be paid by them seamlessly. Much of this infrastructure is being built based on blockchain and other technologies, including sensors, RFID tags, and so on.
One of the criticisms levelled at cryptocurrencies by Carney is that the system is too slow to process them, meaning that traditional banking systems could have processed thousands of transactions in the same time that a distributed ledger could process a handful. At present, this is true, but over time that too will become less of a problem as processors get faster, more powerful, and cheaper. Indeed, the future may be quantum.
So in the long term the serious question to answer will no longer be “is a cryptocurrency money?”, but “what does a banking system offer most human beings on the planet?”
The answer to that question will determine whether cryptocurrencies become a social convention in the long run. As Carney says, one governing purchasing power, a medium of exchange, and a unit of account.
Blockchain and cryptocurrencies are certainly holding the banks to account in many ways. In response, therefore, the banks will have to do much better than close ranks and put the boot in.
Some new HomePod owners are hitting a problem that prevents them from setting up the device. During the initial set up, one of the popup screens is simply blank with seemingly no way out but to cancel the process. It turns out there’s an amusing bug causing this, but luckily there’s a simple fix …
A man sued T-Mobile on Sunday, claiming that the company’s lack of security allowed hackers to enter his wireless account last fall and steal cryptocoins worth thousands of dollars.
Carlos Tapang of Washington state accuses T-Mobile of having “improperly allowed wrongdoers to access” his wireless account on November 7th last year. The hackers then cancelled his number and transferred it to an AT&T account under their control. “T-Mobile was unable to contain this security breach until the next day,” when it finally got the number back from AT&T, Tapang alleges in the suit, first spotted by Law360.
After gaining control of his phone number, the hackers were able to change the password on one of Tapang’s cryptocurrency accounts and steal…
Foxconn, Apple’s primary iPhone assembler and the company’s biggest manufacturing partner, reported December revenue that was up 50 percent year-on-year, largely driven by iPhone X orders. The strong performance was enough to put Foxconn’s revenue up 8 percent on the year, reversing a trend of falling revenue for the company.
The strong results, which indicate healthy iPhone X demand, are a cause for hope for Apple watchers ahead of today’s earnings announcements. Recent reports have suggested that Apple has had to cut iPhone X production thanks to sluggish sales, but those rumors don’t line up with Foxconn’s explosion in revenue.
Over at Seeking Alpha, Mark Hibben extrapolated from the “unusual” pattern of revenue showed by Foxconn to work out iPhone X sales and revenue:
“On the basis of Hon Hai’s revenue bump, I estimate that Apple sold approximately 16 million iPhone Xs in the December quarter, for revenue of $ 17.2 billion. This puts the rumored production cut back to 20 million in calendar Q1 into perspective. If Apple sells 20 million iPhone Xs, this represents a net increase compared to calendar Q4, and a 16.6% cutback in production compared to a 24 million/quarter run rate.
Although some may see the 16 million in iPhone X sales as a disappointment, I believe that iPhone X sales have been largely additive to normal iPhone December revenue. Based on Hon Hai’s calendar Q4 revenue, which has been closely correlated with iPhone sales for the past few years, I have concluded that iPhone revenue will be about $ 70.3 billion, a y/y increase of 29%.”
While supply chain rumors have painted a negative picture of iPhone X sales for the last two weeks, most of the third-party sales data weve seen has been positive for Apple so far. Recent data from Kantar suggested that the iPhone X cracked the top-three bestsellers list in every important market, and was even the best-selling device in urban China.
Right now, most of the pessimism about Apple’s earnings is related to supply chain rumors that Apple has cut its iPhone X orders for Q1 2018. It’s possible that there’s a smidgen of truth to that — for example, Apple might’ve over-ordered in Q4 2017, causing that bump in Foxconn revenue — but it’s worth remembering that this has not been a normal iPhone production schedule. Apple’s manufacturing partners had to produce three new iPhones last year, rather than two, and the delays and yield problems with the iPhone X could have caused irregularities in the supply chain, which some industry watchers could interpret as problems.
Luckily, we don’t have much longer to wait. Apple reports its earnings after the markets close this afternoon, and we’ll finally be able to call the iPhone X a success or a failure.
A U.S. judge has approved sanctions against Apple, ordering the iPhone maker pay $ 25,000 for every day it doesn’t produce requested documents in a Federal Trade Commission lawsuit against Qualcomm. AppleInsider – Frontpage News