UK dealer charged in US over multimillion-dollar fake Bitcoin site scam

Renwick Haddow created trendy companies and duped investors into thinking they were big successes, authorities in New York allege

US authorities on Friday charged a British businessman with securities fraud, accusing him of deceiving investors over what turned out to be a fake trading platform for the cryptocurrency Bitcoin.

The Securities and Exchange Commission (SEC) alleged the clandestine Renwick Haddow, a UK citizen living in New York, diverted funds invested in a phoney Bitcoin site as well as from a flexible workspace firm Bar Works into accounts in Mauritius and Morocco, totalling $5m.

It said he touted experienced senior executives as behind the operations who turned out to be phantoms, and misrepresented the details and success of both companies.

Andrew Calamari, director of the SECs New York office, said: Haddow created two trendy companies and misled investors into believing that highly qualified executives were leading them to quick profitability.

In reality, Haddow controlled the companies from behind the scenes and they were far from profitable.

Bitcoin Store claimed to be an easy-to-use and secure way of holding and trading Bitcoin that had generated several million dollars in gross sales. The SEC alleged that in fact it never had any operations nor generated the gross sales it touted.

In 2015, Bitcoin Stores bank accounts allegedly received less than $250,000 in incoming transfers, none of which appear to reflect revenue from customers, the SEC said.

Haddows investors pumped more than $37m into Bar Works, which claimed to provide workspaces in old bars and restaurants, but in fact primarily sold leases coupled with sub-leases that together functioned like investment notes, the SEC said in a statement.

The commission alleged that throughout Haddow was hiding his connection to the companies given his checkered past with regulators in the UK, where he has faced similar charges for investment schemes.

According to a report in Crains, 27 investors from China filed suit in the state supreme court on 16 June seeking repayment of more than $3m invested in Bar Works, which they called a Ponzi scheme.

Another investment group filed a similar case against Bar Works in Florida in recent weeks.

Read more: www.theguardian.com

Is block power about to revolutionise banking? | John Naughton

Blockchain technology has the potential to bring the world of finance into the modern world. And it cant come soon enough

Science advances, said the great German physicist Max Planck, one funeral at a time. Actually, this is a paraphrase of what he really said, which was: A new scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents eventually die, and a new generation grows up that is familiar with it. But you get the drift.

I always think of Plancks aphorism whenever moral panic breaks out over the supposedly dizzying pace of technological change. Which happens all the time nowadays, even though the data says otherwise. If you take as your measure of speed how long it takes a new technology to be adopted by 50% of US households, for example, then radios (eight years) and black-and-white TVs (nine) reached that threshold faster than PCs (17) or mobile phones (15).

So when we talk about the pace of change, it makes sense to distinguish between different kinds of innovation. If the change requires the building of infrastructure the electricity grid or the internet, say then the pace of change can be very slow. But if it just involves innovations that harness existing infrastructure new TV formats or smartphone apps the pace can indeed be dizzying, because they just piggyback on existing infrastructure. This is why Uber and Airbnb took so long to materialise: they needed smartphones, GPS and ubiquitous wireless networking before they became viable, whereas Facebook only needed the web. And the web itself spread like wildfire only because the infrastructure it needed the wired internet was already in place. No digging required.

Where the trope about accelerating technology-driven change really breaks down, though, is when you try to apply it to governmental, legal and commercial institutions. What you then find is a chaotic spectrum that runs from astonishingly rapid change in some areas to glacial inertia in others. On the governmental/regulation front, for example, data protection legislation is fighting a losing battle against the proliferating ambiguities of big data. Yet at the same time, we learn from Edward Snowden how far the NSA and GCHQ have been ahead of the technological curve while being at the same time supposedly answerable to government bureaucracies running the last but one version of Microsoft Windows (or even XP, for Gods sake).

Or take the finance industry. On the one hand, its banks are global institutions apparently able to move trillions of dollars between continents at the speed of light. High-speed traders spent billions of dollars digging a straight-line trench from Chicago to New York to shave nanoseconds off the time that it takes a buy-or-sell instruction to traverse a strand of glass fibre. On the other hand, it takes five working days to clear a cheque.

Illustration
Illustration by Matt Murphy.

In a fascinating article in the Financial Times last week, the veteran commentator Martin Wolf turned his gaze on the banks. Information technology, he wrote, has disrupted the entertainment, media and retail businesses and, most recently, the supply of hotel rooms and taxis. Is it going to do the same to finance? My first response is: please. My second response is: yes.

Wolfs reasoning is that banks and insurance companies are our core financial institutions because they do three essential things: enable payments, act as intermediaries between saving and investment and provide insurance. But they dont do any of these things well and mostly they do them with staggering inefficiency. Even today, Wolf says, 40% of the global revenues of the banking system thats $1.7tn come from payments and settlement can take still take hours or days.

So here we have a global industry that, in one of its core competencies, is operating at a pace that Mayer Rothschild, the founder of the great banking dynasty in the 1760s, might have recognised. Could digital technology help? Yes, says Wolf. It could, for example, transform payments using some variant of the blockchain technology that underpins cryptocurrencies such as bitcoin.

Hes right: blockchain technology could make payments nearly instantaneous and at very low cost. Which is presumably why the Bank of England has encouraged some UCL computer scientists to design a cryptocurrency that would combine the affordances of a blockchain system with the control over monetary policy that a central bank would expect to retain. And its also why the governments chief scientific adviser recently published a report extolling the potential of blockchains for streamlining government services.

So here we have an interesting conundrum: with astonishing speed, computer scientists have come up with a truly revolutionary technology that could transform both banking and the provision of public services. I said could. But we will have to wait until we can make blockchain payments every day before we know what the real pace of change is. One funeral at a time, remember.

Read more: www.theguardian.com

NHS seeks to recover from global cyber-attack as security concerns resurface

Cybersecurity centre says teams working round the clock to fix systems rendered inaccessible by international ransomware attack

The NHS is working to bring its systems back online after it became the highest-profile victim of a global ransomware attack and faced renewed concern about the strength of its infrastructure.

The National Cyber Security Centre (NCSC) said teams were working round the clock in response to the attack, which resulted in operations being cancelled, ambulances being diverted and documents such as patient records made unavailable in England and Scotland.

Computers at hospitals and GPs surgeries in the UK were among tens of thousands hit in almost 100 countries by malware that appeared to be using technology stolen from the National Security Agency in the US. It blocks access to any files on a PC until a ransom is paid.

The British prime minister, Theresa May, and NHS Digital said they were not aware of any evidence patient records had been compromised in Fridays attack, which is thought to have affected computers in nearly 100 countries.

May said: This is not targeted at the NHS, its an international attack and a number of countries and organisations have been affected.

Amber Rudd, the home secretary, refused to confirm on Saturday morning whether patient data had been backed up, and said the NHS would upgrade its software in the wake of the attack. She said data should be backed up, but would not say whether it actually had been.

The shadow health secretary, Jonathan Ashworth, urged the government to be clear about whats happened, describing the attack as terrible news and a real worry for patients.

The unprecedented attacks, using software called WanaCrypt0r 2.0 or WannaCry, exploits a vulnerability in Windows. Microsoft released a patch a software update that fixes the problem for the flaw in March, but computers that had not installed the security update were vulnerable.

In December it was reported that nearly all NHS trusts were using an obsolete version of Windows for which Microsoft had stopped providing security updates in April 2014. Data acquired by software firm Citrix under freedom of information laws suggested 90% of trusts were using Windows XP, then a 15-year-old system.

It is not known how many computers across the NHS today are still using Windows XP or recent variants Windows 8 and Windows 10.

About 40 NHS organisations are though to have been affected by Fridays bug, which was released the day after a doctor warned that NHS hospitals needed to be prepared for an incident precisely of the kind seen.

In an article published in the British Medical Journal, Dr Krishna Chinthapalli, a neurology registrar at the National Hospital for Neurology and Neurosurgery in London, said hospitals will almost certainly be shut down by ransomware this year.

Ross Anderson, of Cambridge University, said the critical software patch released earlier this year may not have been installed across NHS computers. If large numbers of NHS organisations failed to act on a critical notice from Microsoft two months ago, then whose fault is that? Anderson said.

Alan Woodward, a visiting professor of computing at the University of Surrey, said the attacks success was likely to be because some organisations have either not applied the patch released by Microsoft, or they are using outdated operating systems.

NHS Digital said on Friday night it was unable to comment on the suggestion.

Marco Cover, a systems security researcher, said critics should take into account the complexity of keeping systems up to date. Its easy to blame people who dont upgrade, he said. But in practice things are often more complicated: operations teams may not touch legacy systems for a number of reasons. In some cases they may even be unaware that such legacy systems are running in their infrastructure.

The same malicious software that hit NHS networks attacked some of the largest companies in Spain and Portugal, including phone company Telefnica, and has also been detected on computers in Russia, Ukraine and Taiwan among other countries. The international shipping company FedEx was also affected.

Kaspersky Lab, a cybersecurity company based in Moscow, estimated that 45,000 attacks had been carried out in 99 countries, mostly in Russia. In a blogpost, it added that the totals could be much, much higher.

In the UK, computers in hospitals and GP surgeries simultaneously received a pop-up message demanding a ransom in exchange for access to the PCs.

A warning was circulated on Friday within at least one NHS trust of a serious ransomware threat currently in circulation throughout the NHS, but the attack proved impossible to stop. Patient records, appointment schedules, internal phone lines and emails were rendered inaccessible and connections between computers and medical equipment were brought down. Staff were forced to turn to pen and paper and to use their own mobile phones.

Last year the government established the NCSC to spearhead the countrys defences. In the three months after the centre was launched, there were 188 high-level attacks as well as countless lower-level incidents. The chancellor, Philip Hammond, disclosed in February that the NCSC had blocked 34,550 potential attacks targeting UK government departments and members of the public in six months.

Play Video
0:32

Theresa May: ‘This is not targeted at the NHS, its an international attack’ video

The Patients Association condemned the criminals behind Fridays attack, and said lessons from earlier incidents had not been learned. It has long been known that the NHS struggles with IT in multiple respects and that this includes serious security problems, it said.

Infected computers show a message demanding a $300 (233) ransom per machine to be paid to a Bitcoin wallet address. It says: Many of your documents, photos, videos, databases and other files are no longer accessible because they have been encrypted. Maybe you are busy looking for a way to recover your files, but do not waste your time. Nobody can recover your files without our decryption service.

You only have three days to submit the payment. After that the price will be doubled. Also if you dont pay in seven days, you wont be able to recover your files forever.

NHS Digital confirmed that a number of NHS organisations had been affected and refused to confirm or deny reports that put the total as high as 40. The investigation is at an early stage but we believe the malware variant is Wanna Decryptor, it said. At this stage, we do not have any evidence that patient data has been accessed. We will continue to work with affected organisations to confirm this.

NHS Digital is working closely with the National Cyber Security Centre, the Department of Health and NHS England to support affected organisations and to recommend appropriate mitigations.

British law enforcement agencies said they believed the attack was criminal in nature, as opposed to a cyber-attack by a foreign power, and was being treated as serious but without national security implications.

One NHS worker, who asked to remain anonymous, said the attack began at about 12.30pm and appeared to have been the result of phishing. The computers were affected after someone opened an email attachment. We get a lot of spam and it looks like something was sent to all the trusts in the country. Other hospitals have now been warned not to open these emails all trusts communicate with each other.

Another NHS worker, who works at an Essex hospital and also asked to remain anonymous, said her teams computers went down at about 2pm. We were told to shut down, take out network cables and unplug the phones, she said. A message came up for just one of our team about the fact that all the files would be wiped in two hours unless we gave $300 in bitcoins.

Dr Chris Mimnagh, a GP in Liverpool, said his surgery had severed links to the wider NHS network as a precaution. He said: Unable to access our clinical system as a precaution our area has severed links to the wider NHS, which means no access to our national systems, no computers means no records, no prescriptions, no results. We are dealing with urgent problems only. Our patients are being very understanding so far.

Lorina Nash, 46, from Hertfordshire, was bringing her mother for an appointment at Lister hospital in Stevenage when systems went down. We have been here since 12.30pm and the computers were affected at about 12pm patients are still waiting around but most of the A&E patients have been sent to other hospitals. I have never seen accident and emergency so empty.

They gave my mum a blood test but have had to send her blood to Cambridge by courier for testing. They said it could take two or three hours before it comes back with a result.

Dr Asif Munaf, a gastroenterologist at Chesterfield hospital, said there was a backlog of patients in its A&E, which he said had been badly affected because it was unable to book new patients on the system.

From my wards point of view, were not able to make referrals to, for example, psychiatry because they use a different system to us, he said. Everythings getting delayed. Patients who were supposed to go home this afternoon wont go home until Monday because they now wont be seen and get a follow-up plan. Its quite unfortunate for the patients.

Dr Christopher Richardson, the head of the cybersecurity unit at Bournemouth University, said the process of recovering the NHSs IT systems would involve a painful and longwinded deep strip of affected computers.

You go down to the basic machine, you take everything off it, you reconfigure it and then you build it back up again, he said. If youre talking national health, youre talking a lot of machines on a single site and youve got to get them all because these nasty pieces of malware, they float around, so they only have to remain on one machine and when you reboot it will deliver the same thing again.

Additional reporting by Sam Jones in Madrid

Read more: www.theguardian.com

Australian Craig Wright claims he is bitcoin founder Satoshi Nakamoto

The 45-year-old IT and security consultant has reportedly provided evidence to the BBC supporting his claim that he is the inventor of the cryptocurrency

Australian entrepreneur Craig Wright has identified himself as Satoshi Nakamato, the pseudonymous creator of the digital currency bitcoin.

Wright, who was named as the cryptocurrencys founder by two separate media investigations in December, made the admission in a blog post on Monday, providing what he says is technical proof of his claim.

He also provided evidence to the BBC, reportedly including the use of cryptographic keys linked to the same blocks of bitcoin Nakamoto sent another developer, Hal Finney, in the currencys first transaction in 2009.

His claim was backed up by Jon Matonis, one of the founding directors of the Bitcoin Foundation, who said he had the opportunity to review the relevant data along three distinct lines: cryptographic, social, and technical.

It is my firm belief that Craig Wright satisfies all three categories, he said.

Wright, 45, is an Australian IT and security consultant, who described himself on a now-deleted LinkedIn page as a senior management executive information security specialist.

Until recently he was the director of more than a dozen companies, some involved in cryptocurrency, until he divested himself of 12 of them in the space of a week in July 2015.

Wired and Gizmodo published investigations in December claiming to reveal Wrights identity based on leaked transcripts, emails and financial records. Wright declined to comment on the stories, which were the subject of scepticism among some of his contemporaries.

The same day his north Sydney home was raided by Australian federal police in connection with a tax investigation, unrelated to bitcoin.

Wright said on Monday he was unmasking himself because I care so passionately about my work, and also to dispel any negative myths and fears about bitcoin.

I cannot allow the misinformation that has been spread to impact the future of bitcoin and the blockchain, he said in a statement.

Cryptocurrencies, among which bitcoin is the dominant version, allow consumers to make electronic transactions without commercial banks as intermediaries, and outside the reach of central banks.

There are around 15.5m bitcoins currently in circulation, including the million or so reportedly owned by Nakamoto, giving the founder or founders a net worth of around US$450m, at the current price.

One bitcoin is currently worth around 306 (US$449).

Nakamatos identity has been the subject of fierce speculation since he outlined the ideas behind bitcoin in an academic white paper in October 2008.

The software behind the system was launched the following year, Nakamoto continuing to develop it, with others, until he abruptly stepped back in April 2011, saying he had moved on to other things.

Media organisations including the New Yorker and Newsweek have unsuccessfully tried to reveal Nakamotos identity in past years.

Wright on Monday said the pseudonym was an homage to Tominaga Nakamoto, a 17th century Japanese philosopher, merchant and advocate of free trade.

He wrote on his blog: Satoshi is dead. But this is only the beginning.

After the December stories, Wright reportedly approached the author Andrew OHagan, to whom he also provided evidence of his involvement in bitcoin for an upcoming piece in the London Review of Books.

The Economist, to which Wright also gave evidence, said it had concluded the Australian could well be Mr Nakamoto, but that nagging questions remain.

David Glance, an associate professor of computer science at the University of Western Australia, who has worked with Wright in the past, told the Guardian he remained highly sceptical.

I would wait until weve actually seen absolutely proof that its the case, he said.

Read more: www.theguardian.com

Why we should fear a cashless world | Dominic Frisby

Poor people and small businesses rely on cash. A contactless system will likely entrench poverty and pave the way for terrifying levels of surveillance

The health food chain Tossed has just opened the UKs first cashless cafe. Its another step towards the death of cash.

This is nothing new. Money is tech. The casting of coins made shells, whales teeth and other such primitive forms of money redundant. The printing press did the same for precious metals: we started using paper notes instead. Electronic banking put paid to the cheque. Contactless payment is now doing the same to cash, which is becoming less and less convenient. In the marketplace convenience usually wins.

Thats fine as long as people are making this choice freely. What concerns me is the unofficial war on cash that is going on, from the suspicion with which you are treated if you ever use large sums of cash to the campaign in Europe to decommission the 500 note. Im not sure the consequences have been properly considered.

We already live in a world that is, as far as the distribution of wealth is concerned, about as unequal as it gets. It may even be as unequal as its ever been. My worry is that a cashless society may exacerbate inequality even further.

It will hand yet more power to the financial sector in that banks and related fintech companies will oversee all transactions. The crash of 2008 showed that, when push comes to shove, banks have already been exempted from the very effective regulation that is bankruptcy one by which the rest of us must all operate. Do we want this sector to have yet more power and influence?

In a world without cash, every payment you make will be traceable. Do you want governments (which are not always benevolent), banks or payment processors to have potential access to that information? The power this would hand them is enormous and the potential scope for Orwellian levels of surveillance is terrifying.

Cash, on the other hand, empowers its users. It enables them to buy and sell, and store their wealth, without being dependent on anyone else. They can stay outside the financial system, if so desired.

There are many reasons, both moral and practical, to want this. In 2008 many rushed to take their money out of the banks. If the financial system really was as close to breaking point as we are told it was, then such actions are quite justified. When Cypruss banks teetered on the cliff of financial disaster in 2011, we saw bail-ins. Ordinary peoples money in deposit accounts was sequestered to bail out the system. If your life savings were threatened with confiscation to bail out a corporation you considered profligate, I imagine you too would rush to withdraw them.

We have seen similar panics in Greece and, to a lesser extent, across southern Europe. Mervyn King, the former governor of the Bank of England, recently declared that banking was not fixed and that we would see financial panic again. In Japan, the central bank has imposed negative rates and you are charged by banks to store money. This is to try and goad people into spending, rather than saving. So much cash has been withdrawn from banks that there are now reports that the country has sold out of safes.

These are all quite legitimate reasons to want to exit the system. Im not saying we should all take our money out of the bank, but that we should all have the option to. Cash gives you that option. Why remove it? Its our money. Not the banks.

The telephone teaches us a useful lesson. At its peak in 2008, there were 1.3bn landlines for a global population close to 7 billion. Today more than 6 billion people have a mobile phone more than have access to a toilet, according to a UN study. Many assume that the mobile succeeded where the landline failed, because the superior technology made widespread coverage more possible. There is something to that.

But the main reason, simply, is that, to get a landline, you need a bank account and credit. About half of the worlds population is unbanked, without access to the basic financial services you need. Telecoms companies saw no potential custom, the infrastructure was never built and many were left with fewer possibilities to communicate. But a mobile phone and its airtime you can buy with cash. You dont need to be banked. Almost anyone can get a mobile and they have. The financial system was actually a barrier to progress for the worlds poor, while cash was a facilitator for them.

Six billion people around the world will have a smartphone by 2020. They will have pretty much everything they need to participate in e-commerce internet access, basically except the financial inclusion. Which is why there will be a huge role to play in the future for new forms of digital cash from Kenyas M-Pesa to bitcoin money you can use even if you are not financially included.

Cash has its uses for small transactions a chocolate bar, a newspaper, a pint of milk which, in the UK, are still uneconomic to process by other means. It will always be the fastest and most direct form of payment there is. I like to tip waiters, for example, in cash, knowing they will receive that money, without it being siphoned off by some unscrupulous employer. I also like to shop in markets, where I can buy directly from the producer knowing they will receive the money, without middle men shaving off their percentages.

It also has its uses for private transactions, for which there are many possible reasons, and by no means all of them illegal. Small businesses starting out need the cash economy. Poor people need the cash economy. The war on cash is a war on them.

If you listen to the scaremongering, youd start to think that all cash users are either criminals, tax evaders or terrorists. Sure, some use cash to evade tax, but its paltry compared to the tax avoidance schemes Google and Facebook have employed. Google doesnt use cash to avoid tax. Its all done via legislative means.

Cash means total financial inclusion, a luxury the better-off take for granted. Without financial inclusion and there will always be some who, for whatever reason, wont have it you are trapped in poverty. So beware the war on cash.

Read more: www.theguardian.com

Bitcoin price soars above $5,000 to record high

Rising price of the cryptocurrency, now worth four times as much as an ounce of gold, has led to warnings of a bubble

The price of bitcoin has smashed through $5,000 to an all-time high.

The cryptocurrency rose by more than 8% to $5,243 having started the year at $966. Bitcoin has soared by more than 750% in the past year and is worth four times as much as an ounce of gold.

But the price has been volatile. The digital currency plunged below $3,000 in mid-September after the Chinese authorities announced a crackdown. Beijing ordered cryptocurrency exchanges to stop trading and block new registrations, due to fears that increasing numbers of consumers piling into the bitcoin market could prompt wider financial problems.

Price of bitcoin

Jordan Hiscott, the chief trader at Ayondo Markets, said: “The returns are truly remarkable, especially given the recent ban on bitcoin trading in China, where demand had previously accounted for at least 10% of all global volumes.”

Vladimir Putin, the Russian president, called this week for regulation of cryptocurrencies, saying their use “bears serious risks” such as money laundering, tax evasion and funding for terrorism. But he also warned against imposing “too many barriers,” which appears to have given bitcoin a boost.

Despite warnings over a bubble, bitcoin is gaining in acceptance. Last month, a London property developer, The Collective, said it would allow its tenants to pay their deposits in bitcoin and accept rent payments in the cryptocurrency by the end of the year.

Two weeks ago, Japan’s government implemented rules that recognise bitcoin as a payment method. Celebrities have also got involved, with the boxer Floyd Mayweather, the socialite Paris Hilton and the actor Jamie Foxx promoting coin offerings.

Using bitcoin allows people to bypass banks and traditional payment processes to pay for goods and services directly. Banks and other financial institutions have been concerned about bitcoin’s associations with money laundering and online crime because transactions take place anonymously.

The soaring value of bitcoin and other cryptocurrencies comes despite growing warnings over a price bubble.

The starkest warning came from the JP Morgan chief executive, Jamie Dimon, who said bitcoin was a fraud that would ultimately blow up. Speaking last month, he said there was a limited market for the digital currency, arguing that it was only fit for use by drug dealers, murderers and people living in countries such as North Korea. He pledged to sack any JP Morgan trader investing in Bitcoin, but also admitted he had not been able to dissuade his daughter from investing.

Dimon declined to comment on the surge in bitcoin during an earnings call on Thursday. “I’m not going to talk about bitcoin any more,” he said.

Kenneth Rogoff, a professor of economics and public policy at Harvard University and a former IMF chief economist, has predicted that the technology behind cryptocurrencies will thrive, but the price of bitcoin will collapse.

“It is folly to think that bitcoin will ever be allowed to supplant central bank-issued money,” he wrote in the Guardian this week.

“It is one thing for governments to allow small anonymous transactions with virtual currencies; indeed, this would be desirable. But it is an entirely different matter for governments to allow large-scale anonymous payments, which would make it extremely difficult to collect taxes or counter criminal activity.”

Daniel Murray, global head of research at EFG Asset Management, noted that in 2013, bitcoin soared twelvefold in just four months but within a month had lost a third of its value and four months after its peak had lost 60% of its value.

“Investors buy [an] asset because they are seduced by the prospect of further rapid gains without necessarily thinking about intrinsic value,” he said. He noted that historically currencies were backed by precious metals, and these days most currencies were based on macroeconomic fundamentals such as inflation, interest rates and growth, and were backed by a central bank and government. None of this applied to bitcoin, although the supply is carefully controlled.

“It is hard to argue that bitcoin does anything better than existing currency arrangements whilst it does some things to a lower standard,” Murray added. “Individuals are already able to transact electronically using a plastic card.”

Read more: www.theguardian.com

Wikipedia founder to fight fake news with new Wikitribune site

Crowdfunded online publication from Jimmy Wales will pair paid journalists with army of volunteer contributors

Jimmy Wales, the co-founder of Wikipedia, is launching a new online publication which will aim to fight fake news by pairing professional journalists with an army of volunteer community contributors.

Wikitribune plans to pay for the reporters by raising money from a crowdfunding campaign.

Wales intends to cover general issues, such as US and UK politics, through to specialist science and technology.

Those who donate will become supporters, who in turn will have a say in which subjects and story threads the site focuses on. And Wales intends that the community of readers will fact-check and subedit published articles.

Describing Wikitribune as news by the people and for the people, Wales said: This will be the first time that professional journalists and citizen journalists will work side-by-side as equals writing stories as they happen, editing them live as they develop, and at all times backed by a community checking and rechecking all facts.

Although the site is launching at the beginning of the UK general election campaign, Wales said the impetus for the project came from the US.

Someone I know convinced me to give Trump 100 days before making my mind up, he said, but then on day one Kellyanne Conway came out and said her alternative facts line. That was when I really decided to move forward.

If the fundraising campaign goes well, Wales hopes to be able to hire the sites first journalists as soon as possible perhaps before 8 June, when Britons vote in the general election called by prime minister Theresa May.

Like Wikipedia, Waless new project will be free to access. The publication is launching on Tuesday 25 April with a crowdfunding campaign pre-selling monthly support packages to fund the initial journalists. The first issue will follow soon after.

The community contributors will play a key part in the new site, ensuring that the contents of the articles are always supported by as much extra information shared with the readers as possible.

They will be backed up by a presumption of transparency in the sites reporting, with journalists sharing full transcripts, video and audio of interviews.

He hopes that a combination of the distributed intelligence of Wikipedia and measured professional journalism driven by a business model thats not about chasing clicks will lead to a news organisation built from the ground up to combat fake news and political rabble-rousing.

There is a third way, he said, between the two models of he said, she said faux neutrality, or having a Paul Dacre [editor of the Daily Mail] agenda and ramming things down our throats.

He added: If you take a look at Wikipedia, its noisy and not a perfect place, but for true fake news, theres been almost no impact on the Wikipedia community.

The volunteers are experienced enough to know its nonsense, and have an ethos saying: No, were here for neutral facts: that community knows it from the ground up.

Those contributors who also support the site financially will eventually be able to advise on the topics they want Wikitribune to explore, Wales said.

If you take as an example the bitcoin community, theyre a very active and obsessed community.

Theres a lot of news that comes out in the field, and I think theyd love to be able to raise money to hire a journalist and put them on the bitcoin/blockchain beat.

The ideas behind Wikitribune are similar to other experiments with sustainable community journalism.

Dutch news website De Correspondent, for instance, was launched in 2013 after a 1m (850,000) crowdfunding campaign, with a goal of focusing on reporter-led in-depth coverage of a select few topics backed up by strong involvement from a community of financial backers.

In March, the site announced a push into the US market, funded by a $515,000 (400,000) grant from a number of digital news charities.

But Wales thinks that such comparisons do Wikitribune down. Im not sure that anyones ever been as radical as I am, he said.

Realistically, in terms of saying the community can really have control, a lot of people from traditional newsrooms have really had trouble getting their head around that.

Wales, who sits on the board of Guardian Media Group, the Guardians parent company, founded Wikipedia with Larry Sanger in 2001, before donating the entire project to a non-profit organisation, the Wikimedia Foundation, that he set up in 2003.

He remains a board member of the Wikimedia Foundation, and is the president of Wikia, a Wikipedia spin-off that allows communities to make their own collaboratively-edited encyclopaedias on topics ranging from Top Gear to Harry Potter.

Read more: www.theguardian.com

Don’t dismiss bankers’ predictions of a bitcoin bubble – they should know

The virtual currencys success reflects the continuing lack of trust in traditional banking following the credit crunch

When the boss of Wall Street’s biggest bank calls a bubble, the world inevitably sits up and listens, albeit with a sense of historically weighted irony: of course an investment bank boss would spot disaster after his industry presided over the last one. Jamie Dimon, the chief executive of JP Morgan, said last week that the ascendancy of the virtual currency bitcoin – which has risen in price from just over $2 in 2011 to more than $4,000 at points this year – reminded him of tulip fever in 17th-century Holland. “It is worse than tulip bulbs,” he said. “It could be at $20,000 before this happens, but it will eventually blow up. I am just shocked that anyone can’t see it for what it is.”

Dimon’s comments are an open invitation for derision from those who, rightly, point out that although JP Morgan may be top of the Wall Street heap, that heap is far from being the moral high ground. Under Dimon’s leadership, it has agreed a $13bn settlement with US regulators over selling dodgy mortgage securities – the instruments behind the credit crunch – and its run-ins with watchdogs include a $264m fine last year for hiring the children of Chinese officials in order to win lucrative business in return.

But it doesn’t make him wrong. Even the most basic description of bitcoin – an intellectual test on a par with describing a collateralised debt obligation – elicits mental images of a digital back-alley shell game. A bitcoin is a cryptographic solution to a complex equation. It is not as recognisable to you or me as a unit of value as, say, a dollar bill or a prize conker. There is no central authority validating the creation of bitcoins – instead, they are recorded on a public electronic ledger called a blockchain. If you regard the Bank of England as an all-powerful insurer for the pound, there is no such institution behind bitcoin.

This lack of a central authority is one of the reasons why Dimon cavilled in such strong terms last week. In the interstices of unregulated finance lurk ne’er-do-wells.

“If you were a drug dealer, a murderer, stuff like that, you are better off doing it in bitcoin than US dollars,” he said. “So there may be a market for that, but it would be a limited market.”

Hyperbole aside – murderers don’t necessarily need a digital wallet to fulfil their ambitions – Dimon is referencing a well-trailed link between bitcoin and narcotics. The currency is also vulnerable to hackers. Without a backstop central bank, heist victims stand to lose everything, as with the collapse of the MtGox bitcoin exchange in 2014. Taking out a mortgage denominated in bitcoins is not advisable and, luckily for those stupid enough to try it, you won’t find a high street bank willing to underwrite it.

But some of the perceived flaws behind bitcoin that alarm Dimon – no central authority, a public ledger of transactions – point to the foundations of a new financial establishment. In his jargon-busting lexicon of finance How to Speak Money, the author John Lanchester described how the high priests of ancient Egypt controlled agriculture – and by extension the economy – through a closely guarded flood measurement system known as a nilometer that was hidden behind a load of mumbo jumbo. Dimon, a modern high priest, faces a rival value system in bitcoin. It has no temple, no central authority and uses a rubric over which he has no control. In other words, it is an alternative financial establishment, whose popularity is inextricably linked with the ebbing of trust in the global system that was triggered by the credit crunch.

If bitcoin fails, or is discredited, another system will rise to take its place, without the imprimatur of Dimon or his peers around the altar.

First-time buyers beware: this rate rise could just be the start

House owners, and would-be house owners, beware. Change is coming. The majority on the Bank of England’s monetary policy committee against raising interest rates seems huge, confirmed at 7-2 last week. But the language is tightening around the nation’s finances.

Spare capacity in the economy – unfilled jobs and unspent money – is being whittled away more quickly than previously thought and inflation is still likely to overshoot its 2% target over the next three years. Yes, wage growth is running below an inflation rate that has now hit 2.9%, but all signs now point to that 7-2 split flipping the other way come November.

As the Bank said, “some withdrawal of monetary stimulus is likely to be appropriate over the coming months”. This was firmed up the following day by Gertjan Vlieghe, previously the most anti-rise MPC member, when he said the bank was “approaching the moment” for an increase.

Market punters now think there is a 42% chance of a rise in November, and more than 50% in December. The current split on the MPC masks the weighing of trade-offs – between economic growth and inflation, post-referendum stability and curbing consumer debt – which is ever delicate and close to a tipping point.

A rate rise from 0.25% at present to 0.5% will be no disaster and would merely represent a return to the previous record low, which had lasted from 2009 to the EU vote. But what should sharpen borrowers’ minds is the thought of further increases – as hinted by Vlieghe. Inflation remains stubbornly high; something will have to be done to temper a consumer lending surge growing at 10% a year.

Households might cope with a move to 0.5%, but if a rate increase augurs a sustained move against cheap borrowing and persistent inflation, then a wider rethink of ambitions, from getting further up the housing ladder to buying a new car, will be needed. And for those not on the housing ladder, hopes of a step up could be extinguished altogether.

Disney hopes its Star Wars choice will use the force wisely

Disney’s choice of creative talent in recent years has been impeccable, having handed the Avengers franchise to Joss Whedon and employed Lin-Manuel Miranda to co-write the music for Moana. But its decisions over the Star Wars universe have unravelled of late.

The director of Rogue One, Gareth Edwards, was sidelined during reshoots, while the directing duo behind the new Han Solo film, Phil Lord and Christopher Miller, were fired altogether shortly before shooting finished. Most recently, Jurassic World helmer Colin Trevorrow was yanked off the final Star Wars instalment before filming began.

Last week, Disney announced it was handing the final film in the latest Star Wars trilogy to JJ Abrams, the creator of Lost and director of The Force Awakens, the film that launched this Jedi triptych. Abrams is a conservative choice, by Disney’s recent standards. But what the studio needs right now is a safe pair of hands on the lightsaber.

Read more: www.theguardian.com