The second dotcom boom may seem like a way for money to flow from older, richer people to talented young entrepreneurs. But its not worked out that way
Picture a startup founder.
Chances are you went straight for a Mark Zuckerberg-type: male, white, nerdy and, above all, young. Zuckerberg founded Facebook in 2004, three years after the collapse of the dotcom bubble, at the age of 20.
Twelve years later, the company he founded is worth $270bn, and the tech world is in the middle of a new boom. Valuations are going through the roof, and big money is flowing into every stage of the system: in 2015, almost $60bn of venture capital was invested in startups in the US alone.
As a result, it is easy to see the second dotcom boom as a rare volley in favour of intergenerational equality: huge sums of money flowing from older, richer, people into the pockets of hungry young entrepreneurs with ideas, talent and motivation but no access to capital.
In other words, the stronger the tech sector becomes, the more Mark Zuckerbergs there are, and the less millennials 18- to 34-year-olds, also known as Generation Y have to worry about their systematic economic disadvantage. Dont worry about a financial system tilted against your interests: just invent Facebook.
If that does not sound too reassuring, it is with good reason. Technology will not save us. For every way in which the sector stands alone from the wider economy, there are two more in which it reinforces the same constraints.
Go back and think about that stereotypical founder again: chances are you noted the other attributes that come alongside youth. White, male and nerdy is not the best recipe for a broad spread of wealth among a generation, and yet it remains sadly accurate for a large proportion of the industry.
Y Combinator, a prestigious startup accelerator that provides seed money, advice and connections in exchange for 7% equity, revealed last year that 22% of the companies in its latest intake had a female co-founder. Thats the highest ever. The proportion of companies with a male co-founder, meanwhile, fluctuates between 98% and 100%. And for black and Hispanic co-founders, the situation was even worse: 8% and 5% respectively.
There are definitely less girls in tech, and in science too, says Vivian Chan, 31, the co-founder of scientific search engine Sparrho. Theres only a few names that we can think of, globally, at the co-founder level. And being a female PhD science entrepreneur is a rarity.
Similarities spotted between details of last weeks massive cyber-attack and code used by a prolific cybergang with links to North Korean government
Two top security firms have found evidence linking the WannaCry ransomware to the prolific North Korean cybergang known as Lazarus Group.
Kaspersky and Symantec both said on Monday that technical details within an early version of the WannaCry code are similar to code used in a 2015 backdoor created by the government-linked North Korean hackers, who were implicated in the 2014 attack on Sony Pictures and an $81m heist on a Bangladeshi bank in 2016. Lazarus Group has also been known to use and target Bitcoin in its hacking operations. The similarities were first spotted by Google security researcher Neal Mehta and echoed by other researchers including Matthieu Suiche from UAE-based Comae Technologies.
Shared code doesnt always mean the same hacking group is responsible an entirely different group may have simply re-used Lazarus groups backdoor code from 2015 as a false flag to confuse anyone trying to identify the perpetrator. However the re-used code appears to have been removed from later versions of WannaCry, which according to Kaspersky gives less weight to the false flag theory.
We believe its important that other researchers around the world investigate these similarities and attempt to discover more facts about the origin of WannaCry, said Kaspersky Lab in a blogpost, pointing out that in the early days of the Bangladesh bank attack, there were scant clues linking it to the Lazarus group. However, over time researchers found more clues to build the case against the North Korea-linked cybergang.
Kaspersky is among the research teams to have been studying Lazarus Group for years, and in April it published a detailed under the hood report exposing the groups modus operandi.
This level of sophistication is something that is not generally found in the cybercriminal world. Its something that requires strict organization and control at all stages of operation. Thats why we think that Lazarus is not just another advanced persistent threat actor, said Kaspersky, which also found attacks originating from IP addresses in North Korea.
The WannaCry ransomware attack has now now hit more than 200,000 computers in 150 countries, crippling hospitals, governments and businesses.
The links to North Korea come at a time when security researchers and technology companies are criticizing the US government for stockpiling cyberweapons including the malicious software used in WannaCry.
The WannaCry exploits used in the attack were drawn from a cache of exploits stolen from the NSA by the Shadow Brokers in August 2016. The NSA and other government agencies around the world create and collect vulnerabilities in popular pieces of software (such as Windows) and cyberweapons to use for intelligence gathering and cyberwarfare.
Once these vulnerabilities were leaked by the Shadow Brokers, they became available for cybercriminals to adapt for financial gain by creating ransomware. This ransomware spread rapidly on Friday by exploiting a vulnerability contained in the NSA leak, targeting computers running Microsofts Windows operating system, taking over users files and demanding $300 to restore them.
Early tallying shows ruling coalition led by Independence party vying to hold on to power against challenge from Pirate alliance
Initial counting after polls closed in Icelands election put neither the ruling Independence partys centre-right coalition nor the Pirate partys leftist alliance in a position to secure outright victory.
With roughly one-third of votes counted, support for the mainstream centre-right coalition particularly Independence stood at more than 40%, translating to 27 MPs in Icelands 63-seat parliament.
The opposition alliance had around 43%, giving 29 MPs.
That could leave the newly-established Vireisn meaning Regeneration party in the role of kingmaker. Its share of the vote sat at around 11% in early counting. Its liberal, pro-European stance has proved popular among conservative voters seeking a change from the old parties. We want to improve things in Iceland, the party leader, Benedikt Johannesson, said as he cast his ballot. We are a free trade party, a pro-western party, an open society party.
Polls published on Friday before the election showed the governing coalition of the Independence and Progressive parties on about 37% of the vote, while support for opposition parties led by the Pirates founded barely four years ago by a group of activists, anarchists and former hackers stood at 47%.
Riding a wave of public anger at perceived political corruption in the wake of the 2008 financial crash and the Panama Papers scandal in April, the Pirate party has campaigned for direct democracy, full government transparency, individual freedoms and the fight against corruption.
Its radical platform which also includes decriminalising drugs, offering asylum to whistleblowers such as Edward Snowden and relaxing restrictions on the use of the bitcoin virtual currency propelled it to 40% in the polls this spring but its support has since waned.
Voting at a Reykjavik school on a chill, blustery day, the partys figurehead, 49-year-old MP, poet and former WikiLeaks collaborator Birgitta Jnsdttir, said that if the people were ready the Pirates were too.
Her party would deliver change if people are sick of living in this turmoil that we have been having here in Iceland, where you never know what tomorrow is going to bring.
Change is beautiful. Theres nothing to worry about. We are ready to do whatever people trust us to do.
Part of a global anti-establishment trend, the Pirates advocate an unlimited right for citizens to be involved in political decision-making, proposing new legislation and deciding on it in national referendums.
If it is able the party has said it aims to form a new coalition government with the three other broadly leftist opposition parties: the Left-Greens, Social Democrats and the Bright Future movement.
We think that these parties can cooperate very well, they have many common issues, said Katrin Jakobsdttir, leader of the Left-Green movement. I think it will be a very feasible governmental choice.
The Pirates have ruled out going into government with either of the current two ruling parties.
The revelations sparked outrage and some of the largest protests Iceland has seen, forcing the government to replace Gunnlaugsson with the agriculture and fisheries minister, Sigurur Ingi Jhannsson, and promise elections before the end of the year.
Support for Gunnlaugssons Progressive party has since fallen to about 9% in the polls, barely a third of its score in the previous 2013 elections. Backing for the Independence party seems to have held up far better, especially among older voters.
lafur Hararson, a professor of political science at the University of Iceland, said the Pirates who captured 5% of the vote in 2013, giving them three MPs rose on the back of voters anger at the 2008 financial collapse.
They have managed to focus on the anti-politics and anti-establishment feelings of a lot of voters that have been frustrated in Iceland since the bank crash, Hararson said.
Iceland has recovered economically since the 2008 crash when the countrys three biggest banks collapsed owing 11 times the countrys GDP, the Reykjavks stock market fell 97% and the value of the krona halved.
Helped by a tourism boom 2.4 million visitors, nearly seven times the countrys population, are expected in 2017 economic growth is forecast to reach 4.3% this year and unemployment has fallen to just over 3%.
About 245,000 Icelanders were eligible to vote, with final results due on Sunday morning.
Bought in 2009, currency's rise in value saw $27 turn into enough to buy an apartment in a wealthy area of Oslo. By Samuel Gibbs
The meteoric rise in bitcoin has meant that within the space of four years, one Norwegian mans $27 investment turned into a forgotten $886,000 windfall.
Kristoffer Koch invested 150 kroner ($26.60) in 5,000 bitcoins in 2009, after discovering them during the course of writing a thesis on encryption. He promptly forgot about them until widespread media coverage of the anonymous, decentralised, peer-to-peer digital currency in April 2013 jogged his memory.
Bitcoins are stored in encrypted wallets secured with a private key, something Koch had forgotten. After eventually working out what the password could be, Koch got a pleasant surprise:Â
“It said I had 5,000 bitcoins in there. Measuring that in today’s rates it’s about NOK5m ($886,000),” Koch told NRK.
Koch exchanged one fifth of his 5,000 bitcoins, generating enough kroner to buy an apartment in Toyen, one of the Norwegian capitals wealthier areas.
Two ways to acquire bitcoins
Typically bitcoins are bought using traditional currency from a bitcoin “exchanger”, although due to strict anti-money laundering controls, the process can can be tricky. A user can then withdraw those bitcoins by sending them back to an exchanger like Mt Gox, the best known bitcoin exchange, in return for cash.
However, bitcoin is gaining more and more traction within the physical world too. It is now possible to actually spend bitcoins without exchanging them for traditional currency first in a few British pubs, including the Pembury Tavern in Hackney, London, for instance. On 29 October, the world’s first bitcoin ATM also went online in Vancouver, Canada, which scans a user’s palm before letting them buy or sell bitcoins for cash.Â
A small group of hardcore users also generate extra bitcoins by “mining” for them a process that requires computers to perform the calculations needed to make the digital currency work, in exchange for a share of the built-in inflation.
Mining is a time-consuming and expensive endeavour due to the way the currency is designed. Each subsequent bitcoin mined is more complex than the previous one, requiring more computational time and therefore investment through the electricity and computer hardware required.
More than 45,000 attacks recorded in countries including the UK, Russia, India and China may have originated with theft of cyber weapons from the NSA
A ransomware cyber-attack that may have originated from the theft of cyber weapons linked to the US government has hobbled hospitals in England and spread to countries across the world.
Security researchers with Kaspersky Lab have recorded more than 45,000 attacks in 99 countries, including the UK, Russia, Ukraine, India, China, Italy, and Egypt. In Spain, major companies including telecommunications firm Telefnica were infected.
By Friday evening, the ransomware had spread to the United States and South America, though Europe and Russia remained the hardest hit, according to security researchers Malware Hunter Team. The Russian interior ministry says about 1,000 computers have been affected.
Markus Jakobsson, chief scientist with security firm Agari, said that the attack was scattershot rather than targeted.
Its a very broad spread, Jakobsson said, noting that the ransom demand is relatively small.
This is not an attack that was meant for large institutions. It was meant for anyone who got it.
The malware was made available online on 14 April through a dump by a group called Shadow Brokers, which claimed last year to have stolen a cache of cyber weapons from the National Security Agency (NSA). At the time, there was skepticism about whether the group was exaggerating the scale of its hack.
On Twitter, whistleblower Edward Snowden blamed the NSA.
If @NSAGov had privately disclosed the flaw used to attack hospitals when they *found* it, not when they lost it, this may not have happened, he said.
Its very easy for someone to say that, but the reality is the US government isnt the only one that has a stockpile of exploits they are leveraging to protect the nation, said Jay Kaplan, CEO of Synack, who formerly worked at the NSA.
Its this constant tug of war. Do you let intelligence agencies continue to take advantage of vulnerabilities to fight terrorists or do you give it to the vendors and fix them?
The NSA is among many government agencies around the world to collect cyber weapons and vulnerabilities in popular operating systems and software so they can use them to carry out intelligence gathering or engage in cyberwarfare. The agency did not immediately respond to a request for comment.
Ransomware is a type of malware that encrypts a users data, then demands payment in exchange for unlocking the data. This attack used malicious software called WanaCrypt0r 2.0 or WannaCry, that exploits a vulnerability in Windows. Microsoft released a patch (a software update that fixes the problem) for the flaw in March, but computers that have not installed the security update remain vulnerable.
This was eminently predictable in lots of ways, said Ryan Kalember from cybersecurity firm Proofpoint. As soon as the Shadow Brokers dump came out everyone [in the security industry] realized that a lot of people wouldnt be able to install a patch, especially if they used an operating system like Windows XP [which many NHS computers still use], for which there is no patch.
The ransomware demands users pay $300 worth of cryptocurrency Bitcoin to retrieve their files, though it warns that the payment will be raised after a certain amount of time. Translations of the ransom message in 28 languages are included. The malware spreads through email.
Attacks with language support show a progressive increase of the threat level, Jakobsson said.
The attack hit Englands National Health Service (NHS) on Friday, locking staff out of their computers and forcing some hospitals to divert patients.
The attack against the NHS demonstrates that cyber-attacks can quite literally have life and death consequences, said Mike Viscuso, chief techology officer of security firm Carbon Black. When patients lives are at stake, there is no time for finger pointing but this attack serves as an additional clarion call that healthcare organizations must make cybersecurity a priority, lest they encounter a scenario where lives are risked.
Ransomware attacks are on the rise. Security company SonicWall, which studies cyberthreats, saw ransomware attacks rise 167 times in 2016 compared to 2015.
Ransomware attacks everyone, but industry verticals that rely on legacy systems are especially vulnerable, said Dmitriy Ayrapetov, executive director at SonicWall.
A Los Angeles hospital paid $17,000 in bitcoin to ransomware hackers last year, after a cyber-attack locked doctors and nurses out of their computer system for days.
Jakobsson said that the concentration of the attack in Russia suggested that the attack originated in Russia. Since the malware spreads by email, the level of penetration in Russia could be a sign that the criminals had access to a large database of Russian email addresses.
However, Jakobsson warned that the origin of the attack remains unconfirmed.
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.
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.
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.
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.
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.
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.
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.
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.”
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.
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.