Slashdot Mirror

dreamstateseven writes "Things are getting serious for Bitcoin this month: a federal judge declared it real money, Bloomberg gave it an experimental ticker, Thailand declared it illegal, and now New York's financial regulator announced an interest in regulating it. The department is starting out by subpoenaing 22 digital-currency companies and investors to get a lay of the Bitcoin land. They sent letters to the major Bitcoin players asking them to hand over information regarding their money laundering controls, consumer protection practices, source of funding, pitch books (for Bitcoin start-ups) and investment strategies (for Bitcoin investors). Keep in mind, a subpoena doesn't mean criminal activity has taken place."

An anonymous reader writes "AOL is closing or plans to sell nearly half of the 900 'hyperlocal' news websites operated by its money-losing Patch Media subsidiary (TechCrunch is also owned by AOL). Hundreds of staff layoffs are believed to be imminent. AOL acquired Patch in 2009, soon after ex-Googler Tim Armstrong took over as CEO; Armstrong was also a co-founder of Patch. During a tough conference call last Thursday Armstrong told Patch editors: 'Something at Patch has been missing for some time and that's leadership – leadership with a capital L'. Armstrong then demonstrated his grasp of Donald Trump's management style by firing an employee during the meeting for taking a picture. At 1:18 of the NY Post's sound clip from Jim Romensko: 'Leaking information Patch isn't going to bother me. I'm not changing direction'. At 2:00: 'Abel [Creative Director Lenz], put that camera down. Abel, you're fired. Out.' Armstrong later explained that 'The reason I fired Abel is I don't want anyone taking pictures of this meeting' and that, much like a sports team, AOL couldn't afford to have people 'giving the game plan away'."

Mark Gibbs writes "AT&T's implementation of the FCC's Emergency Alerts System provides minimally useful information in an untimely fashion with little geolocational relevance. ... Yesterday California got its first AMBER alert and my notification arrived at 10:54pm. It came up as panel over my lock screen and here's what it looked like on my notifications screen: 'Boulevard, CA AMBER Alert UPDATE: LIC/6WCU986 (CA) Blue Nissan Versa 4 door.' The problem with this it that's all there is! You can stab away at the message as much as you like but that's all you get, there's no link to any detail and considering the event it related to occurred over 240 miles away from me near to the Mexican border, the WEA service seems to be poorly implemented. Indeed, many Californians were annoyed and confused by the alert and according to the LA Times 'Some cellphones received only a text message, others buzzed and beeped. Some people got more than one alert.' I got a second copy of the alert at 2:22am and other subscribers reported not receiving any alert until late this morning." It seems to have gone down about as well as New York's.

Sparrowvsrevolution writes "At the Def Con hacker conference Saturday, MIT students David Lawrence and Eric Van Albert released a piece of code that will allow anyone to create a 3D-printable software model of any Schlage Primus key, despite Schlage's attempts to prevent the duplication of the restricted keys. With just a flatbed scanner and their software tool, they were able to produce precise models of Primus keys that they uploaded to the 3D-printing services Shapeways and i.Materialise, who mailed them working copies of the keys in materials ranging from nylon to titanium. Primus high-security locks are used in government facilities, healthcare settings, and detention centers, and their keys are coded with two distinct sets of teeth, one on top and one on the side. That, along with a message that reads 'do not duplicate' printed on the top of every key, has made them difficult to copy by normal means. With Lawrence and Van Albert's software, anyone can now scan or take a long-distance photo of any Primus key and recreate it for as little as $5."

schwit1 writes "Stomping on the brakes of a 3,500-pound Ford Escape that refuses to stop–or even slow down–produces a unique feeling of anxiety. In this case it also produces a deep groaning sound, like an angry water buffalo bellowing somewhere under the SUV's chassis. The more I pound the pedal, the louder the groan gets–along with the delighted cackling of the two hackers sitting behind me in the backseat. Luckily, all of this is happening at less than 5mph. So the Escape merely plows into a stand of 6-foot-high weeds growing in the abandoned parking lot of a South Bend, Ind. strip mall that Charlie Miller and Chris Valasek have chosen as the testing grounds for the day's experiments, a few of which are shown in the video below. (When Miller discovered the brake-disabling trick, he wasn't so lucky: The soccer-mom mobile barreled through his garage, crushing his lawn mower and inflicting $150 worth of damage to the rear wall.) The duo plans to release their findings and the attack software they developed at the hacker conference Defcon in Las Vegas next month–the better, they say, to help other researchers find and fix the auto industry's security problems before malicious hackers get under the hoods of unsuspecting drivers."

cold fjord writes "Break out the tin foil hats, and make them double thick. Forbes reports, 'The NSA will soon cut the ribbon on a facility in Utah ... the center will be up and running by the "end of the fiscal year," ....Brewster Kahle is the engineering genius behind the Internet Archive,... Kahle estimates that a space of that size could hold 10,000 racks of servers .... "So we are talking $1 billion in machines." Kahle estimates each rack would be capable of storing 1.2 petabytes of data. ... all the phone calls made in the U.S. in a year would take up about 272 petabytes, ... If Kahle's estimations and assumptions are correct, the facility could hold up to 12,000 petabytes, or 12 exabytes – ... but is not of the scale previously reported. Previous estimates would allow the data center to easily hold hypothetical 24-hour video and audio recordings of every person in the United States for a full year. The data center's capacity as calculated by Kahle would only allow the NSA to create archives for the 13 million people living in the Los Angeles metro area. Even that reduced number struck Internet infrastructure expert Paul Vixie as high given the space allocated for data in the facility. ... he came up with an estimate of less than 3 exabytes of data capacity for the facility. That would only allow for 24-hour recordings of what every one of Philadelphia's 1.5 million residents was up to for a year. Still, he says that's a lot of data pointing to a 2009 article about Google planning multiple data centers for a single exabyte of info. '" Update: 07/25 16:33 GMT by T : For even more, see this story.

Sparrowvsrevolution writes "At the Def Con hacker conference in Las Vegas early next month, security researchers Justin Engler and Paul Vines plan to show off the R2B2, or Robotic Reconfigurable Button Basher, a piece of hardware they built for around $200 that can automatically punch PIN numbers at a rate of about one four-digit guess per second, fast enough to crack a typical Android phone's lock screen in 20 hours or less. Engler and Vines built their bot, shown briefly in a preview video, from three $10 servomotors, a plastic stylus, an open-source Arduino microcontroller, a collection of plastic parts 3D-printed on their local hackerspace's Makerbot 3D printer, and a five dollar webcam that watches the phone's screen to detect if it's successfully guessed the password. The device can be controlled via USB, connecting to a Mac or Windows PC that runs a simple code-cracking program. The researchers plan to release both the free software and the blueprints for their 3D-printable parts at the time of their Def Con talk."

SmartAboutThings writes "Smartphones are susceptible to malware and carriers have enabled NSA snooping, but the prevailing wisdom has it there's still one part of your mobile phone that remains safe and un-hackable: your SIM card. Yet after three years of research, German cryptographer Karsten Nohl claims to have finally found encryption and software flaws that could affect millions of SIM cards, and open up another route on mobile phones for surveillance and fraud."

Taco Cowboy writes with news that Microsoft's stock price dropped over 11 percent yesterday. The selloff was the biggest since 2009, and during the day the price was down more than 12 percent at one point, making it the biggest single day drop since April, 2000. Analysts believe the drop was due primarily to the company missing its quarterly earnings projections in addition to taking a massive, $900 million write-down on unsold Surface RT tablets. "Microsoft’s decline is both a consequence of the changing dynamics of the tech world and the incredible surge in its stock price this year. Shares in the maker of Windows had rallied nearly 30% this year, leaving both the broader stock market and the technology sector in the dust. It was, it seemed, Steve Ballmer’s year. Until Friday. The sell off was sparked by fears over the declines of the PC market. Gartner data show PC shipments fell for the fifth consecutive quarter in Q2, this time tanking 10.9% to 76 million units. Being the world’s largest software company, 'over 80% of its revenue and nearly all of its profits continue to be derived by its ubiquitous Windows OS, its server business (Windows Server), and the business division (Office),' according to UBS. And indeed that decline in the PC industry is hurting the company’s bottom line."

cold fjord writes that, as promised last month, telegraph service in India is being honorably retired: "Only 7 years behind the US. From Forbes: '... in India, where I'm now sojourning, telegraph service has survived as a basic means of communication since the British East India Company sent the first telegram from Calcutta to nearby Diamond Harbor in 1850... As of July 15, the state company that runs the telegraph service is shutting it down. ... "For long, the telegraph was eyed with suspicion as an emblem of imperial rule," editorialized The Indian Express ... "Yet it brought various parts of the country together and eventually entered the traffic of everyday life. When the telegraph winds up, one of the oldest markers of a modern India will be lost. Stop" — the word that typically ended brief telegraphic phrases rather than periods. Until fairly recently, several hundred thousand messages a day moved over the wires of the telegraph system ...' From NBC: 'When it was completed in 1856, the Indian telegraph stretched over 4,000 miles ... Tom Standage, author of "The Victorian Internet" writes, the early telegraph networks were responsible for "hype, skepticism, hackers, on-line romances and weddings, chat-rooms, flame wars, information overload, predictions of imminent world peace."'"

Vanderhoth writes "Today, Microsoft said its advertisers will be able to target users not just on Web search results pages but directly inside Windows Smart Search. David Pann, general manager of Microsoft's Search Advertising Group, said in an interview that advertisers don't have to do additional setup to participate. The Smart Search ads will feature a preview of the websites the ad will send people to, as well as click-to-call info and site links, which are additional links under the main result that direct users deeper into a website to the most likely page they might want."

An anonymous reader writes "After IBM reported disappointing Q1 earnings in March, to nobody's surprise, layoffs (RAs or 'Resource Actions' in IBM parlance) were announced two months later; June 12 seemed to be when most of the pink slips were handed out. While this is hardly a novel occurrence at IBM, this time the RA'd employee water cooler page is now open for everyone's inspection, and Cringely let loose with some predictable I-told-you-so's about financially oriented IBM senior management. Dan Burger at IT Jungle has a more numbers-oriented take on the latest round of layoffs."

New submitter Optimal Cynic writes "Slashdot likes to argue about intellectual property and patents, and it's clear that both extremes are undesirable. Dr Alex Tabarrok has tackled the question — what is the right level of patent protection? His answer is the Tabarrok Curve, which applies the Laffer Curve methodology to innovation."

A few weeks ago you had the chance to ask James Logan, the founder of Personal Audio, about the business, the patents the company holds, and the lawsuits it has filed. James answered most of the questions in great detail. Read below to see what he has to say and what question he passed on and why. Why are you doing this interview?
by MtHuurne

I am curious why you would volunteer to step into the lion's den.

Logan: There is an active debate going on now about whether the patent system should be changed again while we are still adapting to the American Invents Act of 2011, the largest patent reform since the 1950’s. We have strong views on this and want to weigh in on the debate.

Yes, we understand the leanings of Slashdot readers but sometimes going into the “lion’s den” is the best way to get your point across. That’s probably why you see James Carville on Fox News from time to time.

There are some legal risks to us wading into the den, however. Lawyers may try to take things we say and use them against us. You know how that goes. So, we apologize in advance if some of our answers have to be circumspect.



What do you do?
by Antipater

What exactly is Personal Audio? Your website is slashdotted, so I can't find what you make or what your business model is. But you claim not to be a patent troll. You're even willing to come to a hive of kneejerking anti-patent-trolls and answer our questions to try and convince us of this. So, if you're not one, why not? What do you make? What do you sell? What do you do?

Logan: Personal Audio, LLC is a holding company. That is, we own property and our main activities relate to earning a return on that property. Now, it just so happens that our property consists of patents—not real estate, artwork, or copyrights—and that has apparently put us on the wrong side of the patent debate in the eyes of some people (see Lion’s Den above).

The term “patent troll” has emerged in recent years, and to the extent that words matter, this phrase has served as an effective piece of negative branding for those who want to reduce the rights of patent holders. But the debate should go beyond catchy name-calling. Whether we are, or aren’t patent trolls, whatever that term means, isn’t the issue. The issues are what purpose do patents serve and how do we best foster innovation? Which brings us to the next question



To promote the Progress of Science and useful Arts
by nickmalthus

The intent of patent and copyright laws is "to promote the Progress of Science and useful Arts". Certainly back in the 18th century when the Constitution was written access to information, resources, and research specialists was limited and costly. Now in the 21st century, with global economics focused on knowledge and service sectors, these assets are extremely abundant. Would the progress of Science and the Arts be better served by eliminating legal barriers to innovation, such as patents, and letting the market decide which unencumbered producers survive? If not, why not?

Logan: Nick, thanks for this question. Yes, patent rights are laid out in the Constitution and perhaps a few words about history here would be of interest. The U.S. patent system was derived from the earlier, successful English system. According to a recent book by Willliam Rosen,

“It was England's development of the patent system that was the decisive factor (in giving England the dominate role in the Industrial Revolution). By aligning the incentives of private individuals with those of society, it transformed invention from a hobby pursued by the idle rich into an opportunity for spectacular commercial gain open to anyone with a bit of skill and a good idea. That allowed England to harness the creative potential of its artisan classes in a way that no other country had managed before.”

But the English patent system was a rich man’s game and it was expensive to get a patent. It did lead to the successful development of many “heavy industry” inventions (think steam engines and railroads) but not a lot of “micro-inventing”. When Nikola Tesla (the greatest geek who ever lived) came to America later in the 1800’s, he marveled at the innumerable ways that inventive Americans had improved, and patented, everything they could lay their hands on.

You suggest that today, with globalization and an economy focused on knowledge and services, we might be better off without patents. That a world without patents would foster innovation. This really is the most fundamental question of the whole debate.

I think the suggestion is wrong. Patents are even more important in today’s information economy then they were in past centuries. To see why, let’s broaden the debate to include all intellectual property (“IP”).

If there were no copyright laws, do you think AMC would spend $3 million on each episode of Breaking Bad? If anybody could just copy it and give the content away on the Internet why would they? Without copyright laws there would be no Mad Men, New York Times, or Call of Duty.

(Of course, the irony of comparing patent rights to copyrights isn’t lost on us. We’ve come under blistering attack from the media, including NPR, for asserting our patents against some rather large media businesses—companies that wouldn’t blanch at suing teenagers who copy their songs, websites that offer free movie downloads, or even Google who might offer too-detailed of an article summary. And of course, we all have to sit through their FBI warnings at the beginning of a DVD.)

These same copyright arguments apply to hard goods, and by extension to patents. Would Cisco be able to afford its R&D if factories in China could copy its products and sell them here for a fraction of Cisco’s price? Would Microsoft be spending millions on Windows 8 if each update could be freely copied and distributed? Would GE spend money designing wind turbines if others could copy the designs at will?

Would innovation happen without patents? Of course, just not as much. The risk involved in R&D would increase, investors would be less interested, and researchers tired of being “ripped off” would do other things. The pace of progress would slow. As the economy shifts more and more to knowledge-based work, it seems clear to me, that we need even stronger IP protections.



Do you deserve a patent without doing the work?
by saihung

Why do you believe you deserve any money in licensing fees at all, when you haven't apparently done any of the work required to produce a product?

Logan: Well, I could answer this question by arguing that I did try to build a product. That I spent $1.6 million of my own money trying to realize our vision of a custom listening experience that ended up, at the end of the day, being implemented in the form of a cassette tape product, and not the digital player system we envisioned and patented.

But I think that story is beside the point. The question is whether we should have a patent system that requires the inventor to build a product in order to receive a patent. I think that’s exactly what we don’t want and by way of example let me explain why.

I started my first company in the 80’s, when I was working with a young MIT engineer, Blair Evans, to develop the first analog capacitive touch screen. Were we struggling to make it work when we got a letter in the mail from an inventor in Maryland, Bill Pepper, who was literally working out of his garage. He had been working with Bob Moog, inventor of the world’s first electronic synthesizer, on a touch sensitive piano and from that research had gotten several patents on a touch tablets.

Bill had tried unsuccessfully to license these patents to several large companies (“Call me back when there’s a market”, they said) when he heard about our attempts to make a capacitive touch screen. We realized Bill had the solution we were looking for and we promptly signed an exclusive license for his patents. MicroTouch went on to become the world’s largest touch screen company, selling the precursor to today’s projected capacitive touch screen found on all smart phones. When I left MicroTouch to start Personal Audio in 1996, we employed 500 people making touch screens in Massachusetts. Without those patents, we would never have gotten the company off the ground.

The point of the story, besides the fact that patents can play a leading role in driving innovation, is that often the inventor and the implementer are, and should be, two different people or companies. Bill had no desire to build or run a company. He retired off our royalties and went on to invent other things. Blair and I went on to build a company and an industry.

Why would you want a system that mandated such “vertical integration”, where the inventor has to be the producer? A recent paper (pdf) published by Yale looks at the history of patent monetization over the last 200 years. It describes how “the ability to quickly find buyers for patents was an important driver of inventive activity during the late nineteenth and early twentieth centuries, when patenting rates in the United States were at historic highs.” In fact, both Edison and Tesla sold off most of their patent rights. The paper goes on to say that 24% of hi-tech patents were sold off in the twenty-year period leading to 2000.

The whole history of tech over recent decades has been an ever-increasing specialization of labor. In 1980 IBM made everything from chips to software to mainframes. We all know how that evolved—Intel, Microsoft, Adobe, and others came in and took a slice out of that stack, each becoming a master specialist in one function.

The horizontal slicing of technology food chain has continued and has worked its way to intellectual property to an extent. Today you have Cisco, Yahoo, Google and others buying small companies, for their engineers, products, customer bases, and sometimes intellectual property.

There is still work to do, however, in developing more of an actual “IP market”—one where ideas and inventions are sold outright and not necessarily encapsulated in products or services. It’s a hard market to develop because each patent is, by definition, different and speaks to something new and unknown. If commodities are the easiest things to buy and sell, patents and intellectual property are the hardest. In addition, many companies have strong “not invented here cultures” that build barriers to buying-in technology.

But do you think the large tech companies that rail against “patent trolls” would really want rules that required a product to be produced before a patent was granted? After all, these companies get patents all the time for things they only invent on paper.

Even if you had such a requirement, how would you manage it? Would you have to just “produce” a product or would you have to sell it, too? Google dabbles in lots of areas and works on lots of long-range projects. Are you going to tell Larry Paige that if he doesn’t sell a driver-less car within five years those patents expire? Or if he doesn’t ship or offer for sale at least one, 10, or 100 such cars a year his patents expire? Does each car have to use every claimed feature? Does it have to work (well)? Can it be sold at any price? Who would decide all that?

If there were a requirement that only producers could own patents, then Personal Audio would probably start a podcast just to meet the requirement. But then you’d say, “That doesn’t count. You need to have 1% of the market to qualify.” Or maybe it’s 5% (so one doesn’t get patent protection until one succeeds?) Or do you want us to sell ourselves to CBS thus ensuring a system where only large companies have valuable patents?

Even if you don’t agree with my view that the world would be better off if inventors and implementers were sometimes different people, you can see that setting up a system to mandate otherwise would be a nightmare of micro-management with no obvious benefit. Except, I suppose, that there would never be a case where somebody would say, “He or she doesn’t deserve a reward just for inventing something”.

The debate of whether it was necessary to produce a product to get a patent has been thrashed out in the past. The U.S. patent office used to require inventors to send models to Washington DC before a patent would be issued. But inventions were getting more complicated, took longer to implement, and were getting more abstract. So in 1880 the U.S. patent office dropped the “implementation” requirement.



Comment Please, Mr. Logan
by Anonymous Coward

Mr. Logan,
Here's a "comment" from the Computer World story linked above: "'The company was able to hang on to several patents, however, and put them "in a drawer for 10 years," Baker added. "Is that a troll?"'

Yes it is. That is exactly the definition of a troll. They weren't able to make it work, had no impact on the industry, failed and no one has ever heard of them. But when someone more enterprising independently comes up with a similar idea, solves all the problems that Personal Audio couldn't solve, popularizes the concept, and makes it work, they somehow feel they are entitled to a piece of the action. Your thoughts?

Logan: AC, you summarize well points we have heard from others. Let me start off by saying that over 1,300 patents have cited the Personal Audio patent set (meaning these later patent applications referenced the Personal Audio patents as “prior art” to their applications). A lot of folks read our embodiment and probably some of what we taught in the patent did end up in other people’s products and implementation. That still doesn’t answer your question, however, as to whether we are “entitled to a piece of the action”, as you put it.

But our patents, like others, fall under a two-part incentive system. The first incentive gives the hope of a temporary monopoly to the entrepreneur. That hope fosters innovation by getting people to push the envelope and try new ideas, not just copy old ideas. The hope of creating a business protected by patents, like the one I had at MicroTouch, motivated me to create and move forward with Personal Audio.

The second incentive offered by patents, however, is to investors. During the life of Personal Audio, I invested $1.6 million, and lost it all. Personal Audio, LLC, the patent holding company, is the attempt by the investor, me, to get a return on that investment. When investors like me get our money back, plus some if we’re lucky, it means that startups are not as risky as they might otherwise be. To that extent, patents lower the “cost of capital” to startups, that is, make it easier in the long run for them to raise money. If you’ve shopped plans around to VCs, you will see that often they are very interested in the IP potential of the ideas being pursued. They are interested in both the monopoly power it might offer a startup as well as the safety net it provides in case things don’t go well.

So to answer your question, we are small players in a larger system, one set up to foster innovation by turning inventions into property. We are merely using our property as the system was designed. You may not like every outcome of this system, but in general it has served its purpose well over many years.



Why individuals?
by Sockatume

Pursuing the end users of a product which infringes upon one's patent is practically unheard-of. Why have you done so?

Logan: We appreciate the gist of your question, Sockatune. Let me clarify by saying that we have not done anything to approach “end-users”, who technically would be listeners of podcasts or viewers of other episodic content. But you’re probably referring to podcasters or video producers themselves who are on the smaller side of things.

With that in mind, it is worth noting that the cost of negotiating and setting up a patent license is not trivial. As such, it does not make sense for us to deal with hobbyists, non-commercial ventures, and small entities. The economics of it would be prohibitive. As such, we will be focusing on the largest users of our technology and those that collect significant revenues from ads placed on their podcasts or episodic video content, or who gain commercial value from that content in other ways. Finding good information on this score can be challenging, however, so we can’t be certain that our efforts are always perfectly aligned with our strategy.



When did you first hear of podcasting?
by capedgirardeau

When did you first hear of podcasting and why didn't you file your infringement suit immediately instead of waiting until many people were already using the technology?

Logan: We filed the ‘504 patent (U.S. Patent 8,112,504) in 2009, a short time after we filed suit against several infringers of the ‘076 patent (U.S. Patent 6,199,076). The patent then issued in early 2012. We have had a lot of questions concerning how we could have filed for a patent covering podcasting in 2009, years after the first podcasts started coming out, so let me briefly explain that.

Under certain circumstances, specifically when the patent office has not finished prosecuting a family of patents, the inventor is allowed to apply for additional claims that derive from the original invention by filing a “Continuation Patent”. The priority date, or date of invention, that is given by the patent office to this Continuation is the filing date given to the original patent application in the family. In our case, then, the priority date of the ‘504 patent is October of 1996—the date we filed our first patent application in which the material that describes podcasting was included.

Another misconception is that we “waited all those years” while podcasting evolved and then sprung the ‘504 patent on the industry. The fact of the matter is that Charlie Call, my co-inventor and patent attorney, and I were busy working on other things when podcasting as an industry was emerging. We didn’t get focused on the Personal Audio patents until 2008. That delay is unfortunate for Personal Audio because as a result the ‘504 Continuation Patent did not issue until 2012. As a result, we are only able to collect license fees from that date forward. All the activity that happened before the ‘504 issued is not covered



Can you explain?
by trcooper

Can you explain, in terms I could tell the average person, how your patent is novel enough that anyone who wants to distribute audio over the internet should license it from you? I'd appreciate it if you could address how the distributions of podcasts today widely differs from downloading audio files in 1995 and how your patent help change this.

Logan: Trcooper, this is one of those of questions that could get me in a boatload of trouble—with my lawyer, that is. Any comments I make regarding the claims and how they are different from previous systems, can and will be used against me in court. So I’ll have to take a pass on this one.



Cassette Tapes
by CaseCrash

The only business you made with these patents was sending cassette tapes with some recorded articles that were chosen by the customer through the mail. How does this transfer to creating playlists and podcasting? Picking the listening order of sound files I got from the internet doesn't really seem like it should be protected intellectual property. How do you justify what you've done (a failed business in 1995) to justify payment (much much later) from people who had never heard of you or your patents when they made their services/products, and who apparently never tried to patent that process as it seemed too obvious to them?

Logan: CaseCrash, you touch on a few different areas with your questions, so let me tackle them one at a time.

First, the cassette tapes that Personal Audio sold in 1997 have nothing to do with the validity of the patents that were filed in 1996. Are you suggesting that if a company changes its business strategy, it has to abandon any claims to things it might have invented before the switch? Or if you go out of business you have to donate your patents to the public? If so, be sure to let the creditors of A123, the now-bankrupt pioneering battery company, know that their only remaining asset is now toast. Ditto for the Fisker car company. That all sounds a bit like the culture in Europe where entrepreneurs are severely punished for losing. I’m not sure that’s the startup culture we want to embrace here.

Secondly, you seem to be implying that Personal Audio’s patents should be invalidated for obviousness. Well, I’m not at liberty to discuss specifics around this issue in our case, but one of the main functions of the patent office is to screen for obviousness. Some large companies expended significant resources to prove Personal Audio’s patents were obvious but they were unsuccessful. In general, though, things often seem obvious in hindsight, particularly when the idea has been around a while. So we’re not surprised when people say that about our patents.

In addition to a jury trial, some of our patents have also been through more than one re-exam, an extensive process where the patent office prosecutes the patent all over again. While some consider these do-overs to be a quality control step, it can also be thought of as a form of double jeopardy, retrying a case over and over again. Re-exams create an aura of uncertainty over a patent, making it harder to license a technology and get it to market. Think how hard it would be to put up a building if mortgage holders kept coming out of the woodwork.

Ironically, there are now new laws before Congress to institute even more re-exam procedures. I think that is unfortunate. One of the better features of the America Invents Act of 2011 was to allow for an expedited patent process whereby you can get a patent in less than 12 months—a new speedway that is working as advertised. Now you can come up with an idea, get it patented in a matter of months, raise money on the IP, and be off to the races.

Other changes to the patent system are also being considered, including the SHIELD Act, which would force an NPE (a Non-Practicing Entity) to pay the other side’s legal bills if the NPE loses in court. It would be unfortunate (if not unconstitutional) if this passed. As this article in Forbes recently pointed out, NPEs serve a real purpose in offering inventors, investors in failed companies, universities, and even smaller operating companies a way to participate in the market for intellectual property.

While NPEs have been ceaselessly disparaged, one of the most common criticisms has been that they have been responsible for doubling the number of annual patent lawsuits. In their defense it should be said that two factors outside their control have accounted for most of that increase. First is that the America Invents Act mandated that any patent lawsuit can only have one defendant whereas previously a case might have had multiple. This has dramatically increased the nominal number of cases and skewed the data being hurled against NPEs.

Second, is that over recent years many companies have started using a tactic of preemptively suing a prospective licensor the minute they receive an offer to license a patent. This has led to a counter-strategy where many licensing companies decide to sue first then enter into licensing discussions later. This again, has greatly skewed the numbers.

In any case, the IP market today is dominated not by NPEs but by companies like Google, Apple, and other large firms who own tens of thousands of patents. They buy patents by the thousands, cross-license each other, and then go on to hoard their patents effectively shutting out others from the market. Talk about stifling innovation—try to go license a patent from Microsoft or Google.

And these same U.S. tech companies that rail against patent trolls have few qualms about taking ideas from others. They will buy competitors’ products, conduct teardowns to analyze components and features, and incorporate the best of what they find. Yet it rare that these companies check to see if the “borrowed” ideas are patented. If fact, ask anybody in Silicon Valley and they’ll tell you that engineers in many, if not most, R&D labs are specifically requested to refrain from looking at the patent database when designing products.

Finally, many of these firms are themselves now engaged in so-called trolling. They are spinning off unused patents and either selling them to NPEs (often hiding their ownership) or setting up their own patent assertion companies. In effect, they lobby for one thing, while doing that which they lobby against. And the hypocrisy doesn’t stop there. Look here, in fact, and you’ll see that Mark Cuban sponsored the EFF’s “Chair To Eliminate Stupid Patents” in the same year he went for a quick buck by buying 7% of VRingo, a public NPE that has famously sued Google.

But despite all the consternation about NPEs, and who is one and who isn’t, in general I feel the patent system is not broken. The ever-rising number of U.S. patents being filed, the explosion of incubators, and continued flow of venture capital into new enterprises points to vibrant culture of innovation in the country.



How can I license your podcasting patent?
by David Quaid

Hi Jim, I am about to start a podcast of my own, and I want to make sure I do this in the right way. I looked on your website, but there is no information for how to license your podcasting patent. No online shopping option. No form to mail in. No price. In fact, in the This American Life episode, Richard Baker says "We have a price. We just don't want to make it public."

It seems that the only way to license with you, is to first launch my podcast and then settle with you once you threaten to sue me.

You argue that you are really just a legitimate business man and not a patent troll. But despite the ongoing growth of new podcasts, you have not made it possible for an aspiring podcaster to realize what their financial liability to you might be. This makes it very risky to decide to invest in a new podcast and growing the number of subscribers, since I could be sued out of existence if I succeed.

My question: If you are not a troll, why have you chosen only to sue and threaten, and never directly license to interested customers who are joining the growing podcasting industry?

Logan: David, we have no intention of making podcasting a risky endeavor for anybody. Our license is a modest one and reflects, we feel, the relative values of our intellectual property, the podcasters’ copyrights, and the marketing and other efforts that make a podcast succeed. Our licensees are our customers and we want them to succeed just like any business wants its customers to succeed.

We hope to publish our ‘504 license schedule in the coming weeks. If we do, that will give you a sense of the affordability of a license. In any case, if you think you will need a license please contact us and we would be glad to discuss the details.



The EFF
by greg1104

Claiming that the EFF is some sort of enforcer working for large companies to beat up small ones is an idea that can only have come from heavy use of hallucinogenic drugs. Which ones does your team take?

Logan:None of our team-members is on drugs as you suggest, and one of us has even sworn off caffeine. (Not sure how that works.)

Regarding the EFF, I think our point was just that with our limited resources, our primary focus is addressing the larger entities that are podcasting. To that extent, the EFF can be seen to be weighing in on the side of large media conglomerates such as CBS and NBC.

More generally, I think it’s a bit anomalous that patents often get such a bad rap by individuals, such as some engineers in Silicon Valley, or groups like the EFF, which purport to stand for David (vs Goliath). Patents are a great tool for the little guy. If you want to start a company, build it around some patented technology (like Google did). The patents, or even pending applications, will help you raise money, ward off competition, and give you a fighting chance. They’re the ultimate equalizer.



International
by Sockatume

You don't seem to have any presence outside the US, despite apparently having invented podcasting. Why?

Logan: We don’t have any international patents and as such, don’t have any activities outside of the U.S., although we have licensees that are foreign companies.

Why don’t we have any international patents? The answer is that it is very expensive to apply for, and “prosecute” such applications, and the benefits can be scant. One of the beauties of the American patent system is that it provides reasonable protection to inventors, has modest costs associated with it, and the resulting patents cover a critical part of the international market. If a company can get coverage in the U.S. for its products, as we hoped to do when we filed in 1996, it gets a measure of worldwide protection. That is because it’s hard to compete in today’s global economy if you can’t sell in the U.S. This is one of the reasons that many European companies come to the U.S. first to file patents on their inventions—and often bring over their R&D work, too.

Today, patent rights are rapidly being eroded in the U.S. through recent court decisions, legislation, and new patent office regulations. Meanwhile, the Chinese are rapidly strengthening their patent system. Hopefully, we don’t find that in 10 years the tables are turned—that China has the biggest economy and has created an IP fortress, where they incubate and protect products that are then shipped to the U.S.

While we’re on the topic of protecting American intellectual property, let me also point you to a recent report stating that overseas intellectual property theft is a problem that costs the U.S. economy $300 billion a year, a number about 10 times larger than the damages recently ascribed to “trolls” by President Obama.

Well, I hope this has been helpful and thanks for your time!

symbolset writes "Most of you know about Planetary Resources, the asteroid mining company, and their Kickstarter campaign in the finest spirit of Heinlein's The Man Who Sold the Moon. The campaign has reached its minimum $1M goal to get funded with eight days left to go. In celebration, PR's CEO and Chief Asteroid Miner Chris Lewicki does an interview with Forbes where he discusses the future opportunities, the potential pitfalls, and the unlimited potential of private sector space exploitation. It's well worth the read. Planetary Resources' kickstarter has some worthy stretch goals that are well worth looking at, and the sort of supporter premiums that many Slashdotters will not want to miss. Only $175,000 more and they get a second ground station, at $2M they add exoplanet search capability. Both of these stretch goals are within reach."

MojoKid writes "Google (and many other tech manufacturers lately), have been evangelizing the mantra that technology is here to enhance and improve our lives, not get in the way; in the truest sense to 'serve humanity.' Recent events and breakthroughs in the healthcare industry, which make use of leading-edge technology, illustrate this vision better than any marketing or ad campaign could ever possibly hope to. Dr. Rafael Grossman strapped on his Google Glass eyewear to become the first 'Glass Explorer Surgeon.' The procedure involved is called Gastrostomy, a process by which a surgeon inserts a feeding tube into a patient's abdomen. In this case, the good doctor performed the procedure endoscopically, such that he was able to display the entire procedure and the view of it directly as it was being performed. The opportunities for remote medical consultation, mentoring and even real-time guidance are obvious with the sort of technology that products like Google Glass bring to the table. It's always nice to hear stories of how not only 'quality of life' is improved but how lives are actually saved as a result of these magnificent inventions we create."

Contributor Tom Geller writes: "I recently wrote an article about Bitcoin and the law for Communications of the Association for Computing Machinery. In researching it I ran into plenty of wishful thinkers, ridiculous greedheads, and out-and-out nutbags promising a rosy future. I also found the expected blowback from vehement naysayers who think the best way to combat crazy is with more crazy. But despite that, I walked away believing that Bitcoin — or a decentralized cryptocurrency like it (let's call it "Coin") — is here to stay. As an interested outsider to the Coin economy, and a long-time technology commentator, here's what I think its future holds." Read on for Tom's predictions. Coin's primary use will continue to be in international transactions.

While people wonder "When will I be able to pay for groceries and utilities with Bitcoin?", that use might never come. But Coin already shines in international transactions, where it provides a clear advantage over current systems, which are expensive and complicated hassles. That's why PayPal has become the go-to solution: it just works, albeit with typical fees around 3-5%.

Coin reduces that fee to a small fraction of 1% (when sent directly), and is available in places where PayPal fears to tread (Zimbabwe, Pakistan, etc.). Coin transactions occur instantly, with no intermediary, and — for better or worse — without recourse.

That leads to Coin's second primary use: to store liquid value in places where other stores (such as national currency) are unreliable. For all the cries that Bitcoin is "unstable", it seems to have settled quite nicely after its April spike. Certainly it looks appealing to anyone in an unstable country, and it's even tempting for those in places where the currency's been on a long, slow slide, like Argentina.

Coin's big vulnerability is its interface with national currencies ("real money").

None of this matters if you can't get your money out again. And that's where governments are taking a close look at Coin — with good reason. First, Coin exchanges have a terrible track record; second, such points of exchange are bottlenecks through which financial crimes often flow.

In the U.S., the government's Financial Crimes Enforcement Network (FinCEN) issued guidance asserting its right to regulate "Money Services Businesses", and defining exchanges dealing in virtual currencies (including Bitcoin) as such. That's a problem for many existing Coin exchanges, as the costs for complying with regulations are high. But if there's not a stable and reliable way to get national currency in and out of Coin, its value will plummet.

Conversely, Coin's value is likely to shoot up if this interface gets easier. Right now, it's surprisingly hard to buy Bitcoin (et al.) directly with U.S. dollars. Most methods require bank wires, tricky multi-step workarounds, and high fees. (I found Coinbase to be the most accessible, albeit with long delays and a bank verification procedure similar to PayPal's.) If Coin becomes as easy to buy as a gift card and redeemable at every bank, its practical utility will soar for everyday people.

No government will make Coin illegal.

Despite bloviation by a few politicians and baseless statements in the press, Coin is not per se illegal, and there have been no serious attempts to make it so. The FinCEN guidance mentioned earlier explicitly says that ordinary users — those who buy and sell using Coin — are "not subject to FinCEN's... regulations for MSBs". It's possible that other government agencies will continue to claim authority, but there doesn't seem to be much support for it.

A lot of noise has been made about Coin's use in illegal business, for example on Silk Road (where it's the only currency). But law enforcement is realizing that the currency isn't to blame, much as they've started to say that Craigslist isn't responsible for crimes organized through its ads. I predict that that distraction will continue to surface from time to time, but will essentially die soon.

Even if governments attempt to illegalize Coin, there's only so much they could do to criminalize ordinary users. Again, Coin's real vulnerabilities are higher up the chain. However....

If Coin succeeds, governments will get involved — for the better.

"Noooo!!!" scream the cryptoanarchists who are Coin's pioneers. "Keep the government out of this! Coin can't be controlled! Nobody can take away our freedoms!" What they don't realize is that this attitude doesn't reflect the values of Coin's future users. The benefits of "freedom" matter to the innovators; convenience and safety matter to those who follow.

"Government" in this case could also be a government-size corporation, syndicate, or other entity. The important thing is that it's big enough to administer, back, and enforce initiatives to protect the Coin economy. Whatever that "bully entity" is, Coin adopters will welcome it because of two major flaws currently in (Bit)Coin's design.

First, Coin is ridiculously easy to destroy by accident. If you lose the private cryptographic key that identifies your coin, it's gone. Not just stolen, but removed entirely from the economy, so nobody will ever own it again. Consider these stories on Bitcointalk.org, where within a few messages the cumulative total tops 10,000 BTC — currently valued around a million dollars. A central authority could address this in several ways such as tracking, restitution, etc.. People don't care that their cash is anonymous when the rent money disappears.

Second, the entire system is vulnerable to a brute-force attack. Without getting into the specifics, Coin (well, Bitcoin) works because it assumes that at least 50% of the computer power on the network is held by honest players. But a recent 51% attack on Feathercoin (a Coin with much lower capitalization) showed that it's possible for a single party (or syndicate) to trump that.

Let's do the math for Bitcoin, the Coin with by far the highest capitalization, at just north of USD$1 billion (1 x 10^9). To reliably overwhelm the network, you'd need computing power delivering about 100,000 gigahashes per second. Computers optimized for Bitcoin processing are currently available for about $1,000/gigahash, so sufficient computing power can be bought for $100 million. Electricity cost for the deed would be about $200,000/day.

O.K., it's not something a basement hacker could whip up. But there are over 400 people, and thousands of syndicates with a billion dollars in the U.S. alone. Perhaps at least one of them is crazy enough to drop 1% of the wealth to partially control (or completely destroy) a billion-dollar system. (Hell, one of them recently spent 1/10th of that price tag on his wedding.)

Those are only the two biggest technical concerns. Then there's the galaxy of financial services (such as insurance) that's available for fiat money, but which would be hard or impossible to provision for Coin without a central authority. Time could overcome these barriers; a bully entity would overcome them faster, and with greater public buy-in.

Bitcoin is not the end game.

Along those lines, I don't believe that Bitcoin will be the ultimate winner in this game. It's the 1.0, and a brilliant first effort at that. But it's not perfect, and several pretenders to the throne already claim to fix some of its bugs. In fact, shifting conditions may require periodic issuance of new Coin as a matter of course. (As I said before, I believe such issuances will involve a central authority.)

These predictions all assume that Coin will grow, and there are many reasons it might not. However, I'm bullish on it for the long-term. It's already proven its value in use; the public is used to handling Coin-like money (viz. Square Wallet); and its first major hurdles are in the past. Now it's ready to enter a fascinating future.



- - - - -
Tom Geller (tomgeller.com) writes about technology and business. He's best known for Drupal-related work that includes eight video courses for lynda.com, a book for Peachpit Press, and corporate work for Acquia, Commerce Guys, and others. He first became involved in computers as a grade-school student in 1976, playing "Hunt the Wumpus" on a 100-pound monster that spewed tractor-feed paper onto the floor. He lives in Oberlin, Ohio.

Contributor Tom Geller writes: "I recently wrote an article about Bitcoin and the law for Communications of the Association for Computing Machinery. In researching it I ran into plenty of wishful thinkers, ridiculous greedheads, and out-and-out nutbags promising a rosy future. I also found the expected blowback from vehement naysayers who think the best way to combat crazy is with more crazy. But despite that, I walked away believing that Bitcoin — or a decentralized cryptocurrency like it (let's call it "Coin") — is here to stay. As an interested outsider to the Coin economy, and a long-time technology commentator, here's what I think its future holds." Read on for Tom's predictions. Coin's primary use will continue to be in international transactions.

While people wonder "When will I be able to pay for groceries and utilities with Bitcoin?", that use might never come. But Coin already shines in international transactions, where it provides a clear advantage over current systems, which are expensive and complicated hassles. That's why PayPal has become the go-to solution: it just works, albeit with typical fees around 3-5%.

Coin reduces that fee to a small fraction of 1% (when sent directly), and is available in places where PayPal fears to tread (Zimbabwe, Pakistan, etc.). Coin transactions occur instantly, with no intermediary, and — for better or worse — without recourse.

That leads to Coin's second primary use: to store liquid value in places where other stores (such as national currency) are unreliable. For all the cries that Bitcoin is "unstable", it seems to have settled quite nicely after its April spike. Certainly it looks appealing to anyone in an unstable country, and it's even tempting for those in places where the currency's been on a long, slow slide, like Argentina.

Coin's big vulnerability is its interface with national currencies ("real money").

None of this matters if you can't get your money out again. And that's where governments are taking a close look at Coin — with good reason. First, Coin exchanges have a terrible track record; second, such points of exchange are bottlenecks through which financial crimes often flow.

In the U.S., the government's Financial Crimes Enforcement Network (FinCEN) issued guidance asserting its right to regulate "Money Services Businesses", and defining exchanges dealing in virtual currencies (including Bitcoin) as such. That's a problem for many existing Coin exchanges, as the costs for complying with regulations are high. But if there's not a stable and reliable way to get national currency in and out of Coin, its value will plummet.

Conversely, Coin's value is likely to shoot up if this interface gets easier. Right now, it's surprisingly hard to buy Bitcoin (et al.) directly with U.S. dollars. Most methods require bank wires, tricky multi-step workarounds, and high fees. (I found Coinbase to be the most accessible, albeit with long delays and a bank verification procedure similar to PayPal's.) If Coin becomes as easy to buy as a gift card and redeemable at every bank, its practical utility will soar for everyday people.

No government will make Coin illegal.

Despite bloviation by a few politicians and baseless statements in the press, Coin is not per se illegal, and there have been no serious attempts to make it so. The FinCEN guidance mentioned earlier explicitly says that ordinary users — those who buy and sell using Coin — are "not subject to FinCEN's... regulations for MSBs". It's possible that other government agencies will continue to claim authority, but there doesn't seem to be much support for it.

A lot of noise has been made about Coin's use in illegal business, for example on Silk Road (where it's the only currency). But law enforcement is realizing that the currency isn't to blame, much as they've started to say that Craigslist isn't responsible for crimes organized through its ads. I predict that that distraction will continue to surface from time to time, but will essentially die soon.

Even if governments attempt to illegalize Coin, there's only so much they could do to criminalize ordinary users. Again, Coin's real vulnerabilities are higher up the chain. However....

If Coin succeeds, governments will get involved — for the better.

"Noooo!!!" scream the cryptoanarchists who are Coin's pioneers. "Keep the government out of this! Coin can't be controlled! Nobody can take away our freedoms!" What they don't realize is that this attitude doesn't reflect the values of Coin's future users. The benefits of "freedom" matter to the innovators; convenience and safety matter to those who follow.

"Government" in this case could also be a government-size corporation, syndicate, or other entity. The important thing is that it's big enough to administer, back, and enforce initiatives to protect the Coin economy. Whatever that "bully entity" is, Coin adopters will welcome it because of two major flaws currently in (Bit)Coin's design.

First, Coin is ridiculously easy to destroy by accident. If you lose the private cryptographic key that identifies your coin, it's gone. Not just stolen, but removed entirely from the economy, so nobody will ever own it again. Consider these stories on Bitcointalk.org, where within a few messages the cumulative total tops 10,000 BTC — currently valued around a million dollars. A central authority could address this in several ways such as tracking, restitution, etc.. People don't care that their cash is anonymous when the rent money disappears.

Second, the entire system is vulnerable to a brute-force attack. Without getting into the specifics, Coin (well, Bitcoin) works because it assumes that at least 50% of the computer power on the network is held by honest players. But a recent 51% attack on Feathercoin (a Coin with much lower capitalization) showed that it's possible for a single party (or syndicate) to trump that.

Let's do the math for Bitcoin, the Coin with by far the highest capitalization, at just north of USD$1 billion (1 x 10^9). To reliably overwhelm the network, you'd need computing power delivering about 100,000 gigahashes per second. Computers optimized for Bitcoin processing are currently available for about $1,000/gigahash, so sufficient computing power can be bought for $100 million. Electricity cost for the deed would be about $200,000/day.

O.K., it's not something a basement hacker could whip up. But there are over 400 people, and thousands of syndicates with a billion dollars in the U.S. alone. Perhaps at least one of them is crazy enough to drop 1% of the wealth to partially control (or completely destroy) a billion-dollar system. (Hell, one of them recently spent 1/10th of that price tag on his wedding.)

Those are only the two biggest technical concerns. Then there's the galaxy of financial services (such as insurance) that's available for fiat money, but which would be hard or impossible to provision for Coin without a central authority. Time could overcome these barriers; a bully entity would overcome them faster, and with greater public buy-in.

Bitcoin is not the end game.

Along those lines, I don't believe that Bitcoin will be the ultimate winner in this game. It's the 1.0, and a brilliant first effort at that. But it's not perfect, and several pretenders to the throne already claim to fix some of its bugs. In fact, shifting conditions may require periodic issuance of new Coin as a matter of course. (As I said before, I believe such issuances will involve a central authority.)

These predictions all assume that Coin will grow, and there are many reasons it might not. However, I'm bullish on it for the long-term. It's already proven its value in use; the public is used to handling Coin-like money (viz. Square Wallet); and its first major hurdles are in the past. Now it's ready to enter a fascinating future.



- - - - -
Tom Geller (tomgeller.com) writes about technology and business. He's best known for Drupal-related work that includes eight video courses for lynda.com, a book for Peachpit Press, and corporate work for Acquia, Commerce Guys, and others. He first became involved in computers as a grade-school student in 1976, playing "Hunt the Wumpus" on a 100-pound monster that spewed tractor-feed paper onto the floor. He lives in Oberlin, Ohio.

Contributor Tom Geller writes: "I recently wrote an article about Bitcoin and the law for Communications of the Association for Computing Machinery. In researching it I ran into plenty of wishful thinkers, ridiculous greedheads, and out-and-out nutbags promising a rosy future. I also found the expected blowback from vehement naysayers who think the best way to combat crazy is with more crazy. But despite that, I walked away believing that Bitcoin — or a decentralized cryptocurrency like it (let's call it "Coin") — is here to stay. As an interested outsider to the Coin economy, and a long-time technology commentator, here's what I think its future holds." Read on for Tom's predictions. Coin's primary use will continue to be in international transactions.

While people wonder "When will I be able to pay for groceries and utilities with Bitcoin?", that use might never come. But Coin already shines in international transactions, where it provides a clear advantage over current systems, which are expensive and complicated hassles. That's why PayPal has become the go-to solution: it just works, albeit with typical fees around 3-5%.

Coin reduces that fee to a small fraction of 1% (when sent directly), and is available in places where PayPal fears to tread (Zimbabwe, Pakistan, etc.). Coin transactions occur instantly, with no intermediary, and — for better or worse — without recourse.

That leads to Coin's second primary use: to store liquid value in places where other stores (such as national currency) are unreliable. For all the cries that Bitcoin is "unstable", it seems to have settled quite nicely after its April spike. Certainly it looks appealing to anyone in an unstable country, and it's even tempting for those in places where the currency's been on a long, slow slide, like Argentina.

Coin's big vulnerability is its interface with national currencies ("real money").

None of this matters if you can't get your money out again. And that's where governments are taking a close look at Coin — with good reason. First, Coin exchanges have a terrible track record; second, such points of exchange are bottlenecks through which financial crimes often flow.

In the U.S., the government's Financial Crimes Enforcement Network (FinCEN) issued guidance asserting its right to regulate "Money Services Businesses", and defining exchanges dealing in virtual currencies (including Bitcoin) as such. That's a problem for many existing Coin exchanges, as the costs for complying with regulations are high. But if there's not a stable and reliable way to get national currency in and out of Coin, its value will plummet.

Conversely, Coin's value is likely to shoot up if this interface gets easier. Right now, it's surprisingly hard to buy Bitcoin (et al.) directly with U.S. dollars. Most methods require bank wires, tricky multi-step workarounds, and high fees. (I found Coinbase to be the most accessible, albeit with long delays and a bank verification procedure similar to PayPal's.) If Coin becomes as easy to buy as a gift card and redeemable at every bank, its practical utility will soar for everyday people.

No government will make Coin illegal.

Despite bloviation by a few politicians and baseless statements in the press, Coin is not per se illegal, and there have been no serious attempts to make it so. The FinCEN guidance mentioned earlier explicitly says that ordinary users — those who buy and sell using Coin — are "not subject to FinCEN's... regulations for MSBs". It's possible that other government agencies will continue to claim authority, but there doesn't seem to be much support for it.

A lot of noise has been made about Coin's use in illegal business, for example on Silk Road (where it's the only currency). But law enforcement is realizing that the currency isn't to blame, much as they've started to say that Craigslist isn't responsible for crimes organized through its ads. I predict that that distraction will continue to surface from time to time, but will essentially die soon.

Even if governments attempt to illegalize Coin, there's only so much they could do to criminalize ordinary users. Again, Coin's real vulnerabilities are higher up the chain. However....

If Coin succeeds, governments will get involved — for the better.

"Noooo!!!" scream the cryptoanarchists who are Coin's pioneers. "Keep the government out of this! Coin can't be controlled! Nobody can take away our freedoms!" What they don't realize is that this attitude doesn't reflect the values of Coin's future users. The benefits of "freedom" matter to the innovators; convenience and safety matter to those who follow.

"Government" in this case could also be a government-size corporation, syndicate, or other entity. The important thing is that it's big enough to administer, back, and enforce initiatives to protect the Coin economy. Whatever that "bully entity" is, Coin adopters will welcome it because of two major flaws currently in (Bit)Coin's design.

First, Coin is ridiculously easy to destroy by accident. If you lose the private cryptographic key that identifies your coin, it's gone. Not just stolen, but removed entirely from the economy, so nobody will ever own it again. Consider these stories on Bitcointalk.org, where within a few messages the cumulative total tops 10,000 BTC — currently valued around a million dollars. A central authority could address this in several ways such as tracking, restitution, etc.. People don't care that their cash is anonymous when the rent money disappears.

Second, the entire system is vulnerable to a brute-force attack. Without getting into the specifics, Coin (well, Bitcoin) works because it assumes that at least 50% of the computer power on the network is held by honest players. But a recent 51% attack on Feathercoin (a Coin with much lower capitalization) showed that it's possible for a single party (or syndicate) to trump that.

Let's do the math for Bitcoin, the Coin with by far the highest capitalization, at just north of USD$1 billion (1 x 10^9). To reliably overwhelm the network, you'd need computing power delivering about 100,000 gigahashes per second. Computers optimized for Bitcoin processing are currently available for about $1,000/gigahash, so sufficient computing power can be bought for $100 million. Electricity cost for the deed would be about $200,000/day.

O.K., it's not something a basement hacker could whip up. But there are over 400 people, and thousands of syndicates with a billion dollars in the U.S. alone. Perhaps at least one of them is crazy enough to drop 1% of the wealth to partially control (or completely destroy) a billion-dollar system. (Hell, one of them recently spent 1/10th of that price tag on his wedding.)

Those are only the two biggest technical concerns. Then there's the galaxy of financial services (such as insurance) that's available for fiat money, but which would be hard or impossible to provision for Coin without a central authority. Time could overcome these barriers; a bully entity would overcome them faster, and with greater public buy-in.

Bitcoin is not the end game.

Along those lines, I don't believe that Bitcoin will be the ultimate winner in this game. It's the 1.0, and a brilliant first effort at that. But it's not perfect, and several pretenders to the throne already claim to fix some of its bugs. In fact, shifting conditions may require periodic issuance of new Coin as a matter of course. (As I said before, I believe such issuances will involve a central authority.)

These predictions all assume that Coin will grow, and there are many reasons it might not. However, I'm bullish on it for the long-term. It's already proven its value in use; the public is used to handling Coin-like money (viz. Square Wallet); and its first major hurdles are in the past. Now it's ready to enter a fascinating future.



- - - - -
Tom Geller (tomgeller.com) writes about technology and business. He's best known for Drupal-related work that includes eight video courses for lynda.com, a book for Peachpit Press, and corporate work for Acquia, Commerce Guys, and others. He first became involved in computers as a grade-school student in 1976, playing "Hunt the Wumpus" on a 100-pound monster that spewed tractor-feed paper onto the floor. He lives in Oberlin, Ohio.

Loadmaster writes "The new Oddworld game New 'n' Tasty is coming to every platform in the current generation and even the next generation but not the Xbox One. It's not that developer Oddworld Inhabitants isn't porting the game. It's not that they hate Microsoft or the Xbox One. No, it's that Microsoft has taken an anti-indie dev stance with the Xbox One. While the game industry is moving to Kickstarter and self-funded shops, Microsoft has decided all developers must have a publisher to grace their console."

An anonymous reader writes "Simply put, the US government has failed in its role as the 'caretaker' of the internet. Although this was never an official designation, America controls much of the infrastructure, and many of the most popular services online are provided by a handful of American companies. The world is starting to sober up to the fact that much of what they've done online in the last decade is now cataloged in a top-secret facility somewhere in the United States. The goal has been to promote internet freedom around the world, but we may have also potentially created a blueprint for how authoritarian governments can store, track, and mine their citizens' digital lives."

coolnumbr12 writes "In a recent New York Times article called 'No TV? No Subscription? No Problem?' Jenna Wortham noted how she used, 'the information of a guy in New Jersey that I had once met in a Mexican restaurant.' Dave Their of Forbes admitted that he used his sister's boyfriend's father's account in exchange for his Netflix information. But this is stealing under the Computer Fraud and Abuse Act, which makes it a misdemeanor with a maximum one-year prison sentence to 'obtain without authorization information from a protected computer.' It is also a violation of the Digital Millennium Copy Act because it is knowingly circumventing a protection measure set up to prevent someone from watching content like 'Game of Thrones' without paying. Forbes points out that a crafty prosecutor could also claim that using an HBO Go password without paying is a form of identity theft."

puddingebola writes "This story from Forbes touches on Steve Ballmer's announcement that Microsoft will reorganize. From the article, 'Microsoft CEO Steve Ballmer appears to be planning a major reorganization. His apparent objective is to help the company move toward becoming a "devices and services company," as presented in the company's annual shareholder letter last October.' What follows is an analysis of the current state of Microsoft's current ventures: shrinking PC sales, Nokia management calling for a change of course, Office 360 lagging, a $1 Billion investment in Nook, the losses on Xbox. Once again, if Microsoft starts to lose the revenue of Windows and Office, how long does the boat float? And what of the suggestion, on the verge of another update in the Xbox console, that Microsoft should sell the Xbox division?"

An anonymous reader writes "As surveillance technologies have matured in both their sophistication and usage, some are starting to ask the question: is it time we start using them to watch the watchers? The proliferation of dashboard cameras has reduced liability costs, provided valuable evidence, and made police officers safer. The next progression would naturally be for the camera to move out of the car and onto the officer's uniform itself. In The Verge appears a fascinating report about the company behind the non-lethal stun guns that have become commonplace around the world, Taser International, which has set out to transform policing once again – this time, with Axon Flex, a head-mounted camera with a twelve-hour battery life that officers can use to record interactions. The device is constantly on, but it only captures video of the thirty seconds before its wearer begins using it, and then both video and audio while police are speaking to a citizen. Footage is then uploaded to a cloud-based service where it can be accessed by the police department. It includes an audit trail to reveal who has accessed the information and when."

Sparrowvsrevolution writes "At the upcoming Black Hat security conference in late July, three researchers at the Georgia Institute of Technology plan to show off a proof-of-concept charger that they say can be used to invisibly install malware on a device running the latest version of Apple's iOS. A description of their talk posted to the conference website describes how they were able to install whatever malware they wished on an Apple device within a minute of the user plugging it into their malicious charger, which they're calling 'Mactans' after the scientific name of a Black Widow spider. The malware-loaded USB plug is built around an open-source single-board computer known as a BeagleBoard, sold by Texas Instruments for a retail price of around $45. The researchers have contacted Apple about their exploit but haven't heard back from the company and aren't sharing more details of their hack until they do."

First time accepted submitter jahard writes "It's not clear yet whether the preliminary look will result in anything more. The FTC and the Justice Department don't investigate behemoths like Google on a lark, so there's at least a decent chance they'll find reason to look deeper. But according to several online ad sources, the evidence is mixed, and some–even at least one competitor–say Google is playing fair with its so-called 'stack' of ad technologies. Contacted for comment, Google provided only a terse statement: 'We have not heard anything from the FTC regarding any new antitrust investigation.'"

An anonymous reader writes "Within a few months of launching, Snapchat has made an enormous and lasting impact on the culture of communication on the Internet – and we should all be grateful. They have simplified a security process enough to the point that anybody can use it, while validating the market of the next generation of privacy-preserving ephemeral communication. Most importantly, we may finally get a break from the forced permanence of the Facebook and Google world, where everything you do and share is a data point to be monetized and re-sold to the highest bidder."

An anonymous reader writes "Despite warnings that a cyberattack could cripple the nation's power supply, a U.S. Congressional report (PDF) finds that power companies' efforts to protect the power grid are insufficient. Attacks are apparently commonplace, with one utility claiming they fight off some 10,000 attempted attacks every month. The report also found that while most power companies are complying with mandatory standards for protection, few do much else above and beyond that to protect the grid. 'For example, NERC has established both mandatory standards and voluntary measures to protect against the computer worm known as Stuxnet. Of those that responded, 91% of IOUs [Investor-Owned Utilities], 83% of municipally- or cooperatively-owned utilities, and 80% of federal entities that own major pieces of the bulk power system reported compliance with the Stuxnet mandatory standards. By contrast, of those that responded to a separate question regarding compliance with voluntary Stuxnet measures, only 21% of IOUs, 44% of municipally- or cooperatively-owned utilities, and 62.5% of federal entities reported compliance.'"

New submitter QuantumPion writes "The Environmental Protection Agency released draft guidelines last month that could significantly relax radiation hazard standards in the case of a radiological event in the United States by using risk-based decisions. The goal is to have limits that make sense in an emergency that are different from the limits in day-to-day life. From the article: 'Currently, the only guidance are the extremely strict standards that apply for EPA Superfund sites and nuclear plant decommissioning, which are as low as 0.010–0.025 rem/year, far below the natural background levels in the U.S. of 0.300 rem/year, and even well below the average amount of radioactive materials that Americans eat each year. And these guidelines aren’t really different from the 1992 PAG, except in the area of long-term cleanup standards and, perhaps, standards for resettlement. What’s the big deal here? As radworkers, we’re allowed to get 5 rem/year. 2 rem/year doesn’t rate a second thought. ... No one has ever been harmed by 5 rem/year, so setting emergency levels at 2 rem/year is pretty mild and more than reasonable. ... Think of it this way. The situations covered by these new guidelines are similar to someone dying of thirst who has the chance to drink fresh water having 2,000 pCi per gallon of radium in it. While the safe drinking water levels are 20 pCi/gal for Ra, 2,000 pCi/gal is of no threat, especially if you’re going to die from imminent dehydration. Of course, a bag of potato chips has 3,500 picocuries, so go figure.'"

Just a few weeks after Cody Wilson and friends successfully fired an instance of their own 3-D printed handgun design, Sparrowvsrevolution writes, "a couple of Wisconsin hobbyist gunsmiths have already managed to adapt Defense Distributed's so-called Liberator firearm and print it on a $1,725 Lulzbot 3D printer, a consumer grade machine that's far cheaper than the industrial quality Stratasys machine Defense Distributed used. They then proceeded to record their cheaper gun (dubbed the 'Lulz Liberator') firing nine .380 rounds without any signs of cracking or melting. Eight of the rounds were fired from a single plastic barrel. (Defense Distributed only fired one through its prototype.) In total, the Lulz Liberator's materials cost around $25 and were printed over just 48 hours."

mspohr writes with news that Apple might be in a bit of hot water over its policy of offshoring revenues to favorable tax jurisdictions. Only they take it a step further, from the article: "Apple relied on a 'complex web of offshore entities' and U.S. tax loopholes to avoid paying billions of dollars in U.S. taxes on $44 billion in offshore income over the past four years ... The maker of iPhones and iPads used at least three foreign subsidiaries that it claims are not 'tax resident in any nation' to help it avoid paying billions in 'otherwise taxable offshore income,' the Senate Permanent Subcommittee on Investigations said in a statement yesterday."

Mobile photo-sharing app SnapChat has one claim to fame, compared to other ways people might share photos from their cellphones: the photos, once viewed, disappear from view, after a pre-set length of time. However, it turns out they don't disappear as thoroughly as users might like. New submitter nefus writes with this excerpt from Forbes: "Richard Hickman of Decipher Forensics found that it's possible to pull Snapchat photos from Android phones simply by downloading data from the phone using forensics software and removing a '.NoMedia' file extension that was keeping the photos from being viewed on the device. He published his findings online and local TV station KSL has a video showing how it's done."

First time accepted submitter He Who Has No Name writes "While the ATF appears to have no open objection to 3D printed firearms at this time, the Department of Defense apparently does. A short while ago, '#DEFCAD has gone dark at the request of the Department of Defense Trade Controls. Take it up with the Secretary of State' appeared on the group's site, and download links for files hosted there began to give users popups warning of the DoD takeover." Well, that didn't take long. Note: As of this writing, the site is returning an error, rather than the message above, but founder Cody Wilson has posted a similar message to twitter. At least the Commander in Chief is in town to deliver the message personally. Update: 05/09 21:17 GMT by T : Tweet aside, that should be Department of State, rather than Department of Defense, as many readers have pointed out. (Thanks!)

Sparrowvsrevolution writes "The promise of a fully 3D-printable gun is that it can spread via the Internet and entirely circumvent gun control laws. Two days after that digital weapon's blueprint first appeared online, it seems to be fulfilling that promise. Files for the printable gun known as that 'Liberator' have been downloaded more than 100,000 times in two days, according to Defense Distributed, the group that created it. Those downloads were facilitated by Kim Dotcom's startup Mega, which Defense Distributed is using to host the Liberator's CAD files. And it's also been uploaded to the Pirate Bay, where it's one of the most popular files in the filesharing site's uncensorable 3D printing category."

On Friday, we mentioned that Defense Distributed had created a (near-enough-to) fully 3-D printed pistol. Sparrowvsrevolution now writes that "Last week, the Liberator was fired for the first time at a firing range and successfully shot a .380 caliber bullet using a remote firing setup. Over the weekend, Defense Distributed's founder, the anarchist and radical libertarian Cody Wilson, was bold enough to try firing it by hand. The results of that test, witnessed by a reporter, indicate that the era of the 3D-printed firearm may be upon us, for better or for worse." Predictably, certain politicians are — so to speak — up in arms about it.

SpicyBrownMustard writes "Forbes has an article that follows up on the news/hype/buzz/hysteria surrounding the acquisitions of Summly and Wavii by Yahoo and Google, respectively. It's a rather comical write up with a rather sad ring of truth to it, especially that we now know that Summly was little more than a collection of existing technologies built by others. The article says, 'Stress that you have celebrity relationships, and that your app was built by a team that has several hundred successful apps in Google Play and IOS App Store. It doesn’t matter that those aren’t your team members, it is still true.' Summarization technologies are the 'big new thing' apparently. Don't miss out — make your summarization app today and hop onboard that gravy train!"

Sparrowvsrevolution writes "Bitcoin's recent spike and then collapse in value has convinced many that it's too unstable to use as a practical currency. But not the founder of Silk Road, the black market drug site that exclusively accepts Bitcoin in exchange for heroin, cocaine and practically every other drug imaginable. Silk Road's creator, who calls himself the Dread Pirate Roberts, broke his usual media silence to issue a short statement that Silk Road will survive Bitcoin's bubble and bust. The market's prices are generally pegged to the dollar, with prices in Bitcoin fluctuating to account for movements in the exchange rate. And Roberts explained that vendors on the site have the option to also hedge the Bitcoins that buyers place in escrow for their products, so that they can't lose money due to Bitcoin's volatility while the drugs are in the mail. As a result, only about 1,000 of the site's more than 11,000 product listings were taken down during the recent crash."

David Coursey has spent a lot of his life as a journalist, specializing in IT coverage for most of it. He's written for ZDNet and eWeek, Forbes, and other well-known publications, and has had his stories linked from Slashdot more than a few times over the years. What he is not as well known for is his expertise as an EMT, a field he has been in as both a volunteer and professional since the rocks in California (where he lives) were still soft enough that the Flintstones used them as pillows. He and I were chatting on Facebook yesterday, and I realized that David's views on media coverage of the recent Boston Marathon bombings might be worth sharing. Do you think what he's saying is valid? Do you agree or disagree with him? Or some of each?

MouseTheLuckyDog writes "A brief editorial by Steve Forbes, one of our moneymeisters, on why bitcoins are not money.. Hint: For those who are too lazy to read the opinion,. Bitcoins are too volatile to be money." From the article: "Money is most optimal when it is fixed in value just as commerce is facilitated when we have fixed weights and measures. When you buy a pound of hamburger you expect to get 16 ounces of meat. An hour has 60 minutes. A mile has 5280 feet. These measurements don’t 'float.' So too money best lubricates commerce when it has a fixed value."

An anonymous reader writes in with bad news for Apple. "It would appear that Apple has lost an attempt to trademark the 'iPad Mini.' This time it's not nefarious foreigners subverting the just order of things simply by trademarking something several years before Apple did. No, that was what happened in Brazil with the IFone. Nor is it people nefariously selling the rights to everywhere but China but Apple's lawyers didn’t notice, as happened with iPad in China. No, this time it's the U.S. Patents and Trademarks Office saying that Apple simply cannot have a trademark on 'iPad Mini.' For the simple reason that the law doesn't allow them to trademark something which is just a description of the product."

An anonymous reader sends this quote from Forbes: "... it is an almost certainty that within the next few years, three biometric options will become standard features in every new phone: a fingerprint scanner built into the screen, facial recognition powered by high-definition cameras, and voice recognition based off a large collection of your vocal samples. ... We store an enormous amount of our most intimate and personal information on cell phones. Businesses today are already struggling with policies regarding bringing devices from home, and it’s only going to get more difficult. A study by Symantec highlighted the depth of the problem – around the world, all different types of companies consider enterprise mobile device security to be one of their largest challenges. ... Ever since Apple purchased Authentec Inc in July of last year, there has been an endless stream of news stories obsessing over whether Apple will include a fingerprint scanner in their next release. In reality, Apple is one among many players, and whether they include a biometric sensor in the 5S or wait till the 6 is largely irrelevant, the entire mobile industry has been headed this way for years now. ... There are separate questions as to whether these technologies are ready for such a wide-scale deployment."

An anonymous reader writes "Last week, in a blow to the content industry, the Ninth Circuit granted Veoh a pyrrhic victory against Universal Music Group and clarified the scope of the Digital Millennium Copyright Act's safe harbor provisions for online service providers. By adopting a position taken by the Second Circuit in Viacom v. YouTube, the decision harmonized the law in two intellectually influential jurisdictions and set the standard in New York and California, national hubs for content creation and technological innovation. Going forward, tech startups will have more room to innovate while facing decreased risk of crippling financial liability. An article by two IP lawyers published today in TechCrunch simplifies and explains the scope of safe harbor protection in light of these rulings.

skade88 writes "If you are one of the lucky 125,000 people who live in Olathe, Kansas, the rest of us congratulate you on your new amazing $70.00/month, 1 GB Google fiber service. Google also announced they will be letting us know about further cities that will be wired up with Google Fiber service soon. This shows that Google Fiber is not just a sandbox they are going to keep in Kansas City, Google Fiber is a real business they will keep expanding. In other exciting news, the FCC wants to see at least one community in each state with 1 Gigabit home service by 2015."

Sparrowvsrevolution writes "Apple has released a new update for iOS that prevents the jailbreak evasi0n released last month. But that hacking tool has already become the most popular jailbreak ever: It's been used to remove the software restrictions on 18.2 million devices in the 43 days between its release and the patch, according to data from Cydia, the app store for jailbroken devices. In its announcement of the update, Apple says it has fixed six bugs and was polite enough to credit the hackers behind evasi0n with finding four of them. At least one of the bugs used by evasi0n remains unpatched, according to David Wang, one of evasi0n's creators. And Wang says that he and his fellow hackers still have bugs in reserve for a new jailbreak, although they plan to keep them secret until the next major release."

Sparrowvsrevolution writes "At the Fast Software Encryption conference in Singapore earlier this week, University of Illinois at Chicago Professor Dan Bernstein presented a method for breaking TLS and SSL web encryption when it's combined with the popular stream cipher RC4 invented by Ron Rivest in 1987. Bernstein demonstrated that when the same message is encrypted enough times--about a billion--comparing the ciphertext can allow the message to be deciphered. While that sounds impractical, Bernstein argued it can be achieved with a compromised website, a malicious ad or a hijacked router." RC4 may be long in the tooth, but it remains very widely used.

Sparrowvsrevolution writes that at this year's SXSW, Defense Distributed founder Code Wilson has announced a for-profit spinoff of his gun-printing project, from which people will be able to search for and download gun-related CAD files. "Though the search engine will index all types of files, Wilson says he hopes the group's reputation for hosting politically incendiary content will mean users trust that it won't censor search results. 'When we say you should have access to these files, people believe we mean that,' says Wilson. 'No takedowns. No removals. We'd fight everything to the full extent of the law.' Along with the SXSW announcement, Wilson also released a provocative video where he lays out the plan for Defcad.com and criticizes gun control advocates and 'collusive' 3D printing companies like Makerbot."

sl4shd0rk writes "Hot on the heels of last year's Apple win over Samsung, Apple is geared up for its second attempt at knocking Samsung's alleged copy-cat products off the store shelves. District Judge Lucy Koh asked both parties if they could stay the new case while the first one goes up on Appeal. Apple denied citing a delay would "seriously and irreparably prejudice Apple." The company "will likely suffer a long-term loss of market share and of downstream sales". Samsung replied with a statement saying "Apple will be unable to meet its burden of proving infringement without resorting to the same improper 'representative product' strategy," [that shouldn't have been allowed in the first case.] Although some may think this is a good move for business on Apple's part, some claim the litigation is responsible for Apple's dipping sales and stock prices as well as Increased visibility of Samsung. In the end however, all this litigation is most likely going to be shouldered on the pocketbook of the consumer'"

An anonymous reader writes with a link to a story at Forbes about what's said to the first Bitcoin hedge fund; the article goes into some of the details of how the (literally) valuable data is kept. A selection: "The private key itself is AES-256 encrypted. After exporting Bitcoin private keys from wallet.dat file, data is stored in a TrueCrypt container on three separate flash drives. Using Shamir's Secret Sharing algorithm, the container password is then split into three parts utilizing a 2-of-3 secret sharing model. Incorporating physical security with electronic security, each flash drive from various manufacturers is duplicated several times and, together with a CD-ROM, those items are vaulted in a bank safety deposit box in three different legal jurisdictions. To leverage geographic distribution as well, each bank stores only part of a key, so if a single deposit box is compromised, no funds are lost."

gurps_npc writes "Recently there was a poorly designed study that claimed computers don't help teaching. Here with the opposing viewpoint is Sugata Mitra in his recent TED talk. He went to a tiny village in India and put a computer there with software about DNA replication (in English, even though they did not speak or read English). When he came back months later, a group of young children said, 'We don't understand anything — except that mistakes in DNA replication cause diseases.' At heart, his argument is that the old style of teaching derives from Victorian England's need for bureaucrats, so it creates minimally competent people that know how to read, write, and do math in their head. He wants to update our teaching methods with more creative and technological solutions." One of Mitra's main points is that given resources and a question to ponder, children will learn on their own. Interference and too much direction gets in the way of that. Mitra won the $1M TED prize this year for his work. He said in an interview, "We spent 7000 years debating this issue of how do we educate everybody. We have never lived in a world where one standard educated everyone. And given that we have failed for over 7000 years, perhaps we will never have one standard. Maybe the right conclusion is that we do away with standard education. Maybe the convergence of technology and curiosity will solve this problem."

concealment writes "Many of us have had the experience of going to Amazon to buy one thing but checking out with a huge shopping cart of items that we didn't initially seek—or even know were available. Amazon's merchandising often benefits Amazon's customers, but trademark owners who lose sales to their competition due to it aren't as thrilled. Fortunately for Amazon, a California federal court recently upheld Amazon's merchandising practices in its internal search results."