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Data Sheet—Saturday, July 16, 2016

July 16, 2016, 4:21 PM UTC

Back at sea level, I’ve finally kicked the dizzying, dehydrating bout of altitude sickness that took hold in Aspen, where Fortune held its annual Brainstorm Tech conference this week. (Maybe it was just the excitement?) For those not in attendance, here’s a quick recap of the roundtables I had the pleasure of moderating.

The first, on the so-called blockchain, drew a crowd interested in the newfangled technology that powers cryptocurrencies like Bitcoin. Some highlights: Brian Armstrong, CEO of Coinbase, talked up an alternate system of cryptocurrency, Ethereum, that can execute “smart” contracts. Jim Breyer, founder of Breyer Capital, said he had met as many as seven people claiming to know the true identity of Satoshi Nakamoto, the famously illusive, pseudonymous creator of Bitcoin (none checked out). And Justin Newton, CEO of Netki, proposed putting Pokémon on the blockchain. (Consider this a petition, Nintendo.)

At one point, I called on Peggy Johnson, head of global business development at Microsoft, who wasn’t an officially listed participant, to expound on why she had a day prior, during a main stage panel, cited the blockchain as having vast disruptive potential. A good sport, she mentioned the possibility of overhauling industries besides finance, such as healthcare. Adam Ludwin at Chain, meanwhile, fired back that he believes the word “blockchain” is being abused. Unless there’s a transferable financial asset involved, he argued, then it’s just database management featuring cryptographic signatures. Innovations with respect to electronic medical records, in his view, don’t qualify.

The second panel, on cybersecurity, touched on the latest digital attack trends and defense tactics. One attendee told the group she had once been personally hacked to tune of six figures. Thankfully, she said, Chase, her bank, had been able to return the cash. Steve Herrod, a general partner at the venture capital firm General Catalyst, shared a similarly nightmarish experience. When he served as the chief tech officer of VMware, hackers infiltrated and stole the company’s source code. Eventually, they published it online, line by line.

The breakfast session also featured Elena Kvochko, head of security strategy at Barclays, Paul Judge, CEO of Luma and chairman of Pindrop Security, and Michelle Zatlyn, chief operating officer at CloudFlare. Others made an appearance, too: Glenn Chisholm, chief tech officer at antivirus firm Cylance, Emmanuel Schlait, CEO of password manager Dashlane, and Nico Sell, founder of the Wickr Foundation. A big thank you to all who came and contributed.

Not hours after descending from the mountains, developments abroad brought me back down to earth. A horrific massacre in Nice, France. Later, an attempted military coup in Turkey. Reminders both of geopolitical instability and international unrest. As always, stay safe, dear readers.

More news below.

Robert Hackett


Welcome to the Cyber Saturday edition of Data Sheet, Fortune’s daily tech newsletter. Fortune reporter Robert Hackett here. You may reach me via Twitter, Cryptocat, Jabber (see OTR fingerprint on my, PGP encrypted email (see public key on my, Wickr, Signal, or however you (securely) prefer. Feedback welcome.


End of a coup. Parts of the Turkish military forcibly attempted to takeover the country, shutting off access to social media sites such as Facebook, YouTube, and Twitter. President Erdoğan, meanwhile, delivered a message to the people via Apple's FaceTime. The coup ended with the president remaining in power. (Fortune, Fortune)

What's stored in Ireland stays in Ireland. The tech giant won a highly scrutinized case that has broad implications for international data privacy. The Department of Justice sought to force Microsoft to hand over customer emails stored on a computer server in Ireland. Microsoft stood its ground and won: the department will have to request access through diplomatic channels first. (Fortune)

FDIC: Breach? What breach? Hackers infiltrated the Federal Deposit Insurance Corporation, a big United States banking regulator, in 2010, 2011, and 2013, according to a Congressional report. The organization apparently covered up the breaches, which some experts have blamed on Beijing. (Fortune)

Pokémon "No." A security researcher raised a decidedly false alarm about the massively popular Pokémon Go game requesting "full access" to people's Google accounts—emails, photos, and all. Niantic, the company behind the game, later clarified that it only accessed basic profile info, such as name and email address. (Fortune, Fortune)

Value of hacked company. Many top execs struggle to grasp the importance of information security to their firms. Independent cybersecurity journalist Brian Krebs dispels some myths and provides a few tips for IT security pros tasked with protecting their organizations. (Krebs on Security)

Going the way of the DAO. An unidentified hacker stole $53 million in the cryptocurrency Ether from a leaderless investment group called the Decentralized Autonomous Organization. Now teams of coders are scrambling to rectify the situation, reclaim the funds, and patch the flaws before its too late. (Motherboard)

By the way, an ex-Google engineer who designed Android speech recognition software is working on a blockchain-based operating system for banks.

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Fortune's Clifton Leaf reports on a Brainstorm Tech session about nuclear terrorism and weapons smuggling.

Here are three plot-lines for a Hollywood thriller:

1. Yuri (Benicio del Toro), a down-on-his-luck Moldovan nuclear engineer tries to sell two grams of enriched uranium on the black market. Yuri is caught by Anya (Scarlett Johansson), a Hungarian-born Interpol agent pretending to be a buyer for ISIS. They fall in love—but she still puts him away.

2. Maurice (Gérard Depardieu), a plump, nearly retired security guard at a nuclear facility, successfully smuggles spent fuel rods out of a reactor in Chinon, France. He is caught only after he confesses his crime to his village priest.

3. Bailey (Jack Black) and three Vancouver buddies try to steal a truck hauling used nuclear fuel from a Canadian reactor. Hijinks ensues—before they are nabbed by a determined Canadian Mountie (Dwayne Johnson).

As canned as these scenarios—all fictional, I should add—may seem, they are preposterously, ludicrously, and frighteningly closer to reality than almost anyone would realize.
arguments. Read the rest on


Ashley Madison Confirms it Used Chatbots to Lure Cheaters by David Z. Morris

Privacy Shield Data Transfer Pact Is In Effect by Reuters

Analysts Would Like To See Intel Dump Cyber Security Business by Aaron Pressman

Wildly Popular Pokemon Go Leads to Robberies, Injuries, and a Body by Reuters

SWIFT Global Bank Messaging System Gets Help Against Hackers by Reuters

Hackers Are Spreading Malware Through Pokémon GO by David Z. Morris


Fiat Chrysler launched a bug bounty program. The carmaker has invited white hat hackers to test the security of its vehicle software with help from the bug bounty startup Bugcrowd. The payouts aren't very big: $1,500 max per reported flaw. Last year the auto-manufacturer issued software updates to its customers via mailed USB drives after hackers remotely hijacked one of its Jeep Grand Cherokees. (Fortune)