Cyber Saturday—Big Tech’s Cryptocurrency Conspiracy
April 7, 2018, 4:52 PM UTC
Good afternoon, Cyber Saturday readers.
On this week’s episode of Balancing The Ledger, Fortune’s new show covering the future of finance, my colleague Jen Wieczner and I chatted with David Pakman, a partner at the venture capital firm Venrock, about the hardline approach tech giants are taking against the nascent cryptocurrency industry.
To wit: Facebook, Alphabet’s Google, and Twitter have all blacklisted cryptocurrency-promoting advertisements on their platforms this year. Google said Monday it would forbid extensions that “mine” cryptocurrency from its Chrome Web Store. And MailChimp, a purveyor of email newsletters, put the kibosh on dispatches that self-interestedly hawk virtual moneys. (If you’re seeking a responsible replacement, I might recommend our upcoming Ledger newsletter; sign up here.)
Presumably, the Internet behemoths—who have been facing increased scrutiny from the public and regulators in recent months—are reacting harshly to appease a growing chorus of critics. An apologist might say that these companies are simply trying to protect consumers from scams. (The field abounds with swindlers, yes.) But could there be an ulterior motive behind Big Tech’s blanket bans?
“It’s just a little bit too convenient for my taste to see a platform ban an entire ecosystem, or an entire market segment, just because they don’t want to spend the time figuring out who the bad actors are,” Pakman told me.
“We’re talking about highly centralized platforms who, in theory, have the most to lose from the advent of decentralized technologies and platforms,” Pakman said. “It kind of underlines the point of why alternative structures for platforms are needed, because on a whim a single platform can ban an entire market.”
Conspiratorial as it may sound, Pakman has a point. Whether Big Tech is conscious of the biases it possesses or not, there’s no denying the incumbents have an interest in smothering a would-be usurper in its crib. Cryptocurrencies, which proponents expect one day could decentralize Internet services, like social networking, search, and more, pose a legitimate, if early, threat to today’s tech business models.
“The space should be cleaned up, but sometimes we lose sight of the fact that there’s incredible innovation happening,” Pakman said. “We hope they don’t throw the baby out with the bath water.”
We hope so too. Have a great weekend; I’ll be sipping the last dregs of the ski season on a mountain in Vermont.
Robert Hackett
@rhhackett
robert.hackett@fortune.com
Welcome to the Cyber Saturday edition of Data Sheet, Fortune’s daily tech newsletter. Fortune reporter Robert Hackett here. You may reach Robert Hackett via Twitter, Cryptocat, Jabber (see OTR fingerprint on my about.me), PGP encrypted email (see public key on my Keybase.io), Wickr, Signal, or however you (securely) prefer. Feedback welcome.
THREATS
Hang in there, Zuck. Facebook continues to have a terrible news cycle. The company revealed that as many as 87 million people—30 million more people than were originally estimated—may have had their personal data misappropriated by the voter profiling firm Cambridge Analytica and used for political influence. The company failed to properly delete videos people thought they have removed from its namesake social network, and yet its executives managed to delete their own email messages from other people's inboxes. The Messenger app apparently scans links and photos sent via text. People's profiles were easily scrape-able. Honestly, there are too many Facebook controversies to count—but investors seem ready to start forgiving the company.
Tragedy in San Bruno. A shooter opened fire on YouTube employees at the company's headquarters on Tuesday. The suspect, Nasim Najafi Aghdam, wounded three people before killing herself. Companies are now questioning whether they run tight enough security around their campuses.
Shoplifting. Hackers hit Saks Fifth Avenue and Lord & Taylor and made off with financial information for more than 5 million customers. Hudson Bay Company, which owns both retail chains, said it would notify the victims. Data thieves also struck Sears and Delta Airlines by breaching a mutual contractor, a customer services operation called [24]7.ai. Sears said the theft affected "less than 100,000" people, while Delta said merely that the breach affected "small subset" of customers.
Just dial 1.1.1.1. Cloudflare, an Internet performance and security booster, released a consumer Domain Name Service product on April Fool's Day last weekend. The purpose is to provide faster and more private Internet connections to ordinary Internet users. The company says it is the fastest such service around.
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ACCESS GRANTED
What not to do. Panera Bread totally fumbled its response to a vulnerability report and data leak disclosure this week. The restaurant failed to adhere to best practices, such as maintaining a contact page for security researchers and responding to tips in a timely manner. I conducted a post-mortem on the affair, the introduction of which I've excerpted below.
Panera Bread messed up big time.
Even without getting into the technical failures that caused the restaurant giant to leak personal information for what appears to be millions of customers, the company’s handling of the bug reporting and breach disclosure processes alone proved abominable. They represent a masterclass in how not to behave when confronted with a cybersecurity predicament.
It’s worth reviewing what the company got wrong so that other organizations can learn from its mistakes. Fortune has pulled together five lessons that companies can take away from the data-exposing debacle, which left Panera customers’ names, email and street addresses, birthdays, and the last four digits of their payment cards out in the open for months...
FORTUNE RECON
Twitter Has Suspended 1.2 Million Terrorist Accounts Since 2015, by Don Reisinger
Bitcoin Price Jumps on News That Hack-Victim Exchange Coincheck May Be Rescued, by David Meyer
Facebook Announced Two Policies to Fight Election Meddling, by Jamie Ducharme
How 3 Army Vets Allegedly Became International Hitmen, by Aric Jenkins
Facebook Decides Now's Not a Great Time to Start Harvesting Patients' Medical Data, by David Meyer
JPMorgan's Blockchain Chief Is Setting Out on Her Own, by Robert Hackett
Twitter to Test a New Strategy to Stop Proliferation of Nastiness, by Jonathan Vanian
ONE MORE THING
Off with her head! Ever wonder about the history of the guillotine? The origin story of that macabre death machine is fascinatingly told by The Paris Review. The literary magazine details the evolution of execution from the medieval to the modern, and how "the slow, somber process of old was replaced by swift clinical brutality." It's heady stuff.
