RISKS-LIST: Risks-Forum Digest Friday 2 December 2022 Volume 33 : Issue 55

ACM FORUM ON RISKS TO THE PUBLIC IN COMPUTERS AND RELATED SYSTEMS (comp.risks)
Peter G. Neumann, founder and still moderator

***** See last item for further information, disclaimers, caveats, etc. *****
This issue is archived at <http://www.risks.org> as
<http://catless.ncl.ac.uk/Risks/33.55>
The current issue can also be found at
<http://www.csl.sri.com/users/risko/risks.txt>

Contents:
Blockchains, What Are They Good For? (Paul Krugman)
Idle Crypto is the Devil's Workshop (Connel Fullenkamp)
El Salvador's Chivo Wallet: a slapstick saga of software disaster:
Attack of the 50-Foot Blockchain (David Gerard)
San Francisco Considers Allowing Use of Deadly Robots by Police (NYTimes)
Going great in Texas: Entire City of Houston placed under boil-water notice
after system outage (ABC23)
Smart inverters' vulnerability to cyberattacks needs to be identified and
countered, according to researchers (techxplore.com)
We Need to Change the System That Keeps Pilots from Seeking Mental Health
Care (Scientific American)
Gig workers in India are uniting to take back control from algorithms
(Rest of World)
Eufy Cameras Have Been Uploading Unencrypted Footage to Cloud Without Owners
Knowing (Gizmodo)
Scientists are using facial recognition software to track and protect seals
(Mathew Kruk)
Alexa, is the voice-assistant industry doomed? (CBC)
Golf Robot Putts Like a Pro (Edd Gent)
Programming Tool Turns Handwriting into Computer Code (Louis DiPietro)
Network-Crashing Leap Seconds to Be Abandoned by 2035, for at Least a
Century (Ars Technica)
Re: The World Generates So Much Data, New Unit Measurements Were Created to
Keep Up (Amos Shapir)
Re: Elon, Twitter, China, and human lives -- and more (Lauren Weinstein)
Abridged info on RISKS (comp.risks)

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Date: December 3, 2022 2:26:05 JST
From: Dewayne Hendricks <dewayne@warpspeed.com>
Subject: Blockchains, What Are They Good For? (Paul Krugman)

Paul Krugman, *The New York Times*, 2 Dec 2022 National Edition Opinion,
and online 1 Dec 2022
https://www.nytimes.com/2022/12/01/opinion/blockchains-what-are-they-good-for.html

[IMPORTANT NOTE: I have almost always eschewed including entire pay-walled
articles in RISKS, resorting to *fair- use* principles. I have been
subscribed to the hardcopy delivery of *The NYTimes* for more years than I
can count, going back to 1940 when I first started reading it daily. I
respect the need to keep careful newsources in business, despite some of
you who occasionally complain about my including paywalled URLs in RISKS.
Also, remember that the *Times* mantra is very distant from ``All the news
that fits we print'' nor ``Truth is our least important concern.''
HOWEVER, I think Paul (and *The NYTimes*) would not mind getting more
recognition for this piece, which beautifully articulates many of the
views previously in RISKS on blockchains and cybercurrencies that really
need wider attention. (It might be worth for home-delivery nonsubscribers
to spend $1 a month for Internet access, or whatever the going rate is.)
END OF RANT. PGN]

A year ago Bitcoin and other cryptocurrencies were selling at record prices,
with a combined market value of around $3 trillion; glossy ads featuring
celebrities -- most infamously Matt Damon's ``Fortune Favors the Brave''
-- filled the airwaves. Politicians, including, alas, the mayor of New York,
raced to align themselves with what seemed to be the coming thing. Skeptics
like yours truly were told that we just didn't get it.

Since then the prices of crypto assets have plunged, while a growing number
of crypto institutions have collapsed amid allegations of scandal. The
implosion of FTX, which appears to have used depositors' money in an attempt
to prop up a related trading firm, has made the most headlines, but it's
only one entry on a growing list.

We are, many people say, going through a ``crypto winter.'' But that may
understate the case. This is looking more and more like Fimbulwinter, the
endless winter that, in Norse mythology, precedes the end of the world -- in
this case the crypto world, not just cryptocurrencies but the whole idea of
organizing economic life around the famous ``blockchain.''

And the real question, it seems to me, is why so many people -- not just
na=C3=AFve small investors, but also major financial and business players --
bought into the belief that this bad idea was the wave of the future.

A blockchain is a digital ledger associated with an asset, recording the
history of transactions in that asset -- who bought it from whom and so
on. The asset could be a digital token like a Bitcoin, but it could also be
a stock or even a physical thing like a shipping container. Ledgers, of
course, are nothing new. What's distinctive about blockchains is that the
ledgers are supposed to be decentralized: They aren't sitting on the
computers of a single bank or other company; they're in the public domain,
sustained by protocols that induce many people to maintain records on many
servers.

These protocols are, everyone tells me, extremely clever. I'll take their
word for it. The question I've never heard or seen satisfactorily answered,
however, is, ``What's the point?'' Why go to the trouble and expense of
maintaining a ledger in many places, and basically carrying that ledger
around every time a transaction takes place?

The original rationale for Bitcoin was that it would do away with the need
for trust -- you wouldn't have to worry about banks making off with your
money, or governments inflating away its value. In reality, however, banks
rarely steal their customers' assets, while crypto institutions more easily
succumb to the temptation, and extreme inflation that destroys money's value
generally happens only amid political chaos.

Still, there was an alternative, more modest justification for using
blockchain technology, if not necessarily for cryptocurrencies: It was
supposed to offer a lower-cost, more secure way to keep track of
transactions and stuff in general.

But that dream appears to be dying, too.

Amid all the sound and fury over FTX, I'm not sure how many people have
noticed that the few institutions that seriously tried to make use of
blockchains seem to be giving up.

Five years ago, it was supposed to be a big deal -- a sign of mainstream
acceptance -- when Australia's stock exchange announced that it was planning
to use a blockchain platform to clear and settle trades. Two weeks ago, it
quietly canceled the plan, writing off $168 million in losses.

Maersk, the shipping giant, has also announced that it is winding down its
efforts to use a blockchain to manage supply chains.

A recent blog by Tim Bray, who used to work for Amazon Web Services, tells
us why Amazon chose not to implement a blockchain of its own: It couldn't
get a straight answer to the question, ``What useful thing does it do?''

So how did this enterprise, which never stood up to scrutiny, become such a
big deal?

It was probably a combination of factors. Political ideology played a role:
Not all crypto enthusiasts were right wingers, but distrust of banks -- we
all know who runs them -- and government-managed money provided a hard core
of support.

The romance of high tech also played a role, with the very
incomprehensibility of crypto discourse acting, for a while, as a selling
point. And then, as prices soared, fear of missing out -- plus large
outlays on marketing and political influence-buying -- brought many others
into the bubble.

It's an amazing story, and also a tragedy. It's not just the small investors
who have lost much if not all of their life savings. The crypto bubble has
had huge costs to society as a whole. Bitcoin mining alone uses as much
energy as many countries; I've been trying to estimate the value of the
resources consumed in producing fundamentally worthless tokens, and it's
probably in the tens of billions of dollars, not counting the environmental
damage.

[Amusingly, Dewayne left out the last two paras, which I have added. PGN]

Add in the costs associated with other tokens and the resources burned up in
abortive efforts to supply a blockchain approach to everything, and we're
probably talking about waste on an epic scale.

No doubt I'll hear from many people still insisting that I don't get it.
But it really looks as if there never was an *it* to get.

------------------------------

Date: Mon, 28 Nov 2022 19:38:09 PST
From: Peter Neumann <neumann@csl.sri.com>
Subject: Idle Crypto is the Devil's Workshop (Connel Fullenkamp)

Connel Fullenkamp (Duke prof.), *The New York Times*, 28 Nov 2022

Sam Bankman-Fried's downfall is spectacular, but it's really nothing new.

FTX's collapse had very little to do with either the characteristics of
cryptocurrency in general or the specific features of the coins that FTX
minted and distributed. FTX failed because the people who ran the company
didn't follow some basic rules of finance that can be difficult to enforce
even in well-regulated markets.