Tuesday, March 19, 2024

More On Pig Butchering

Thankfully, pig butchering scams are getting attention. Three weeks after I posted Tracing The Pig Butchers, John M. Griffin and Kevin Mei posted How Do Crypto Flows Finance Slavery? The Economics of Pig Butchering:
Through blockchain addresses used by ‘‘pig butchering’’ victims, we trace crypto flows and uncover methods commonly used by scammers to obfuscate their activities, including multiple transactions, swapping between cryptocurrencies through DeFi smart contracts, and bridging across blockchains. The perpetrators interact freely with major crypto exchanges, sending over 104,000 small potential inducement payments to build trust with victims. Funds exit the crypto network in large quantities, mostly in Tether, through less transparent but large exchanges—Binance, Huobi, and OKX. These criminal enterprises pay approximately 87 basis points in transaction fees and appear to have recently moved at least $75.3 billion into suspicious exchange deposit accounts, including $15.2 billion from exchanges commonly used by U.S. investors. Our findings highlight how the ‘‘reputable’’ crypto industry provides the common gateways and exit points for massive amounts of criminal capital flows. We hope these findings will help shed light on and ultimately stop these heinous crimes.
Griffin & Wei Fig. 9
Their Figure 9 shows the flow of funds over time into the scammer's wallets at exchanges. This is how they estimated the $75.3B; their extremely conservative estimate is $35.1B, and their liberal estimate is $237.6B. Note the huge ~$45B increase from January 2021 to January 2023, partly driven by the cryptocurrency boom, and the slowing until January 2024. Presumably the ETF pump will accelerate the rate.

Below the fold, some commentary on this and other recent developments.

Tuesday, March 12, 2024

Petabit Optical Media?

Sabine Hossenfelder does the good Dr. Pangloss proud in her report on A 3D nanoscale optical disk memory with petabit capacity by Miao Zhao et al. Their abstract claims that:
we increase the capacity of [optical data storage] to the petabit level by extending the planar recording architecture to three dimensions with hundreds of layers, meanwhile breaking the optical diffraction limit barrier of the recorded spots. We develop an optical recording medium based on a photoresist film doped with aggregation-induced emission dye, which can be optically stimulated by femtosecond laser beams. This film is highly transparent and uniform, and the aggregation-induced emission phenomenon provides the storage mechanism. It can also be inhibited by another deactivating beam, resulting in a recording spot with a super-resolution scale. This technology makes it possible to achieve exabit-level storage by stacking nanoscale disks into arrays, which is essential in big data centres with limited space.
Below the fold I discuss this technology.

Tuesday, March 5, 2024

Microsoft's Archival Storage Research

2016 Media Shipments

Exabytes Revenue $/GB
Hard Disk693$26.8B$0.039
LTO Tape40$0.65B$0.016
Six years ago I wrote Archival Media: Not a Good Business and included this table. The argument went as follows:
  • The value that can be extracted from data decays rapidly with time.
  • Thus companies would rather invest in current than archival data.
  • Thus archival media and systems are a niche market.
  • Thus archival media and systems lack the manufacturing volume to drive down prices.
  • Thus although quasi-immortal media have low opex (running cost), they have high capex (purchase cost).
  • Especially now interest rates are non-zero, the high capex makes the net present value of their lifetime cost high.
  • Archival media compete with legacy generic media, which have mass-market volumes and have already amortized their R&D, so have low capex but higher opex through their shorter service lives.
  • Because they have much higher volumes and thus much more R&D, generic media have much higher Kryder rates, meaning that although they need to be replaced over time, each new unit at approximately equal cost replaces several old units, reducing opex.
  • Especially now interest rates are non-zero, the net present value of the lower capex but higher opex is likely very competitive.
Below the fold I look into why, despite this, Microsoft has been pouring money into archival system R&D for about a decade.