A Modest Proposal About Ransomware

On the evening of July 2^nd the REvil ransomware gang exploited a 0-day vulnerability to launch a supply chain attack on customers of Kaseya's Virtual System Administrator (VSA) product. The timing was perfect, with most system administrators off for the July 4^th long weekend. By the 6^th Alex Marquardt reported that Kaseya says up to 1,500 businesses compromised in massive ransomware attack. REvil, which had previously extorted $11M from meat giant JBS, announced that for the low, low price of only $70M they would provide everyone with a decryptor.

The US government's pathetic response is to tell the intelligence agencies to investigate and to beg Putin to crack down on the ransomware gangs. Good luck with that! It isn't his problem, because the gangs write their software to avoid encrypting systems that have default languages from the former USSR.

I've writtten before (here, here, here) about the importance of disrupting the cryptocurrency payment channel that enables ransomware, but it looks like the ransomware crisis has to get a great deal worse before effective action is taken. Below the fold I lay out a modest proposal that could motivate actions that would greatly reduce the risk.

Intel Did A Boeing

Two years ago, Wolf Richter noted that Boeing's failure to invest in a successor airframe was a major cause of the 737 Max debacle:

From 2013 through Q1 2019, Boeing has blown a mind-boggling $43 billion on share buybacks

I added up the opportunity costs:

Suppose instead of buying back stock, Boeing had invested in its future. Even assuming an entirely new replacement for the 737 series was as expensive as the 787 (the first of a new airframe technology), they could have delivered the first 737 replacement ($32B), and be almost 70% through developing another entirely new airframe ($11B/$16B). But executive bonuses and stock options mattered more than the future of the company's cash cow product.

Below the fold I look at how Intel made the same mistake as Boeing, and early signs that they have figured out what went wrong.

Graphing China's Cryptocurrency Crackdown

Below the fold an update to last Thursday's China's Cryptocurrency Crackdown with more recent graphs.

Taleb On Cryptocurrency Economics

Nassim Nicholas Taleb has a draft paper entitled Bitcoin, Currencies and Bubbles that applies quantitative finance and economic arguments to cryptocurrencies. It is definitely worth reading. Spoiler, he's not an enthusiast! Below the fold, some commentary on it.

China's Cryptocurrency Crackdown

BTC "price"

Cryptocurrency mining in Sichuan, especially in the rainy season, is hydro-powered, so miners thought they'd be spared the Chinese government's crackdown, for example in Qinghai, Xinjiang and Yunnan. But they were rapidly disabused of this idea, as Matt Novak reports in Bitcoin Plunges as China's Sichuan Province Pulls Plug on Crypto Mining:

BTC miners' revenue

Bitcoin continued its dramatic plunge to $32,281 Monday morning, down 17.65% from a week earlier as some of China’s largest bitcoin mining farms were shut down over the weekend. The bitcoin mining facilities of Sichuan Province received an order on Friday to stop doing business by Sunday, according to Chinese state media outlet the Global Times.

The Sichuan Provincial Development and Reform Commission and the Sichuan Energy Bureau issued an order to all electricity companies in the region on Friday to stop supplying electricity to any known crypto mining organizations, including 26 firms that had already been publicly identified,

BTC Hash Rate

As the "price" chart shows, the crackdown is having an impact. The result of this is that miners' revenue has taken a hit. The result of this is to squeeze uneconomic mining out of the mining pools, decreasing the hash rate. The result of that is that the network has to adapt, by reducing the difficulty of mining the next block in order to maintain the six blocks an hour target for the Bitcoin blockchain, averaged over time. Below the fold, more details and graphs.

DNA Data Storage: A Different Approach

Last month I continued my blogging about storing data in DNA with an update on the work of the University of Washington/Microsoft Molecular Information Systems Lab (MISL). They are not the only group working on this technology. John Timmer's A DNA-based storage system with files and metadata discusses Random access DNA memory using Boolean search in an archival file storage system by James L. Banal et al from MIT and the Broad Institute. Their abstract reads:

DNA is an ultrahigh-density storage medium that could meet exponentially growing worldwide demand for archival data storage if DNA synthesis costs declined sufficiently and if random access of files within exabyte-to-yottabyte-scale DNA data pools were feasible. Here, we demonstrate a path to overcome the second barrier by encapsulating data-encoding DNA file sequences within impervious silica capsules that are surface labelled with single-stranded DNA barcodes. Barcodes are chosen to represent file metadata, enabling selection of sets of files with Boolean logic directly, without use of amplification. We demonstrate random access of image files from a prototypical 2-kilobyte image database using fluorescence sorting with selection sensitivity of one in 106 files, which thereby enables one in 106N selection capability using N optical channels. Our strategy thereby offers a scalable concept for random access of archival files in large-scale molecular datasets.

Below the fold, some commentary on this significantly different approach to accessing DNA databases.

Mining Is Money Transmission (Updated)

In How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission, Nicholas Weaver makes an important point that seems to have been overlooked (my emphasis):

The mining process starts with a pile of unconfirmed digital checks, cryptographically signed by the accounts’ corresponding private keys (in public key cryptography, only the private key can generate a signature but anyone can verify the signature with the public key). Each miner takes all the checks and decides which ones they are going to consider. Miners first have to make sure that each check they consider is valid and that the sending account has sufficient funds. Miners then choose from the set of valid checks they want to include and collect them together in a “block.”

Below the fold, I look into the implications Weaver draws from this.