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After a Decade of Promises, Blockchain Still Fails to Deliver Privacy

After a Decade of Promises, Blockchain Still Fails to Deliver Privacy

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Does blockchain technology grant enough anonymity? Experts’ opinions vary, as some say the technology hasn’t lived up to the expectations.

The first blockchain was launched more than 10 years ago and since then, it has evolved from simply being a backbone for Bitcoin (BTC) to a global technological phenomenon. In some sense, the distributed ledger became more popular than Bitcoin itself. Even the harshest cryptocurrency critics — like the government of China and JPMorgan Chase’s Jamie Dimon — recognize blockchain technology’s potential, while corporations as large as Microsoft and Accenture have adopted it to their needs.

However, there is another view of blockchain technology. One that is based on the assumption that the technology has stalled in certain areas it has been trying to disrupt — privacy being one of those fields.

In mainstream culture, Bitcoin is still viewed as a digital currency that allows users to stay fully under the radar. In reality, most cryptocurrencies based on public blockchains merely offer pseudonymity. Meanwhile, tracking cryptocurrency transactions is only getting easier for law enforcement agents. Therefore, how much privacy does blockchain really offer?

The feds are no longer scared

Back in 2012, at the dawn of blockchain and crypto, an internal FBI report leaked a warning to security service employees that Bitcoin provides a tool “to generate, transfer, launder and steal illicit funds with some anonymity.” The word “some” is key here, because according to the original white paper, “the risk is that if the owner of a key is revealed, linking could reveal other transactions that belonged to the same owner.” Therefore, Bitcoin, as well many other cryptocurrencies based on public blockchains, are pseudonymous and not fully anonymous — meaning that there is only a limited amount of privacy they can provide. 

Indeed, as time went by, authorities started successfully tracking down criminals who used Bitcoin to cover their tracks. One of the most high-profile cases in that regard was the arrest of Ross Ulbricht, an American national who operated the renowned deep web marketplace “Silk Road.” As told by a former FBI special agent, Ilhwan Yum, in court during the trial, he managed to track more than 700,000 BTC from Silk Road to what appeared to be Ulbricht’s personal wallets. Suddenly, buying things with Bitcoin on the dark web was no longer seen as foolproof.

But that’s what bad guys get, one might argue, and law-abiding citizens have nothing to be afraid of. That’s not likely to be the case, as average cryptocurrency users could also be of interest to authorities. In 2018, top American exchange Coinbase informed approximately 13,000 of its customers that it was handing over their private information to the United States at the demand of the IRS. That data included social security numbers, names, birth dates, addresses and transaction records from 2013–2015. 

In 2018, researchers from Qatar published a paper showing how easy it is to identify sloppy users through their years-old Bitcoin transactions — even for people who don’t work in the intelligence services. Upon collecting thousands of visible Bitcoin wallet addresses and searching for direct links between them and Tor-sensitive hidden services like Silk Road and The Pirate Bay, they were able to find 125 unique users along with their public accounts.

Pseudonymity is not good enough

“Public blockchains were not created for privacy,” Pavlo Radchuk, the blockchain security lead at Hacken, a self-described “ecosystem of white-hat hackers,” told Cointelegraph, explaining that an active Bitcoin or Ethereum user can be tracked in different ways like if “an account bought something on a website [with crypto]. Now, this website has this account’s related IP address; delivery physical address, receiver name, etc.”

Pseudonymity “is clearly not enough” when it comes to protecting one’s identity, Ghassan Karame, the manager and chief researcher at Security Group of NEC Laboratories Europe, confirmed in a conversation with Cointelegraph, elaborating:

“The main issue with pseudonymity is that it does not hide the user profile including: transaction amounts, expenditure habits, time of payments, etc. Pseudonymity also does not attempt to hide the binding between the user profile and the user’s IP. All these issues make it relatively straightforward to deanonymize users in systems that rely on simple pseudonymity.”

Hartej Sawhney, the CEO and co-founder of cybersecurity agency Zokyo Labs, painted an even grimmer picture where knowing the victim’s address is enough for the attacker to use physical force and get what they’re after: “A thief with some effort can trace an IP address, show up at your house and apply rubber hose cryptography to get your keys.”

“We don’t believe that blockchain has the privacy benefits that I think some of its supporters first hoped,” Catherine Tucker, a professor of management at MIT Sloan and a co-founder of the Cryptoeconomics lab, told Cointelegraph, referring to the 2018 paper she co-authored with Susan Athey, a professor of economics at the Stanford Graduate School of Business, and Christian Catalini, a fellow MIT professor, who also works at Facebook’s Calibra.

Blockchain technology’s trademark immutability has large privacy consequences, Tucker added. She argued that sensitive information — like health care records — is not necessarily fit to be stored on a blockchain, contrary to what a number of industry startups are trying to achieve:

“Ultimately, when it comes to the privacy of data, I worry most about the kind of data that if it is public, has persistent consequences for me economically — such as my genome, my underlying health factors — things that I can’t change. I don’t worry about data that tells an advertiser I want a particular pair of shoes on a day — that is temporary data, which may change tomorrow, and is unlikely to have persistent consequences. And the danger of blockchain is we may be creating immutable data that we have no idea what the consequences of it will be for an individual 10 years in the future.”

But what about permissioned blockchains — the ones that grant access only to relevant parties and market participants? “I’m not sure if there’s much difference between a permissioned blockchain and a shared database,” Harry Halpin, the CEO of privacy mixnet NYM Technologies, told Cointelegraph, adding that it “all depends on who has access or who is in your federation.” Karame went further, explaining that permissioned blockchains mostly rely on Crash fault tolerant or Byzantine fault tolerant — which have been studied better than proof-of-work and proof-of-stake — adding:

“As the name indicates, CFT only tolerates crashes and does not provide any security against misbehavior otherwise. BFT systems, on the other hand, provide full tolerance to Byzantine behavior. Both CFT and BFT offer final consensus. This means that the confirmation output of such systems is final; most permissionless blockchains only offer eventual consensus guarantees, meaning that one’s transaction could be dismissed later in time — e.g., in case a block fork happens.”

While blockchain technology has been deemed hack-proof (in the sense that it has yet to be compromised on a systematic level), the crypto industry is basically a land mine when it comes to security breaches. Over $292 million and over 500,000 pieces of customer data were stolen from cryptocurrency exchanges in 2019 alone (it was the biggest year for cryptocurrency hacks so far, although the amount of stolen funds was much smaller compared to previous years).

Related: Crypto Exchange Hacks in Review

If blockchain technology is so secure, why are industry actors getting hacked? There’s a variety of different techniques that attackers use, although most of the aforementioned breaches involved social engineering — i.e., some participation on behalf of the victim, like opening an infected email, using public Wi-Fi to log into cryptocurrency wallets, installing malicious apps, etc. There are also more niche methods like clipboard hijacking, cryptojacking and bug exploiting — but in most cases, hackers target people or company servers, and not blockchains.

Privacy coins can ensure some level of anonymity

Immutability doesn’t mean that blockchain technology cannot offer additional privacy, however. There are several privacy-oriented services, with Monero (XMR) and Zcash (ZEC) being the most popular examples. Both of them aim to protect the privacy of users by hiding transactions and their receivers through different methods. However, although privacy coins do offer a “decent level of privacy,” they still don’t make their users absolutely anonymous and leave some trail behind, said Karame:

“Such systems are geared to provide sender anonymity, recipient anonymity, unlinkability of transactions, and hide as well the payment amount. They do not offer ‘absolute privacy’ though in the sense that the time that transactions are made is still publicly available. Such timing information could leak information about the geographic location of users.”

Normally, there are ways to trace even anonymity-focused technologies, as Jonathan Levin, a co-founder and the CSO of blockchain and crypto analytics firm Chainalysis — one of the primary sources of crypto transaction data for U.S. agencies — affirmed in an email exchange with Cointelegraph: “While not impossible, anonymity is very difficult to achieve due to humans needing to implement and use them.”

Moreover, regulators are overall not impressed with privacy coins and the anonymity they provide. Some jurisdictions, like South Korea and Poland, have gone as far as to force local exchanges to delist them, citing guidelines set out by the Financial Action Task Force. That drives those coins even deeper underground, applying additional stigma. Furthermore, as Halpin noted in a conversation with Cointelegraph, private blockchains such as Zcash and Monero “have all had critical bugs within the last year,” meaning that there is still a risk of getting exposed.

Other blockchains are not immune to regulatory problems

It’s not just niche blockchain products whose privacy-enabling features are being scrutinized by regulations, added Nir Kshetri, a University of North Carolina-Greensboro professor who studied blockchain’s roles in strengthening cybersecurity and protecting privacy. In fact, the Chinese government has already introduced regulations in that area in February 2019. Kshetri told Cointelegraph:

“The regulation requires users to provide real names, as well as national ID card numbers, mobile phones or company registration to use blockchain services. User anonymity is thus not allowed. Blockchain services are required to remove ‘illegal information’ quickly in order to stop it from spreading among users. Providers of blockchain services are also required to retain backups of user data for six months. Moreover, law enforcement must be able to get access to data whenever it is necessary.”

The European Union’s General Data Protection Regulation law that attempts to supervise blockchain data is another concern for blockchain technology’s privacy, Kshetri continued: “The GDPR assumes that there is a data controller. Data subjects enforce their data protection rights against the controller. Blockchain’s decentralization feature means that there is no single center of control.” Moreover, regulations are unclear on how blockchain’s data controller is determined so it’s unclear who’s legally accountable if personal data is abused. Kshetri concluded that immutability is also a cause for concern:

“When a block is added, it is extremely difficult or even impossible to delete or modify data in the block. The difficulties of deleting blockchain data violates data minimization and purpose limitation provisions of the GDPR. The idea here is that personal data should not be held longer than needed to achieve the purpose for which the data is collected.”

Despite problems, blockchain has made progress

Nearly 10 years in, privacy remains a controversial topic for blockchain technology. Still, there has been “lots of progress” on this front, says Karame of NEC Laboratories Europe: “Privacy has been increased in most blockchains — both permissionless and permissioned — over time, and this also includes the privacy of lightweight clients that connect to these platforms as well.”

Indeed, anonymity-focused coins like Zcash, Dash (DASH) and Monero didn’t emerge until the mid-2010s, introducing a whole new level of privacy for cryptocurrency users. There are also cryptocurrency mixing services that picked up pace last year (they cloak the user’s info by creating temporary wallet addresses), although some governments are already onto them as well.

Besides, how anonymous can one really get in the digital age where data is the main currency? “Complete transparency is not necessarily an ideal place,” as Levin previously told Cointelegraph, because privacy can empower bad actors to facilitate illicit behavior like money laundering and illegal trading. Indeed, despite some privacy-related problems, blockchain remains an innovative technology with much greater yet fewer controversial use cases.

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The Coming Of The Police State In America

The Coming Of The Police State In America

Authored by Jeffrey Tucker via The Epoch Times,

The National Guard and the State Police are now…

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The Coming Of The Police State In America

Authored by Jeffrey Tucker via The Epoch Times,

The National Guard and the State Police are now patrolling the New York City subway system in an attempt to do something about the explosion of crime. As part of this, there are bag checks and new surveillance of all passengers. No legislation, no debate, just an edict from the mayor.

Many citizens who rely on this system for transportation might welcome this. It’s a city of strict gun control, and no one knows for sure if they have the right to defend themselves. Merchants have been harassed and even arrested for trying to stop looting and pillaging in their own shops.

The message has been sent: Only the police can do this job. Whether they do it or not is another matter.

Things on the subway system have gotten crazy. If you know it well, you can manage to travel safely, but visitors to the city who take the wrong train at the wrong time are taking grave risks.

In actual fact, it’s guaranteed that this will only end in confiscating knives and other things that people carry in order to protect themselves while leaving the actual criminals even more free to prey on citizens.

The law-abiding will suffer and the criminals will grow more numerous. It will not end well.

When you step back from the details, what we have is the dawning of a genuine police state in the United States. It only starts in New York City. Where is the Guard going to be deployed next? Anywhere is possible.

If the crime is bad enough, citizens will welcome it. It must have been this way in most times and places that when the police state arrives, the people cheer.

We will all have our own stories of how this came to be. Some might begin with the passage of the Patriot Act and the establishment of the Department of Homeland Security in 2001. Some will focus on gun control and the taking away of citizens’ rights to defend themselves.

My own version of events is closer in time. It began four years ago this month with lockdowns. That’s what shattered the capacity of civil society to function in the United States. Everything that has happened since follows like one domino tumbling after another.

It goes like this:

1) lockdown,

2) loss of moral compass and spreading of loneliness and nihilism,

3) rioting resulting from citizen frustration, 4) police absent because of ideological hectoring,

5) a rise in uncontrolled immigration/refugees,

6) an epidemic of ill health from substance abuse and otherwise,

7) businesses flee the city

8) cities fall into decay, and that results in

9) more surveillance and police state.

The 10th stage is the sacking of liberty and civilization itself.

It doesn’t fall out this way at every point in history, but this seems like a solid outline of what happened in this case. Four years is a very short period of time to see all of this unfold. But it is a fact that New York City was more-or-less civilized only four years ago. No one could have predicted that it would come to this so quickly.

But once the lockdowns happened, all bets were off. Here we had a policy that most directly trampled on all freedoms that we had taken for granted. Schools, businesses, and churches were slammed shut, with various levels of enforcement. The entire workforce was divided between essential and nonessential, and there was widespread confusion about who precisely was in charge of designating and enforcing this.

It felt like martial law at the time, as if all normal civilian law had been displaced by something else. That something had to do with public health, but there was clearly more going on, because suddenly our social media posts were censored and we were being asked to do things that made no sense, such as mask up for a virus that evaded mask protection and walk in only one direction in grocery aisles.

Vast amounts of the white-collar workforce stayed home—and their kids, too—until it became too much to bear. The city became a ghost town. Most U.S. cities were the same.

As the months of disaster rolled on, the captives were let out of their houses for the summer in order to protest racism but no other reason. As a way of excusing this, the same public health authorities said that racism was a virus as bad as COVID-19, so therefore it was permitted.

The protests had turned to riots in many cities, and the police were being defunded and discouraged to do anything about the problem. Citizens watched in horror as downtowns burned and drug-crazed freaks took over whole sections of cities. It was like every standard of decency had been zapped out of an entire swath of the population.

Meanwhile, large checks were arriving in people’s bank accounts, defying every normal economic expectation. How could people not be working and get their bank accounts more flush with cash than ever? There was a new law that didn’t even require that people pay rent. How weird was that? Even student loans didn’t need to be paid.

By the fall, recess from lockdown was over and everyone was told to go home again. But this time they had a job to do: They were supposed to vote. Not at the polling places, because going there would only spread germs, or so the media said. When the voting results finally came in, it was the absentee ballots that swung the election in favor of the opposition party that actually wanted more lockdowns and eventually pushed vaccine mandates on the whole population.

The new party in control took note of the large population movements out of cities and states that they controlled. This would have a large effect on voting patterns in the future. But they had a plan. They would open the borders to millions of people in the guise of caring for refugees. These new warm bodies would become voters in time and certainly count on the census when it came time to reapportion political power.

Meanwhile, the native population had begun to swim in ill health from substance abuse, widespread depression, and demoralization, plus vaccine injury. This increased dependency on the very institutions that had caused the problem in the first place: the medical/scientific establishment.

The rise of crime drove the small businesses out of the city. They had barely survived the lockdowns, but they certainly could not survive the crime epidemic. This undermined the tax base of the city and allowed the criminals to take further control.

The same cities became sanctuaries for the waves of migrants sacking the country, and partisan mayors actually used tax dollars to house these invaders in high-end hotels in the name of having compassion for the stranger. Citizens were pushed out to make way for rampaging migrant hordes, as incredible as this seems.

But with that, of course, crime rose ever further, inciting citizen anger and providing a pretext to bring in the police state in the form of the National Guard, now tasked with cracking down on crime in the transportation system.

What’s the next step? It’s probably already here: mass surveillance and censorship, plus ever-expanding police power. This will be accompanied by further population movements, as those with the means to do so flee the city and even the country and leave it for everyone else to suffer.

As I tell the story, all of this seems inevitable. It is not. It could have been stopped at any point. A wise and prudent political leadership could have admitted the error from the beginning and called on the country to rediscover freedom, decency, and the difference between right and wrong. But ego and pride stopped that from happening, and we are left with the consequences.

The government grows ever bigger and civil society ever less capable of managing itself in large urban centers. Disaster is unfolding in real time, mitigated only by a rising stock market and a financial system that has yet to fall apart completely.

Are we at the middle stages of total collapse, or at the point where the population and people in leadership positions wise up and decide to put an end to the downward slide? It’s hard to know. But this much we do know: There is a growing pocket of resistance out there that is fed up and refuses to sit by and watch this great country be sacked and taken over by everything it was set up to prevent.

Tyler Durden Sat, 03/09/2024 - 16:20

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate…

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate iron levels in their blood due to a COVID-19 infection could be at greater risk of long COVID.

(Shutterstock)

A new study indicates that problems with iron levels in the bloodstream likely trigger chronic inflammation and other conditions associated with the post-COVID phenomenon. The findings, published on March 1 in Nature Immunology, could offer new ways to treat or prevent the condition.

Long COVID Patients Have Low Iron Levels

Researchers at the University of Cambridge pinpointed low iron as a potential link to long-COVID symptoms thanks to a study they initiated shortly after the start of the pandemic. They recruited people who tested positive for the virus to provide blood samples for analysis over a year, which allowed the researchers to look for post-infection changes in the blood. The researchers looked at 214 samples and found that 45 percent of patients reported symptoms of long COVID that lasted between three and 10 months.

In analyzing the blood samples, the research team noticed that people experiencing long COVID had low iron levels, contributing to anemia and low red blood cell production, just two weeks after they were diagnosed with COVID-19. This was true for patients regardless of age, sex, or the initial severity of their infection.

According to one of the study co-authors, the removal of iron from the bloodstream is a natural process and defense mechanism of the body.

But it can jeopardize a person’s recovery.

When the body has an infection, it responds by removing iron from the bloodstream. This protects us from potentially lethal bacteria that capture the iron in the bloodstream and grow rapidly. It’s an evolutionary response that redistributes iron in the body, and the blood plasma becomes an iron desert,” University of Oxford professor Hal Drakesmith said in a press release. “However, if this goes on for a long time, there is less iron for red blood cells, so oxygen is transported less efficiently affecting metabolism and energy production, and for white blood cells, which need iron to work properly. The protective mechanism ends up becoming a problem.”

The research team believes that consistently low iron levels could explain why individuals with long COVID continue to experience fatigue and difficulty exercising. As such, the researchers suggested iron supplementation to help regulate and prevent the often debilitating symptoms associated with long COVID.

It isn’t necessarily the case that individuals don’t have enough iron in their body, it’s just that it’s trapped in the wrong place,” Aimee Hanson, a postdoctoral researcher at the University of Cambridge who worked on the study, said in the press release. “What we need is a way to remobilize the iron and pull it back into the bloodstream, where it becomes more useful to the red blood cells.”

The research team pointed out that iron supplementation isn’t always straightforward. Achieving the right level of iron varies from person to person. Too much iron can cause stomach issues, ranging from constipation, nausea, and abdominal pain to gastritis and gastric lesions.

1 in 5 Still Affected by Long COVID

COVID-19 has affected nearly 40 percent of Americans, with one in five of those still suffering from symptoms of long COVID, according to the U.S. Centers for Disease Control and Prevention (CDC). Long COVID is marked by health issues that continue at least four weeks after an individual was initially diagnosed with COVID-19. Symptoms can last for days, weeks, months, or years and may include fatigue, cough or chest pain, headache, brain fog, depression or anxiety, digestive issues, and joint or muscle pain.

Tyler Durden Sat, 03/09/2024 - 12:50

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February Employment Situation

By Paul Gomme and Peter Rupert The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000…

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By Paul Gomme and Peter Rupert

The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000 average over the previous 12 months. The payroll data for January and December were revised down by a total of 167,000. The private sector added 223,000 new jobs, the largest gain since May of last year.

Temporary help services employment continues a steep decline after a sharp post-pandemic rise.

Average hours of work increased from 34.2 to 34.3. The increase, along with the 223,000 private employment increase led to a hefty increase in total hours of 5.6% at an annualized rate, also the largest increase since May of last year.

The establishment report, once again, beat “expectations;” the WSJ survey of economists was 198,000. Other than the downward revisions, mentioned above, another bit of negative news was a smallish increase in wage growth, from $34.52 to $34.57.

The household survey shows that the labor force increased 150,000, a drop in employment of 184,000 and an increase in the number of unemployed persons of 334,000. The labor force participation rate held steady at 62.5, the employment to population ratio decreased from 60.2 to 60.1 and the unemployment rate increased from 3.66 to 3.86. Remember that the unemployment rate is the number of unemployed relative to the labor force (the number employed plus the number unemployed). Consequently, the unemployment rate can go up if the number of unemployed rises holding fixed the labor force, or if the labor force shrinks holding the number unemployed unchanged. An increase in the unemployment rate is not necessarily a bad thing: it may reflect a strong labor market drawing “marginally attached” individuals from outside the labor force. Indeed, there was a 96,000 decline in those workers.

Earlier in the week, the BLS announced JOLTS (Job Openings and Labor Turnover Survey) data for January. There isn’t much to report here as the job openings changed little at 8.9 million, the number of hires and total separations were little changed at 5.7 million and 5.3 million, respectively.

As has been the case for the last couple of years, the number of job openings remains higher than the number of unemployed persons.

Also earlier in the week the BLS announced that productivity increased 3.2% in the 4th quarter with output rising 3.5% and hours of work rising 0.3%.

The bottom line is that the labor market continues its surprisingly (to some) strong performance, once again proving stronger than many had expected. This strength makes it difficult to justify any interest rate cuts soon, particularly given the recent inflation spike.

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