Start Up No.957: Facebook’s dark PR pitches, lots of bitcoin, Google to stop News?, Snap spectacles 2, and more

Bitcoin's fall in price on 20 November: down about $1,000
Bitcoin has been rivalling Theresa May’s Draft Withdrawal Agreement for popularity

A selection of 12 links for you. Look, it’s a tactical thing, you wouldn’t understand. I’m @charlesarthur on Twitter. Observations and links welcome.

Read the mud-slinging pitches Facebook’s PR firm sent us  • TechCrunch

Natasha Lomas:

»

Zooming out for a second, you do also have to pause and wonder at quite how radioactive the corporate culture must be when the “solution” to a string of hugely damaging disinformation scandals is to reach for whataboutery and even actual fake news, as the NYT has claimed, to try to muddy the waters in your favor.

It’s almost as if manipulation is in the corporate DNA.

Though, again, Facebook has decried knowledge of exactly what Definers was up to on its behalf. Yet not knowing isn’t any kind of defence when your business stands accused of defective oversight, self-serving opacity and having a vacuum where its moral compass should be…

…Since the NYT story broke, Facebook has claimed journalists were well aware that Definers was working on its behalf. But the truth is rather murkier there, too.

We checked our inboxes and none of the pitches Definers sent to TechCrunch made an explicit disclosure that the messages they contained had been paid for by Facebook to push a pro-Facebook agenda. They all required the recipient to join those dots themselves.

A proper journalist engaging their critical faculties should have been able to deduce Facebook was the paying customer, given the usually obvious skew.

But if Definers was also sending out this stuff (and indeed worse things than we were pitched) more widely, to content seeders and fencers that trade on framed outrage to drive online clicks, their tasty-sounding tidbits would not have been so critically parsed. And angles they were pushing likely still flowed where they could influence opinion — thanks to the “inverse” osmosis of social media.

(As far as we can tell none of the Definers’ oppo research pitches that we received ended up in a TechCrunch article — well, until now… )

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And yes, some of the pitches do follow. I’d have lifted my weary eyes skywards at them too; they’re transparent whataboutery, and aren’t “stories”. Facebook was wasting its money.
link to this extract


Men behind TalkTalk data breach jailed • Out-law

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Matthew Hanley, 23, and Conner Allsopp, 21, both of Tamworth in England, received their sentences at the Old Bailey in London on Monday. Hanley was sentenced to 12 months’ imprisonment and Allsopp to eight months.

The sentences were issued after both men had previously pled guilty to offences under the UK’s Computer Misuse Act.

Hanley was responsible for “hacking the TalkTalk database, obtaining files to enable the hack of websites and supplying these files to others”. He also supplied a spreadsheet of TalkTalk customer details for use in fraud, the Metropolitan Police Service said in a statement.

Allsopp was responsible for supplying an article for use in fraud and supplying a computer file to enable hacking intended for the commission of an offence under the Computer Misuse Act, the Met said.

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This is quite weird: the breach was in October 2015, more than three years ago, and these two were arrested within a year. (The story of what they did is one of the chapters in my book Cyber Wars. Now we’ll need another edition..) What on earth has been going on for two years?
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Google News may shut over EU plans to charge tax for links • The Guardian

Jim Waterson:

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Richard Gingras, the search engine’s vice-president of news, said while “it’s not desirable to shut down services” the company was deeply concerned about the current proposals, which are designed to compensate struggling news publishers if snippets of their articles appear in search results.

He told the Guardian that the future of Google News could depend on whether the EU was willing to alter the phrasing of the legislation [on copyright which could demand a “link tax” for large companies]. “We can’t make a decision until we see the final language,” he said.

He pointed out the last time a government attempted to charge Google for links, in 2014 in Spain, the company responded by shutting down Google News in the country. Spain passed a law requiring aggregation sites to pay for news links, in a bid to prop up struggling print news outlets. Google responded by closing the service for Spanish consumers, which he said prompted a fall in traffic to Spanish news websites.

“We would not like to see that happen in Europe,” said Gingras. “Right now what we want to do is work with stakeholders.”

Traditional news publishers have a difficult relationship with Google, which they blame for sucking up much of the advertising revenue which used to prop up print newspapers. However, many are also heavily dependent on Google News to send millions of readers to their websites, which can help boost digital revenues.

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I’m actually a bit Brexit on this one. Google says it’s not a moneymaker for it? Fine – close it. Wouldn’t this create an opportunity for a new, European aggregator to replace it? Or would people just use apps and go to sites?
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These secret settings instantly make any Android phone feel twice as fast • BGR

Zach Epstein:

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When you switch apps or top around through pop-ups, the speed of the animations that transition you from one screen to the next actually have a huge impact on the speed of the user interface. They already seem to move so quickly that you barely notice them. But believe it or not, doubling the speed of these animations actually has a massive impact on how fast your Android phone feels. And as you might have surmised by now, that’s exactly what we’re going to teach you how to do in this post.

As we mentioned, each time you open an app, close an app, open or tap out of pop-ups, or switch between apps, your phone plays a transition animation. This way there’s a smooth transition from one screen to the next, rather than just an abrupt image change. Those animations might seem fast, but there’s an easy way to speed them up even more and the end result is a phone that feel much faster with a UI that seems much more fluid. And the best part is that it couldn’t be easier to adjust these settings.

There’s a secret Settings menu inside Android’s Settings app called “Developer options” and it’s filled with a wide range of advanced options. It’s hidden by default — it is a secret, after all — but it’s simple to gain access to it on your phone.

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Including this because some people might not know it.
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iPhone owners are losing their minds over this keyboard cursor trick • BGR

Jacob Siegal:

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iPhone owners are appreciative of the fact that iOS allows them to tap or drag the cursor in order to change or delete a specific word in a text message, but it can be a surprisingly difficult task to perform. No matter how small your hands are, trying to tap the invisible gap between two letters can be maddening, and it often takes several tries to get it right. More often than not, I just hold down the backspace key until I reach the problem area.

But it turns out that it doesn’t have to be this way. While you can try to manually adjust the cursor with your fat fingers, Apple has also included an alternate control scheme that most people don’t know about.

On Sunday, food blogger Krissy Brierre-Davis shared a tip on Twitter which immediately went viral. It turns out that if you click and hold on the space bar when the keyboard appears, the keyboard turns into a touchpad which you can use to drag the cursor freely around the text box. This trick works for phones without 3D touch like the iPhone XR. On handsets with 3D Touch, you can press firmly and hold anywhere on the keyboard for a second or two to activate the touchpad, eliminating the need for tapping on words.

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Including this just in case anyone didn’t know this already. Someone won’t. Been in iPhones since 2015. But discoverability is very low.
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Samsung CEO seeks breakthrough with Galaxy 10, foldable phone • Korea Herald

Song Su-hyun:

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[Samsung CEO Koh Dong-jin] recently said in a corporate message to executives and employees of the information technology and mobile communications division of Samsung that he felt “sorry about the currently struggling status of the Samsung smartphone business and will do my best to overcome the crisis with the upcoming Galaxy 10 and foldable phones.” 

The message comes amid rumors concerning his position, as the tech giant approaches its year-end personnel reshuffle and organizational restructuring.

Koh was reportedly criticized for weakening competitiveness of Samsung phones by Vice Chairman Lee Jae-yong, who ordered improvement in camera technology for the smartphones after personally visiting a shop in Europe. 

“Koh’s message appeared to show how much of a critical position Samsung’s mobile business is in at the moment. The atmosphere within the company is currently serious as we hear outside criticism toward the products,” said an insider.

Samsung recorded 2.2 trillion won ($1.95bn) in operating profit for mobile business in the third quarter, down more than 30% from the previous quarter.

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Samsung is struggling? That’s news to me.
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Snap to release new spectacles with two cameras for $350 • Cheddar

Alex Heath:

»

Snap is planning to release a new version of its Spectacles glasses with two cameras and a higher price point of $350 by the end of the year, Cheddar has learned.

The new Spectacles, internally codenamed Newport, will feature an all-new design with a more premium frame made of aluminum and cameras capable of producing augmented reality effects in videos, according to people familiar with the matter. With a $350 price point, the new glasses will be more than double the cost of the first iteration of Spectacles, which were released in 2016.

A Snap spokesperson declined to comment.

By utilizing two cameras, the Snapchat app will be able to overlay AR lenses and create 3D-like photo effects from footage taken by the Spectacles, the people said. The new hardware is intended to further CEO Evan Spiegel’s grand vision of eventually creating eyewear technology that seamlessly overlays virtual objects onto the real world.

Snap initially captivated the tech industry with the surprise release of Spectacles and its rebranding as a “camera company” in the fall of 2016. But early buzz around the glasses led Snap to widely overestimate demand, leading to a charge of roughly $40m in unsold inventory after the company ordered roughly 800,000 units from its Chinese supplier.

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It’s almost a good idea, except you’d really want to be able to superimpose content from other social networks in there. In which case, why Snap? Or would Snap make enough profit from them even so? It’s not the price that’s an obstacle if they’re good enough; it’s the content.
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Nvidia grapples with cryptocurrency miners’ exit • WSJ

Sarah Needleman:

»

At the height of the cryptocurrency boom, when even moms in British Columbia were stockpiling videogame graphics cards to generate digital currency, average gamers couldn’t get their hands on their favored hardware. Prices ballooned and inventory vanished.

Those days are over. But inflated prices have taken longer than expected to come down, says Nvidia Corp. , particularly for its moderately powerful chips built on an architecture it calls Pascal.

Nvidia misjudged how quickly prices for the graphics cards that those chips go into would normalize now that cryptocurrency mining isn’t as hot, and the company is now dealing with months of expensive inventory that price-conscious gamers won’t touch.

The company’s message to Wall Street: Videogaming is fine, and the crypto hangover is lasting longer than expected. Still, some analysts don’t see a quick fix.

“The real recovery won’t take place until the second, third and fourth quarters of fiscal 2020,” said Gary Mobley, analyst at Benchmark. “It’s 12 weeks of inventory out there we’re dealing with.”

«

The cryptocurrency crash – presently underway, because we’re just past the anniversary of the big runup in bitcoin’s “value” – is going to ripple out in all sorts of interesting directions. Nvidia is just a first-order one.
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Taiwan chipmakers asked to defer mining ASIC shipments • Digitimes

Cage Chao and Willis Ke:

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Taiwan IC designers capable of providing crypto mining ASIC solutions are feeling increasing pressure from customers postponing shipments and new product development amid Bitcoin plunging to a new low of under US$5,000 recently, and the waning mining fever is expected to undermine revenue performances of the chipmakers in the first half of 2019, according to industry sources.

The sources said that since the beginning of 2018, many new mining customers have moved to contract Taiwan chipmakers, including MediaTek, Global Unichip, Alchip, Faraday Technology and RDC Semiconductor, to design exclusive ASICS fabricated on advanced 7nm process to effectively save power consumption and better mining performance.

But the ever-declining prices of Bitcoin and other virtual currencies have not only built up record-high inventory levels of mining graphic cards at suppliers, but also sent mining ASIC clients asking Taiwan IC designers to delay shipments.

Among the designers, RDC Semiconductor has suspended development of ASIC solutions for mining customers; MediaTelk is not expected to enforce its 7nm mining ASIC plan until the first half of 2019; and other peer chipmakers Global Unichip, Alchip and Faraday do not have clear delivery schedules for such customers, the sources said. Even TSMC has directly scaled down mining ASIC foundry orders to near zero, according to industry sources.

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Grifter journalist Jerry Ji Guo remanded in jail for alleged bitcoin long con • The Daily Beast

Kevin Poulsen:

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He bounced right into New York’s “Silicon Alley” tech startup community, scoring YCombinator seed funding for a group-dating service called Grouper that lasted eight months.

In the years since, according to his LinkedIn profile, the Chinese-American Yale graduate has been owner and head chef of a burger bar in Beijing and founded a “growth hacking” marketing firm in Atlanta. Last year he finally landed in the field he seemed born to occupy, cryptocurrency, launching a $2m ICO for a content-sharing platform he claimed had deals in place with American Idol and The Voice.

Now Guo is on a new adventure, potentially his last for the next 63 to 78 months. On Nov. 9, FBI agents in Puerto Rico arrested the self-described “serial blockchain entrepreneur” on wire-fraud charges for allegedly stealing over $3.5m worth of cryptocurrency from startups that hired him as a consultant.

On Friday a federal judge in San Juan ordered Guo’s transfer to San Jose, California, to face the eight-count indictment, which carries a sentence of up to 20 years in prison by statute, and at least five years, three months under federal sentencing guidelines.

At the center of the case is Guo’s career in the fast money world of initial coin offerings.

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Say no more – ICOs are of course grifter central. But some of the detail here in the indictments is amazing.
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Bitcoin-rigging criminal probe focused on tie to Tether • Bloomberg

Matt Robinson and Tom Schoenberg:

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A focus of the Justice Department’s investigation is whether the dramatic rise of digital tokens in recent years was purely driven by actual demand, or was partially fanned on by market tricks. Along with the CFTC, prosecutors have been looking into a number of trading strategies, including spoofing — the illegal practice of flooding the market with fake orders to trick other traders into buying or selling, Bloomberg reported in May.

While not as well known as Bitcoin, Tether is widely used by traders to bet on price moves for other cryptocurrencies. That’s because the token is more stable than other digital coins but remains outside the traditional banking system, making it relatively easy to transfer between different crypto exchanges.

Tether’s stability, and it’s name, comes from the fact that its value is supposed to be tethered to the U.S. dollar. Tether Ltd. even says that for each digital coin issued, it has $1 in the bank. Some investors have questioned that claim. One reason the CFTC subpoenaed the company was to seek proof that tokens are backed by a reserve of U.S. dollars, Bloomberg reported in June.

Among the issues the Justice Department is examining is how Tether Ltd. creates new coins and why they enter the market predominantly through Bitfinex, the people said.

The probe follows allegations made in a June paper by University of Texas Professor John Griffin and co-author Amin Shams. Griffin and Shams wrote that trading in Tether shows a pattern of underpinning, and manipulating, Bitcoin.

They claimed that Tether was used to buy Bitcoin at pivotal periods, and that about half of Bitcoin’s 1,400% gain last year was attributable to such transactions. Griffin briefed the CFTC on his findings earlier this year, according to two people with direct knowledge of the matter.

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ICOs and crypto fund managers are in trouble • Off The Chain

Anthony Pompliano:

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The SEC announced two new enforcement actions and settlements against ICO projects last week. In the case materials, the regulatory body used language that (1) indicates most ICOs will be deemed sales of unregistered securities and (2) the projects that violated the law will have to comply and pay financial fines.

There is a nuance to the financial fines that could be devastating to the industry though. Regulators are requiring teams to issues refunds to investors (if the investors would like one), at the US dollar price when the investor invested. Almost every project raised capital in the form of cryptocurrency — for example, lets say investors contributed 50 BTC to a project at a price of $10,000 for a total of $500,000 raised. This example team would be on the the hook for returning $500,000 to investors on top of the financial fine levied by the SEC.

Normally this wouldn’t be a big problem, except crypto prices are down 50-90% since the all-time high. It is unlikely that an ICO project has enough funds, based in US dollars, to pay investors back (depending on when the ICO was raised — most were in Q3 & Q4 2017). In our example, if Bitcoin is down 50% since investors contributed the 50 BTC, the team would only have $250,000 on hand to repay investors (if the team didn’t spend any of the money yet either). The only options they have is to raise more capital (unlikely) or declare bankruptcy.

The current bear market is going to go from bad to worse very quickly for both crypto funds and ICO projects. The pain ahead is something that many of these entrepreneurs and fund managers have never had to deal with. Fortunately, some teams listened to folks like Keith Rabois as they warned against these future challenges, but not nearly as many as should have.

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Uh-oh. So this is probably all going to start crashing down next year.
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2 thoughts on “Start Up No.957: Facebook’s dark PR pitches, lots of bitcoin, Google to stop News?, Snap spectacles 2, and more

  1. re. Googel News: use RSS ! There’s a reason Google stopped supporting it and FB et al never did: it’s so good it makes their clickbait -ranking AI utterly pointless. Subscribe to 5-20 feeds of trustworthy news sources, you get a summary of eahch article, dismiss the ones you’re not into, read the regular ones, save and share the choiciest ones… done !

    You’re not being manipulated and analyzed by a feed, you’re not prisoner of a single site… best of both worlds.

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