Start Up No.1774: how bitcoin helped trace a child abuse site, life in El Salvador, FBI v Russian malware, exit Twitter?, and more


The progress of the war in Ukraine was forecast, mostly correctly, by a wargaming team ahead of the invasion in February. But their forecast isn’t encouraging for resolution. CC-licensed photo by manhhai on Flickr.

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A selection of 10 links for you. No, you delete your account. I’m @charlesarthur on Twitter. Observations and links welcome.


Inside the bitcoin bust that took down the web’s biggest child abuse site • WIRED

Andy Greenberg:

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The UK National Crime Agency agent showed [South African entrepreneur Jonathan] Levin a Bitcoin address that the agency had determined was part of [child sexual abuse content site] Welcome to Video’s financial network. Levin suggested they load it in Chainalysis’ crypto-tracing software tool, known as Reactor. He set down his cup of tea, pulled his chair up to the agent’s laptop, and began charting out the site’s collection of addresses on the Bitcoin blockchain, representing the wallets where Welcome to Video had received payments from thousands of customers.

He was taken aback by what he saw: many of this child abuse site’s users—and, by all appearances, its administrators—had done almost nothing to obscure their cryptocurrency trails. An entire network of criminal payments, all intended to be secret, was laid bare before him.

Over the years, Levin had watched as some dark-web operators wised up to certain of his firm’s crypto-tracing tricks. They would push their money through numerous intermediary addresses or “mixer” services designed to throw off investigators, or use the cryptocurrency Monero, designed to be far harder to track. But looking at the Welcome to Video cluster in the NCA office that day, Levin could immediately see that its users were far more naive. Many had simply purchased bitcoins from cryptocurrency exchanges and then sent them directly from their own wallets into Welcome to Video’s.

The contents of the website’s wallets, in turn, had been liquidated at just a few exchanges—Bithumb and Coinone in South Korea, Huobi in China—where they were converted back into traditional currency. Someone seemed to be continually using large, multi-input transactions to gather up the site’s funds and then cash them out. That made it easy work for Reactor to instantly and automatically cluster thousands of addresses, determining that they all belonged to a single service—which Levin could now label in the software as Welcome to Video.

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Deeply reported. (Deeply disturbing, too, in what it tells you about some of the people we share the planet with.)
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Paying with bitcoin in world’s crypto capital is still an infuriating experience • Bloomberg via Archive

Michael McDonald:

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The sign at el Salvador International Airport beckons like a message from the future. “Chivo,” it reads in slick blue script. Slang for “cool,” the word signals that Bitcoin are welcome at passport control, along with the almighty dollar and credit card.

So begins my journey—and experiment. For five days, I’m trying to pay my bills only in Bitcoin. El Salvador is the ideal laboratory. In September it became the first country to declare Bitcoin legal tender, which means all businesses should accept it as a form of payment.

On this Monday in February, the airport cashier stands before me, ready to accept the $12 entry fee. On her shirt she wears the El Salvador coat of arms, which features its famed volcanoes and motto: “God, Union, Liberty.” It’s a fitting image for the dream of cryptocurrency, which seeks to disrupt the world financial system.

I wave my iPhone, packed with Bitcoin ready to show their value as an honest-to-goodness medium of exchange. Then the official interrupts my reverie. “I’m sorry, sir,” she says. “Only cash or credit.”

It turns out that Chivo, El Salvador’s Bitcoin-processing system, isn’t so cool after all. Its point-of-sale device, a white gizmo that looks like a credit card reader, isn’t working. Something about the internet signal. I charge the fee to my Visa card. Score one for international banking, zero for the digerati.

It’s disappointing, because the trip took some serious prep.

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McDonald gives it a go. And he shows that, for all President Bukele’s noise, it isn’t working.
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US says it secretly removed malware worldwide, pre-empting Russian cyberattacks • The New York Times

Kate Conger and David Sanger:

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The malware enabled the Russians to create “botnets” — networks of private computers that are infected with malicious software and controlled by the GRU, the intelligence arm of the Russian military. But it is unclear what the malware was intended to do, since it could be used for everything from surveillance to destructive attacks.

An American official said on Wednesday that the United States did not want to wait to find out. Armed with secret court orders in the United States and the help of governments around the world, the Justice Department and the FBI disconnected the networks from the GRU’s own controllers.

“Fortunately, we were able to disrupt this botnet before it could be used,” Mr. Garland said.

The court orders allowed the FBI to go into domestic corporate networks and remove the malware, sometimes without the company’s knowledge.

President Biden has repeatedly said he would not put the US military in direct conflict with the Russian military, a situation he has said could lead to World War III. That is why he refused to use the US Air Force to create a no-fly zone over Ukraine or to permit the transfer of fighter jets to Ukraine from NATO air bases.

But his hesitance does not appear to extend to cyberspace. The operation that was revealed on Wednesday showed a willingness to disarm the main intelligence unit of the Russian military from computer networks inside the United States and around the world. It is also the latest effort by the Biden administration to frustrate Russian actions by making them public before Moscow can strike.

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The FBI can “go into” domestic corporate networks “sometimes without the company’s knowledge”? This is a hell of a thing to mention in passing.
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Why the WHO took two years to say COVID is airborne • Nature

Dyani Lewis:

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According to Trish Greenhalgh, a primary-care health researcher at the University of Oxford, UK, the IPC GDG [Infection Prevention and Control Guidance Development Group, an external group which advises the WHO on infection containment] members were guided by their medical training and the dominant thinking in the medical field about how infectious respiratory diseases spread; this turned out to be flawed in the case of SARS-CoV-2 and could be inaccurate for other viruses as well. These biases led the group to discount relevant information — from laboratory-based aerosol studies and outbreak reports, for instance. So the IPC GDG concluded that airborne transmission was rare or unlikely outside a small set of aerosol-generating medical procedures, such as inserting a breathing tube into a patient.

That viewpoint is clear in a commentary by members of the IPC GDG, including Schwaber, Sobsey and Fisher, published in August 20202. The authors dismissed research using air-flow modelling, case reports describing possible airborne transmission and summaries of evidence for airborne transmission, labelling such reports “opinion pieces”. Instead, they concluded that “SARS-CoV-2 is not spread by the airborne route to any significant extent”.

In effect, the group failed to look at the whole picture that was emerging, says Greenhalgh. “You’ve got to explain all the data, not just the data that you’ve picked to support your view,” and the airborne hypothesis is the best fit for all the data available, she says. One example she cites is the propensity for the virus to transmit in ‘superspreader events’, in which numerous individuals are infected at a single gathering, often by a single person. “Nothing explains some of these superspreader events except aerosol spread,” says Greenhalgh.

Throughout 2020, there was also mounting evidence that indoor spaces posed a much greater risk of infection than outdoor environments did. An analysis of reported outbreaks recorded up to the middle of August 2020 revealed that people were more than 18 times as likely to be infected indoors as outdoors. If heavy droplets or dirty hands had been the main vehicles for transmitting the virus, such a strong discrepancy would not have been observed.

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I still see people washing their hands as though it’s going to make the faintest difference; and wearing masks outside, ditto. The concerning phrase is “could be inaccurate for other viruses as well”. Maybe we’ve had a lot wrong for quite a while without realising.
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Apple TV+ market share grows and gets closer to HBO Max • 9to5Mac

Filipe Espósito:

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According to a new report from JustWatch, Apple TV+ lost some users after Apple reduced the free trial period for new customers in July 2021. Between July and September 2021, Apple TV+’s market share declined below 5%, but the platform regained subscribers in October 2021, surpassing the 5% mark.

The influx of new users to Apple TV+ in that period might be explained by the highly anticipated new shows and seasons that were released in September and October, such as Foundation, Invasion, and the second season of The Morning Show

In February 2022, the global market share of Apple TV+ was 5.6% – which is still far behind major competitors like Disney+ and Netflix, but it’s getting close to HBO Max. The streaming platform owned by WarnerMedia lost subscribers last month despite its expansion to more European countries. JustWatch estimates that HBO Max accounts for 7% of the global streaming market share.

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The graph shows Disney+ with 17.6%, HBO Max with 7%, Apple with 5.6%, and Peacock (NBC?) with 2.1%. Guessing that pretty much all the rest is taken by Netflix.

Love to know where Apple wants to get to with TV+. Is 5% enough? Or should it be 10%? 15%?
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Wargaming a Long War: Ukraine fights on • Modern War Institute

James Lacey, Tim Barrick and Nathan Barrick on the ongoing wargame that tried – ahead of time – to simulate what would happen in Ukraine, found it surprising, and is now catching up with reality, and trying to predict the future:

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Although Russia continues suffering higher attrition rates than its opponent, Ukrainian forces are far from unscathed. The most damaging losses for the Russians are in experienced officers, troops, and armored vehicles, which are the primary targets of local counter-attacks given increasing numbers of portable antitank weapons. The wargame highlighted Ukrainian capabilities to employ killer-drones to knock out Russian vehicles, including tanks, armored personnel carriers, and self-propelled artillery.

Open sources claim that Ukraine has over fifty such weapons on near-constant patrols and this number is growing. If only one drone in ten kills a vehicle each day, that equates to 150 vehicles a month and 1,350 Russian vehicles losses between now and Christmas. Moreover, the wargame-imposed daily success rate of a mere ten% is likely a gross underestimate. Add to this the losses inflicted from thousands of anti-tank weapons and the Russians soon ran short on modern armor to support combat operations. Over the wargame’s year-long course, Russian losses in troops and vehicles approached the entire amount it had built up around the perimeter of Ukraine at the conflict’s start.

Despite our intention to devote the rest of the wargame to a possible insurgency or national resistance campaign, the fact that, even if Ukraine was not winning the war, it was certainly not losing it, caused a re-evaluation. As Ukraine still had an intact, discernible, and well-manned front line, it was decided to let the wargame continue on its natural course. What was apparent to all was that the wargame was starting to parallel the situation the warring parties found themselves in 1915, with both sides unable to launch major offensives as manpower and munitions stocks were nearly exhausted.

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Yes, that’s 1915, the First World War one year in to its four-year duration. But notice how things are turning out unlike they expected, again and again. (Thanks G for the link.)
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How much is US intelligence helping Ukraine? • Mystics & Statistics

Christopher Lawrence:

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The strike at Belgorod [by two Ukrainian helicopters on a fuel dump inside Russia] brings out a point that I have not discussed yet in this blog. It does appear that Ukraine is getting significant help from the US intelligence assets. I have not evidence of this and am not aware of any other reporting on this.

Still, I find it hard to believe that Ukraine flew two or more helicopters dozens of miles across enemy territory, dodging radar, dodging their air force, and dodging their extensive SAM [surface to air missile] capability, to strike at a depot in Russia, if they did not know the path was clear. It is possible that a couple of guys took a high risk operation figuring they could get in and out of there by flying low, but most likely, the Ukrainians knew exactly what the radar coverage and SAM coverage was and flew between or around it. Ukraine probably does not have that intel capability. The US does. 

There have been several other incidents in the war that point to Ukraine having good intelligence. This includes 1) the picking off of six Russian generals, 2) the preplanned ambush that halted the Russian armored column at Brovary, and 3) the attack on the airbase near Kherson that took out at least ten Russian helicopters.

Each of these may have been caused by Ukrainian planning and acumen, but they are easier to explain if Ukraine has considerable help from US intelligence assets. It is pretty hard to conceive that Ukraine flew two+ helicopter into Russia to strike near Belgorod without knowing what was in the area.

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Seems very likely that it’s real-time intelligence, not just something that gets passed day by day.
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Twitter employees vent over Elon Musk investment and board seat • Business Insider

Kali Hays:

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Twitter employees expressed outrage, frustration and disappointment after learning Elon Musk is deeply involved in their company as the top shareholder and newly minted board member.

Musk helped build PayPal, birthed the modern space industry through SpaceX, and made Tesla the world’s leading electric carmaker. While that makes him more than qualified as a director, the billionaire is a divisive figure who speaks his mind and pushes companies and employees hard. Tesla faces 46 lawsuits from former and current employees alleging they were targeted and harassed based on gender and race, for instance.

One Twitter employee changed their Twitter profile name this week to “elon musk is a racist demagogue with a god complex.” Another took to the platform to say he’s “so disappointed,” adding that Musk being appointed to the board is “a huge step in the wrong direction.”

“Never been a perfect platform or fully convincing leadership, but I felt the overall direction and room Safety was given were encouraging,” Brian Waismeyer wrote. “This one hits hard.”

Private chatter inside the company has a similar tone to the public postings of Twitter staff, according to one worker. Some people are “frustrated” that an executive like Musk is now seen influencing any of Twitter’s decisions, this person said. They asked not to be identified discussing sensitive topics.

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The perfect tweet on the topic. Though as Hays also points out, the surge in the stock means that lots of the staff there are abruptly quite a bit richer through their stock options. And talking of Twitter staff venting on Twitter…
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It’s time for institutions to make their employees get off Twitter • The Washington Post

Megan McArdle:

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We in the media rue how so much of the right has closed itself off into bubbles that cannot be penetrated by facts or sources inconvenient to its ideology. We have talked much less about how our own behavior contributes to this phenomenon, particularly on social media.

I wouldn’t trust anyone who talked about me and my friends with the arrogant contempt that I routinely see emanating from journalists and academics on Twitter; we shouldn’t be surprised that conservatives don’t, either. Especially as they watch institutions be forced by Twitter mobs to hew to an ever-narrower ideological line.

These costs of tweeting aren’t balanced by the benefits, and at this point the majority of Twitter users I know seem to agree. They hate what Twitter does to their organizations and friends, they hate the pervasive fear, they even hate how much time they waste that could have been spent on better work. But they’re addicted to the attention, or fear ceding mindshare to people who are willing to stay in the fray. And so they’re all stuck in a destructive, yet unfortunately stable, equilibrium.

I’m just as guilty as anyone, and I can see how this might sound like me asking my boss to fire my dealer, because I don’t have the fortitude to quit. But this is really a collective action problem: People feel they have to stay on because others do, and others are on for the same reason.

Collective action problems can generally be solved only institutionally, which is why I think the big media outlets and the major think tanks should tell their employees to read Twitter all they like, but not to post anything more controversial than baby pictures or recipes for cornbread. Those who are lucky enough to have reputations big enough to lose — or to work for organizations that do — will be better off if they take their voices back inside the institutions that were designed to amplify their best work, rather than their worst moments.

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I think there’s a general truth in here, and in Social Warming I write about the effect that Twitter (in particular, Facebook less so) has had on journalism – driving journalists to compete to put out hot takes, to boost their brand, and often do so in effective opposition to the organisation they’re working for. The BBC seems to me to be getting hold of this.

Related: NYT’s executive editor tells its journalists to “meaningfully reduce” time spent on Twitter.
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US wind energy sets record for power generation • CNNPolitics

Ella Nilsen:

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The United States set a major renewable energy milestone last Tuesday: wind power was the second-highest source of electricity for the first time since the Energy Information Administration (EIA) began gathering the data.

As E&E reporter Ben Storrow noted and the EIA confirmed, wind turbines last Tuesday generated over 2,000 gigawatt-hours of electricity, edging out electricity generated by nuclear and coal (but still trailing behind natural gas).

Last year, wind was the fourth-largest electricity source behind natural gas, coal, and nuclear, generating close to 380 terawatt-hours for the entire year, according to the EIA. For context, a terawatt is a thousand times bigger than a gigawatt.

Major milestone aside, wind energy in the US is still lagging behind one European country that recently broke a record of its own: Germany.

Although the US has more wind capacity by sheer numbers – it’s a larger country with a larger population – Germany is outpacing the US in terms of how much electricity it gets from wind. In February alone, windmills in Germany generated a record 20.6 terawatt-hours of wind energy, Rystad Energy reported Tuesday, which made up 45% of its total energy in February.

In 2020 – the most recent year the EIA has robust statistics for – Germany got 24% of its electricity from wind, compared to 8% in the US.

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Just think how well positioned Germany would be if it had kept its many reactors online.
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• Why do social networks drive us a little mad?
• Why does angry content seem to dominate what we see?
• How much of a role do algorithms play in affecting what we see and do online?
• What can we do about it?
• Did Facebook have any inkling of what was coming in Myanmar in 2016?

Read Social Warming, my latest book, and find answers – and more.


Errata, corrigenda and ai no corrida: none notified

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