Start Up No.1802: Apple headset history leaks, ‘cryware’ targets crypto, Musk and the irrelevant spambots, Napster sold, and more

Playing video games has a positive effect on children’s intelligence, according to a new study. Unexpected result, eh? CC-licensed photo by Sherif Salama on Flickr.

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A selection of 10 links for you. Best not viewed through a headset. I’m @charlesarthur on Twitter. Observations and links welcome.

Apple’s mixed reality headset project challenges explained • 9to5Mac

Michael Potuck, filleting The Information’s report on this:


When the headset team founder and leader Mike Rockwell was working on getting buy-in from Apple’s various teams to help with the development, his team was shut down on the idea of making it a VR headset. Ive’s team also pushed back on “practical uses” and doubted consumers would want to wear headsets for any considerable amount of time.


Rockwell, Meier and Rothkopf soon encountered pushback from Ive’s team. The three men had initially wanted to build a VR headset, but Ive’s group had concerns about the technology, said three people who worked on the project. They believed VR alienated users from other people by cutting them off from the outside world, made users look unfashionable and lacked practical uses. Apple’s industrial designers were unconvinced that consumers would be willing to wear headsets for long periods of time, two of the people said.


That ended up birthing the idea of a mixed reality headset:


The men came up with a solution to address the concerns of Ive’s team. For example, they proposed adding cameras to the front of the headset so that people wearing the device could see their surroundings, said the three people. But the feature that ultimately sold the industrial designers on the project was a concept for an outward-facing screen on the headset. The screen could display video images of the eyes and facial expressions of the person wearing the headset to other people in the room.

These features addressed the industrial design group’s worries about VR-induced alienation—they allowed other people in a room to interact and collaborate with a person wearing a headset in a way not possible with other VR gear. For years, the existence of such a display, internally code-named T429, was known only to a small circle of people even within Rockwell’s group.


The Information’s report hints that a follow-up piece will cover a “pivotal moment for the Apple headset” that occurred in 2019. That’s likely when Jony Ive “balked” at the idea of selling a headset that required a base station device to operate. That’s when the team pivoted to working on a less powerful, but more independent AR/VR device.

The latest expectation is that Apple could announce its mixed reality headset in 2023. As far as price, we’ve heard reports that it could sell from above $2,000 to $3,000.


I talked about life in the metaverse for an upcoming episode of The Bunker podcast. I feel that if they get it right, it’ll get takeup in business. Not sure how much more widely, though.
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In hot pursuit of ‘cryware’: Defending hot wallets from attacks • Microsoft Security Blog

“Microsoft 365 Defender Research Team”:


The steep rise in cryptocurrency market capitalization, not surprisingly, mirrors a marked increase in threats and attacks that target or leverage cryptocurrencies. But Microsoft researchers are observing an even more interesting trend: the evolution of related malware and their techniques, and the emergence of a threat type we’re referring to as “cryware”.

Cryware are information stealers that collect and exfiltrate data directly from non-custodial cryptocurrency wallets, also known as hot wallets. Because hot wallets, unlike custodial wallets, are stored locally on a device and provide easier access to cryptographic keys needed to perform transactions, more and more threats are targeting them.

Cryware signifies a shift in the use of cryptocurrencies in attacks: no longer as a means to an end but the end itself. Before cryware, the role of cryptocurrencies in an attack or the attack stage where they figured varied depending on the attacker’s overall intent. For example, some ransomware campaigns prefer cryptocurrency as a ransom payment. However, that requires the target user to manually do the transfer. Meanwhile, cryptojackers—one of the prevalent cryptocurrency-related malware—do try to mine cryptocurrencies on their own, but such a technique is heavily dependent on the target device’s resources and capabilities.

With cryware, attackers who gain access to hot wallet data can use it to quickly transfer the target’s cryptocurrencies to their own wallets. Unfortunately for the users, such theft is irreversible: blockchain transactions are final even if they were made without a user’s consent or knowledge.


They go into a lot of detail here, but it’s the “cryware” epithet that’s novel.
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Warning: another stablecoin loses peg – DEI team working to restore the peg • Finbold

Dino Kurbegovic:


Deus Finance’s stablecoin Dei (DEI) is the latest stablecoin to lose its 1-to-1 peg to the US dollar. The coin is currently trading at $0.64, as this drop follows several algorithmic stablecoins losing their peg last week, the most notable of which was the algorithmic stablecoin TerraUSD (UST). 

Deus Finance uses DEUS and DEI tokens for their DeFi protocol, where minting 1 DEI requires $1 of collateral. When redeeming, for instance, one DEI, users would get 80% of the value in USDC and 20% in DEUS if USDC was used as collateral for the creation of DEI in the first place. 

This is important because the collateral ratio fell to 43%; according to data from Deus Finance, low collateral meant difficult redemption of DEI tokens since there is not enough capital behind the stablecoin.   

Traders are taking advantage of this arbitrage mismatch, buying up DEI coins and exchanging them for $1 worth of collateral, making matters worse. Deus Finance reacted by halting the redemption process in order to try and stabilize the coin.  


When I checked about seven hours ago, that wasn’t going too well: down to $0.57. USDC never seems to have been very well capitalised. Still, to lose one peg might look like accident, to lose two…
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Intel can’t even grow profits during a global chip shortage; where did it all go wrong? • The Conversation

Howard Yu is professor of management and innovation at the International Institute for Management Development:


TSMC doesn’t have to shoulder the risks of launching a new product. It just needs to excel in manufacturing, because if a Qualcomm product fails, AMD’s may take off. TSMC can switch capacity from one client to another. Risk is mitigated when demand is pooled.

For chip designers, outsourcing to TSMC has gradually meant they can afford to be fast-moving and bold in product design. If a new chip doesn’t sell, they can pull the plug without having to worry about the factory: that’s TSMC’s problem.

That’s how Nvidia has evolved beyond deploying graphic processors only in the gaming sector; it’s now leading in designing chipsets for AI applications. And AMD, an underdog close to bankruptcy in 2014, now makes some of the most powerful processors.

Intel, meanwhile, still needs to ensure that every product wins with enough volume to feed its network of factories, each costing billions of dollars. This has made the company more and more conservative. And having stuck to supplying chips to PCs, servers and data centres, it is struggling to innovate. Tellingly, the company’s gross margin – total revenue minus the cost of production – has been sliding for nearly a decade. The biggest danger for a technology company is that it’s not developing leading-edge products fast enough, backsliding into selling commodities.


Intel’s was the utterly winning formula while desktop/laptop was the only game in town. But as soon as that diversified, the formula became a deadweight. Intel’s now-CEO argued strongly against RISC as a design architecture, insisting that CISC was the better option. That was absolutely correct as long as power consumption wasn’t a relevant metric. Now, though, it is.
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The impact of digital media on children’s intelligence while controlling for genetic differences in cognition and socioeconomic background • Scientific Reports

Bruno Sauce et al (from Holland, Germany and Sweden):


Digital media defines modern childhood, but its cognitive effects are unclear and hotly debated. We believe that studies with genetic data could clarify causal claims and correct for the typically unaccounted role of genetic predispositions. Here, we estimated the impact of different types of screen time (watching, socializing, or gaming) on children’s intelligence while controlling for the confounding effects of genetic differences in cognition and socioeconomic status.

We analyzed 9,855 children from the USA who were part of the ABCD dataset with measures of intelligence at baseline (ages 9–10) and after two years. At baseline, time watching (r = − 0.12) and socializing (r = − 0.10) were negatively correlated with intelligence, while gaming did not correlate. After two years, gaming positively impacted intelligence (standardized β =  + 0.17), but socializing had no effect. This is consistent with cognitive benefits documented in experimental studies on video gaming. Unexpectedly, watching videos also benefited intelligence (standardized β =  + 0.12), contrary to prior research on the effect of watching TV. Although, in a posthoc analysis, this was not significant if parental education (instead of SES) was controlled for.


“Gaming positively impacted intelligence”. Bet you didn’t expect that one.
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Tesla hacker proves a way of unlocking doors, starting engine • Bloomberg

Margi Murphy:


Tesla customers might love the carmakers’ nifty keyless entry system, but one cybersecurity researcher has demonstrated how the same technology could allow thieves to drive off with certain models of the electric vehicles.

A hack effective on the Tesla Model 3 and Y cars would allow a thief to unlock a vehicle, start it and speed away, according to Sultan Qasim Khan, principal security consultant at the Manchester, UK-based security firm NCC Group. By redirecting communications between a car owner’s mobile phone, or key fob, and the car, outsiders can fool the entry system into thinking the owner is located physically near the vehicle. 

The hack, Khan said, isn’t specific to Tesla, though he demonstrated the technique to Bloomberg News on one of its car models. Rather, it’s the result of his tinkering with Tesla’s keyless entry system, which relies on what’s known as a Bluetooth Low Energy (BLE) protocol. 

There’s no evidence that thieves have used the hack to improperly access Tesla vehicles. The carmaker didn’t respond to a request for comment. NCC provided details of its findings to its clients in a note on Sunday, an official there said.

Khan said he had disclosed the potential for attack to Tesla and that company officials didn’t deem the issue a significant risk. To fix it, the carmaker would need to alter its hardware and change its keyless entry system, Khan said. The revelation comes after another security researcher, David Colombo, revealed a way of hijacking some functions on Tesla vehicles, such as opening and closing doors and controlling music volume.


It’s a little difficult to evaluate how much of a risk this is. “Redirecting communication” sounds like they’re trying to unlock the car and the thief intercepts that? Not sure how dangerous that would really be.
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Elon Musk does not care about spam bots • Bloomberg

Matt Levine, whose newsletter is an excellent choice of reading:


I think it is important to be clear here that Musk is lying. The spam bots are not why he is backing away from the deal, as you can tell from the fact that the spam bots are why he did the deal. He has produced no evidence at all that Twitter’s estimates are wrong, and certainly not that they are materially wrong or made in bad faith. (Musk can only get out of the deal if Twitter’s filings are wrong in a way that would cause a “material adverse effect” on Twitter, which is vanishingly unlikely.) His own supposed methodology for counting spam bots is laughable. Yesterday Twitter’s chief executive officer, Parag Agrawal, tweeted a thread explaining in general terms how Twitter estimates that fake accounts represent fewer than 5% of its count of active users, and how this analysis can’t be easily replicated by outsiders (because they don’t know which accounts are real, and also because they don’t know which accounts Twitter counts as daily active users). It seems clear that Agrawal’s thoughtful answer is basically correct. 1  Musk responded with a poop emoji.

More important, nothing has changed about the bot problem since Musk signed the merger agreement. Twitter has published the same qualified estimate — that fewer than 5% of monetizable accounts are fake — for the last eight years. Musk knew those estimates, and declined to do any nonpublic due diligence before signing the merger agreement. He knew about the spam bot problem before signing the merger agreement, as we know because he talked about it constantly, including while announcing the merger agreement. If he didn’t want to buy Twitter because there are spam bots, he should not have signed a contract to buy Twitter. No new information has come to light about spam bots in the last three weeks. 

What has happened in the last three weeks? Well, the prices of tech stocks have gone down, making the $54.20 price that Musk agreed to look a bit rich.


Levine is, it should be said, a fan of italics. I now put the chances of this deal happening at around 10%. That is, if someone offers you £10 for a £1 bet that it happens, take it. But not for £9.

Also: remember a fortnight ago, when everyone was sure the deal was all done bar a couple of dotted i’s?
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About that passenger who landed a plane • Breaking the News

James Fallows, an experienced pilot, on some of the things that the guy who landed the plane when the pilot passed out (here’s the FAA account):


What’s hard about landing a plane includes the following elements, which are distinct from the other parts of “learning to fly”—weather, radio work, regulations, avionics, mechanical and electrical systems, etc.

• You’re intentionally pointing the plane toward the ground. This can be disconcerting
• You have to maintain the “sight picture.” You can judge whether you’re on the right vertical descent path, by how the approach end of the runway looks as you head down. When the winds are smooth, this can be like riding an escalator down toward the runway. It becomes second nature, just like judging the traffic flow when you’re changing lanes on a busy freeway. But it’s not first nature
• You have to manage step-downs in altitude and speed. Planes typically cruise at speeds that are many multiples of their proper touch-down speed for landing. They need to reduce the speed in predictable increments —meanwhile while descending, which (unless offset) increases the airplane’s speed
• Managing the speed, and altitude, and alignment through these processes again becomes as natural as guiding a bike in a turn. But not the first time—or, for most people, the 10th, or the 50th
• You have to manage “pitch and power,” which I’m not going to get into. Nor the use of “flaps.” Again, everyone learns to do this by muscle memory, but no one starts that way
• You have to manage winds. When there’s a crosswind, which seems to be most of the time, you “crab” into the wind, pointing the plane’s nose upwind so that its course remains aligned with the runway. And then there is “wind shear,” and allowing for “gust factor
• You have to manage the “flare.” The difference between what feels like a “rough” and “smooth” landing often comes down to a difference of a few inches, and a few knots, in how the plane goes through the last little bit of descent.


As Fallows points out, we haven’t had the tapes of the conversation between air traffic control and the (presumed completely amateur) passenger. So we don’t know what the conversation was. It’s going to be absolutely fascinating to know how they literally talked him down. (Via John Naughton.)
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MetaFilter’s rule-laden mini-utopia • New_ Public

“New_ Public” (a “community of thinkers, designers and technologists building the digital public spaces of the future”):


Today, there’s an expectation that if you want to join a social media network, the experience should be “frictionless” — you should be able to start as easily and seamlessly as possible. The quicker a platform can get you comfortable and interested (and typically, at least casually addicted), the better. MetaFilter, which comes from an era of image-less forums, where you can’t even reply to a post in-line, takes a different approach. Anyone can read the site, but to post you must pay $5 and wait one week. As they explain on their new user page, these rules, and other waiting periods, are partly to combat spam and bots. But primarily, they want users to understand what MetaFilter is, how it works, and what’s expected of users before they jump in completely.

It may take a little time and effort to get into MetaFilter, but every decision about how the site works is instantly available for any visitor to read through the MetaTalk subpage. This goes far beyond basic policies and terms of service. For example, the site is currently moving to a new moderation model, which is being chronicled by the users. 

The owner since 2017 has been Josh Millard, who goes by cortex on MetaFilter. Millard is now ceding control of the site to a transition team of longtime users who will decide how to proceed. In a recent candid post, Millard opened up about what it takes to run the site. “I’ve been especially aware of both the toll the job has been taking on me and the degree to which my burnout and mental health challenges have been preventing me from being as effective a manager, moderator, and business administrator as I want MetaFilter to have,” he wrote.

Here, the gulf between MetaFilter and the largest social platforms gets even wider. If Elon Musk’s stated goal of a Twitter with no restrictions on speech is one end of the spectrum, then MetaFilter might be the other end. It’s important to know that the amount of new content each day is extremely low (maybe 10 posts) and the site has a deep catalog of posts that mods do not want to be repeated. The FAQ could not be more clear: “MetaFilter is a moderated site and not all posts pass muster.”


But, of course, that takes a lot of work. Metafilter came close to death a few years ago when Google downranked it.
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Napster gets bought again, this time with a web3 pivot in the works • Music Ally

Stuart Dredge:


How many roads must a man walk down before you call him a man, wondered Bob Dylan in 1963. How many owners must a Napster change hands between before you call it a revolutionary blockchain and web3 platform, wonders Music Ally in 2022. Whatever the number, you can add one to it this morning.

Yes, Napster has been acquired again, this time by two companies from the web3 sector: Hivemind and Algorand. “Dear friends, we are excited to share that we’ve taken Napster Group private, and to bring the iconic music brand to web3,” wrote Hivemind founder Matt Zhang on LinkedIn.

“Volatile market and uncertain times often bring exciting opportunities. At Hivemind, we believe in developing thesis and building enduring value. Music x Web3 is one of the most exciting spaces we’ve come across, and we are thrilled to work with Emmy Lovell and many talents to unlock value for the entire ecosystem and revolutionize how artists and fans enjoy music.”

Lovell has been named interim CEO of Napster, with the former WMG exec stepping up from her previous role as chief strategy officer, having joined the company in April 2021 shortly after its last acquisition by music VR company MelodyVR.


I honestly thought Napster was still going in its second incarnation, as a music service. Seems not. It’s changed hands more times than Delicious (which finally got bought by Pinboard, to stop other people buying it and passing it round).
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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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