Monthly Archives: November 2016

Part 2: So how does Bitcoin work?

In traditional money systems, governments simply print more money when they need to.  But in bitcoin, money isn’t printed at all – it is discovered.  Computers around the world ‘mine’ for coins by competing with each other.

How does mining take place?

People are sending bitcoins to each other over the bitcoin network all the time, but unless someone keeps a record of all these transactions, no-one would be able to keep track of who had paid what. The bitcoin network deals with this by collecting all of the transactions made during a set period into a list, called a block. It’s the miners’ job to confirm those transactions, and write them into a general ledger.

Making a hash of it

This general ledger is a long list of blocks, known as the ‘blockchain’. It can be used to explore any transaction made between any bitcoin addresses, at any point on the network. Whenever a new block of transactions is created, it is added to the blockchain, creating an increasingly lengthy list of all the transactions that ever took place on the bitcoin network. A constantly updated copy of the block is given to everyone who participates, so that they know what is going on.

how-bitcoin-mining-works-300x185But a general ledger has to be trusted, and all of this is held digitally. How can we be sure that the blockchain stays intact, and is never tampered with? This is where the miners come in.

When a block of transactions is created, miners put it through a process. They take the information in the block, and apply a mathematical formula to it, turning it into something else. That something else is a far shorter, seemingly random sequence of letters and numbers known as a hash. This hash is stored along with the block, at the end of the blockchain at that point in time.

Hashes have some interesting properties. It’s easy to produce a hash from a collection of data like a bitcoin block, but it’s practically impossible to work out what the data was just by looking at the hash. And while it is very easy to produce a hash from a large amount of data, each hash is unique. If you change just one character in a bitcoin block, its hash will change completely.

Miners don’t just use the transactions in a block to generate a hash. Some other pieces of data are used too. One of these pieces of data is the hash of the last block stored in the blockchain.

Because each block’s hash is produced using the hash of the block before it, it becomes a digital version of a wax seal. It confirms that this block – and every block after it – is legitimate, because if you tampered with it, everyone would know.

If you tried to fake a transaction by changing a block that had already been stored in the blockchain, that block’s hash would change. If someone checked the block’s authenticity by running the hashing function on it, they’d find that the hash was different from the one already stored along with that block in the blockchain. The block would be instantly spotted as a fake.

Because each block’s hash is used to help produce the hash of the next block in the chain, tampering with a block would also make the subsequent block’s hash wrong too. That would continue all the way down the chain, throwing everything out of whack.

Competing for coins

So, that’s how miners ‘seal off’ a block. They all compete with each other to do this, using software written specifically to mine blocks. Every time someone successfully creates a hash, they get a reward of 25 bitcoins, the blockchain is updated, and everyone on the network hears about it. That’s the incentive to keep mining, and keep the transactions working.
butterfly-labs-bitforce-mini-rig-sc1-1024x8161-300x185
The problem is that it’s very easy to produce a hash from a collection of data. Computers are really good at this. The bitcoin network has to make it more difficult, otherwise everyone would be hashing hundreds of transaction blocks each second, and all of the bitcoins would be mined in minutes. The bitcoin protocol deliberately makes it more difficult, by introducing something called ‘proof of work’.

The bitcoin protocol won’t just accept any old hash. It demands that a block’s hash has to look a certain way; it must have a certain number of zeroes at the start. There’s no way of telling what a hash is going to look like before you produce it, and as soon as you include a new piece of data in the mix, the hash will be totally different.

Miners aren’t supposed to meddle with the transaction data in a block, but they must change the data they’re using to create a different hash. They do this using another, random piece of data called a ‘nonce’. This is used with the transaction data to create a hash. If the hash doesn’t fit the required format, the nonce is changed, and the whole thing is hashed again. It can take many attempts to find a nonce that works, and all the miners in the network are trying to do it at the same time. That’s how miners earn their bitcoins.

Hope this helps explain how Bitcoin Mining works.  Stayed tuned for tomorrow on “bitcoin transaction”.

DOJ defends new cyber snooping regulations

digital_fingerprintThe Department of Justice calls them procedural changes that will help the government to pursue child pornographers who use cybertechnology to conceal their identities. Opponents say they are substantive and troubling changes that will vastly expand the government’s ability to spy on innocent Americans.

The changes in question are amendments to Rule 41 of the Federal Rules of Criminal Procedure, which deals with the issuance of warrants and protocols for searches and seizures. Barring congressional action, the amendments take effect on Dec. 1.

The amendments have been under debate for the past three years and are designed to address the thorny question of which court has jurisdiction to issue warrants in cases where suspected cybercriminals are using tools such as Tor or virtual private networks to conceal their identities and locations. Journalists, human rights activists and law enforcement officials also use such tools for legal purposes.

The amendments would allow the issuance of a single warrant to potentially search millions of computers suspected of being infected by botnet malware.

The Justice Department has been posting a series of blogs in support of the new rules.

“When a child abuser has successfully anonymized their identity and location online, investigators do not know where the abuser’s computer is located,” Assistant Attorney General Leslie Caldwell wrote in a recent blog post. “So in those cases, the [existing] rules do not clearly identify which court the investigators should bring their warrant application to.”

In another post, Caldwell argued for using a single warrant to search multiple computers in different locations that are suspected of being infected by a botnet.

“The Rules [of criminal procedure] as currently written (and as conceived in 1917) would require the investigators to apply simultaneously for identical warrants in all 94 judicial districts in America — a severe impracticality if not impossibility,” he wrote.

Privacy advocates and some lawmakers are trying to block what they see as a green light to access the personal devices of millions of Americans on the mere suspicion that they are infected with botnets.

In October, a bipartisan group of 23 members of Congress signed a letter to the attorney general asking for clarification on how the Justice Department will notify individuals whose computers are infected with botnet malware, how it will conduct searches or “clean” such computers without collateral damage and how the principle of probable cause will be applied to “justify the remote search of tens of thousands of devices.”

The Electronic Frontier Foundation also has been a vocal opponent of the changes. “The amendment to Rule 41 isn’t procedural at all,” EFF Activism Director Rainey Reitman wrote earlier this year. “It creates new avenues for government hacking that were never approved by Congress…. Congress should reject the proposal completely.”

The Justice Department released another blog post on Nov. 28 to respond to criticisms of the amendments.

“The pending amendments do not authorize the government to undertake any search or seizure or use any remote search technique that is not already permitted under the Fourth Amendment,” the post states. “The amendments neither endorse particular searches as reasonable, nor do they in any way change the traditional constitutional, statutory, and prudential factors the department relies on to determine whether to seek a warrant. They simply identify the appropriate court to ask.”

But that response has not satisfied critics, including Sen. Ron Wyden (D-Ore.), who co-sponsored legislation that would block the Rule 41 amendments from going into effect. Although his office acknowledges it is an uphill battle to pass any legislation before the rules take effect, he and others remain committed to blocking or amending the changes.

In a recent statement, Wyden said Justice officials have failed to provide details on how they intend to hack potentially millions of devices under a single warrant.

“[That] should be a big blinking warning sign about whether the government can be trusted to carry out these hacks without harming the security and privacy of innocent Americans’ phones, computers and other devices,” he said.

Part 1: What is a Bitcoin and how does it work?

So I’ve been asked several times in the past couple of weeks, what is a Bitcoin and how does it work?

Bitcoin is a form of digital currency, created and held electronically. No one controls it. Bitcoins aren’t printed, like dollars or euros – they’re produced by people, and increasingly businesses, running computers all around the world, using software that solves mathematical problems.

It’s the first example of a growing category of money known as cryptocurrency.

What makes it different from normal currencies?

Bitcoin can be used to buy things electronically. In that sense, it’s like conventional dollars, euros, or yen, which are also traded digitally.

However, bitcoin’s most important characteristic, and the thing that makes it different to conventional money, is that it is decentralized. No single institution controls the bitcoin network. This puts some people at ease, because it means that a large bank can’t control their money.

Who created it?

A software developer called Satoshi Nakamoto proposed bitcoin, which was an electronic payment system based on mathematical proof. The idea was to produce a currency independent of any central authority, transferable electronically, more or less instantly, with very low transaction fees.

Who prints it?
bitcoins
No one. This currency isn’t physically printed in the shadows by a central bank, unaccountable to the population, and making its own rules. Those banks can simply produce more money to cover the national debt, thus devaluing their currency.

Instead, bitcoin is created digitally, by a community of people that anyone can join. Bitcoins are ‘mined’, using computing power in a distributed network.

This network also processes transactions made with the virtual currency, effectively making bitcoin its own payment network.

So you can’t churn out unlimited bitcoins?

That’s right. The bitcoin protocol – the rules that make bitcoin work – say that only 21 million bitcoins can ever be created by miners. However, these coins can be divided into smaller parts (the smallest divisible amount is one hundred millionth of a bitcoin and is called a ‘Satoshi’, after the founder of bitcoin).

What is bitcoin based on?

Conventional currency has been based on gold or silver. Theoretically, you knew that if you handed over a dollar at the bank, you could get some gold back (although this didn’t actually work in practice). But bitcoin isn’t based on gold; it’s based on mathmatics.

Around the world, people are using software programs that follow a mathematical formula to produce bitcoins. The mathematical formula is freely available, so that anyone can check it.

The software is also open source, meaning that anyone can look at it to make sure that it does what it is supposed to.

What are its characteristics?

Bitcoin has several important features that set it apart from government-backed currencies.

1. It’s decentralized

The bitcoin network isn’t controlled by one central authority. Every machine that mines bitcoin and processes transactions makes up a part of the network, and the machines work together. That means that, in theory, one central authority can’t tinker with monetary policy and cause a meltdown – or simply decide to take people’s bitcoins away from them, as the Central European Bank decided to do in Cyprus in early 2013. And if some part of the network goes offline for some reason, the money keeps on flowing.

2. It’s easy to set up

Conventional banks make you jump through hoops simply to open a bank account. Setting up merchant accounts for payment is another dauting task, beset by bureaucracy. However, you can set up a bitcoin address in seconds, no questions asked, and with no fees payable.

3. It’s anonymous

Well, kind of. Users can hold multiple bitcoin addresses, and they aren’t linked to names, addresses, or other personally identifying information. However…

4. It’s completely transparent

…bitcoin stores details of every single transaction that ever happened in the network in a huge version of a general ledger, called the blockchain. The blockchain tells all.

If you have a publicly used bitcoin address, anyone can tell how many bitcoins are stored at that address. They just don’t know that it’s yours.

There are measures that people can take to make their activities more opaque on the bitcoin network, though, such as not using the same bitcoin addresses consistently, and not transferring lots of bitcoin to a single address.

5. Transaction fees are miniscule

Your bank may (most likely) charge you a fee for international transfers. Bitcoin doesn’t.

6. It’s fast

You can send money anywhere and it will arrive minutes later, as soon as the bitcoin network processes the payment.

7. It’s non-repudiable

When your bitcoins are sent, there’s no getting them back, unless the recipient returns them to you. They’re gone forever.

So, bitcoin has a lot going for it, in theory. But how does it work, in practice? Stayed tuned for more tomorrow.

 

Internet of Things (IOT), Big Data, Business Intelligence, Data Science, Digital Transformation: Hype or Reality? Facts and Figures

analytics

The Internet of things (IoT) is the internetworking of physical devices, vehicles, connected devices and smart devises, buildings and other items, embedded with electronics, software, sensors, actuators, and network connectivity that enable these objects to collect and exchange data without requiring human-to-human or human-to-computer interaction.

The worldwide IOT market spend will grow from $592 billion in 2014 to $1.3 trillion in 2019 according to IDC, while the installed base of IoT endpoints will grow from 9.7 billion in 2014 to 30 billion in 2020 where 40% of all data in the world will be data resulting from machines to machines communication (M2M).

Gartner survey shows that 43 % of Organizations are using or plan to implement the Internet of things in 2016. Gartner predicts $2.5M per minute in IoT spending and 1M new IoT devices sold every hour by 2021.

Industrial IOT (Internet of Things) market is estimated at $60 trillion by 2030.

By 2020, IoT will save consumers and businesses $1 trillion a year in maintenance, services and consumables.

By 2022, a blockchain-based business will be worth $10B, Blockchain being a digital platform that records and verifies transactions in a tamper and revision-proof way that is public to all.

By 2018, Cloud Computing infrastructure and platforms are predicted to grow 30% annually. Many enterprises have failed to achieve success with cloud computing, because they failed to develop a cloud strategy linked to business outcomes. Many companies are unsure how to initiate their cloud projects. The key success factors for Cloud projects are the good design of the Business Processes, the focus on the Services delivered and a good design of the transition from “As Is” to “To Be” Applications Architecture.

By 2019, Global Business Intelligence market will exceed $ 23 billion and Global Predictive Analytics market will reach $ 3.6 billion by 2020, driven by the growing need to replace uncertainty in business forecasting with probability and the increasing popularity of prediction as a key towards improved decision making. Predictive analytics is the branch of the advanced analytics which is used to make predictions about unknown future events. Predictive analytics uses many techniques from data mining, statistics, modeling, machine learning, and artificial intelligence to analyze current data to make predictions about future. It is about the increased need & desire among businesses to gain greater value from their data. Over 80% of data/information that businesses generate and collect is unstructured or semi-structured data that need special treatment using Big Data Analytics.

Big Data investments will account for over $46 Billion in 2016 reaching $72 Billion by the end of 2020.

A new brand of analysts called “data scientists” are introducing data science courses into degrees ranging from computer science to business. Data Scientists usually require a mix of skills like mathematics, statistics, computer science, algorithmic, machine learning and most importantly business knowledge. If Data Scientists are lacking business knowledge, they will definitely fail. They also need to communicate the findings to C-Level management to be able to take the right strategic decisions.

Data science needs to be a fundamental component of any digital transformation effort.

All Sectors will have to hire and educate a significant number of Data Scientists.

Let’s take the example of the Energy Sector where the Digital Transformation is playing a crucial role to reach Global and European Energy targets:

87% of CFOs agree that growth requires faster data analysis and 50% of Networked enterprises are more likely to increase their market-share.

With the 2020 energy climate package and the 2050 energy roadmap, Europe has engaged early in the transformation of its Energy system.

As the Industrial Revolution was the transition to new manufacturing processes between 1760 and1840, the digital revolution will be the disruptive transformation of the 21st century to a new economy, a new society and a new era of low-emission energy.

Many large Energy players will appoint Chief Digital Officers to drive the digital transformation of their processes and create new businesses.

Four recommendations to boost Customer Centric Energy innovations will heavily require the Digital Transformation roadmap to be adopted:

  1. Accelerate Customer innovations by making the Data available for Market participants
  2. Build massive Energy Services as downloadable Apps through Energy Exchange Platforms B2B, B2C and C2C
  3. Full Customer participation by making customer usability as simple as one click
  4. Build the pan-European Energy Union of Customer Services by extending to cross-border Energy Management

With the enablement of IOT, BI, Predictive Analytics and Data Science and the proven business models, we predict that 90% of Commercial and Industrial Customers and 70% of Residential Customers will be adopting Smart Energy technologies by 2025.

Let me ask you the following questions:

  • What are the Top 3 priorities that justifie Digital Transformation in your business?
  • Are you planning to setup a Data Science team?
  • Are you considering Digital for existing business improvement or for creating new businesses?

 

“Don’t Click” for Black Friday/Cyber Monday

black-friday
Some civilized thoughts:

1. “Don’t click stuff from unknown sources!”

2. Don’t scan (QR codes) from unknown sources.

3. ANY time you scan, you click OR hand over your E-Mail your expectations of privacy have evaporated.

4. Your E-Mail and your Phone number are worth a LOT more than a 10% coupon.

5. Always worth being careful of “cheap” electronics or bargains that just seem too good to be true….

6. Online coupons and online sites, PLEASE validate, check and then DOUBLE check the site, the security, the SSL Certificate AND the spelling before putting in a credit card.

7. Links embedded in emails AND sites AND anything you are looking at CAN and SHOULD be examined very carefully before being clicked!

8. Shopping at the Mall, be careful of the “free web access” people like me are sitting there VERY happy to give you a Chase, Wells Fargo or AMEX login.

9. Need to sign up for something in a hurry? USE A UNIQUE PASSWORD!

And remember if it looks to good to be true…..then it probably is!

Ok, hope that helps

Oh, and DON’T CLICK !

Top tips on protecting your devices from hackers

iot_hackers

Billions of fitness trackers, medical implants, surveillance cameras, home appliances, thermostats, baby monitors and computers in automobiles now are connected as part of a rapidly expanding (IoT) “internet of things.”

But many such devices were developed without security considerations. As a result, they are prime targets for hackers.

Tips to protect your devices:

How do I know if I have an internet of things device?

If you have a device that is capable of connecting to the internet or shares information over a wireless network in your home, it is potentially insecure and can be leveraged for a cyber attack.

Last month, hackers harnessed an army of 100 000 internet-connected devices around the world, such as DVRs and security cameras, to attack Dyn, which helps route internet traffic to its destination. It caused temporary internet outages to sites that included Twitter, PayPal, Pinterest, Reddit and Spotify.

Why should I care?

Hackers can penetrate devices to directly harm someone or to target critical infrastructure.

They can remotely disable a car, raise the thermostat on refrigerated foods, and toy with internet-enabled medical devices.

In the Dyn attack, hackers used the devices to flood the internet infrastructure company with data and knock it offline.

Such tactics also could be used against electrical and water systems, which are increasingly being put online to allow for remote operation.

What can I do?

Make sure you are aware of what you are connecting to the internet, and think about what is necessary.

That feature on your new bathroom scale that syncs with your phone is handy, but can you password protect it from getting hacked?

Any device that has the capabilities of remotely sending information elsewhere is vulnerable. Therefore, the software on that device and the network in connects to must be secured.

If a device comes with a default password, make sure you change it. You should also change the password on your wireless network at home. Use complex passphrases to ensure your device is not easily hacked.

The Dyn attack was made possible by devices with default passwords that were never changed.

Whom do I contact if I am worried about a device?

Contacting the manufacturer or vendor of the device may not always help.

This is especially true because innovation has frequently outpaced cyber security education.

In the US, the Homeland Security Department, for example, sends out public alerts about vulnerabilities through its US-CERT programme that you can sign up for on its website .

 

The IT Guy Becomes a Player

it

Back in the days of mainframes, the ubiquitous “IT Guy” was responsible for planning, building and maintaining in-house infrastructure, as well as developing custom solutions to automate back-office functions. And while the role evolved some over the years, the first truly tectonic shift occurred when cloud computing emerged, combined with aftershocks in the form of mobile, social and Big Data. As technology became commoditized and consumerized, some analysts suggested in-house IT would become obsolete.

In reality, the role of the IT Guy is evolving into one of greater value and significance.

Recently, IDC and Forrester Research, two of the largest technology industry research firms, released predictions that IT is poised to take the lead as companies move toward their digital futures. The reason: While many companies outsourced their initial forays into cloud and mobile applications, they can’t continue to depend on external consultancies for much longer. Digital transformation is so critical to the future of businesses, the analysts say, that relying on external parties to provide solutions will be too dangerous. In-house IT will, of necessity then, become the core driver of “how business does business.”

Taking on a more important role

Even in today’s quick moving environments, the role of the IT department has increased in value across the enterprise, as it works with various internal teams and links its goals to the wider objectives of the business. A recent survey by Forrester asked company executives to name the most important senior leader in driving or supporting business transformation and innovation, and one of the top answers was the CIO – ahead even of the CEO.

As the master of all things digital, talented CIOs are perfectly positioned to take the lead on leveraging new tech elements to help shape a business’ overall strategy – and use high-performance networks to effectively pursue it.

This new, more challenging—but much more valuable—vision of the IT Guy’s role as an innovator and strategist also seems to be widely accepted, according to a survey by Gartner Research.

The CIO as chief innovator is trending up: The Gartner survey says more CIOs are adding value to their roles by leading boardroom discussions about using cloud, mobile, analytics and social technologies to drive new product development, online marketing and other customer-facing initiatives. The research firm concludes that the perception of the CIO has evolved from an IT service provider to an enabler of digital products that support business.

And that’s only the beginning. The next great leap for businesses will be the Internet of Things (IoT), and CIOs will have the opportunity to lead by solving the challenges that will come with IoT integration.

Three types of CIOs

“IoT requires the creation of a software platform that integrates the company’s IoT ecosystem with its products and services,” says Peter Sondergaard, senior vice president, Gartner Research, adding that CIOs will be the “builders” of the new digital platforms and high-performance networks that IoT projects will require. However, while the change of role might be adventurous for some, not every CIO wants to embrace the change from being operational to innovative, according to an IDC study, “The Changing Role of IT Leadership: CIO Perspectives for 2016.”

The study outlines three types of CIOs: operational (keeping the lights on and costs down); business services manager (providing an agile portfolio of business services); and chief innovation officer (business innovator).

Business innovator is the role CIOs must play in order to have a meaningful future, says Michael Jennett, vice president for enterprise mobile strategy at IDC.

“For these executives to stay relevant, they must shift their focus to transformation and innovation,” he adds. “CIOs who stay operational will find themselves further marginalized over the next three years.”

The big question for many businesses, then, is will the IT Guy be prepared to incorporate an understanding of the company’s mission and develop value-added strategies to generate, as Jennet says, “revenue out of what you do.”

Interestingly, the IDC study found that while more than 40 percent of line-of-business executives view the CIO as an innovator, only 25 percent of CIOs describe their own role that way, with more than 40 percent viewing themselves as primarily operational, and 34 percent as business service managers.

However, with global digital commerce revenue at over $1 trillion annually, CEOs see digital as fuel for growth, and expectations for IT departments are running high. To succeed in this environment, and bring value, the IT Guy needs to rise to the occasion and take on responsibility for digital innovation, as well as maintaining the infrastructure.