How do you deal with a bully?

Over the past year this blog has been quiet. I cannot, however, remain quiet any longer about the situation in Russia. Even back in 2008 I wrote that Vladimir Putin was trouble, that the Cold War was back on, and that President Bush stood idly by. It would be bad enough to say that nothing has changed, but since then, things have gotten worse, and for the Ukraine, a lot worse.

Once again the world stands at the brink of war with a maniac, and we wonder how to avoid it. Those Russians who resist the kook are subject to harassment or arrest. The casual relationship Mr. Putin has with the truth makes negotiations impossible. It would be bad enough if it were just the Ukraine that was put through this nightmare. But Estonia has suffered cyberattacks from Russia, and it is a sure bet that the rest of the world has suffered them as well.

All of this because the Ukraine dared enforce their democracy to establish stronger economic ties with the European Union, against their neighbor’s will. And when it was shown that threatening to turn off the gas was not enough to dissuade Ukrainians, Mr. Putin invaded.

There are very few steps between where we are now and opened armed conflict beyond the Ukraine. Knowing this, rather than seeking peaceful resolution to the situation, Mr. Putin rattled his large nuclear sword, like bullies flex their muscles.

But there are a few.

Europe took additional steps this week to attempt to restrain this great bear, and one knows that Russia has transgressed when the leaders of the EU can agree on something. Whether it is enough to keep the peace in the Ukraine and to keep Russia’s domineering presence at bay is a question only Mr. Putin can answer.

Europe ought not stand alone when dealing with this threat. The United States has a role to play by supporting Europe in arranging for alternative sources of fuel. Other leaders need to stand up and say that this is not a way for a superpower to behave.

Rest in Peace, Nelson Mandela

How to speak the truth and yet lie? Ask General Alexander

Old joke in the industry: the difference between a sales person and marketing person is that the marketing person knows when he’s lying. Which is General Alexander?

Let’s appreciate that the head of a spying agency is in a tough spot. Allies and citizens of the U.S. alike are outraged, making an actual dialog difficult. Leaders, however, must address hard issues head on and truthfully; and they must demonstrate command of the subject matter, or we waste our time.

Let’s go through some of the General’s statements:

“the assertions… that NSA collected tens of millions of phone calls [in Europe] are completely false”.

– From a BBC article

Maybe, but he and the president have in the past made the distinction between so-called “meta-data” (which the rest of us just call “data”). And so maybe the NSA doesn’t have access to the calls, but he has not denied that they have access to who people called, the time and date they called, and for how long. What is the truth?

Yesterday The Washington Post dropped another Snowden bombshell, indicating that the NSA was intercepting Google customer traffic by tapping into their communications lines. The Guardian had previously reported that GCHQ was tapping fiber cables. Alexander’s response, this time?

This is not NSA breaking into any databases. It would be illegal for us to do that. So, I don’t know what the report is. But I can tell you factually we do not have access to Google servers, Yahoo servers. We go through a court order.–From CNN

Except in this case, the NSA is not accused of breaking into servers, but rather tapping communications off of fiber cables. By answering a charge that wasn’t made, either general doesn’t understand the issue and therefore cannot meaningfully inform the President or the public, or he does understand the truth and is intentionally prevaricating to the public. What is necessary is a public debate over the policy issues relating to surveillance, and when it should and should not be authorized. The people leading that dialog should be truthful and informed.

I’m sure the general is aware that everyone has their day of reckoning. It’s time for his. The president needs to find a new director of the NSA who can intelligently advance an honest discourse.

Q: When do principles cost too much?

A: when they’re the wrong principles and the money could be spent educating students instead.

USA Today/Ganette is reporting that The Easton, PA school district is appealing a federal appeals court decision that allowed two girls to wear bracelets that say, “I (heart) Boobies”. The bracelets are part of a breast cancer awareness campaign. Easton’s argument is that the bracelets are lewd.

I grew up in a town that had a track record of going to the Supreme Court for stupid reasons. The first case involved trying to claim that English as a Second Language Teachers weren’t actually teachers, despite their qualifications and the fact that they were in fact teaching. They lost. In a separate case, they went to the Supreme Court over having searched a girl’s locker and having had her arrested. The Court dismissed the notion that they were entitled to act in loca parentis, under the theory that few parents would have their children arrested. Both of these cases cost the tax payers millions of dollars.

Easton, PA is not a rich town. The district does okay with what they have (about the middle of the pack in PA). Still, their money is being wasted by a case of very questionable merit, where even a positive result will not help a single student. So why sue? Because the superintendent wanted to be the ultimate source of authority in his district for what is and is not appropriate for students to wear. Guess what? He’s a public servant, applying the rules of our society. He doesn’t get the final say. And he’s wasting a lot of money finding out. Oh and their lawyer story claims that the appeal will cost $2,000-$3,000. Horse hockey!

Is Bitcoin Really Money Laundering?

For those who don’t know, BitCoin is an attempt at a new type of currency, one that isn’t linked to any nation. In a way, bitcoin is a lot like gold or other commodities, only it differs in that you don’t actually have to ship anything around or even keep trading futures to stay in the game. Still it accrues similar benefits as gold. In fact there is a bitcoin to gold price, based on milligrams of gold. As you can see the number of milligrams one gets for a bitcoin has gone from about 300 in January to about 3,300 in October. Bitcoins have clearly paid off for some people.

One of the other goals of bitcoin is that they be as anonymous as cash. This is where the problems start. Let’s say you want to sell a few bitcoins, and receive American dollars. One question is simply this: do you have to list the sale on Schedule D? I am no accountant, but I would think the answer would be “yes”. Now let’s say that instead of selling them, you are just holding them, and let’s for the sake of argument say that you have $500,000 worth of bitcoins. Do these represent foreign assets? If so, you are required to file forms with both the Treasury (TD-F 90-22.1) and the relatively new IRS Form 8938.

Those who in any way behave like banks will find that the Treasury department expects them to do all the things banks do. That includes reporting on suspicious transactions or any transaction over $10,000.

This hasn’t stopped people from attempting to hide transactions. Here’s an article from CNN about a guy who attempted to do all sorts of nasty things with Bitcoins. This led to a huge drop in their value, almost overnight.

So, now the question: are bitcoins here to stay or are they a passing fad (read: pyramid scheme)? The entire technical premise of bitcoins is in fact that they can be anonymously traded. The bad news for people with bitcoins is that because there is no single management point that has guns (thus differentiating them from a classic currency), unless the likelihood is that those with the guns will want to limit or prohibit this sort of transaction; especially in large quantities.

A similar situation arose in 2001 when the U.S. government began to crack down on those using the old mechanism known as Hawala, even though the mechanism is legal. And so one question is simply this: are bitcoins really anonymous? A researcher named Sarah Meiklejohn will present a paper at SIGCOMM this month on just what law enforcement capabilities there are. Watch that spot.