Bitcoin: What is it and why is it in the news?

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Before Russia quasi-invaded Crimea and before the Malaysian plane disappeared from the Earth, there was a story floating around the news about Bitcoin and something called Mt. Gox. For many people, it was the first time they had ever heard of Bitcoin and while they will probably never look at it again, Bitcoin is a fascinating creation that is growing and shrinking furious fits. Hopefully this post sparks your interest in reading up on Bitcoins.

What is/are Bitcoin(s)?

Well, to put it simply, Bitcoins are a type of digital currency. Often called crypto-currency, Bitcoins are money that can be used to purchase goods and services from places that accept them. Essentially, you can “exchange” real currency (dollars, yuan, euros) for Bitcoins at an online exchange. One Bitcoin can be worth $29 or $1000 depending on the timing of your exchange. The value is determined like any currency. It is based on consumer confidence, exchange trading, and the stability of it. Unlike normal currency, though, you do not hold real Bitcoins. While you can make physical copies, the common holding place for Bitcoins is in a digital wallet. Now of course you have to be asking “Why can’t anyone just make them?” Well when you exchange for a Bitcoin, you receive a code that is unique to that coin. This code ensures that you and you alone may spend the Bitcoin.

Why does it exist in the first place?

Besides the inventiveness of the internet, Bitcoins can be useful in the global economy. As a decentralized currency, it is not tied to any one country and can avoid certain sanctions and problems. It is relatively unregulated, which allows for a wide freedom in its use. But the biggest advantage to Bitcoin is what is known as the “block chain.” The block chain is the public ledger of where Bitcoins are spent or transferred. Every transaction is recorded when the key is entered. This prevents issues like double spending and money laundering because the key can be traced back through the internet.

So why has it been in the news recently?

To put it simply: it imploded. Well not exactly. What happened was one of the largest Bitcoin exchanges (where people can buy Bitcoins and store them until they wish to use or sell them back) collapsed. Mt. Gox (a/k/a Magic the Gathering Online Exchange) was at one time handling 70% of all Bitcoin trades. Then in February of 2014 reports came out that there was a massive security breach. It was unclear the extent of the breach, but Mt. Gox quickly closed ranks and stopped and transactions or withdrawals from happening. It finally came out that the company had lost almost all of their customers Bitcoins totaling around $473,000,000. When the exchange collapsed, about 7% of the total Bitcoins in circulation were lost and the customers seem to have little recourse to recoup their losses.

Why does it matter?

All of this matters to Bitcoin holders because it plays into the volatility of the currency. Unlike most prominent currencies, which remain relatively stable, Bitcoin fluctuates wildly. The volatility prevents companies from wanting to accept them and in turn prevents them from becoming more stable. For those that don’t own Bitcoins, the whole affair is an entertaining view of economics, free markets, and currency on a small scale. It goes to the heart of what makes money valuable. While I am not going to immediately buy into Bitcoin, I will follow them and watch just how far this digital currency will go.

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And We’re Back!!

Sorry for the short hiatus, but we’re back!  Here’s a few links to ease you back in:

Spies Infiltrate a Fantasy Realm of Online Games (NY Times)

Cellphone Data Spying: It’s Not Just the NSA (USA Today)

Enjoy!

 

Memories Of Doom, By John Romero & John Carmack

Today’s link comes from Kotaku.com

Memories of Doom, by John Romero & John Carmack

Doom was the first game I remember playing as a kid.  It was what got me into video games.

Enjoy.

Finals

I apologize for the lack of posts lately.  With finals this week, my time has been constrained.  We will be back running fully by next week.

 

Tim

Friday Morning Philosophy: An Inherent Good in the Truth

The Thinker

Wikileaks, Edward Snowden, Anonymous.

We all grow up with a belief that the truth is inherently a good thing.  That while it may cause short term pain, the eventual result of being informed of the truth is to our benefit.  We accept that truth is inherently good.  The question, though, is why?  Why do we freely accept that truth is always a good thing to have?  Most of us assumed the government was able to access our messages, phone calls, and everything else about our life.  We agreed to this when our elected representatives passed the Patriot Act.  We may have disagreed on an individual basis, but our country, through the chosen system of governance, decided that security is paramount over privacy.  So what did we gain through the revelations of Edward Snowden and Bradley Manning?  Anger, distrust, cynicism, and general negative feelings.  But like Pandora’s Box, a positive was revealed.  Truth.  So why do we not feel more positive?  Perhaps not enough time has passed.  Perhaps the changes in governance, culture, society have not yet come about that will create a better world.  We can rationalize our belief in the inherent good in truth, but maybe there is another reality.

For 3 years I was a student of philosophy before continuing my education in law school, which is just another form of philosophy.  While 6 years of philosophical studies does not make me an expert, it has changed the way I examine everything that I know, believe, and hear.  One such change is the blind acceptance of the truth as being inherently good.  To declare something as inherently good is to remove it from context and outcomes, and place it in a bubble.  It states that regardless of whatever happens, knowing the truth is always positive.  But the world does not exist without context or outcome.  And being “good” is more often based in subjective opinions rather than rational fact.  We all seem to declare to know what is good, but when we confront each other over the definition, we find that “good” and “bad” mean very different things.  The family stealing food for survival is “good” in the eyes of the family, but “bad” in the eyes of the worker who is fired for the missing materials.

So what is goodness based in?  Does it come from happiness?  If so, then why do we consider lies as “bad” when they prevent unhappiness.  Does it come from personal satisfaction?  Personal satisfaction varies so much that it would be impossible to find common goods.  But what if we agree that some things are inherently good?  What if we just decide that lying is bad?  Well that leads to moral relativism, which basically is morality by majority.  By determining what is “good” through agreement, we can set anything as good or bad so long as enough people agree.  Perhaps truth is “good” just because?  This may be the most believable, but when we dig deeper, we end up in the same place.  Where does this universal fact come from?  How do we know that this is a universal fact while this other thing is not?  We find ourselves in a never-ending cycle of questioning until we become a cynic and accept nothing as “good” or “bad.”

Knowing this now, can we still claim an inherent good in the truth?  Or are we reacting emotionally to the fact that we were lied to?  Do we believe in the goodness of the truth simply because we react negatively emotionally to being lied to?  Perhaps emotion determines what is “good” and “bad.”  Regardless, there is a greater discussion that must be had when a new leak emerges.  Beyond what truth have we learned, are we better off knowing it?  Is truth an inherently “good” thing?  I want to say yes, but after 6 years, I can only know one thing for certain:  the answer is never simply yes or no.

Not Just a Series of Tubes

This is where it began.

On June 28, 2006, Sen. Ted Stevens (R-Alaska) made the statement above.  He was talking about his opposition to “Net Neutrality” and allowing internet providers to charge companies fees for a higher priority in traffic.  Net Neutrality is essentially the belief that all data on the internet should be treated equally, rather than allowing services to slow, impede, or outright block internet content as they see fit.  He was also the chairman of the United States Senate Committee on Commerce, Science and Transportation.  This is the committee that oversaw internet laws and regulations  The ranking member proceed to describes the internet saying “It’s not a big truck.  It’s a series of tubes,” he blamed bandwidth problems for email issues when that is not plausible, he confused the term “internet” with “email,” and demonstrated a basic lack of knowledge of how the internet worked.  While it was only 2006, it was still shocking that the ranking member of the regulation of the internet had such a strong opinion based on a gross misunderstanding of the topic.  This is what first sparked my interest in the internet and the law.

Clickwrap Agreements: Why Clicking “I agree” Binds You to a Contract

Every time we download or install an product we go through the same steps.  We click “Next” over and over until we see the bar pop up showing how long it will take to install the product and we can leave to do something more productive.  Yet during those initial clicks, there is one that always stand out as different.  A text box will pop up with the words “User License Agreement” somewhere on the front and we can scroll down to read what the document says.  We also have to click on a button or check a box that says something to the effect of “I agree to the Terms and Conditions.”  Of course we don’t read what it says.  No one does.  We’ve never had a problem with it and we assume it is just useless legal jargon to limit liability in the case of a bear attack or something.  Unfortunately, by clicking “I agree” we have likely entered into a contract.  The question now is what have we agreed to.

But how can they do this?  Well our friends in the 7th Circuit established “Clickwrap Agreements” as a valid form of contracts.  In ProCD v. Zeidenberg, the court held that such agreements, though unilaterally made, are valid because the purchaser can always return the item or choose not to download it.  The fact that the person did not read the terms is his own fault.  You always have the duty to read the terms of a contract before agreeing to it.  Since he accepted an offer that he had the right and ability to refuse, the court found that clickwrap agreements were valid contracts.

Every Wednesday, we hope to cover a User License Agreement that a vast amount of people have likely agreed to and summarize what is in the terms.

So be warned: just because you don’t know what the agreement says, that doesn’t mean you won’t be bound by it.

[For more in-depth discussion, check out:  The Clicks That Bind: Ways Users “Agree to Online Terms of Service]

Disclaimer:  This information is not for use as legal advice, in litigation, or in any other way that concerns the practice of law.  Any legal questions should be directed to a practicing attorney in your area.  This information is for news and opinion purposes only and is intended to promote discussion and further research.  This is not to be relied on for legal purposes.

Wednesday ULA: iTunes for Windows

It’s time for our Wednesday User License Agreement.

Today’s is iTunes for Windows (click on the link for the full document).

Here are some highlights:

  1. The software is being licensed to you, not sold.  This enables Apple to limit property and ownership rights that you would normally have if you owned iTunes.
  2. You cannot disassembled or reverse engineer the software…among other things.
  3. You can only make a one-time permanent lending of the software provided that all parts are transferred, you do not retain any copies, and the receiving party reads and agrees to the license.
  4. You can limit ad-tracking by opting out of program.  Go to settings in iTunes and clicking “Limit Ad Tracking” setting.  This won’t eliminate ads, but it will prevent the companies from targeting you with specific ones.
  5. Privacy policy is located at www.apple.com/privacy/.
  6. iTunes Store and other Services are a pile of overlapping agreements allowing them to use data and other information from your use of them.
  7. Your rights under the license are terminated automatically, without notice, by Apple if you fail to comply to the terms in the agreement.
  8. As a consumer (not for business, trade, or profession) that use of the software is at your own risk, as permitted by law.
  9. All warranties are disclaimed, expressed or implied, including merchantability and many others, as permitted by law.
  10. Apple does not warrant against interruption of service or use, discontinuation of a service, or that defects will be corrected.
  11. Apples will not be liable for personal injury or any consequential or incidental damages whatsoever. (unless allowed by law; details in the terms)
  12. In no event shall Apple’s total liability exceed $50 (other than required by law).
  13. The governing law will be of California.

The agreement has much more detail so I recommend reading it.  Hopefully you have a better idea of what you have agreed to.

Disclaimer:  This information is not for use as legal advice, in litigation, or in any other way that concerns the practice of law.  Any legal questions should be directed to a practicing attorney in your area.  This information is for news and opinion purposes only and is intended to promote discussion and further research.  This is not to be relied on for legal purposes.

Puffery: Why You Cannot Buy a Harrier with Pepsi Points

Back in the day, Pepsi ran a commercial offering points for every Pepsi product you buy.  Those points would lead to various prizes.  The commercial ended with the young teenager purchasing a Harrier jet with 700,000,000 points.  While the commercial is very 90’s and the marketers probably imagined no one would ever attain that many points, one person did.  John Leonard crunched the numbers and found out the jet would only cost $700,008.50.  In reality, the jet ran for well over $24 million.  The rules allowed a person to directly purchase points.  So using his 15 existing points, Leonard purchased the remaining 699,999,985 at $0.10 a point and paid a $10 shipping and handling fee.  Of course Pepsi did not own such a jet so Leonard sued.  In Leonard v. Pepsico the court would find that the advertisement only amounted to mere “puffery” and never established a commitment or contract.  Basically the court allows the company to make false statements in advertisements.  The courts today look at a couple factors in determining what is puffery:

  1. Is it an oral or written offer?
  2. Is it reasonable to believe it is a true offer?
  3. Is it an objective (fact) or subjective (opinion) statement?
  4. Is it made by someone with the authority to make those promises?

So remember this at the next E3, Blizzcon, or other gaming convention.  Just because the speaker promises you that the game will be a massive open world, completely online, with a constantly changing world that is free with no micro-transactions, be suspicious.  Because even when they lie, game makers can be legally protected.  Just look at Aliens: Colonial Marines.