Month: January 2018

If you’ve ever used bitcoin to buy drugs on the Silk Road, there’s a nonzero chance that researchers in Qatar know your real name. In a paper published this month, Husam Al Jawaheri of Qatar University outlined the simple method that his team used to tie data from the open web—specifically, information shared on Twitter and in a popular bitcoin forum—to transactions that appeared on the bitcoin blockchain, the distributed and fully public database that lists transactions without connecting them to an identity or location.

By scraping sites on the dark web for bitcoin addresses and then cross-referencing them with those same addresses on the blockchain, Jawaheri’s team was able to link 125 unique users to 20 Tor hidden services, “including sensitive ones, such as The Pirate Bay and Silk Road.”

Moving bitcoin from one user to another requires posting to the blockchain “public keys,” which are strings of letters and numbers in the possession of users. If you wanted to pay me in bitcoin, I would generate a receiving address (one of those strings) that you could use to send me currency. I wouldn’t need to provide you with a username, email address, or anything tied to my identity. I could even post the receiving address online in the form of a QR code, so people can send me bitcoin without even knowing my real name.

If you are able to link my name to that address, however, the transaction is no longer anonymous; nor are any other transactions carried out with the same address.

The weakness that Jawaheri’s team identified is that bitcoin enthusiasts over the years have given their public keys out to lots of people and posted them in lots of different places. Many of them did so using internet accounts on which they also posted bits and pieces of identifying information about themselves, even if they wrote under a pseudonym—things like where they live, what they do for work, where they went to school or grew up, how many kids they have, whether they’re married. This thread on the forum Bitcoin Talk, which the Qatar University researchers scraped for public addresses, references a public spreadsheet full of public addresses.

Not everybody who used bitcoins to buy drugs on the Silk Road in the early 2010s is identifiable, but some appear to be very identifiable:

“There are 22 users that had a link to Silk Road through transactions with seized Bitcoin addresses. These users are located across the world in countries such as India, Canada, and the USA. They include 4 males and 6 females of different ages that range between 13 and 42 years. The 18 users from the forum dataset were active on BitcoinTalk between 2013 and 2015, while 3 of them are still active in 2017. As for the 4 users from the twitter dataset, they posted an average of 45 tweets in 2014. One particularly interesting user is a young teenager from the USA. This user has been a registered BitcoinTalk member since 2013, and had a transaction with Silk Road in 2013, the takedown year, during which he was even younger than what his current age shows on his profile. The associated profile also includes his personal website, which contains links to his Facebook, Twitter, and Youtube profiles.”

It’s a small group of people, so maybe it doesn’t sound like a big deal. But Jawaheri’s team was only, in its words, “a passive, limited adversary.” They were just seeing what identifications they could make using data that were just lying around. Law enforcement, hackers, and other active investigators could surely dig up more.

This isn’t the first time researchers have found a way to identify bitcoin users. In 2014, computer scientists at Penn State proved it possible to associate bitcoin purchases on the open web with IP addresses, depending on traffic volume. But as far as I know, this is the soundest method anyone has devised for tying dark web activity to open web identities without actually commandeering a dark web server. The Justice Department now has servers from at least two sites—the Silk Road and AlphaBay—and it has already used years-old Silk Road data to build a very recent case against a group of marijuana vendors in California.

There are a number of things bitcoin users can do to keep their transactions not just private, but anonymous. “First, users should never expose their Bitcoin addresses along with their personally identifiable information,” the researchers write. “Second, a new address should be generated for each transaction in order to reduce linkability of transactions, regardless of whether the user is the sender or the receiver of the payment. This is especially true for cases where users expose a donation address on different kinds of online social networks.”

The researchers also mention the rise of monero, a cryptocurrency that many dark net customers claim is actually anonymous, if less commonly used and accepted. It’s also worth looking into the process of “tumbling,” which moves bitcoin purchased on a platform like Coinbase through a wallet that mixes users’ bitcoin together, effectively obscuring who owns what.

Bitcoin Core, the community of cryptographers and engineers developing the open-source software that runs the network, are also working on a variety of privacy-enhancing technologies, including a new system for aggregating public keys, and a technique that would make it harder to link a transaction to an IP address.

Many people have bought personal quantities of drugs online over the years, and law enforcement has neither the time nor the interest in harassing and surveilling every single one of them. But this study should serve as a wakeup call to anyone who sees the dark web as a convenient place to buy illegal substances. If buying drugs online feels easy, you’re probably doing it wrong.

Firearm regulation often has more to do with a weapon’s looks than its lethality. Nothing illustrates this better than the sudden freakout over Elon Musk’s new flamethrower venture.

Musk’s Boring Company started taking preorders of its $500 “world’s safest” flamethrowers this past weekend. Musk claims to have already sold some 15,000 units, which he promises to ship come the spring.

The sudden success of this high-octane novelty item has provoked panic among politicians and a gun-skeptical media, who were aghast to learn that neither the federal government nor 48 of the states have any laws on the books regarding flamethrowers.

California—where Musk’s Boring Company is headquartered—is one of the two exceptions. It requires a permit from a fire marshal for flamethrowers that can shoot fire over 10 feet. Musk’s product falls well short of that range.

Nevertheless, California Assemblyman Miguel Santiago (D–Los Angeles) is already promising to block their sale, declaring in a press release that selling flamethrowers is NOT funny. “I cannot even begin to imagine the problems a flamethrower would cause firefighters and police officers alike,” he says.

The Washington Post has taken a similar line, devoting a good portion of its write-up of Musk’s new business venture to the nation’s lax regulation of flamethrowers. “Despite being phased out by the Defense Department decades ago, flamethrowers are unregulated in almost every state,” the article notes, adding that “for thousands of years, weapons able to harness the power of fire offered users a gruesome advantage during combat.”

The Post has actually been raising the alarm on the dangers of flamethrower freedom for some time, fretting in 2015 that “the flamethrowers now on the market are all ordered online, so there’s no way of knowing whether a minor, a convicted criminal or a mentally unstable person is behind the credit card number.”

That same year, Rep. Eliot Engel (D–N.Y.) introduced the “Flamethrowers? Really? Act” which would have prohibited the possession of flamethrowers. The bill was never assigned to a committee.

Despite the lack of regulation of flamethrowers, their use in the commission of crimes is exceedingly rare. The 2015 Washington Post story notably mentions no crimes committed with a flamethrower.

A schizophrenic man did kill several students with a homemade flamethrower in a suburb of Cologne, Germany, in 1964. In 1995, a British teacher attacked his pupils with a flamethrower, seriously burning three. So far I have found no such examples in the United States.

Indeed, almost any violent crime one might conceivably use a flamethrower to commit, from a school shooting to a liquor store robbery, would be far better accomplished with a traditional firearm. Such guns are cheaper, more lethal, and more easily concealed, and they have far better range and accuracy. If criminals ditched firearms for flamethrowers, it would probably produce a net gain for public safety.

Flamethrowers do of course pose a fire hazard, in the same way a blow torch or a deep fryer might. That may well be a reason to subject them to fire control regulations. It does not follow that they would need to be subject to firearm regulations. Just because something looks like a gun doesn’t mean it needs to be subject to gun control.

The first thing you need to know about “The Memo” is that nobody can truly tell you what you need to know about “The Memo” in advance. That’s part of the whole shtick.

Here are some basics, though. Rep. Devin Nunes (R-Calif.), previously an extremely pro-surveillance lawmaker, and his staff in the House Intelligence Committee crafted a four-page memo that claims to show that the FBI abused its surveillance authorities. The memo apparently claims that the FBI misled the Foreign Intelligence Surveillance Court (FISC) with the now-infamous “Steele Dossier” in order to get permission to wiretap former Trump aide Carter Page and his conversations with Russian officials. All of this, they say, was part of a conspiracy to attack the Trump administration.

Nunes’ memo is currently classified. It has been seen by House lawmakers and, over the weekend, by FBI Director Chris Wray. Last night the House Intelligence Committee voted to begin the process of publicly declassifying and releasing the memo. This starts a five-day clock for Trump to weigh in on if he wants to keep the memo classified. The White House has suggested that it supports the memo’s release; we’ll see what actually happens.

In the meantime, everybody wants to tell you what to think about the memo based on whether they’re backers of Team Red or Team Blue. For those of us who are neither and don’t care whose ox gets gored (or hope they all do), there are still reasons to care about what’s happening, why it’s happening, and the overall impact of this fight.

Yes, This Memo’s Release Is Politically Motivated. That’s OK.

The Democrats also prepared their own memo explaining what they believed happened with the wiretapping. The Republican-controlled Intelligence Committee declined to release the Democratic version. So only one party here—the party the president belongs to—will be able to publicly represent its interpretation of the surveillance of somebody close to the president.

It’s silly to pretend that this is not a deliberate effort to undermine the investigation of potentially inappropriate behavior between people close to Trump and foreign governments. It’s also silly to deny that the Democrats’ sudden insistence that the FBI is beyond reproach (yeah, right) is a deliberate attempt to undermine critique.

But there might actually be an upside to all this political posturing. The average American knows very little about how federal surveillance works in practice. A sudden burst of transparency, even one-sided and politically motivated, can at least give everyone a better understanding of how the secretive foreign intelligence court actually works.

And for better or worse, Trump is the president of the United States. Secret surveillance of people in the president’s orbit by members of his own government is a big deal. It’s completely appropriate to reject the idea that we should simply trust that FBI officials are behaving appropriately. They have a very lengthy history of doing otherwise.

But the Memo Is Not Going to Tell You What Actually Happened.

The Nunes memo is an interpretation of classified intelligence that was used to get authorization to snoop on Page. But it’s not the intelligence itself. So if we’re willing to acknowledge that part of the motivation to release the memo is to protect Trump, we have to acknowledge that this memo is probably not going to tell the whole story.

Do not take this as a demand to keep the memo secret. We should see the memo. We should see the Democrats’ memo. And at some point, we should be able to see the underlying intelligence.

Note that Trump, as the president of the United States, has wide authority to arrange for the declassification and release of this intelligence information that supposedly has been misapplied in order to snoop on him and undermine his presidency. That little detail doesn’t seem to capture as much attention. The Nunes’ memo is one step removed from being able to see what the FBI actually presented.

Again, this is not a demand for less transparency, but for more. We shouldn’t settle for the perspective of people who have an obvious interest in shielding the president.

None of This Will Lead to a Discussion of Surveillance Policies and Practices.

A reminder for the umpteenth time: Many of these Republican members of Congress who are acting outraged about the surveillance of Trump just voted to renew and expand the FBI’s authority to snoop on American citizens through this secret system. And Trump himself signed the bill into law.

All the while, these same folks misled the American public by saying these surveillance powers were necessary to capture foreign terrorists. As the Cato Institute’s Julian Sanchez notes over at Just Security:

One need not believe that there are ongoing partisan conspiracies within the FBI and Justice Department to support more stringent civil liberties safeguards on the broad spying authorities the intelligence community has accumulated over the past two decades. But it is very hard to understand how one could believe such a conspiracy exists—indeed, continues to be covered up by sitting officials—yet reject even the idea of pausing to debate such safeguards before renewing precisely the sorts of powers one claims have been abused.

That’s especially frustrating for those of us (and you) who have been paying attention to the federal government’s misuses of surveillance for years now, long before Trump even announced his candidacy for president.

President Donald Trump is set to address immigration during tonight’s State of the Union address. His remarks follow last week’s rollout of a White House immigration proposal that would offer a path to citizenship to 1.5 million Dreamers—undocumented immigrants brought to the United States as children—while reducing the overall flow of immigrants into the United States and providing $25 billion in new funding for a border wall. It’s probable that the president will stick to the same basic outline during tonight’s speech.

But what if Trump were somehow to give up on immigration restrictionism? What could he say? What should he? Such a transformation is unlikely, to say the least. But as an exercise in political fantasy, it’s more than political comfort food, for imagining such remarks can help us understand not only what has already gone wrong when it comes to immigration, but the policy path that, in a better world, would lie ahead.

*

Mr. Speaker, Mr. Vice President, Members of Congress, My Fellow Americans:

Everyone says I never admit I am wrong and never apologize.

Well, let me begin my Second State of the Union address tonight by doing both: You see, I woke up this morning thinking that I am married to an immigrant woman, who almost certainly modeled illegally for a while (she won’t fess up lest Attorney General Sessions dispatch an ICE swat team to the White House to take her away) and I employ low-wage foreign labor in my hotels and golf courses.

Yet the policies I have advocated thus far would cutoff access to these workers by other businesses with far slimmer margins than my own over-priced facilities.

This is rank hypocrisy, and I am ashamed that I engaged in it just to exploit the anti-immigrant fervor of my economically ignorant base. Imperiling businesses is no way to MAGA and I apologize for suggesting otherwise. Going forward, my immigration policies will be humane and pro-growth just as the excellent 2013 Reason immigration e-reader suggested. I have read this compilation of Reason’s best work cover-to-cover and committed it to memory because, as you all know, I have an incredible brain. And I am also ordering my entire staff to read it.

Speaking of my staff, to demonstrate with deeds that I have had a change of heart, I have decided to fire—effective immediately—both my White House aide Stephen Miller, a nativist stick-in-the-mud who has sabotaged my negotiations with Congress over the fate of Dreamers, and also my Chief of Staff, General John Kelly. He has been a great disappointment.

Instead of bringing out my better angels on this issue, as many had hoped, he has done the opposite. In addition, I am replacing Attorney General Sessions, a xenophobe who has forever been spreading malicious lies about immigrants, with Arizona’s Republican Senator Jeff Flake, a decent man who understands the vital role that immigrants have played in making America an economic powerhouse.

Flake will call off Sessions’ ICE (Immigration and Custom Enforcement) workplace raids to round up unauthorized workers. Such tactics are more worthy of a police state than the United States. Bill Maher recently said that I may not be Hitler, but ICE is certainly the Gestapo, and he is right about that. ICE’s reign of terror must end.

Hardworking foreigners busting their butts to put cheap food on the tables of Americans don’t deserve to be deported. They deserve respect. We’d be poorer without them in a million different ways.

Hence, I am going to work with Congress to pass legislation to create a pathway to citizenship for all 11 million of them except actual criminals. These folks, who are entitled to no federal means-tested benefits, have already contributed $100 billion and counting to the Social Security Trust Fund through payroll taxes. Yet they won’t collect a dime from it. It is time for us to stop milking them much less separating them from their loved ones.

No doubt Rush Limbaugh and his ilk will scream “amnesty” and rend their clothes that I am “rewarding law breakers” and “undermining the rule of law.” All I can say is, bite me! The founder of FIRE (Foundation for Individual Rights in Education) Harvey Silverglate has documented that Uncle Sam has criminalized so many victimless activities that literally every American commits three felonies a day. Should we incarcerate them all in the name of the sanctity of the rule of law?

Indeed, amnesty had a long an honorable history in this country untill nativists turned it into a dirty word. We have handed amnesty to Confederates who fought against the Unionists and to tax scofflaws. The need for amnesty in the face of widespread non-compliance is a sign of the inefficacy and injustice of a law—that it is out-of-sync with the normal aspirations of a people. It suggests that we need to reform the law because enforcing it would be too costly: monetarily, morally, socially.

That would certainly be the case if I doubled down on my current immigration enforcement regime. In order to be effective, this regime will need to go after employers that hire undocumented workers, landlords who rent to them, use anti-harboring laws to go after humanitarian workers administering first aid (some of which my administration has shamefully started doing). In short, it will require a massive police state that would devour the rights and liberties not just of foreigners, but also ordinary Americans.

Also, trying to stop the future flow of undocumented aliens by throwing $25 billion to build the “big, beautiful wall” on the Southern border would be colossally wasteful and unwise, I have realized. It won’t allow us to “control” the border as restrictionists claim. It would create an even bigger black market in labor that would only enrich human coyotes.

A far better option than a regime of labor prohibitionism would be to give these hardworking laborers legal avenues to work and live in the United States. How? By creating a new and improved version of the guest worker barcero program with Mexico that we scrapped in 1965, thanks to labor union pressure.

That program, which was not perfect, at least allowed Mexican laborers to easily and cheaply acquire work visas to come and go with the seasons. Taking away that option without offering usable substitutes while simultaneously cracking down on the border made it difficult for these workers to go back and forth. So once they managed to sneak in, they stayed put and brought their families here too or found American mates. What was a cyclical population turned into a permanent underclass.

President Ronald Reagan blundered mightily when he failed to combine his amnesty with a guest worker program. This sowed the seeds of our current predicament over undocumented aliens that is eating away at America’s soul and truncating its humanity. I will not repeat that mistake.

But even as we create a new guest worker program for low skilled migrants not just from Mexico but all of Latin America, we have to improve the H-1B program for foreign tech workers. Without these techies there would be no Silicon Valley and no IT industry. Foreigners are involved in the founding of literally half of all IT startups in this country valued at billion of dollars. Each H-1B supports four native jobs. I lied when I claimed that foreign workers threaten native wages and jobs.

And while I’m fessing up, let me also admit that the immigration reforms I’ve been demanding in exchange for legalizing Dreamers would not make our immigration system more “merit based.” They would simply take away the ability of Americans to legally sponsor their parents, adult children and siblings, not make it easier for us to admit high-skilled worker. In fact, the ransom I want to extract in exchange for Dreamers would cut legal immigration by 40 percent. It’s nativism dressed up as immigration liberalism. It would make America’s immigration system more “merit-based” just as Obamacare made it possible for you “keep your health plan, if you liked it.”

In order to truly liberalize our immigration system, the first thing we need to do is cut the red tape. I can’t call myself the great deregulator while setting Department of Labor inspectors loose on companies that hire foreign workers. Currently, any company that wants to sponsor a foreign techie for an H-1B visa needs to first prove to the DOL that it could not find qualified Americans to do the job. And then if it hires too many H-1Bs—becomes “H-1B dependent” in bureaucratic parlance—all hell can break loose. The company has to be prepared to justify to labor inspectors the discharge of any American worker 90 days before or after hiring an H-1B. A company that is found to be willfully violating the law can be barred for three years from hiring foreign workers and slapped with serious fines.

This is nothing more than affirmative action for natives meant to shield them from competition. Such protectionism has never made any country great. Ever.

So I entreat Congress to scrap the ridiculously low 85,000 annual H-1B cap and let high-tech companies hire however many workers they need from wherever they want. This won’t cost American jobs it will protect them. As Steve Jobs told President Obama, another great liar, that the reason he employed 700,000 workers in China was that he could not find 30,000 engineers in the United States.

That is madness. We need markets to decide the mix of our labor pool, not Beltway bureaucrats. Talk about draining the swamp.

All of the policies I have outlined so far will make America’s immigration system more pro-growth. To make it more humane, I am going to end my assaults on America’s refugee program and withdraw my Muslim travel ban (yes, that is what it is, even though I have thrown in countries like North Korea to cover my ass in court). Our policies in the Middle East are at least partly responsible for destabilizing the region and creating the current mess. So it is only right we do our part to bring as many people to safety as we possibly can.

Immigrants have made America great and will do so again. Letting them in would be the best way to MAGA. It’s time to reaffirm our commitment to who we are: A land of immigrants.

Virginia has 352 wineries, 262 breweries, and 62 distilleries. The state imposes no limits on how much oenophiles and cerevisaphiles may quaff when they visit a winery or brewery—that’s up to the discretion of the folks dispensing the drinks. That is not the case for drinkers who enjoy stronger spirits. In the Cavalier Commonwealth, visitors to distilleries may imbibe a total of only 3 ounces of liquor in some combination of half-ounce tastings and 1½-ounce cocktails.

That’s bad, but it’s a vast improvement over the situation three years ago, when in-house sipping was limited to one and a half ounces.

Even worse, each distillery must be licensed as an ABC store. This means that distillers have to buy their own product at prices set by the ABC and then send all in-store sales receipts to the ABC Board, which returns the wholesale price back to the distilleries. The Virginia wine tax is $1.51 per gallon and the tax on beer is $0.26 per gallon. The ABC Board marks up the price for liquor sold on-site at distilleries by 69 percent. Once ABC takes its 54 percent cut of the purchase price, it ends up effectively taxing spirits at a rate of $30.88 per gallon.

Distillery lobbyist Curtis Coleburn explains in the Richmond Times-Dispatch: “When they sell a $30 bottle of booze at the distillery, about half of that’s going to the state.” He adds that breweries and wineries pay a dollar or less in taxes when they sell an equivalent amount of alcohol through their tasting rooms.

Earlier this month, Del. Nick Freitas (R-Culpeper) introduced a bill in the Virginia General Assembly that would establish what he calls “booze equality.” Basically, the bill would repeal the ABC’s high stealth tax on spirits by allowing distillers keep the profits from their on-site sales and thus put them on a more competitive footing with wineries and breweries. Officials from ABC pointed out in a hearing that this would reduce its take by $1.7 million in fiscal year 2020. Virginia distilleries employed 500 people and brought in more than $7.2 million in 2017, up nearly $1 million in 2016 and $2.2 million in 2015.

Sadly, a bill proposed by Del. Matthew Fariss (R-Campbell) that would have lifted the restrictions on how much distillers could serve visitors on-site appears to be going nowhere. The measure failed, in part, because of opposition from the restaurant lobby, which fears competition in the cocktail-serving business.