Tech Brew Ride Home - Fri. 08/16 - Coinbase says all your bitcoin base are belong to us

Episode Date: August 16, 2019

Coinbase says all your bitcoin base are belong to us, Apple sues a “virtualization” company, was Amazon offering vendors a pay to play scheme with Amazon Choice, and, as always, the weekend longreads suggestions. Sponsors: Metalab.co MacStadium.com/ridehome Links: Exclusive: Coinbase Buys Xapo Custody for $55 Million, Eyes Lending Business (Fortune) Apple Files Lawsuit Against Virtualization Company Corellium for Illegally Replicating iOS and Apple Apps (MacRumors) Amazon offered vendors ‘Amazon’s Choice’ labels in return for ad spending and lower prices (Digiday) YouTube shuts down music companies' use of manual copyright claims to steal creator revenue (TechCrunch) Weekend Longreads Suggestions: Weird gadgets that are actually really useful (ZDNet) Trump Tumult Has Gadget Giants Splitting Along U.S.-China Lines (Bloomberg) THREE YEARS OF MISERY INSIDE GOOGLE, THE HAPPIEST COMPANY IN TECH (Wired) WEWORK ISN’T A TECH COMPANY; IT’S A SOAP OPERA (The Verge) WeWTF (ProfGalloway.com) Elon Musk’s Neuralink: Both an evolution and a plan for radical change (Ars Technica) SpaceX’s First Astronauts Train Up for Space, but Crew Dragon Faces Delays (Inverse.com) HOW A 'NULL' LICENSE PLATE LANDED ONE HACKER IN TICKET HELL (Wired) Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the TechMeme right home for Friday, August 16th, 2019. I'm Brian McCullough. Today, Coinbase says all your Bitcoin base are belonged to us. Apple sues a virtualization company. Was Amazon offering vendors a pay-to-play scheme with Amazon Choice? And as always, the weekend

long-reads suggestions. Here's what you missed today in the world of tech. Coinbase has acquired the custody business of Zappo. Not Zappo. Zappo itself, just its custody business. Now, you probably think you've never heard of Zappo. Actually, you probably have. They're best known for storing Bitcoins in an actual real vault, i.e. an actual real vault under a Swiss mountain. Coinbase has been aggressively moving into custody services recently. Again, you know, actually holding crypto assets. And given the amount of crypto assets Zappo has under that mountain over $7 billion worth, this acquisition could result in Coinbase eventually being responsible for storing over 5% of all Bitcoins in circulation.

Rumors are that Coinbase outbid fidelity for Zappos' custody services. Fortune snagged an interview with CEO Wences Cezares. Quote, Cesares said other firms placed higher bids for Zappos custody business than the one from Coinbase, but those bidders lacked the security or regulatory credentials to be acceptable to Zappos clients. Among those clients was Grayscale investments, which manages Bitcoin and other crypto investments in trust for wealthy customers. In early August, Grayscale transferred over 225,000 Bitcoins worth about $2.7 billion in assets to Coinbase custody, one of the largest crypto transactions in history. According to the source familiar with the deal,

the majority of Zappo's largest clients have agreed to transfer their assets to Coinbase, giving the company control of over 514,000 Bitcoins. The remaining Zappo customer accounts are reportedly worth over $3.5 billion, and if Coinbase can sign on those customers as well, the company will have over 860,000 Bitcoins under custody. There are approximately 16.4 million bitcoins in circulation, though analysts believe 4 million of these are lost forever, end quote. So in short, look at this as an attempt by Coinbase to diversify away from relying largely on trading revenue, but also in a way, look at this as Coinbase solidifying itself as the biggest player in Bitcoin in a certain sense. Apple is suing a mobile device virtualization company called Correlium, accusing it of copyright infringement for illegally replicating iOS, along with a slew of iPhone and iPad apps.

Corallium calls itself, quote, the first and only platform, and quote, that offers iOS, Android, and Linux virtualization on Arm. Basically, Apple alleges there is virtualization, and then there is straight up plagiarization. Quoting Mac rumors. According to Apple, Corellium's iOS virtualization product infringes on Apple's copyrights, quote, Corallium has simply copied everything. The code, the graphical user interface, the icons, all of it in exacting detail, reads the lawsuit. Corallium's product creates digital replicas of iOS, iTunes, and other interface elements available on a web-based platform or a custom platform built by Corallium. It is designed to create virtual iOS devices for the purpose of running iOS. And at the recent Black Hat USA conference, Correlium emphasized that its, quote, Apple product, end quote, is an exact copy of iOS, able to allow researchers and hackers to find and test vulnerabilities. Apple goes on to say that though Corellium poses its product as a research tool for those aiming to discover security vulnerabilities, the company's actual goal is, quote, profiting off its blatant infringement, end quote,

by encouraging users to sell discovered information on the open market to the highest bidder. Apple says it does not want to encumber, quote, good faith security research, end quote, but instead is aiming to end Corallium's quote, unlawful commercialization of Apple's valuable copyrighted works, end quote. Sources and a leaked pitch deck that Digidae has gotten its hands on indicate that Amazon may have offered vendors the ability to bid for an Amazon choice badge in 2017. You might be familiar with the Amazon choice labeling, as it has come under scrutiny on all of the antitrust and regulatory smoke collecting around how Amazon operates its third-party commerce platform, but probably you also recognize it from, you know, shopping on Amazon. Amazon's choice label, which is a mark that denotes that an item is recommended, gives certain

products and items higher and more obvious placement in search results. While it's unclear how exactly the mark is earned, it's been accepted that it's generally a mix of product listing and specifications, price and reviews operated by Amazon's algorithms. But sources say that Amazon actually offered sellers the chance to bid on the mark back in 2017. A pitch deck reviewed by Digiday details a 2017 bidding program for the Amazon's choice badge in a particular product category. The deck explained the Amazon's Choice program, which launched in 2015, as valuable to brands in that it increases the visibility of a product's listing in Amazon's search results, which then drives an increase in units sold and revenue over time. An example for an Amazon's Choice recommended electronic showed a 10% increase in units sold over one quarter and an immediate increase in the number of people going to the product page over a few weeks. While Amazon didn't set up an outright pay-to-play system for its coveted Amazon's Choice badge,

which increases visibility and conversion rates for product listings that receive the tag, it did set up an internal process that could be seen as manipulating the Amazon's choice system, end quote. Again, any evidence of Amazon offering preferential treatment to some vendors over others or the existence of some sort of pay-to-play preferential scheme by any other name would certainly be of interest to regulators. Amazon says that the Amazon's choice badges are driven by algorithms, as we said, and are only awarded based on factors like high in-stock ratios and conversion rates, as well as high customer ratings and competitive pricing. So, Amazon's argument is, it's just a system to help consumers. Don't worry about it. But then again, if you're a vendor

and Amazon is your main platform for doing business and Amazon knocks on the door and offers you the chance to bid for some sort of glorified Amazon seal of approval? Do you really have any other choice but to pay that money? Small win for creators on YouTube, it used to be that if a short segment of a song was playing in the background of a video that you uploaded to YouTube, the copyright owner of that song was able to monetize that video on YouTube's platform, and you, the person that uploaded it, could not. But YouTube has changed policy, and now the copyright holder of a song, only has the option to prevent the video from being monetized full stop.

Now, that might not sound like a win, and actually it might get more videos taken down in the short term. But in the long term, the thinking is, if copyright owners don't have the incentive to make money off of snippets of their songs, then they're more likely to leave these short-term. order infringing videos alone, thus allowing the video poster to continue to monetize the videos themselves, quoting Sarah Perez and TechCrunch. The problem with the manual claiming policy is that it was impacting creator content even when the use of the claimed music in videos was very short,

even a second long, or unintentional. For example, a creator who was vlogging may have walked past a store that was playing the copyrighted song, but then could lose the revenue from the video as a result. In April, YouTube said it was looking to address this problem. And ahead of this year's VidCon, YouTube announced several well-received changes to the manual claiming policy. It began to require that copyright owners specify the timestamp in the video where the claim occurs, a change that YouTube hoped would create additional friction and cut down on abuse. Creators were also given tools of their own that let them easily remove the clip or replace the infringing content with free-to-use tracks. These newly announced changes go even

further as they remove the ability for the copyright owner to monetize the infringing video at all. Copyright holders can now only prevent the creators themselves from monetizing the video, or they can block the content. However, given the new creator tools for handling infringing content, it's likely that creators in those situations would just address the problem content in order to keep their videos online, end quote. Time for the weekend long read suggestions. And the first one is a little bit bit offbeat. You know that story I did yesterday about what three words? Well, it sent me down a rabbit hole of searches for, I don't know what you would call it, like, I guess just be prepared

tech. So first up, a listicle from ZDNet listing eight weird gadgets that could actually be super useful in a pinch. I'm not getting any affiliate money or anything like that. It's just I thought there were some good ideas in there. Like I just ordered that Swiss tech utility key. morning. Next, I've been watching, as you know, the trade war machinations and whether or not they will cause a tipping point for manufacturing in China. But I hadn't thought much about how this goes both ways. In short, Chinese firms also need to decouple from U.S. entanglements, which might be just fine for them, because they can source from a ton of other places, perhaps easier than U.S. companies can. But also, their own internal market is.

is such a large one to sell into that maybe they wouldn't miss selling to the U.S. market. Plus, China, as we know, has been making great strides to sell to the rest of the world in recent years, Southeast Asia, Africa, South America, quote, it's something Foxcon's billionaire founder Terry Gao calls G2 or the emergence of two competing global standards created by China and the U.S., end quote, or at least the creation of two completely separate and possibly competing global supply chains. I don't often do this, but I'm going to recommend a long read that I haven't actually had the chance to read yet. But there's been a lot of chatter this week about that big article Unwired, looking at the cultural cold civil war that has been going on at Google for the past three years or so.

We've been talking about this in various stories over the months. So a nice summary of how it's played out over that time. And look, you've heard everyone's skepticism about WeWork in The Verge. Elizabeth Lapato has a pretty decent summary up using a close reading of Wee's S1 filing to highlight the various ways that we kind of maybe is a bonkers company remains to be seen. So that one is more detailed, but still skeptical. However, I couldn't help but pairing that with Scott Galloway's blog post about the Wee filing, which is just apoplectic. So, read this as a sort of shot and chaser sort of thing, quote, find the hottest sector, and if you don't have the insight, IP, genius, capital, code, skills, human capital, or a clue, then just borrow the words. SaaS firms trade at multiples of revenue, yay!

Versus real estate firms, which trade at a multiple of EBITDA. Boo! So, we isn't a real estate firm running desks. It's a space as a service. Newfangled SaaS firm. Oh, and I know. use the word technology over and over, despite having little R&D and computers and stuff, and voila. We're Salesforce. Today, I froze water and used this technology to reconfigure the environment

encapsulating my Zaccapa and Coke, so I'm Bill Gates. Better yet, today I began calling my wife Giselle, which I'm pretty sure means I'm the starting QB for the Pats, end quote. Next, R's Technica has one of its customary deep dives. This time, though, into a company, not a hardware or software release. They take a look at Elon Musk's Neurrelink, what it is, what it's trying to do, and concludes by saying Neurrelink is probably going to fail. It's just a little too aggressively optimistic, but when it does fail, it will probably do so in interesting and worthwhile ways. Speaking of Elon Musk, did you know, SpaceX is soon going to have its own astronauts? I mean, now that I say that out loud, I should have always known that. The man wants to frigging send

people to Mars, right? But I did not know that SpaceX was going to have astronauts. Turns out the Demo 1 mission that SpaceX launched in March sent 400 pounds of cargo and an actual dummy into space to replicate the weight of two astronauts. The Demo 2 mission was scheduled for July of this year, but it has been postponed because of problems. That Demo 2 mission was supposed to carry Robert Bankin and Douglas Hurley into space. Now that mission isn't expected until next year at the earliest. Bacon and Hurley are former NASA astronauts, and in the article I'm linking to from inverse.com, you can see videos of the two going through their training paces and a summary of some of these

problems that has delayed this first human cargo mission for SpaceX. So come for that, but then scroll down for an explanation about why earlier this morning, Elon Musk tweeted out that he wanted to nuke Mars. Not joking. And also, yes, there is a sort of scientific explanation for that. And finally, this story is just something amazing. Just listen to this because it's just the beginning. Quote, in late 2016, John Tartaro decided to get a vanity license plate. A security researcher by trade, he ticked down possibilities that related to his work. Seg fault, maybe, or something to do with vulnerabilities. Sifting through his options, he started typing null pointer, but caught himself after the first word, null. Funny. Quote, the idea was,

I'd get void for my wife's car, so our driveway would be null and void, Tartaro says. The joke had layers, though. As Tartaro well knew, and as he explained in a recent talk at the DefCon Hacker Conference, Null is also a text. string that in many programming languages signifies a value that is empty or undefined. To many computers, null is the void. That setup also has a brutal punchline, one that left Tartaro at one point facing over $12,000 of traffic fines wrongly sent his way. He's still not sure if he'll ever be able to renew his auto registration this year without paying someone else's tickets. And thanks to the Kafkaesque loop, he's caught in. It's not clear if the citations

will ever stop coming, end quote. It's a crazy, crazy story. Somewhere in the databases, the California DMV or their subcontractors system thinks that any time something comes up in the database as null, it's related to Tartaro. If a traffic cop forgets to fill in the license number on a citation, Tartaro gets the ticket. He's even getting tickets from years in the past before he even did this trick because the system seems to to send things his way retroactively. It's hilarious, but again, it is sort of frightening, as the story says, in a very modern Kafka-esque sort of way.

That is indeed all for today and for this week. But we will have a weekend bonus episode coming tomorrow. And other than that, I don't know. I think I'm going to electric scooter home early today. I hope everyone has a good one, because the summer is. on its way out the door. So enjoy one more summer weekend.