Tag Archives: technology

What is a Bitcoin and should I invest?!

Hi All,

There has been a lot of discussion about “Bitcoins” recently including some news broadcasts, and a lot of you may be confused as to what a Bitcoin actually is and whether it’s “dodgy”!

In simple terms, a Bitcoin(or BTC), is a global virtual currency and a couple of years ago, $15 would buy you 1 BTC. You could then keep that BTC, or use it to buy goods (virtual or physical) from any website that accepts BTC as a form of payment.

Bitcoins are found/created through a process called “mining”, which is where a very difficult mathematical equation is solved, requiring a HUGE amount of computing power! The technology behind the Bitcoin restricts the market to only ever having 21 million Bitcoins, but these aren’t expected to be all in trading until 2040….! Due to this it is free from political influence and inflation – It is one truly global private currency! Incredible!

The creator is unknown! This is a little scary – There is a pseudonym for the creator thus is thought to be a 30 something year old male from Japan (Satoshi Nakamoto). Due to the cryptography and encryption behind the Bitcoin, either he is an absolute genius, or it was actually a much larger scale operation.

To buy a Bitcoin is relatively simple. MTGox is the leading trader (bank transfer some money in, buy or sell BTC, that simple!). As I write this blog, the BTC is priced at around $85!

So why has the Bitcoin been in the news the past few days and what’s all this talk of a “Bitcoin bubble”? I mentioned before that a couple of years ago it was priced at $15. It raised up to $30, and a few weeks ago, an explosion happened. We saw something like this:

1) Value raised to $150

2) Value dropped to below $100

3) Value raised to $260

4) Value dropped to $120

5) Value raised to $200

6) Value dropped to $60

7) Value currently at $85 at time of writing

Graph for BTC Value
Graph for BTC Value from http://bitcoinity.org

Most of this actually happened in the past 2 days (3 to 7). Many people invested heavily at around the $50 mark, and sold at $260 making over $200 for each Bitcoin! But why the big drops and rises? The market is influenced by only one thing – PEOPLE!

That means, if there’s a news article saying it may crash, and everyone goes on to sell, the value of the BTC drops substantially. To make matters worse, MTGox, the leading trader, has been regularly down due to being overloaded with requests! In fact, on the 11th of April it suspended ALL trades to help normalise the currency. Whatever their reason was, it meant people could not sell their Bitcoins if they had them stored with MTGox. This meant, as the price dropped, investors could simply watch their account shrink and do nothing about it…! On the plus side, if you buy when it’s low and it shoots up, happy days!

You’ll now be thinking to yourself “Should I invest?”. There are many teccies saying “YES INVEST” and many non teccies saying “NO DON’T INVEST”. I actually have a mixed view. The dangers are:

1) No one knows who created it which is a little concerning, but does this affect the value of it? Probably not

2) It can be hacked (someone could potentially hack your account and steal your bitcoins). This is true of ANY currency however, so I wouldn’t say this is a reason to avoid!

3) The traders can’t be trusted? Well, this one is maybe a better point. If you lose lots of money or a trader goes offline, do you have any legal rights? Maybe, maybe not. It’s said to be an illegal currency in the US, but it’s a very grey area.

What I would advise, is if you have money that you can lose without being upset, then invest, and invest big when the price is low again. I have money waiting in BitStamp (which remained online throughout the MTGox trading suspension), ready to take advantage if it crashes again. I’ve debated buying at $85 but due to the high’s and lows, I’m pretty content with waiting a week and seeing how things go. There’s a chance it will crash to 0 (forever), or as a few close friends have predicted, there’s a chance it could rise to $1000+ over the coming years…..

Whatever you do, it’s risky business but it could potentially be very profitable. From a technical standpoint, this “thing” is causing a stir to the world!

Tweet me @thejsug !

The End of Passwords?

Hi Everyone!

Paypal and Lenovo have just joined Google and others in developing the “post-password” era which will look at modern alternatives to the age old text based password. I wanted to give my thoughts into passwords, the problems and what potential resolutions there are in the future.

Current Situation:

For any website with a login, you require at least 2 pieces of information:
1) Username
2) Password

The username can be hard enough to remember as many websites have their own unique take on what is or isn’t allowed. An email address? An 8 digit username? 15 digit?

The Problems:

If usernames weren’t hard enough to remember, the password field adds another layer of complexity due to the following reasons:
1) Websites have different requirements on what is an acceptable password
2) You should never use the same password for more than one website (if one gets hacked, your entire digital world could be at risk)
3) A password isn’t enough because:

Sums up the password problem nicely. Thanks Splashdata.com!

Nope, even with a username and a unique complex password, this isn’t enough. Google, Microsoft, Facebook and all the major banks now add the ability for two-factor authentication. This is compulsory for banks, though an optional extra for your social media and email sites. This usually takes advantage of a secondary password, and having to remember certain digits within it. I.E “What is the 1st, 3rd and 5th digit of your secret word?”. Alternatively, you may use your mobile phone for verification, an RSA ID tag or a little card reader that generates something called a “one-time password” in order to login.

Tokenguard’s SecureID Password Solutions

That got a little technical, but going back to basics we can see that it’s a difficult process to login to a website, never mind logging into 10 different sites. This means we have some shocking statistics including:

64% of end users report that they have written down their password at least once
Study: Rainbow Technologies Password Survey: 64 Percent Write Passwords Down Compromising Corporate Data – April 28 2003

70% of people do not use a unique password for each Web site
Study: Attitudes and Behavior Towards Password Use on the World Wide Web – October 11 2000

A quarter of Brits forget their online passwords on a regular basis
Study: Microsoft UK Password Survey – November 2 2004

The Microsoft one is the most interesting for me personally. 25% of people on a “regular” basis have to reset their online password. I must have logins for over 100 various online websites, so that means I’d regularly have to reset my password for around 25 of those. What’s more concerning, is I can fully relate to that!

What Paypal & Google Plan to Do:

-Password Protected USB Sticks
-Embedded Hardware Modules
-Other Tokens

These are the main contenders for the post-password era. Biometrics is an idealists view on digital identification. The best way to login to a site is to prove it’s us based on biological identifiers. In a basic form, this could be a fingerprint scan, though these can be quite easy to replicate for people who do want to gain access. Alternatively, facial scanners are available with the obvious flaws (putting a picture up of the person you’re immitating?), and eye scanners which are intrusive, expensive and uncomfortable.

Alternatively, password protected USB sticks are limited as my phone, nor tablet, have USB ports. Hardware embedding has the obvious problem of losing the device, which leaves us with the final option “Other”.

Google has been toying around with the idea of a ring containing a small NFC (Near-Field Communication) chip which, if present, will allow the user to instantly prove it’s the correct owner of the account. Losing the ring is the obvious concern, and adding other authentication methods on top of this means the process is more complex than systems today.

Google Replace Passwords

Summary & Thoughts:

There’s a lot of talk about the “post-password” era, and authentication is certainly a technical and complex problem to solve. In reality, there is no developed solution to this [INSERT BUSINESS IDEA HERE]. The best possible solution to this would be a master login to your entire digital world, which uses some form of two-factor authentication with your phone or something similar. Most websites are starting to integrate single sign on with Facebook which is certainly reducing the need for so many, but it’s still not an ultimate solution.

Will we see the end of the 8 digit password (With an upper case letter and number)? N0chanc3

As a final tip, don’t write passwords down on paper (or anywhere), use a different password for every site, and use some sort of application such as LastPass to store/remember them all which is a secure password database.


Tweet me @thejsug !