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JP Morgan creates first US bank-backed crypto-currency

US investment bank JP Morgan has created a crypto-currency to help settle payments between clients in its wholesale payments business.

JPM Coin is the first digital currency to be backed by a major US bank.

The crypto-currency, which runs on blockchain technology, has been used successfully to move money between the bank and a client account.

JP Morgan says it sees potential in using digital coins to reduce risk and enable instant transfers.

Although JP Morgan’s chief executive Jamie Dimon has publicly criticised Bitcoin – the first crypto-currency in existence – on several occasions, the bank says it has always “believed in the potential of blockchain technology”.

“We are supportive of crypto-currencies as long as they are properly controlled and regulated,” Umar Farooq, JP Morgan’s head of Digital Treasury Services and Blockchain, wrote in an online Q&A page.

How do crypto-currencies work?

Virtual currencies can be used to pay for things in the real world, such as a hotel room, food or even a house.

Digital tokens are held in online wallets, and can be sent anonymously between users.

For this reason, crypto-currencies are attractive to people who want to make illegal purchases on the Dark Web – a part of the internet that is not indexed by search engines.

What is blockchain?

The blockchain is a ledger of blocks of information, such as transactions or agreements, that are stored across a network of computers.

This information is stored chronologically, can be viewed by a community of users, and is not usually managed by a central authority such as a bank or a government. Once published, the information in a certain block can’t be changed.

If people try to tamper with that information, it becomes obvious.

This is a powerful concept. Ten years ago, blockchain was combined with other technologies to create cryptocurrencies, and the first blockchain-based cryptocurrency was Bitcoin.

Can anyone use JPM Coin?

No. JPM Coin is not for retail customers – it will be used internally by JP Morgan to enable the instantaneous transfer of payments between institutional accounts.

When a JP Morgan client deposits money into an account, the money is converted into an equivalent number of JPM Coins.

The coins are used to perform transactions over the bank’s blockchain network Quorum with other clients, for example money movement or payments in securities transactions.

Once the transactions have been performed, holders of JPM Coins can redeem them for US dollars from the bank.

This story was originally published on BBC Technology News

Attack at email provider wipes out almost two decades’ worth of data

Instead of seeking financial gain or other goals, the attacker leaves ‘scorched digital earth’ behind

An unknown attacker has wrought rare havoc on email service provider VFEmail, wiping out all of the company’s data stored in the United States, according to an announcement on the firm’s website.

Describing the incident as “catastrophic”, the company said that the intruder had destroyed not only the primary data on the firm’s US servers, but also all backups. The onslaught thrashed 18 years’ worth of user data and backups of a company that has provided both free and paid email services for businesses and end users alike. That, of course, means countless email messages sent and received by its users over the years.

The attack on the Wisconsin-based company is believed to have unfolded over several hours on Monday. Shortly after users began to complain that something was amiss, VFEmail acknowledged the attack at its entire US-based infrastructure.

“At this time, the attacker has formatted all the disks on every server. Every VM [virtual machine] is lost. Every file server is lost, every backup server is lost,” VFEmail tweeted later, assessing the damage.

In addition, the attacker zoomed in on the company’s resources in the Netherlands. There, as reported by security journalist Brian Krebs, VFEmail “caught a hacker in the act of formatting one of the company’s mail servers”.

The primary data in the Netherlands was also destroyed but, as per CNET, at least some of the backups were salvaged. However, “[i]t’s nowhere near a full restore,” wrote the site, quoting VFEmail owner Rick Romero.

In the meantime, the site is said to have restored the ability to deliver and send email at least for a portion of its users. VFEmail wrote that they continue to work on recovering whatever user data can be recovered.

That said, Romero painted a grim picture on his personal Twitter account: “Yes, @VFEmail is effectively gone. It will likely not return,” he intimated.

Krebs noted the service’s past troubles with cybercriminals. Over the years, VFEmail has mainly faced multiple debilitating distributed denial-of-service (DDoS) attacks, including those involving extortion attempts. However, none of those or other attacks has resulted in what is apparently an irretrievable data loss.

14 Feb 2019 – 02:55PM

This story was originally published on We Live Security by Eset

British hacker Marcus Hutchins loses bid to omit 'intoxicated' testimony

British cyber-security expert Marcus Hutchins – who has been accused of writing virus code – has lost a legal bid to suppress some evidence prosecutors want to use against him.

The evidence is comments he made in an interview after the FBI arrested him.

He wanted the testimony discounted, claiming he gave it when “intoxicated”.

A court ruling issued earlier this week threw out the request saying there was no evidence that he was under the influence of drugs.

FBI agents arrested Mr Hutchins on 2 August 2017 at Las Vegas’s McCarran International Airport as he was starting his journey home after attending the Def Con hacker conference. He has been held in the US ever since his arrest.

He faces 10 charges related to malware, or malicious software, including a program called Kronos which is designed to steal banking credentials.

He has pleaded not guilty to the charges.

Judge JP Stadtmueller wrote: “Hutchins appeared to be alert, engaged, co-ordinated, and coherent,” in his ruling, tech news site Ars Technica recorded.

The judge added that there was no evidence that Mr Hutchins was under the influence of drugs but was rather suffering a “terrible hangover”. This did not render him unable to understand the procedure or be fully aware of why he was being quizzed, said the judge.

The ruling also said he was informed of all relevant rights prior to the interview by the agents who arrested him.

Mr Hutchins, from Ilfracombe in Devon, came to prominence for his pivotal role in preventing the spread of the Wannacry computer virus in early 2017.

This story was originally published on BBC Technology News

Merging neutron stars to reveal secrets about the structure of matter

Measuring the grativational waves produced by the merging of two neutron stars will reveal secrets about the fundamental structure of matter in the universe, according to scientists.

Neutron stars are the among the most dense objects in the universe, composed of the core of a collapsed star that did not form a black hole.

Scientists believe that when they crash into each other they may prompt a phase transition in which neutrons dissolve into the sub-atomic particles of quarks and gluons.

New research published in Physical Review Letters has reported the calculations of two international groups of scientists of what such a phase transition would look like in a gravitational wave.

Quarks are the smallest particles which form matter. They never appear alone and are bound inside larger particles such as protons and neutrons.

In the core of neutron stars, which could weigh as much as the sun but measure the size of a city, matter can be packed so densely that neutrons could dissolve into quarks.

This kind of transition is known as a phase transition to physicists and is similar to the phase transition when water boils and becomes steam or vapour.

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Essentially, such a transition is theoretically possible when neutron stars merge to form a density so high that atoms themselves are crushed at temperatures 10,000 times higher than in the core of the sun.

NASA perplexed by 'unusual' infrared light from neutron star

NASA perplexed by ‘unusual’ infrared light from neutron star

The mysterious light emission “could indicate new features” which scientists have never been able to observe before

Measuring gravitational waves emitted from merging neutron stars would be a great way to detect such a phase transition, according to the scientists.

They believe it would leave a special signature in the wave signal, and have used supercomputers to figure out what this signature could look like.

“With aid of the Einstein equations, we were able to show for the first time that this subtle change in the structure will produce a deviation in the gravitational wave signal until the newly formed massive neutron star collapses under its own weight to form a black hole,” explained Professor Luciano Rezzolla, who is a professor for theoretical astrophysics at Goethe University.

The computer models of Dr Andreas Bauswein differ slightly, but also show a specific signature in the gravitational wave signal.

“We succeeded to show that in this case there will be a distinct shift in the frequency of the gravitational wave signal,” said Dr Bauswein.

“Thus, we identified a measurable criterion for a phase transition in gravitational waves of neutron star mergers in the future.”

The difference is about when the quarks appear, whether small amounts gradually develop throughout the merged object or if a core of quark matter begins to form at the object’s interior.

Unfortunately, some of the qualities of the gravitational wave signal which could identify which phase transition takes place would be unmeasurable with current detectors.

But a new generation of technology and a merger event relatively close to the Earth could allow this special signature to be identified.

By detecting which of the gravitational wave signatures the scientific groups have proposed is actually emitted by the merger event, scientists could gain crucial new insights into phase transitions in nuclear matter, and thus into how that matter is structured.

This story was originally published on Sky News Technology

What is Article 13? The EU's copyright directive explained

The final version of a controversial new EU copyright law has been agreed after three days of talks in France.

Google has been particularly vocal about the proposed law, which it says could “change the web as we know it”.

Article 13 of the EU Copyright Directive states services such as YouTube could be held responsible if their users upload copyright-protected movies and music.

In a few weeks, MEPs will vote to decide whether it becomes law.

The EU last introduced new copyright laws in 2001. The EU says it wants to make “copyright rules fit for the digital era”, but not everyone agrees with the proposed changes.

If the UK leaves the EU with a deal, and the directive becomes law, it would apply to the UK during any transition period.

What is Article 13?

Article 13 is the part of the new EU Copyright Directive that covers how “online content sharing services” should deal with copyright-protected content, such as television programmes and movies.

It refers to services that primarily exist to give the public access to “protected works or other protected subject-matter uploaded by its users”, so it is likely to cover services such as YouTube, Dailymotion and Soundcloud.

However, there is also a long list of exemptions, including:

  • non-profit online encyclopaedias
  • open source software development platforms
  • cloud storage services
  • online marketplaces
  • communication services

What does Article 13 say?

Article 13 says content-sharing services must license copyright-protected material from the rights holders.

If that is not possible and material is posted on the service, the company may be held liable unless it can demonstrate:

  • it made “best efforts” to get permission from the copyright holder
  • it made “best efforts” to ensure that material specified by rights holders was not made available
  • it acted quickly to remove any infringing material of which it was made aware

These rules apply to services that have been available in the EU for more than three years, or have an annual turnover of more than €10m (£8.8m, $11.2m).

Article 13 says it shall “in no way affect legitimate uses” and people will be allowed to use bits of copyright-protected material for the purpose of criticism, review, parody and pastiche.

What are the concerns?

Critics say it would be impossible to pre-emptively license material in case users upload it.

German MEP Julia Reda suggested services would have to “buy licences for anything that users may possibly upload” and called it an “impossible feat”.

Article 13 does not force companies to filter what users are uploading, although critics say companies will be left with no choice.

YouTube already has its Content ID system, which can detect copyright-protected music and videos and block them. But critics say developing and implementing this type of filter would be too expensive for small companies or start-ups.

Others have warned that algorithms often make mistakes.

“Filters will subject all communications of every European to interception and arbitrary censorship if a black-box algorithm decides their text, pictures, sounds or videos are a match for a known copyrighted work,” said a blog by online rights group EFF.

Article 13 does say services must put in place a “complaint and redress mechanism” so that their users can quickly resolve disputes if their content is blocked by mistake.

What was YouTube campaigning for?

Before the final text of the directive was agreed, there were three versions: one by the European Parliament, one by the Council of the EU, and one by the European Commission. They worked together to produce the final version of the text.

YouTube had warned that the European Parliament’s original draft was its worst-case scenario.

It dramatically claimed it would have to block existing videos and new uploads from creators in the EU, and encouraged prominent vloggers to make videos about Article 13.

It warned its Content ID system only worked if rights-holders engaged with it and “provided clarity” about what material belonged to them.

The final version of Article 13 says services must make “best efforts” to remove copyright-protected videos in cases where “the rights holders have provided… the relevant and necessary information”.

That seems like a win for YouTube.

In a statement, Google said: “We’ll be studying the final text of the EU copyright directive and it will take some time to determine next steps. The details will matter, so we welcome the chance to continue conversations across Europe.”

However, lawyer Kathy Berry, from Linklaters, said Article 13 still contained some “broad and ambiguous terms”, such as the requirement for services to demonstrate “high industry standards of professional diligence”.

She said it would be “likely to result in an ongoing lack of legal and commercial certainty” until legal cases set a precedent and “flesh out” the directive.

The proposed law will face a final vote in the European Parliament in the next few weeks. If it passes, it will be implemented by national governments over the next two years.

This story was originally published on BBC Technology News