The slow death of passwords

Passwords, at their best, are inelegant. The complicated and indecipherable strings of characters which make up an effective password are impractical for the average person, with companies searching for a neater way to protect accounts. While a credible alternative does not yet exist, it’s potentially not very far away.

Yahoo! recently announced users now have the option to ditch their password for an alternative security system. Called the Yahoo Account Key, users can sign into their account by confirming a login attempt is real by responding to a notification on their phone. “It’s secure, and there’s no need to remember a difficult password”, said Yahoo! Product Manager Lovelesh Chhabra in a blog. Google is also trialling a similar system. While neither will likely create a killer blow for passwords, it is another step to ending the awkward and relatively weak security measure.

The origin of the password dates back to the 1960s and the earliest computers. Naturally, so does password fraud. Wired reported that a researcher from the Massachusetts Institute of Technology printed out all the passwords of the school’s Compatible Time-Sharing System in 1962 so he could use the system for more than his weekly allotted time. While systems for securing passwords in computer networks have improved, people have not.

When major security breaches hit big companies, the public gets a peek at what the most commonly used passwords are. Lists are generally pretty miserable. Following the Ashley Madison attack, research found the five most common passwords were, from most to least, ‘123456’, ‘12345’, ‘password’, ‘DEFAULT’ and ‘123456789’.

Since people tend to use the same password for multiple websites, one leak such as this might be enough for hackers to access several different services. Even if a password was more unique – like the name of a first pet – the programs hackers use to guess passwords in quick succession are weighted towards trying words and names first. A shorter, more random sequence could be tougher to crack.

The origin of the password dates back to the 1960s and the earliest computers. Naturally, so does password fraud

There are plenty of free tools online that will generate an example of a strong password. Passwordgenerator.net is one, and also provides a mnemonic device to help remember it. It’s also useless in practice. For example, it suggests the strong password ‘Y3N’:QPn\tC_t:[n’ could be remembered with ‘YELP 3 NUT ‘ : QUEEN PARK nut \ tokyo COFFEE _ tokyo : [ nut’. While one highly complex password could probably be committed to memory by the average person, the dozens needed for multiple accounts can’t be.

People can also easily be tricked into compromising their own security. Social engineering is the act of compelling people to hand over their password, or the information needed to guess a password. An example might be someone impersonating a bank employee and asking for login details.

John McAfee, cybersecurity icon and founder of McAfee Security claimed he could socially engineer his way into the iPhone that has been the focus of the FBI’s recent court battle with Apple. While he backed down quickly after commentators pointed out the iPhone’s owner is deceased, tactics like this are highly effective.

There are a few credible alternatives to developing passwords. One solution has been biometric security, in particular fingerprint scanners. Apple now integrates fingerprint scanners on many of its devices, and as the technology improves its use is only going to become more widespread. Other measures include looking at a person’s iris, voice and even a heartbeat.

Amazon recently filed a patent for a ‘pay by selfie’ system, where your camera takes a photo of you winking, smiling or turning your head to confirm a transaction. A gesture is required as to prove someone isn’t holding up a photo.

While a person might be worried of criminals cutting their thumbs off to access their bank account, the reality is more benign. iPhone fingerprint scanners have, and will continue to be, tricked in relatively pretty straightforward ways, including photocopies. The bigger problem with biometric security though is if it is compromised, a person can’t generate new biometrics. Once the code of a ‘heartbeat signature’ is in the hands of hackers, short of getting a heart transplant someone couldn’t use their pulse for security ever again.

While none of these provide complete security, a combination of two or more might make sense. Two-factor authentication is currently very common, with many services asking for a single use code sent via email or SMS to verify a login attempt. It’s not difficult to imagine a combination becoming the standard in the future, with passwords eventually being replaced by a code and a fingerprint perhaps.

Until then, the best way to make use of passwords remains password managers. Password managers automatically generate, change and secure passwords in one place, taking the hassle out of having to change and relearn your details on a regular basis. It turns out the best password is the one you don’t even know.

While Bill Gates might have had his timing wrong when he predicted the end of password in 2004, he will be right in the long run. The password will be made redundant in the coming years as better and safer solutions are refined and combined.

Samsung Pay launches in China

Samsung Pay is the latest name to enter China’s trillion-dollar mobile-wallet market, after launching its service in cooperation with local vendor UnionPay. Hot on the tails of a one-month public beta, Samsung Pay’s launch has been made official and will be supported by nine institutions, Bank of China, China Bohai Bank and China Construction Bank among them.

China’s is the largest market in the world for smartphones, with an estimated 68 percent of the population now owning one

“The reception of Samsung Pay since its launch has been extremely positive and the service has already seen tremendous success in terms of availability and adoption by consumers”, said Injong Rhee, Samsung’s Executive Vice President and Head of R&D, Software and Services, Mobile Communications Business. “In compliance with national laws and regulations, thanks to cooperating with CUP and many banks, we ultimately want to make Samsung Pay available to as many consumers as possible in China, so that everyone can have the opportunity to enjoy the simplicity, safety and convenience of this mobile payment solution.”

Apple, meanwhile, has made no secret of its ambitions to crack Chinese consumers. This should come as no surprise given the country’s booming middle class offers the biggest opportunity for mobile payment services in the world. China’s is the largest market in the world for smartphones, with an estimated 68 percent of the population now owning one. According to the China Internet Network Information Centre, 358m people paid for goods last year using their mobile device.

Samsung faces a tough battle with Apple. In terms of mobile payments, the American multinational has a one-month head start and boasts a much better reputation on Chinese soil. Samsung was the country’s fourth largest smartphone vendor in the first quarter of 2015, although it failed to make the top five in the fourth. Apple trails Huawei in second place and makes up a 14.6 percent share of the whole.

It’s too late for Samsung to get ahead of Apple – at least in the immediate term – but its mobile payments service could play a central part in boosting the company’s reputation in China.

Pebble cuts 25 percent of staff

In an interview with Tech Insider, Pebble CEO Eric Migicovsky said the company would be cutting 40 employees – about 25 percent of its staff. He attributed the layoffs to a toughening venture capital environment in Silicon Valley, despite the company raising $26m in investment over the last eight months.

Pebble is not the only wearable tech company adjusting its products or workforce

“We’ve definitely been careful this year as we plan our products”, he said. “We got this money, but money [among venture capitalists in Silicon Valley] is pretty tight these days.”

Pebble popularised the smartwatch: after launching its first Kickstarter campaign in April 2012, it amassed over $10m from backers to fund its first watch. It launched a second Kickstarter for a revised design in February 2015 and generated over $20m. At the start of March, it cut the prices of its Time and Time Round models by $50, to $149.99 and $199.99 respectively. The company also launched an integrated fitness tracker at the end of last year, a feature Migicovsky said most users are interested in.

The overall health of the wearable industry is difficult to gauge, but Pebble is not the only company adjusting its products or workforce. Last week, Apple cut the price of its entry level Apple Watch to $299, a drop of $50. While Apple has not released sales figures for the Apple Watch, the price cut suggests it is not performing as well as the company had hoped. FitBit’s shares have fallen considerably this year after it released lacklustre projections. Acquisitions have also begun, with Misfit having been purchased by Fossil Group for $260m last year.

Powa down

It has been revealed London-based e-commerce business Powa Technologies was never profitable, despite being valued at well over £1bn and receiving considerable investment. The detail is one of many to have emerged following the company’s demise.

Many of Powa’s deals were simply letters of interest and not contractual agreements

Once a poster child for London start-ups, Powa Technologies was a payment company founded by Dan Wagner in 2007. It sold a range of e-commerce products including point-of-sale systems and codes that allowed advertisers to sell products directly from billboards or print advertisements. The company received considerable investment and was praised by Prime Minister David Cameron in 2013 for its contribution to the UK economy.

The business fell apart in February when the Financial Times reported it had missed staff and contractor payments. Powa entered administration days later. While the company claimed 1,200 businesses had signed up to use its payment app, the deals were simply letters of interest and not contractual agreements. Powa’s employees had also complained of uncontrolled spending, high turnover of staff, and Wagner’s behaviour. In February, a video memo from Wagner said the company was still “pre-revenue”.

An investigation by the BBC found a deal Powa had signed in December that would allow it to tap into the Chinese market was a last ditch attempt to drum up interest in the company from investors, since the deal was largely tentative. The company burnt through its investors’ money on high rents for prestigious office locations, a substantial amount of publicity, and a rapidly growing staff.

Striking a cautionary chord, Powa Technologies may have been able to remain profitable had it remained at a smaller scale, with reports suggesting its Powaweb online store service was viable on its own.

For an in-depth look at the common reasons technology start-ups fail, look out for a special report in the next edition of The New Economy.

Climate regulations threaten carmakers

 

Automakers have faced wave upon wave of environmental regulations in recent years, and a new study by CDP shows tighter restrictions could have a “significant business impact” on the industry.

“It’s time for carmakers to take climate change seriously”, said Paul Simpson, Chief Executive Officer of CDP. “Today’s new investor research shows that too many companies still fall short in the light of stringent regulation and possible penalties on fleet emissions, and that’s a significant risk for the sector as a whole.”

Each automaker was graded on fleet emissions, advanced vehicles, manufacturing emissions and carbon regulation supportiveness

CDP’s automotive Super-League Table looked at automakers representing 90 percent of global car sales and a combined market capitalisation of $846bn. It found that, while some are responding well to the climate challenge, others are “driving into trouble”.

Each automaker was graded on fleet emissions, advanced vehicles, manufacturing emissions and carbon regulation supportiveness, before being awarded an overall score. Out in front were Nissan, Renault, BMW and Toyota, which were all, according to Simpson, “putting themselves in the fast lane for future growth”, particularly in advanced vehicle technology and low-carbon regulation.

One area in need of improvement is regulation; although half the respondents were at least mildly supportive of low-carbon regulation, Daimler, Hyundai and FCA all received an ‘E’ grade. “So seven companies I’d say are mildly supportive of low carbon regulation and the remaining eight companies are obstructive”, said James Magness, CDP’s Head of Investor Research. “Although I’d say most of them are mildly obstructive. The research also shows that regulations need to tighten even more if global warming is to be limited to a two-degree rise as agreed by world leaders in Paris last year.”

Seven of the 15 manufacturers would face up to $4.8bn in penalties for non-compliance on their fleet emissions if credits were pulled. US giants GM and Ford are the two most at risk and their penalties could amount to $1.8bn and $1.2bn respectively. Kia is the only carmaker outside the top 16 that chose not to respond to CDP’s request for information.

“I would say that a significant number are playing the system with credits”, said Magness. “So, in the US, you can get a credit which offsets your fleet emissions, which are available for air conditioning or just having advanced vehicles, for instance. Some manufacturers are relying on these credits and we think that regulation needs to get tougher quicker as these credits aren’t going to be around forever.”

Magness went on to stress the current system is in need of changes, and singled out the US as a particularly generous case when it comes to carrying forwards credits. Not only do the credits need to be phased out in a much shorter timeframe, but the targets themselves made more strict. “We need the credits phased out and the penalties to kick in”, he said. “And if they do start to kick in, it’s going to cause massive problems for some of these companies.”

Toshiba confirms SEC investigation

Toshiba has announced it is cooperating with the US Department of Justice and the Securities Exchange Commission in an investigation of the firm’s US businesses following last year’s revelations about its poor accounting practices. It did not say which US subsidiaries were under investigation, but cited an “accounting problem” as the reason for the information request. Toshiba also announced it would be cutting a further 3,000 jobs as it streamlines its business, bringing its total number of planned job losses to 14,000.

Toshiba inflated its profits by JPY 151.8bn over a period of several years

The Japanese conglomerate has been under heavy scrutiny since audits last year revealed it had inflated its profits by JPY 151.8bn over a period of several years. Toshiba’s then-President and Chief Executive Hisao Tanaka, Vice Chairman Norio Sasaki and advisor Atsutoshi Nishida resigned after it was revealed they pressured business heads to manipulate figures. Japan’s Securities and Exchange Surveillance Commission imposed a YEN 7.37bn fine on the company in December.

Since the scandal, the company has been restructuring and selling off some of its divisions. This week, Canon agreed to purchase the Toshiba Medical Systems arm, and a preliminary deal was struck for the sale of the consumer electronics business to Midea. Toshiba also announced it was looking at whether a write-down was needed for its US-based nuclear arm Westinghouse. It acquired Westinghouse in 2006, but nuclear power’s popularity has since fallen dramatically, with many countries freezing their nuclear expansion plans in the wake of the Fukushima disaster.

Toshiba is expecting a financial loss this year of YEN 710bn, due to declining demand across all arms of its business, but expects to be profitable again in the next financial year.

Spotify makes deal over unpaid royalties

Following a period of negotiation, Spotify and the US National Music Publisher’s Association (NMPA) have come to an agreement over unpaid royalty fees charged to the music streaming service. The deal requires Spotify pay around $21m, which includes $16m in unpaid royalties, as well as a $5m “bonus compensation” that will be divided among music publishers who opt for a 90-day payment programme by registering with an online portal.

The deal could save Spotify hundreds of millions of dollars

The agreement allows music publishers in the US to receive royalties for songs whose ownership was “previously unknown”. The issue of missing ownership information has festered for several years, making it difficult to compensate some writers and publishers whose music has featured on Spotify. The deal struck by the NMPA, however, establishes a process for identification and compensation in such cases.

In reaching this deal with the NMPA, Spotify is covered for music it has featured since first entering the US market in June 2011, until June 2017, and could save the company hundreds of millions of dollars from various class action lawsuits that have been pursued by music artists.

“We appreciate the hard work of everyone at the NMPA to secure this agreement and we look forward to further collaboration with them as we build a comprehensive publishing administration system”, said Jonathan Prince, Spotify’s Global Head of Communications and Public Policy, in a statement published on the NMPA website.

Google AI defeats Go champion 4-1

Google’s artificial intelligence AlphaGo has defeated Go master Lee Se-dol 4-1 in a five game series. The program, developed by UK company DeepMind and purchased by Google in 2014, represents a major milestone in artificial intelligence development as it becomes the first computer to beat a professional nine-dan Go player.

DeepMind learnt the game by playing millions of rounds against itself

AlphaGo won the first three games in the series before the 18-time world champion was able to claw the fourth game back. “Because I lost three matches and then was able to get one single win, this win is so valuable that I wouldn’t exchange it for anything in the world”, said Lee Se-dol. “That’s because of the cheers and the encouragement that you all have shown me.”

The AI finished the series with a win, claiming $1m in prize money, which will be donated to charity. AlphaGo surprised audiences with highly unconventional moves and very few mistakes. DeepMind founder and CEO Demis Hassabis tweeted:

Board games have provided both a challenge for programmers and a publicity opportunity for companies since Deep Blue beat chess Grandmaster Gary Kasparov in 1997. But developing a program that could achieve a similar feat on the Go board proved a particular challenge.

Very popular in Asia, Go is a 3,000-year-old Chinese board game played by placing stones to control territory on a 19×19 grid. While the rules are relatively simple, the number of moves available to a player at any one time is so large it is impossible to compute all possible outcomes (the method used by chess computers). Given this and the reliance on intuition over predictable strategies by most Go players, many considered a champion-beating program an impossibility. But DeepMind learnt the game by playing millions of rounds against itself and developed the ability to recognise patterns while selectively calculating the best moves. It’s this ability to learn that makes AlphaGo such an achievement.

The software that powers AlphaGo is currently being developed for more practical applications, with DeepMind creating a series of healthcare programs to help doctors and nurses identify patients at risk.

China’s building nuclear reactors that float

China has started work on a nuclear reactor housed in a floating vessel as part of plans to transform its energy mix. The small, modular, offshore and multipurpose reactor will be the first of its kind worldwide, with construction slated for next year and generation to commence in 2020. Approved by China’s National Development and Reform Commission, General Nuclear’s floating reactors are part of the country’s strategy to develop innovative energy technologies.

China’s nuclear ambitions

$100bn

Investment by 2030

~7

Reactors to be built annually

400

New reactors by 2050

$1trn

Potential investment by 2050

This new type of power plant is but one component of China’s 13th five-year plan, which also includes building more than 100 nuclear power reactors over the next decade. With plans to invest over $100bn, the government aims to construct around seven reactors annually up to 2030. The nuclear power goals for 2050 include up to 400 new nuclear reactors, which could mean over a trillion dollars’ worth of investment. China’s eventual objective is to be the largest exporter of nuclear energy technology in the world.

The strategy is not only to expand in quantity, but also in technological diversity. China will produce reactors of all scales and types: small modular; fast; molten; thorium; and large light-water.

The 200MW reactor that will be used in the first floating plant has been developed to supply electricity, heat and desalination facilities. It can be used on islands or in coastal areas to support offshore oil and gas exploration, to provide power for large industrial parks needing lots of quick base power, or to provide emergency power in case of a natural disaster. The plant is able to move between sites, which gives it logistical benefits, and construction in a factory or shipyard will significantly reduce costs while keeping its environmental impact low.

China’s fast-paced nuclear energy plan is an attempt to change its energy consumption habits. The US Energy Information Administration reported China was the world’s largest net importer of petroleum and other liquids, and, in 2014, was responsible for more than 40 percent of the world’s oil consumption growth. Some 66 percent of China’s energy currently comes from coal.

By 2020, China hopes to derive 10 percent of its energy from nuclear. Already the world’s leading producer of renewable energy, China has partnered with the US for its next-generation nuclear programmes. If the country can overcome the challenges associated with nuclear power, it could significantly transform China’s energy mix.

GM revs up its self-driving ambitions

Last year, GM said it had “aggressive” plans to develop autonomous vehicle technology; now it’s following up on that promise with its planned purchase of Cruise Automation. Talks between the two initially centred on a new round of venture capital, only for the focus to turn to a full blown acquisition. Financial details are scant, but Fortune quoted a source as saying the deal is valued at “north of $1bn,” made up of a combination of cash and stock.

Cruise Automation has raised over $18m in venture capital funding over its three years in existence

The acquisition is in keeping with GM’s decision earlier this year to invest $500m in Lyft and create a connected network of self-driving cars. GM’s President Dan Ammann said at the time: “We see the future of personal mobility as connected, seamless and autonomous.” This latest announcement is proof the ambition remains.

San Francisco-based Cruise Automation has raised over $18m in venture capital funding over its three years in existence and is best known for creating an aftermarket kit that turns standard vehicles into autonomous ones. “The next step is to make sure we bring the full resources to the table to accelerate what Cruise is doing and integrate into the GM vehicle system”, Ammann told TechCrunch.

The acquisition isn’t expected to close until the year’s second quarter, but, once completed, it could accelerate GM’s plans to develop a driverless fleet. With Uber, Google and Apple as competition, the acquisition could hand GM a much-needed advantage.