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When Coding Is Criminal

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A federal district court in Illinois recently dismissed the US government’s case against Jitesh Thakkar, a computer programmer who was accused of writing code that someone else used to commit a crime. But programmers at large are hardly off the legal hook. Expect more cases against them in the not-too-distant future.

Thakkar was one of seven individuals whom the U.S. Justice Department last January charged with the crime of “spoofing”—that is, in this instance, using an algorithm to trick a market. Thakkar was accused of creating an algorithm that enabled a London trader to artificially overstate demand for stock market futures. Aided by another developer’s software, this tactic sparked the 2010 “flash crash” that saw the US stock market lose $1 trillion in value in just 36 minutes.

Consider Thakkar’s case a warning to programmers the world over. They might assume they’re protected by the First Amendment when writing code, but that might not be the case. Computer coders would also be wrong to think they face no potential liability if they’ve been employed by someone else making decisions about how a product is used.

Programmers, in fact, might very well be held liable for the products they write—a point underscored this past November, when the Securities and Exchange Commission hit the creator of a purported cryptocurrency trading platform with a $388,000 fine for contributing to the operation of an unregistered exchange. In response, the Electronic Frontier Foundation, a digital free speech group, expressed worry that the decision was written in a way that “could be read to imply that persons engaged in merely writing and publishing computer code could run afoul of US securities law.”

Well, there is no “could” about it. This is, without doubt, a new realm of legal exposure.

Traditionally, market manipulation cases have been filed against the person or people doing the actual buying and selling. That seemed to hold in the case of Michael Coscia, who was the first individual convicted of spoofing under the 2010 Dodd-Frank financial reform act. Testimony by the programmer whom Coscia had hired to write the code proved critical during a 2015 trial that ended with a three-year sentence in prison.

In that instance no charges were filed against the programmer.

In 2017, the SEC created a new Cyber Unit tasked with poring over smart contracts, Initial Coin Offerings (ICOs), and other cutting-edge technologies, in search of violations. “Cyber-related threats and misconduct are among the greatest risks facing investors and the securities industry,” Stephanie Avakian, codirector of the SEC’s enforcement division, said in a press release announcing the new unit.

That same year, the SEC filed its first charges against a blockchain company, related to the issuance of an ICO.

In Chicago, the case against Thakkar hinged largely on the testimony of Navinder Sarao, the British futures trader blamed for the 2010 crash. Sarao had already pleaded guilty, facing as many as 30 years behind bars. Before sentencing, Sarao agreed to help the government. Yet in Chicago his testimony led to a hung jury in the Thakkar trial, and US District Judge Robert Gettleman acquitted the programmer of the conspiracy charge. Only now has the judge dismissed the whole case.

Thakkar’s attorney compared the prosecution of his client to a cell phone salesperson on trial for selling a phone later used in a drug crime. To convict, by this logic, the jury would have had to infer that Thakkar knew, or had reason to know, that Sarao was using his program to trick the market for financial gain.

Notwithstanding the results in the Thakkar case, the worry among lawyers like me who practice in this area is that the relevant markets are in great flux. The world is still wrestling with blockchain, cryptocurrencies, smart contracts, and other emerging technologies—with too little guidance from regulators, who are similarly struggling to keep pace. Expect more enforcement actions, along with challenges, as governments modernize the rules to keep up with a reinvention of markets and exchanges.

Meanwhile, programmers run the risk of ending up on the wrong side of the law for getting involved with projects that might seem just interesting but are, in fact, nefarious. It wouldn’t take much to place a programmer in jeopardy. You may not have to actually know you’re violating the law to be liable. If prosecutors believe that you should have known your code would be put to an unlawful purpose and that you deliberately avoided learning that fact, you could find yourself in the same predicament as Thakkar.

Programmers need to remain aware that the programs they write carry legal implications and that regulators are watching. That’s especially true when taking a job in the financial community. Think about the legality of what you’re signing up for. As I’ve written before, ignorance is risk.

No matter how much faith you put in the First Amendment, the potential for personal liability looms for any coder who signs up with the wrong company.

WIRED Opinion publishes pieces written by outside contributors and represents a wide range of viewpoints. Read more opinions here. Submit an op-ed at opinion@wired.com

Read more: https://www.wired.com/story/opinion-when-coding-is-criminal/

The WIRED Guide to Open Source Software

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When someone buys a new smartphone, often they're preoccupied with the camera specs or the size of the screen or its storage capabilities. It's easy to overlook one of the most foundational aspects of these sleek consumer gadgets: their operating systems. The world's most popular mobile operating system is Google's Android. It powers more than 86 percent of smartphones in the world. What's even more remarkable is that Android is based on the open source Linux operating system.

That means anyone can view the code at the heart of the vast majority of smartphones, modify it, and, more important, share it with anyone else. This openness enables collaboration. Unlike, say, Microsoft Windows, which was developed and is maintained by a single company, Linux is developed and maintained by more than 15,000 programmers around the world. These programmers might work for companies that compete with each other, or they might volunteer to create something new that’s then given away. For free. Gratis.

As crazy as that might sound, the open source way of building software is now embraced by the likes of IBM, which plans to pay $34 billion for open source company Red Hat, Microsoft, which paid $7.5 billion to acquire the code hosting and collaboration platform GitHub, and Walmart, which released its own open source software.

Open source is even seeing applications in the next iteration of technology: AI. Google open sourced its artificial intelligence engine, TensorFlow, in 2015, enabling companies and researchers to build applications using some of the same software the search giant used to create tools that search photos, recognize spoken words, and translate languages. Since then, Dropbox has used TensorFlow to recognize text in scanned documents and photographs, Airbnb has used it to help categorize photos in its listings, and a company called Connecterra has used it to help dairy farmers analyze their cows' health.

Why would Google give away something so central to its business? Because it hoped outside developers would make the software better as they adapted it to their own needs. And they have: Google says more than 1,300 outsiders have worked on TensorFlow. By making it open source, Google helped TensorFlow become one of the standard frameworks for developing AI applications, which could bolster its cloud-hosted AI services. In addition to garnering outside help for a project, open source can provide valuable marketing, helping companies attract and retain technical talent.

Keep in mind that Google didn't give away the data that powers its AI applications. Just using TensorFlow won't magically allow you to build a search engine and advertising business that can compete with Google.

So Google stands to benefit, but why would an outsider contribute improvements to TensorFlow? Let's say a company makes its own version of TensorFlow with unique elements, but keeps those elements private. Over time, as Google made its own changes to TensorFlow, it might become harder for that other company to integrate its changes with the official version; also, the second company would miss out on improvements contributed by others.

In short, open source provides a way for companies to collaborate on technology that’s mutually beneficial.

The Rise of Open Source

The open source software movement grew out of the related, but separate, "free software" movement. In 1983, Richard Stallman, at the time a programmer at the MIT Artificial Intelligence Laboratory, said he would create a free alternative to the Unix operating system, then owned by AT&T; Stallman dubbed his alternative GNU, a recursive acronym for "GNU's Not Unix."

For Stallman, the idea of "free" software was about more than giving software away. It was about ensuring that users were free to use software as they saw fit, free to study its source code, free to modify it for their own purposes, and free to share it with others. Stallman released his code under a license known as the GNU Public License, or GPL, which guarantees users those four software freedoms. The GPL is a "viral" license, meaning that anyone who creates software based on code licensed under the GPL must also release that derivative code under a GPL license.

Importantly, the license doesn't forbid companies from selling copies of GNU software. As long as you allow your customers to share your code, you can charge as much as you want for your software. The phrase "free as in free speech, not free as in free beer" is often used to help explain this apparent contradiction.

Other programmers soon followed Stallman's example. One of the most important was Linus Torvalds, the vitriolic Finnish programmer who created the Linux operating system in 1991. Linux is a "kernel," the core of an operating system that talks to the hardware and translates the basic input from your keyboard, mouse, or touchscreen into something the software can understand. GNU lacked a finished kernel at the time, so many GNU users combined GNU and Linux into a functional operating system. Bundles of the GNU operating system, Linux kernel, and other tools became known as GNU/Linux distributions; some purists still refer to Linux-based operating systems as "GNU/Linux." Soon, companies like Red Hat were making money selling support for open source technologies like Linux.

Linux—or GNU/Linux if you prefer—became especially popular for running web servers and now runs 69.4 percent of web servers, according to data compiled by W3Techs. Alongside the rise of Linux and the web came several other free tools, including the Apache web server, MySQL database, and programming languages like Perl and PHP. Many used the GPL license, but others adopted more permissive licenses that, unlike the GPL, allowed companies to create proprietary products using their code.

In time, tensions grew between those, like Stallman, who believed that all software should be free on ethical grounds, and more business-oriented developers who thought that freely sharing code was a better way to build software but not an ethical imperative. In 1998, a group met to discuss how to promote the idea of shared code and open collaboration. Worried that the term “free software” and Stallman’s more absolutist philosophy would make their ideas less palatable to businesses that wanted to keep some of their code proprietary, the group settled on the label "open source," coined by Christine Peterson, to distinguish its aims.

During the 2000s, open source went truly mainstream. In 2004, programmer David Heinemeier Hansson released his web application programming framework Ruby on Rails, which quickly became one of the world’s most important web development tools, as well as the foundation for services like Twitter and Kickstarter. Meanwhile, Yahoo was funding the development of the open source data-crunching system Hadoop. After its release in 2006, other companies, including Facebook, Twitter, and eBay began contributing to the project, helping demonstrate the value of inter-company collaboration. Sun Microsystems' $1 billion acquisition of MySQL in 2008 proved open source could be big business. That same year Google released its first Android phones, moving open source from the server to your pocket.

Now open source is practically everywhere. Walmart uses open source software like the development platform Node, and it has opened up the code of its cloud management tool OneOps and its development platform Electrode. JP Morgan Chase open sourced its blockchain platform Quorum, on which its employees collaborated with the creators of the privacy focused bitcoin alternative Zcash. Even Microsoft, whose former CEO once called Linux a "cancer," now uses and releases open source software such as its popular .NET programming framework. It even uses Linux to run parts of its cloud service Azure and has shared its own Linux tools with the community.

Open source isn’t counterculture anymore. It’s the establishment.

The Future of Open Source

The rise of open source hasn't been without glitches. Despite the corporate world's embrace of open source software, many independent or startup-based projects still haven't figured out how to make money. Even the developers of software that’s widely used by major companies can struggle to raise funds to cover their costs or hire others. That can have serious consequences.

For example, in 2014, security researchers revealed serious vulnerabilities in two crucial open source projects: OpenSSL and Bash, which are part of many major operating systems. No software is free of potential security problems, but the fact that these issues went undetected for so long highlighted a big problem for open source: Many big-name open source projects rely on lesser-known open source components run by volunteers who have little time to fix problems and no money to hire security auditors.

Some companies that have built businesses around open source products are adopting controversial new licensing schemes. In an effort to keep cloud computing services from selling competing services based on its code, MongoDB created a new license in 2018 that restricts how other companies can use its MongoDB Community Server. Other open source companies have adopted the Fair Source license, which requires companies with more than 15 employees to pay a fee to use software that uses the license, or the newer Commons Clause, which restricts how companies can commercialize the software. You can still view the source code from software released under these licenses, but they break with the free and open source software tradition of allowing users to do whatever they want with the code.

Startups, meanwhile, are working on novel ways to turn a profit on open source. Red Hat makes money by selling support for its open source products, but that’s not feasible for every open source project. A company called Tidelift aims to sell support through a single subscription fee for a package of open source projects. Think of it as “Netflix for open source.”

Solving these funding problems is crucial to the future of open source. But money isn’t the only problem. The open source workforce is even less diverse than the tech industry as a whole, according to a survey conducted in 2017 by GitHub. Half of the respondents had witnessed bad behavior—such as rudeness, name calling, or harassment—and said it was enough to keep them away from a particular project or community. Around 18 percent of survey respondents had experienced such bad behavior firsthand. That's a problem because working on open source projects is now an important part of landing a job in technology. If women and minorities are shut out of open source, then the technology industry as a whole becomes that much less diverse.

One way many open source projects are trying to address the issue is through a code of conduct called the Contributor Covenant, which warns participants against personal attacks, harassment, or "other conduct which could reasonably be considered inappropriate in a professional setting." As common sense as these guidelines might sound, they've proved controversial among open source coders used to being judged solely on their code, not their professionalism—or lack thereof. The author of the Contributor Covenant is still periodically harassed.

Still, there are signs of progress. In 2018, Torvalds, long accused of creating a toxic environment in the Linux community, apologized for his past behavior, and the Linux project adopted the Contributor Covenant.

Inclusion isn’t just an ethical issue for open source. Diverse teams build better products. And making better software is what open source is all about.

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Last updated April 23, 2019.

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The Brave Browser Will Pay You to Surf the Web

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If you were on the internet in the late 1990s, you might remember companies like AllAdvantage that promised to pay you to surf the web. You could install a program that tracked your browsing and showed you targeted ads at the top of the screen; then AllAdvantage would give you a cut of the ad revenue you generated.

These schemes largely disappeared after the dot-com crash. But Brendan Eich, the controversial creator of the JavaScript programming language and cofounder and former CTO of Mozilla, thinks his company Brave Software has found a way to revive that old idea.

Brave makes a browser based on Google Chrome that blocks tracking scripts and other technologies that spy on your online activity. As a result, it also blocks many web ads; if you visit WIRED.com using the Brave browser, you won’t see any ads. But starting Wednesday, Brave will give users the option to see ads that Eich says will respect your privacy. The ads will appear as desktop notifications, he says, not as replacements for the ads the Brave browser blocks. So you still won’t see ads on WIRED.com, but you might see them elsewhere on your screen. If you choose to see these ads, you’ll get 70 percent of the revenue they generate.

Eich hopes Brave can solve two of the web's most vexing problems—privacy and revenue—by turning the traditional digital advertising model on its head. Today, ad networks pay sites like WIRED.com for ad space and web browsers like Brave and Chrome deliver content from those publishers to users. Brave is trying to put the browser in the center of the advertising experience. Instead of paying publishers directly, ad networks would pay Brave, which will pass part of the money to users—and eventually to publishers—and keep a cut for itself.

By handling advertising in the browser on your device, Brave says it will be able to target ads without sending your data to the cloud, and protect your privacy. When you interact with an ad on Brave, the browser sends notice to the company's servers, but doesn't include any identifying information. Eich sees four sets of winners: browser makers get paid; users get paid, and get more privacy; advertisers can target pitches without running afoul of European privacy regulations; and publishers can survive in a world where many users are installing ad blockers.

Eich cofounded Brave in 2015 following his ouster from Mozilla in 2014 over his 2008 donation toward a California ballot initiative to ban same-sex marriages. The first version of Brave’s browser launched in 2016 with the ability to block trackers; the company added features later that year that allowed users to donate to their favorite websites. Now it’s adding the first of its promised advertising features.

Eventually, the company plans to offer a service that will replace any blocked ads on a publisher's site with ads placed by Brave and give those publishers a cut of the ad revenue. Eich says Brave will only replace ads on sites that opt into its service.

The Brave browser; the box in the lower-right-hand corner is an example of the types of ads the browser will display starting Wednesday.

Brave

Publishers and ad networks might bristle at the idea of putting browser makers in the middle of their business. But in recent years browsers have taken a more active role in shaping the web, instead of merely displaying a website’s content. Chrome now blocks ads on a small number of sites with particularly egregious advertising practices, while browsers like Firefox and Safari have added privacy protections. Meanwhile, browser plugins are giving users more control over their experience. There are Chrome extensions, for example, that let you change Facebook's color scheme, or change the way images are displayed on Pinterest. And of course there are extensions that block all ads.

Trying to win advertisers and publishers to a new model isn't Brave's only challenge. It also needs users. Eich says Brave has 5.9 million users and is growing. But Brave doesn't yet register on web analytics firm StatCounter's rankings of web browsers, where Chrome reigns supreme with about 63 percent market share.

Brave will give users a 70 percent cut of its advertising revenue, which Eich estimates could work out to about $5 a month. Brave will pay users with its own bitcoin-style "cryptocurrency” called Basic Attention Tokens or BAT, which has traded for as little as 12 cents and as much as 46 cents over the past 12 months, according to CoinMarketCap. Today, there’s no way for users who receive BAT for viewing ads to swap their digital currency for dollars, but Eich says Brave will partner with cryptocurrency exchanges to make that possible.

The company offers a service through the cryptocurrency exchange Uphold to allow users to buy BAT and donate it to publishers, and for publishers to exchange the BAT they receive for dollars. Advertisers, which Brave says will include Vice, HomeChef, and a number of cryptocurrency related companies, will be able to buy ads either with BAT or with traditional currencies.

Eich says Brave opted to create its own tokens using the Ethereum cryptocurrency platform in part to avoid regulatory requirements, such as verifying users' identifies, that partners like Uphold are better equipped to handle.

Read more: https://www.wired.com/story/brave-browser-will-pay-surf-web/

In an Ex-Googler’s Novel, Silicon Valley Runs on Male Ego

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The Big Disruption, a satirical novel written by Jessica Powell, Google’s former head of communications, is set inside the lush and bountiful Silicon Valley headquarters of Anahata, a massive, 10-year-old tech giant in love with its own mythology about open-door board meetings and profound yet “napkin-able” ideas. Visionary CEO Bobby Bonilo deploys the company’s vast resources and intellectual firepower mainly to play catch-up with Galt, the hottest startup in the Valley, famous for creating apps and tools capable of “reducing all thought and opinion to easily shareable, bite-sized chunks.”

The parallel to Powell’s real life is obvious. Anahata began as a search engine that couldn’t seem to get social networking right. The company takes a literal shot at the moon. But even though Bonilo seems like an easy match to either Sergey Brin or Larry Page, Powell says she was based in Europe when she wrote the book in 2012 and hadn’t yet met Google’s cofounders in person.

Instead, she says the book’s yogi-CEO, who speaks in cryptic tech koans, was based on a short stint handling PR for the dating-app company Badoo. At the time, Walter Isaacson’s biography of Steve Jobs had just been published, and Badoo employees would consult the book to guide even the most inconsequential product decisions.

Medium

Much like the real-life tech giants, Anahata ultimately attempts world domination, but not out of thirst for money, power, and data. Rather, its ambitions are driven mainly by Anahata’s need to keep Galt from poaching its engineers and Bonilo’s need to feel relevant. Big Tech’s critics may imagine that behind closed doors, executives debate trade-offs between ad revenue and user safety. But inside Anahata, product changes or developments with momentous global impact are the result of petty office politics in a rigid hierarchy that places engineers at the top, product managers somewhere in the lower middle, and legal, HR, marketing, and PR at the bottom. (Policy and ethics don’t even merit a rung.)

 

Powell hopes her novel will ring true for tech workers. “Fiction that portrayed the Valley was so heavy on dystopias and evil laugh tracks,” she says. “If you’re sitting there and you’re an engineer working on a cloud storage solution and you hear that your company is doing evil, evil things, how do you even reconcile that? It’s not what you see,” and so “you just completely discount that outside voice.”

Medium published the book online in October and, 100,000 or so readers later, decided to publish it in print—both firsts for the company. Powell wrote the book before rejoining Google in 2012. When Powell resigned from Google in August 2017, she was on the management team reporting directly to CEO Sundar Pichai.

The book touches briefly on racial discrimination in Silicon Valley but mainly satirizes the industry’s treatment of women. Across 90,000 words, there is a single female engineer, who is made to feel unwelcome by the company’s insanely sexist HR practices.

 
 

Powell never intended to publish the book under her real name, but her friends told her that the book’s critique about the lack of women in the industry wouldn’t hold much water without her experience. Then The New York Times published an anonymous op-ed written by a Trump administration official tearing into President Trump. Powell realized, “This anonymous thing is played,” which made Medium happy as well. “They had always said don’t be dumb. Although they were very kind about it.”

The Big Disruption was written closer to the Arab Spring than the tech backlash—there’s an overseas revolution, but it’s driven by a search engine rather than social media. But it predicted one of Google’s many ongoing political predicaments. In the book, an Anahata engineer, a royal prince in exile, is captured in his native country, ruled by an oppressive regime. In order to help the engineer—and get a “democracy uptick” in Anahata’s stock price—Bonilo starts manipulating search results to redirect users in the country to negative stories about the regime. You know, the kind of thing that we now call “fake news.” Would Google ever attempt something similar in the real world? “No, that would be ridiculous,” Powell says.

Even in that instance, however, Bonilo’s move is fueled by his desire to keep up with Galt. The initial seeds of a revolt were fomented by a viral post on Galt’s social network, so if the government is overthrown, “Galt will get all the credit for having spread a revolution and ushering in a new era of democracy,” an Anahata executive named Greg Fischer tells Bonilo. “We’ve done a handful of revolutions now—that’s our space. We can’t let Galt take this by themselves,” Fischer continues. (Fischer is the company’s chief financial officer and corporate affairs officer, who also runs “all the departments—legal, finance, marketing, and PR—that were seen as necessary evils in helping run a large company,” Powell writes.)

In any case, the joke’s on Bonilo because the media loves the story of a tech-enabled revolution toppling foreign dictators, but it doesn’t help Anahata’s stock price, because the market sees no upside in human rights.

 

Powell uses overdrawn characters and hyperbolic plot to comment on Silicon Valley’s monoculture of thought and the lack of women in tech. But the bits about office culture inside tech giants are actually more chilling. What if the fabric of civil society unraveled not because a CEO wanted to sell more ads but because some engineer wanted to prove that he was smarter than his coworkers?

The book is best when Powell is teasing out the existential dread fueling Anahata’s sense of manifest destiny. Wildly ambitious “quirky” projects like a social car are used to distract engineers from getting bored or jumping ship. At one point, Bonilo tries to hire a fixer during a PR crisis, but the fixer ends up articulating the CEO’s worst fears, telling Bonilo, “You’re so desperate that you gobble everything up, thinking size alone will secure your future. But listen to me when I tell you that you have no future in the future.”

In Powell’s telling, the need to grow is both endless and inevitable. For ad-supported companies, it’s a slippery slope from a search engine to a browser to laying down fiber-optic cable to monetize the developing world. As a real-world example, Powell pointed to reports that Facebook is working on its own cryptocurrency, which means Apple or Google would soon be forced to follow. “Now these companies are so big that they’re all watching each other, because they’re all in each other’s like verticals, even though each one is doing the other’s vertical crappier,” Powell says.

 

Read more: https://www.wired.com/story/ex-googlers-novel-silicon-valley-runs-male-ego/