You’re probably aware of the ongoing clash between Apple and the Federal Bureau of Investigation.
In a nutshell, the FBI wants Apple to unlock the iPhone used by mass murderer Syed Rizwan Farook. She’s the psycho that went on a shooting rampage with her nutjob husband in San Bernardino in December, killing 14 people.
Apple’s chief executive Tim Cook’s reply to the FBI was a resounding ‘no’.
Kris Sayce first wrote about Apple’s defiance in the Port Phillip Insider a few weeks ago.
Today the stalemate continues. According to Reuters, ‘Apple and the FBI refused to back down in the battle over law enforcement access to iPhones at a Capitol Hill hearing on Tuesday.’
It takes some serious cojones — and no shortage of integrity — to stand up to the FBI. But Apple is proving it’s no pushover. And the company has been joined by industry heavyweights Google, Facebook, and Microsoft, among others. The companies are filing a joint legal brief appealing a court order that would force Apple to create software to unlock the iPhone.
A bit of history
With the stoush between Apple and the FBI heating up, I did a little digging into the history of encryption.
Now you’re probably familiar with the Enigma machine. Aside from earning a page in your high school history book, it’s been the topic of many a movie, most recently The Imitation Game.
The German invention was used by the Nazis in the Second World War to encrypt messages to their military commanders. The Enigma machine’s messages were considered unbreakable, as the Germans changed the cipher every day.
Eventually, as you know, the British managed to break the code, giving the Allies full insight into the Nazi’s plans.
That was in 1943. However, the history of encryption goes back a lot further than that. About 2700 years further, in fact.
From scytales to iPhones
While you’ve probably heard of the Enigma machine, you may not be familiar with the scytale.
Scytales were used by the Spartan military way back in 700 BC to relay sensitive information between commanders in the field. According to visual.ly,
‘Both the sender and the recipient had a wooden rod of the exact same diameter and length. To encrypt a message, the sender tightly wound a piece of leather parchment around the sticks and wrote a message on it. The unwound leather was sent to the recipient, who could only read the message once it was tightly wound around his own scytale. Anyone else would see disarranged letters with no meaning.’
Primitive, but ingenious.
And it made me wonder, what would the Spartans tell the FBI if the Bureau demanded to know the exact diameter and length of their wooden rods? I’ll let you fill that in for yourself. But knowing a bit about the Spartans, it’s probably not fit to print.
Fast forward 2,700 years and encryption has gotten a little more sophisticated. So sophisticated that one of the world’s most powerful intelligence organisations cannot breach it without a key from its creator.
A Spartan scytale Apple’s iPhone 5
|Source: Wikipedia Source: Apple|
When it comes to all things tech, there’s only one person I turn to. That’s right, our very own Sam Volkering, Editor of Revolutionary Tech Investor. I asked him for his take on the ongoing battle between the tech giants and the US law enforcement behemoth. Here’s what he wrote back:
‘This is a good old fashioned Mexican standoff. But Apple has to win this. If they don’t then a dangerous precedent is set. Initially the FBI will have access to known terrorists. Soon enough they’ll use it for suspected terrorists. Then suspected criminals. Then everyone, because let’s face it, anyone could be a terrorist right? This is quite possibly the turning point on whether George Orwell’s 1984 stays fiction, or becomes a scary and accurate foresight of the world as we know it.‘
I think Sam’s spot on. And having recently re-read 1984 — if you haven’t read it, do — I can only hope Apple stands strong. That’s in line with what Kris wrote a few weeks back. ‘Apple is right to contest the ruling. Whatever the situation, you can never trust the government to play by the rules. Once it has an opening, it will always want more…’
We received some positive feedback on that bold stance. Though not all of our readers agreed. Like this mail, from subscriber John H.
‘If anyone dear to you was killed or injured by these cretins, or there was a major loss of Aussie lives, do you reeeeelly think that you’d be interested in the privacy issue, which in effect protects these guys? Really?
‘These types of people will work the system anyway they can in order to kill and maim us in the name of poor old god, (I’m sure god’s impressed!!) and they will use every means to do it, even play on our outrage over the sanctity of privacy. Sorry but I don’t buy the concept in instances such as this, and I’d hazard the guess that if push came to shove and someone dear to you was a victim of their actions that you’d indeed change your mind.’
John brings up a good point. I can’t speak for Kris, but if my daughter was a victim of Syed Loose-screw Farook I would almost certainly want Apple to cough up the key. I would also be first in line to push a plunger injecting her with a lethal chemical cocktail.
Yet that’s precisely the kind of frontier justice that a proper government (small and for the people) is intended to prevent. If someone dear to you is directly affected by a crime, your emotions will cloud your judgement.
Just as we cannot support the concept of lynch mobs — no matter how deserving the ‘lynchee’ — we cannot support the massive infringement of our privacy the FBI is attempting to orchestrate. Once that door is open, it will never be closed.
Now, I’ll step off my pedestal and move onto something less divisive, though no less intriguing.
Artificial intelligence takes a seat with MasterCard
Yesterday I ran across the following article from CNBC:
‘MasterCard sales staff will begin using artificial intelligence (AI) systems to advise them on putting together and closing deals with potential clients…
‘The U.S. credit and debit card company has teamed up with U.K. start-up Rainbird Technology, which has developed the AI software to be trialed with MasterCard’s staff in Britain.
‘Staff would talk to potential clients about their requirements for a product. They could then consult the AI system, which is software on a desktop that users can type into, and receive an answer about the next steps they should take in the deal…
‘Artificial intelligence is essentially a system that can continue to learn and carry out increasingly complex tasks autonomously. Often these systems are created solely using data. But Rainbird’s solution is slightly different. It inputs actual human responses into the AI model as well as data in order to create the software… In theory, the more that people use it, the smarter it will become.’
As daunting as the concept of AI is — think Skynet — if used properly it could revolutionise the way we live. It won’t surprise you that Sam Volkering was all over this story. When I emailed him about it, he fired back this reply.
‘You know something’s afoot when the world’s second largest payments processing company is turning to “artificial intelligence” to help boost its sales. Technically this isn’t true artificial intelligence; this is machine learning, or cognitive computing. It’s an example of the progression of how we interact with computers.
‘In the past humans have always worked “on” computers. Now, with smarter machines and cognitive computing, we’re learning to work alongside machines. This is the next wave of computing, where we leverage automated systems and automated process to help us be better at our jobs. This isn’t a machine coming along to do the job of humans (like most people fear) this is a harmonious relationship.
‘If we can embrace the power of modern and future computing, we can accelerate the pace of technological change even further. These automated systems and cognitive computing will make companies like MasterCard better, smarter and more profitable. This is the power of modern technology. And it’s opening up some of the biggest profit opportunities I’ve ever seen.’
Speaking of big profit opportunities, few areas of the market offer a better potential for outsized gains than the tech sector. Of course not all tech companies succeed. With any investment there’s always the risk of losing money. But with technological progress speeding up, the profitable opportunities are likely to grow.
Of course you’ve got to know where to look.
Sam’s been researching technology and the companies driving revolutionary innovations for 10 years now. And he’s identified four key opportunities he believes will create what he calls ‘a wealth eruption’ the likes of which we’ve never seen before.
He likens this to the PC revolution, the smartphone and internet era. And he’s just completed a new report highlighting these four key opportunities, along with five ‘wealth eruption stocks’ you can invest in today.
Now I read a lot of financial reports. A lot. But this one still has my head spinning. If Sam’s right — and I believe he is — these wealth eruption opportunities will unleash some of the most dramatic shifts in society since the discovery of electricity, the invention of the car, and the creation of the internet.
That’s all I can tell you now. But you can find out more from Sam directly, here.
Managing Editor, Money Morning
Ed Note: The above article was originally published in Port Phillip Insider.
From the Port Phillip Publishing Library
Special Report: The biggest stock gains can come from the least likely places. While the ASX fell 9% in the 12 months to November 2015, one tiny, hated mining stock soared 1,200%. What seemed like an ugly, bad investment quickly transformed every $5,000 worth of shares into $65,000. This is the power of ‘10-bagger’ companies. Where will the next one come from? Read Greg Canavan’s special Crisis & Opportunity presentation to find out…(more)