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Google Down: The Perils of Centralization

Google going down was a jarring reminder of the hidden costs of the easy-to-use, centralized systems that permeate the web.



Dec 14, 2020 at 9:56 p.m. UTCUpdated Dec 14, 2020 at 10:57 p.m. UTC

(itsarasak thithuekthak/iStock/Getty Images Plus)

Google Down: The Perils of Centralization

Google was down for only an hour, but Monday’s outage served as a jarring reminder of how much modern existence online depends on the centralized search engine colossus.

From Gmail and Google Calendar to YouTube and even Google’s two-factor authentication, the outage temporarily ground online work to a halt for many, including publications that would have otherwise been reporting on the outage.

Moreover, it underscored the hidden costs of the easy-to-use systems that permeate the web, and just how taxing or debilitating they can be when the head of the many-tentacled beast that is Google nods off, even for just an hour.

“If an internet giant like Google can suffer such a major attack – denying millions of users access to basic internet services – it just goes to show that under the surface of the shiny web interfaces we see, internet infrastructure actually hangs in a delicate and vulnerable balance,” said Jaro Šatkevič, head of product at Mysterium Network, an open-source Web 3.0 project focused on decentralizing the internet.

Google down and out

According to a tweet from Google, the company suffered an “authentication system outage” that essentially rendered a wide variety of servers useless for about 45 minutes because the system was unable to confirm users were who they said they were.

It seemed to largely affect Europe and extended well beyond what people might normally associate with not being able to get into their email. On Android smartphones, for example, native apps like Google Maps ceased to work, and internet-connected devices through Google Home were seemingly also down.

Tal Be’ery, co-founder and security researcher at ZenGo, the cryptocurrency wallet company, said that, in theory, a decentralized solution that would have allowed users to authenticate their credentials with Google using other services might have solved that problem. Such solutions do exist; however, they were “probably not aligned with Google’s business model and therefore not implemented,” he continued.

The blackout shows just how much control and how far-reaching the effect of having a single point of failure in a centralized system can be. Services and features critical to daily life were suddenly gone, with users having no idea, and much less control over, when they might be back.

“Google infrastructure is distributed, with servers across all continents. But these depend on each other and are controlled centrally,” said Šatkevič. “They are upgraded centrally. They talk to each other – not just by using the same protocol, but through a shared software that is operated by the same employees (centrally).”

Limits of centralization

While the Google outage appears to be due to internal technical issues, the news comes on the heels of one of the more sophisticated cyber attacks the U.S. government has seen in years, with allegedly nation state-directed hackers infiltrating the U.S. Treasury and Commerce departments through a standard remote update by SolarWinds that injected malicious code into a variety of systems.

SolarWinds, which develops software to manage networks, has hundreds of customers including Fortune 500 companies and other government agencies. These include the Secret Service, the U.S. Defense Department, the Federal Reserve, Lockheed Martin and the National Security Agency.

The update allowed the hackers to then access internal emails at various agencies via Microsoft Office 365. It’s unclear what else they were able to do or access.

In a rare move, the U.S. Cybersecurity and Infrastructure Security issued Emergency Directive 21-01, which “calls on all federal civilian agencies to review their networks for indicators of compromise and disconnect or power down SolarWinds Orion products immediately.”

These single points of entry, automatic updates controlled by a central actor and the swath of disruption they can enable are part and parcel of Web 2.0, which relies largely on central actors to maintain systems, control access to them and ensure they run smoothly. But that has siloed power in the hands of a few massive, centralized companies such as Google, internet service providers and others.

Pushing back on power

While there is some early pushback, including antitrust cases being brought against Google and Facebook in the U.S., there have also been extensive lobbying efforts on behalf of those behemoths to maintain their power in places like the European Union.

“My personal opinion is these companies are just old-fashioned monopolies,” said Canadian-British tech blogger and science fiction writer Cory Doctorow when I spoke with him earlier this year. “Their growth is not because of the magical properties of data or network effects or whatever. It’s just because they bought all their competitors, which is a thing that used to be illegal and is now legal.”

Decentralized architecture prevents this form of centralized control by design, making sure no one person can make a call, decision or update (or mistake) that might affect millions or even billions of people. CoinDesk has reported on the implications of this that play out in the public discourse, such as the debate over content moderation on social media, which some see as corporate censorship.

But in the case of Google, such centralized constructions of data and power show the long shadow these companies cast over seemingly mundane and increasingly critical parts of our lives.

Be’ery said at ZenGo they are not “religious” about decentralization; rather, he believes a hybrid model, smartly combining the robustness and security of decentralization and the simplicity often associated with centralized services, is the best solution for customers in many cases.

What’s next is continuing a debate to decide whether that remains the case.

“Explaining the advantages in decentralization to end users is usually harder as these advantages of greater stability and robustness do not manifest themselves on a daily basis,” said Be’ery. “Only in time of failures, such as the one experienced by Google users today, are the merits of decentralization highlighted.”




World’s Oldest Central Bank Extends Digital Currency Test Till 2022

Riksbank said it would continue developing a technical solution for a central bank-issued e-krona under its pilot project.



Sweden’s Riksbank said it would continue work with Accenture on a potential e-krona digital currency until next year.

(Mario Ortiz/Shutterstock)

Feb 17, 2021 at 10:12 a.m. UTC

World’s Oldest Central Bank Extends Digital Currency Test Till 2022

The world’s oldest central bank, Sweden’s Riksbank, is to extend its pilot project for a potential central bank digital currency (CBDC) for another 12 months.

According to a press release on Friday, the project, which is being carried out with assistance from professional services firm Accenture, will run until February 2022.

The Riksbank said it would continue developing a technical solution for a central bank-issued e-krona “as a complement to cash,” with the primary objective being for the bank to increase its knowledge around the technology.

For 2021, the institution will continue developing its potential digital currency offering with a focus on performance and scalability. Testing offline functions and bringing external participants into the test environment is also on the table.

The project has raised some concerns from Sweden’s commercial banking sector over the viability of a sovereign CBDC and how that would impact the entire banking system.

There is no final decision over the issuance of the e-krona despite strong lobbying from the central bank to government last year. But with traditional cash seeing falling use, even more so during the coronavirus pandemic, Sweden has been mulling a switch to the CBDC.

However, questions still remain over the digital currency’s ultimate design and underlying technology, according to Friday’s release.



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Bitcoin Mining: Wasted Energy or a Better, Greener System?

Harry Sudock, VP of strategy at GRIID Infrastructure on the modern energy landscape, how far we’ve come and where bitcoin mining fits.



Is it wasteful to use electricity mining bitcoin? As the Biden Administration settles into power with an ambitious agenda around clean energy, notably promising to eliminate carbon emissions from the US power generation sector by 2035, the question of bitcoin mining and it’s ever-growing use of energy bubbles up once more.

In this episode of ‘On Purpose, With Tyrone Ross,’ Harry Sudock, VP of strategy at GRIID Infrastructure joins the show to discuss the modern energy landscape, how far we’ve come and where bitcoin mining can fit into a sustainable energy system.

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Deutsche Bank Quietly Plans to Offer Crypto Custody, Prime Brokerage- CoinDesk

The bank’s game plan was hidden in plain sight in a widely overlooked report by the World Economic Forum.



The bank’s game plan was hidden in plain sight in a widely overlooked report by the World Economic Forum.

Deutsche Bank headquarters in Frankfurt, Germany (Thomas Lohnes/Getty Images)

Feb 13, 2021 at 2:10 a.m. UTCUpdated Feb 13, 2021 at 2:18 a.m. UTC

Deutsche Bank Quietly Plans to Offer Crypto Custody, Prime Brokerage

Deutsche Bank has joined the growing ranks of large financial institutions exploring cryptocurrency custody, with aspirations to offer high-touch services to hedge funds that invest in the asset class.

The Deutsche Bank Digital Asset Custody prototype aims to develop “a fully integrated custody platform for institutional clients and their digital assets providing seamless connectivity to the broader cryptocurrency ecosystem,” according to a little-noticed report by the World Economic Forum, host of the annual gathering of muckety-mucks in Davos, Switzerland.

In a passage buried on page 23 of the December 2020 report, Germany’s largest bank says it plans to create a trading and token issuance platform, bridging digital assets with traditional banking services, and managing the array of digital assets and fiat holdings in one easy-to-use platform.

Big banks are now announcing plans to enter crypto custody on an almost daily basis, with Bank of New York Mellon, the world’s largest custodian bank, joining the party earlier this week.

U.S. banks were given some regulatory clarity thanks to last year’s interpretation letters from the Office of the Comptroller of the Currency. In Germany, firms are queuing up to get their hands on special crypto custody licenses from the country’s regulator, BaFIN.

Deutsche, the world’s 21st largest bank, said it aims to “ensure the safety and accessibility of assets for clients by offering an institutional-grade hot/cold storage solution with insurance-grade protection.” No specific cryptocurrencies or tokens are mentioned.

The digital asset custody platform would be launched in stages. It would eventually provide clients with the ability to buy and sell digital assets via a partnership with prime brokers (which act sort of like concierges for hedge funds), issuers and vetted exchanges.

The bank says it would also provide “value-added services such as taxation, valuation services and fund administration, lending, staking and voting, and provide an open-banking platform to allow onboarding of third-party providers.”

The service would be aimed at asset managers, wealth managers, family offices, corporates and digital funds, the bank said.

In terms of a business model, the bank would start out collecting custody fees, it said, later charging fees for tokenization and trading.

Deutsche said it has completed a proof of concept and is aiming for a minimum viable product in 2021, while exploring global client interest for a pilot initiative.

The bank’s press office could not be reached for comment Friday evening. A spokesperson had declined to comment on potential plans for a digital asset custody business when contacted last week by CoinDesk.



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