WEBVTT - Bitcoin Takes Another Tumble 0:00:01.800 --> 0:00:04.400 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:04.440 --> 0:00:07.240 Bloomberg Quick Takes Tim Stanibek. We're here every day bringing 0:00:07.280 --> 0:00:09.799 you the latest news from the world of business and finance, 0:00:09.840 --> 0:00:13.600 plus technology, politics, economics, all harnessing the power of Business 0:00:13.640 --> 0:00:17.119 Week reporters and editors, not to mention our journalists and 0:00:17.120 --> 0:00:20.000 analyst in more than one twenty countries. You can download 0:00:20.000 --> 0:00:23.200 Bloomberg Business Week on iTunes, SoundCloud, or Bloomberg dot Com. 0:00:23.400 --> 0:00:25.120 You can also listen to our radio show at two 0:00:25.160 --> 0:00:27.840 pm Eastern Time on Bloomberg Radio or watch us on 0:00:27.880 --> 0:00:32.839 YouTube search Bloomberg Global News. So we're gonna dig into 0:00:32.880 --> 0:00:35.640 crypto in the next thirty minutes here on Bloomberg Business Week. 0:00:35.680 --> 0:00:38.960 First up, the CEO of Colonial Pipeline, Joseph Blown. He 0:00:39.080 --> 0:00:42.080 was testifying for the Senate Homeland Security Committee today. He 0:00:42.120 --> 0:00:44.880 apologize big time for the ransomware attack that shuttered the 0:00:45.000 --> 0:00:49.280 nation's largest fuel pipeline. We know it paralyzed the East 0:00:49.280 --> 0:00:52.120 coast flow of gasoline, diesel, and jet field check it out. 0:00:52.520 --> 0:00:54.760 It was the hardest decision I've made in my thirty 0:00:54.840 --> 0:00:58.240 nine years in the energy industry, and I know how 0:00:58.280 --> 0:01:01.440 critical our pipeline is to the country, and I put 0:01:01.480 --> 0:01:04.959 the interests of the country first. I kept the information 0:01:05.000 --> 0:01:09.440 closely held because we were concerned about operational safety and security, 0:01:09.560 --> 0:01:11.679 and we wanted to stay focused on getting the pipeline 0:01:11.680 --> 0:01:14.680 back up and running. I believe with all my heart 0:01:14.920 --> 0:01:17.480 it was the right choice to make a major maya 0:01:17.520 --> 0:01:20.000 colpa there. Of course, that's the Colonial Pipeline CEO Joseph 0:01:20.040 --> 0:01:24.200 Blount testifying earlier today before the Senate Homeland Security Security Committee. 0:01:24.240 --> 0:01:26.880 Let's get right into it with card cam Rotra cybersecurity 0:01:26.959 --> 0:01:29.479 porter here at Bloomberg News joining us on the line 0:01:29.560 --> 0:01:32.800 from San Francisco, Cardike, what do we learn from the 0:01:32.880 --> 0:01:36.000 CEO of Colonial Pipeline today about the ransomware attack that 0:01:36.040 --> 0:01:41.360 we didn't know? So? One of the biggest details about 0:01:41.400 --> 0:01:44.080 this hack, something that he disclosed today but also disclosed 0:01:44.120 --> 0:01:47.000 to us UH late last week, is that the actual 0:01:47.160 --> 0:01:53.120 attack was the result of a stolen password for a 0:01:53.480 --> 0:01:57.720 an account into a VPN that had been hacked and 0:01:57.720 --> 0:02:00.800 and put on the dark web months at So it 0:02:00.880 --> 0:02:04.000 was it was not a complex campaign. There wasn't a 0:02:04.600 --> 0:02:07.560 you know, a solar wind type of vulnerability here that 0:02:07.680 --> 0:02:12.800 resulted in this UH devastating attack. It was a very simple, uh, 0:02:13.120 --> 0:02:16.960 loss of a password that resulted in this exploitation and 0:02:17.080 --> 0:02:20.480 ultimately the four point four million dollar ransom payment that 0:02:20.520 --> 0:02:23.440 we all learned yesterday, much of which was caused that. Okay, 0:02:23.480 --> 0:02:25.519 so I have to just just jump in here, Carter K. 0:02:25.680 --> 0:02:29.000 Because I know you're a cybersecurity reporter. I assume that 0:02:29.480 --> 0:02:31.919 you know how to keep your accounts secure at least 0:02:31.960 --> 0:02:36.640 as as we can as consumers. Two factor authentication, Can 0:02:36.680 --> 0:02:40.359 we talk about that for a second. Yeah, I mean 0:02:41.120 --> 0:02:45.440 there was no multi factor authentication on that particular VPN, 0:02:45.560 --> 0:02:49.839 that virtual private network, So that is that is sort 0:02:49.880 --> 0:02:54.639 of ground zero for security right now. Enterprise networks, corporate networks, 0:02:54.639 --> 0:02:58.480 your personal accounts, you should turn on multi factor authentication. 0:02:58.560 --> 0:03:01.880 It means that a single password is not enough for 0:03:01.919 --> 0:03:04.480 you to log into your device. You need a one 0:03:04.520 --> 0:03:09.120 time password or a second form of verification to ensure 0:03:09.440 --> 0:03:11.520 that you are who you are when you're logging in. 0:03:11.639 --> 0:03:15.240 It'll keep everyone a lot safer, all right. But now 0:03:15.240 --> 0:03:18.359 we've got blockchain explorers. We're talking about this a lot, right, 0:03:18.720 --> 0:03:21.520 A crypto search engine essentially to quite literally follow the 0:03:21.560 --> 0:03:24.360 money of these things. Does this mean we now have 0:03:24.480 --> 0:03:29.800 the tools to kind of investigate any future cyber attacks 0:03:29.840 --> 0:03:34.840 here that require ransomware sort of. Uh, it sort of 0:03:34.880 --> 0:03:39.320 means that, so, yes, the technology has existed to track 0:03:40.200 --> 0:03:46.360 some currencies in uh blockchain. Bitcoin for sure can be tracked, 0:03:46.440 --> 0:03:49.280 especially by law enforcement and in some private company that 0:03:49.400 --> 0:03:53.520 specialized in this UM. So if you know exactly how 0:03:53.600 --> 0:03:58.600 much was paid, be it a criminal transaction or you 0:03:58.720 --> 0:04:02.240 sending money to your family member, you can go and 0:04:02.320 --> 0:04:05.280 follow the money, literally follow the money. Uh. And that's 0:04:05.280 --> 0:04:11.200 what law enforcement did after UM Colonial Pipeline paid dark Side, 0:04:11.320 --> 0:04:14.320 a ransomware group four point four million dollars or seventy 0:04:14.320 --> 0:04:18.080 five bit coin UM about a month ago. They followed 0:04:18.120 --> 0:04:21.200 the money and we're able to see exactly where it 0:04:21.279 --> 0:04:25.479 was parked in a digital crypto wallet and take some 0:04:25.600 --> 0:04:28.640 of it back UM. And that's a big deal, and 0:04:28.680 --> 0:04:32.000 that's something that law enforcement has done in the past. 0:04:32.120 --> 0:04:35.480 But what unique here is that is that the actual 0:04:35.600 --> 0:04:39.679 victim Colonial Pipeline disclosed the fact that they had been hacked, 0:04:39.680 --> 0:04:43.960 and that does not happen very often. Victims of ransomware 0:04:44.360 --> 0:04:47.520 don't want the public to know they've been compromised because 0:04:47.560 --> 0:04:51.240 of a variety of security issues. Board issues, DOT price issues, 0:04:51.400 --> 0:04:53.800 and so they keep it quiet. In this case, Colonial 0:04:53.839 --> 0:04:55.640 came out and said it. They got the help of 0:04:55.680 --> 0:04:58.039 the FBI, they got some of their money back. So 0:04:58.160 --> 0:05:01.320 does this undermine the crypt a world as we've come 0:05:01.400 --> 0:05:06.320 to know it, at least the kind of illegitimate or 0:05:06.720 --> 0:05:09.640 you know where there might be UM cyber attacks and 0:05:09.760 --> 0:05:14.080 ransomware incidents. I don't know undermine might be strong, But 0:05:14.240 --> 0:05:18.400 I think there's definitely an issue about the economic backbone 0:05:18.520 --> 0:05:22.919 of cybercrime, and that is cryptocurrency. For sure, there are regulation, 0:05:23.160 --> 0:05:25.960 not just in the US, but but in Europe. Know 0:05:26.200 --> 0:05:31.680 your Consumer regulations that would require or do require UM 0:05:32.080 --> 0:05:35.159 people on exchanges to share some details about who you are. 0:05:35.200 --> 0:05:39.799 They're just really administered. If one knows who is investing 0:05:39.880 --> 0:05:42.400 or buying cryptocurrency at a certain period of time, that 0:05:42.400 --> 0:05:45.839 would make it easier for law enforcement to follow criminals 0:05:45.839 --> 0:05:49.039 who are using it to commit cybercrime. I think the 0:05:49.080 --> 0:05:54.360 fundamental issue here isn't the use of cryptocurrency to promote cybercrime, 0:05:54.400 --> 0:05:57.600 and the fact that cybercriminals have been able to target 0:05:58.040 --> 0:06:01.800 poorly protected networks for years and have made off like 0:06:01.880 --> 0:06:05.200 gangbusters for quite some time and are getting more brazen 0:06:05.200 --> 0:06:07.640 in their campaign. Well, Cardig, just in the last thirty seconds, 0:06:07.680 --> 0:06:09.680 what are you hearing in your reporting, seeing your reporting 0:06:09.680 --> 0:06:12.680 hearing from sources about the way that cybersecurity companies and 0:06:12.720 --> 0:06:15.360 CSOs are are reacting to this in the last month 0:06:15.400 --> 0:06:18.640 and how they're preparing for the next one. Well, I 0:06:18.720 --> 0:06:22.560 think the reality is that what we're seeing now is 0:06:22.680 --> 0:06:26.640 what these security companies have been dealing with four years. 0:06:27.000 --> 0:06:31.120 What's changed is that the Colonial Pipeline had allowed the 0:06:31.160 --> 0:06:35.400 general public to understand what the state when gas supplies 0:06:35.520 --> 0:06:37.919 for the for the Northeast were cut off for a 0:06:37.920 --> 0:06:41.760 period of time, finally resonated with the public and now 0:06:41.800 --> 0:06:46.840 we know what's happening. Hopefully utilities, the government companies are 0:06:46.839 --> 0:06:49.080 going to prioritize it's going for and if you've got crypto, 0:06:49.120 --> 0:06:50.360 a bit of put it in a cold wallet. That's 0:06:50.400 --> 0:06:52.520 all we're gonna say. Cardig Marotra, thank you so much. 0:06:52.560 --> 0:06:55.760 Cybersecurity reporter at Bloomberg News on the phone in San Francisco, 0:06:55.960 --> 0:06:59.000 mikel Cologne, Commodity Strategies at Bloomberg Intelligence. He's been on 0:06:59.080 --> 0:07:02.560 the road. He's back home here in our interactive broker studio. 0:07:02.800 --> 0:07:07.320 Hello there, Hello, Carol, you guys are the dream team. Okay, 0:07:07.360 --> 0:07:10.120 we're not gonna argue with that crypto though kind of 0:07:10.120 --> 0:07:12.960 not the dream currencies. It feels like today they're down 0:07:13.080 --> 0:07:15.160 a lot of them. You were at this big event 0:07:15.240 --> 0:07:17.520 in Miami set the stage of what was going on, well, 0:07:17.560 --> 0:07:20.640 I like to describe it was like a woodstock because 0:07:20.760 --> 0:07:22.880 this kind of conference will never be repeated. It was 0:07:22.920 --> 0:07:25.000 the first big conference on the planet where there was 0:07:25.040 --> 0:07:28.400 no no masks. Everybody was there and the subject was 0:07:28.600 --> 0:07:31.040 quite unique Bitcoin. So it was that sense. There was 0:07:31.120 --> 0:07:34.640 packed wall the wall the main ex main presentation room. 0:07:34.680 --> 0:07:37.080 They were pushing people away standing room only. And then 0:07:37.080 --> 0:07:39.600 when you walk into the ex you know the exhibit 0:07:39.680 --> 0:07:41.440 room where you have all the desks and everything you 0:07:41.480 --> 0:07:43.200 can right away you walk and you feel that heat 0:07:43.280 --> 0:07:45.080 of people and it's hard to get through, and then 0:07:45.120 --> 0:07:47.920 the lines of the man's room or forever. But there 0:07:48.000 --> 0:07:50.720 was that sentiment all about there's so many people doing 0:07:50.760 --> 0:07:52.920 good and so I get the thought, Okay, is this 0:07:53.040 --> 0:07:55.760 the peak or is this mainstream? In my sense, it's 0:07:55.800 --> 0:07:58.400 more mainstream now we see it down today. But there 0:07:58.400 --> 0:08:00.200 were so many cool things that really came of it 0:08:00.240 --> 0:08:02.040 that we can touch on yeah, Well, what was it 0:08:02.120 --> 0:08:04.560 specifically about the conference that made you think it was 0:08:04.600 --> 0:08:07.320 more mainstream than peak? The people I met and with. 0:08:07.560 --> 0:08:09.080 So I walked by one of my friends and you're 0:08:09.120 --> 0:08:11.320 standing next to a guy who from a major accounting firm. 0:08:11.640 --> 0:08:13.080 And then I met, you know, someone I knew who 0:08:13.120 --> 0:08:15.200 used to be in eats, and another one and another 0:08:15.240 --> 0:08:18.920 group I met were was a trust bank, so trust bank, 0:08:19.000 --> 0:08:21.120 a t F and account and then a lot of miners. 0:08:21.120 --> 0:08:22.640 I met with a lot of miners, and some of 0:08:22.640 --> 0:08:24.680 them are some of the most respectable people I've ever met. 0:08:24.760 --> 0:08:26.280 One of them was a minor our Palli and then 0:08:26.280 --> 0:08:29.320 this he got into bitcoin only because he needed his 0:08:29.320 --> 0:08:32.640 his his position was providing power and energy and he 0:08:32.679 --> 0:08:34.560 needed the manager at flow and when it access power, 0:08:34.559 --> 0:08:36.520 he said, okay, I'll just use bitcoin to offset that. 0:08:36.600 --> 0:08:39.319 Mining Bitcoin offs as that excess power. So what what 0:08:40.040 --> 0:08:42.320 where does it go? In your view? We've had the 0:08:42.320 --> 0:08:45.760 conversations about it being a collectible, right, We've talked about that. 0:08:45.960 --> 0:08:47.840 So where does it go? Is it that we have 0:08:47.960 --> 0:08:51.559 multiple cryptocurrencies, is it again about blockchain? Where do you 0:08:51.600 --> 0:08:53.160 see it all going? To me, that's the key thing 0:08:53.160 --> 0:08:55.280 in the conference. Bitcoin is a collectible and then there's 0:08:55.320 --> 0:08:58.680 ten thousand wantabes um there is oncoin market cap docount 0:08:58.679 --> 0:09:02.120 actually ten thousand three three at the moment um U last. 0:09:02.600 --> 0:09:05.840 So there you go, massive excess of supplyees of entry. 0:09:05.960 --> 0:09:08.480 Rules of economics does not favorite higher prices. But it's 0:09:08.520 --> 0:09:10.600 the number two that I liked, bringing up a lot 0:09:10.640 --> 0:09:13.280 of THEORYM. You know, that's that lesson from Frederick Douglas. 0:09:13.280 --> 0:09:15.640 You say, just agitate, So I tried to agitate, and 0:09:15.679 --> 0:09:17.920 behind the scenes everybody mentioned the THEORYUM, so it was 0:09:17.960 --> 0:09:20.040 all positive about it. But on the stage it wasn't 0:09:20.040 --> 0:09:21.959 a good idea that mentioned because it was all about bitcoin. 0:09:22.160 --> 0:09:24.480 So that's the cool thing about bitcoin. It's you know, 0:09:24.520 --> 0:09:27.040 it's banking, the un bank, the key quota of the conferences. 0:09:27.120 --> 0:09:29.040 You know, two thirds of the people on the planet 0:09:29.080 --> 0:09:32.720 don't have bank accounts. Of them have cell phones or 0:09:32.880 --> 0:09:35.760 smartphones and they can get bitcoin cryptos on their phones. 0:09:35.800 --> 0:09:38.320 And what's happening lately with this you know what you 0:09:38.360 --> 0:09:41.720 saw with this UM finding these funds from the colonial Like, 0:09:41.840 --> 0:09:44.440 that's nothing new, and I can dig into that. Like 0:09:44.480 --> 0:09:48.679 the MC of the conference he got into initially got 0:09:48.720 --> 0:09:51.960 into bitcoin from buying drugs, on Silk Road, which was 0:09:52.000 --> 0:09:54.520 busted by the FEDS because they just tracked the transactions. 0:09:54.640 --> 0:09:58.199 But this is what got all the attention when it 0:09:58.240 --> 0:10:02.000 came to the cryptocurrency. Mike you you in your report 0:10:02.200 --> 0:10:04.920 outlining this event, summarizing this event, you asked the question 0:10:04.960 --> 0:10:07.360 what problem does bitcoin solve? What was the answer that 0:10:07.400 --> 0:10:09.640 you found in potentially how it changed at the conference? 0:10:09.800 --> 0:10:14.360 That was a question I have answered distinctly um with 0:10:14.559 --> 0:10:17.839 answer at first with I go straight to the British Museum. 0:10:17.880 --> 0:10:19.440 I think of the hack SNeW Hord's one of my 0:10:19.480 --> 0:10:21.440 favorite things that visit there. It's the largest horde of 0:10:21.440 --> 0:10:23.559 precious metals I ever found on the planet. It was 0:10:23.600 --> 0:10:25.559 from the Roman times. It fixtured yourself and you're a 0:10:25.679 --> 0:10:29.000 Roman leader. It's collapsing. The locals don't like you need 0:10:29.000 --> 0:10:30.520 to get out and hide your wealth. They never came 0:10:30.520 --> 0:10:32.360 back to find it, and you figure, I figured he 0:10:32.400 --> 0:10:34.560 probably didn't moon that light at night, and he probably 0:10:34.640 --> 0:10:36.040 he had to do it himself. Because if you have 0:10:36.040 --> 0:10:37.599 a servant to it, a servant only to find it 0:10:37.679 --> 0:10:39.680 come back and tell someone else or kill you know 0:10:39.760 --> 0:10:41.720 you kept it. But the point is it's set wealth 0:10:41.720 --> 0:10:44.640 to be able to transmit, transport and transact in wealth 0:10:44.840 --> 0:10:48.040 a certain amount of and put it stored someplace. Seven 0:10:48.080 --> 0:10:50.160 be able to do it on a cell phone or 0:10:50.360 --> 0:10:52.640 on a phone or in your head. It's never been 0:10:52.840 --> 0:10:55.320 possible in time. So that's the problem solves. It's banking 0:10:55.360 --> 0:10:57.080 the end bank. So here's the latest to leave you with. 0:10:57.559 --> 0:11:00.520 L Salvador has already said they might adopted as a currency. 0:11:00.559 --> 0:11:02.400 Know what's happening in al Savador in the last thirty 0:11:02.800 --> 0:11:06.360 wars currency collapses. Yeah, if you have something to confce against, 0:11:06.400 --> 0:11:09.240 like bitcoin is like a goal, not like a dollar, 0:11:09.480 --> 0:11:11.920 then it can help solve that problem ten seconds. So 0:11:12.000 --> 0:11:13.840 at some point in our life, will we all have 0:11:13.920 --> 0:11:17.080 some bitcoin in our portfolio or what have your access 0:11:17.120 --> 0:11:19.120 to it? I think so? I think so because if 0:11:19.160 --> 0:11:21.040 we don't, it's kind of it's kind of like a 0:11:21.400 --> 0:11:23.679 digital version of gold and the world's going digital and 0:11:23.720 --> 0:11:26.679 bitcoin is the first in that space. Oh my god, 0:11:26.760 --> 0:11:30.440 can you just stay for like another sixty minutes tomorrow 0:11:30.480 --> 0:11:33.520 to be continued. Mike mclowan commodity strategies of Bloomberg Intelligence 0:11:33.679 --> 0:11:36.480 in our Interactor Broker studio. So, as Tim and I 0:11:36.520 --> 0:11:38.720 mentioned at the top, it feels like our digital world 0:11:38.760 --> 0:11:40.920 continues to get poked at me, get reminded of the 0:11:40.960 --> 0:11:43.079 potential holes in that world. Doesn't it feel that way? 0:11:43.080 --> 0:11:45.360 And it's certainly felt that way at about six am 0:11:45.440 --> 0:11:48.240 this morning. Well let's talk about that. Yeah, so, I 0:11:48.559 --> 0:11:51.400 as as anyone who is online earlier today trying to 0:11:51.440 --> 0:11:54.199 go to any common website might have found that they 0:11:54.200 --> 0:11:56.560 were unable to reach that website in New York tites 0:11:56.559 --> 0:11:58.599 like New York Times, our own Bloomberg dot com was 0:11:58.640 --> 0:12:02.760 affected by this. In fact, British government websites affected by 0:12:02.760 --> 0:12:05.440 it as well. Yeah, so let's get into this because vastly, 0:12:05.440 --> 0:12:07.520 which helps push data quickly around the Internet, so that 0:12:07.520 --> 0:12:10.080 it had fixed the issue that caused that global outage. 0:12:10.400 --> 0:12:12.200 And I just think we're learning more about we just 0:12:12.240 --> 0:12:14.200 take so many things for granted. So let's bring in 0:12:14.240 --> 0:12:19.000 why we maybe shouldn't. Uh, Bloomberg Intelligence senior technology Analysmandie saying, uh, 0:12:19.080 --> 0:12:20.720 let's see what he has to say about He's back 0:12:20.960 --> 0:12:23.600 in our interactive broker's studio, So nice to have you 0:12:23.640 --> 0:12:27.200 in studio. So I just take it for granted. I 0:12:27.240 --> 0:12:28.840 go online if there's not a problem. I think there's 0:12:28.840 --> 0:12:31.520 something wrong with my phone or my service. This was different. 0:12:31.559 --> 0:12:34.800 What happened, well, in this case, it was an outage. 0:12:34.800 --> 0:12:38.360 An outage could be caused by a number of reasons. 0:12:38.400 --> 0:12:41.600 It could be you know, them making a code change 0:12:41.720 --> 0:12:44.920 which they moved to production and that cause an outage, 0:12:45.160 --> 0:12:47.679 or it could be a breach, or you know, any 0:12:47.720 --> 0:12:50.480 sort of a cyber attack. I mean, we've seen so 0:12:50.520 --> 0:12:54.040 many different types of attacks that at this point it's 0:12:54.120 --> 0:12:57.080 hard to say that, you know, one company has a 0:12:57.160 --> 0:13:00.000 software that can protect you against all kinds of attacks, 0:13:00.200 --> 0:13:02.520 and that is what we're seeing. Well, who is fastly? 0:13:02.720 --> 0:13:06.959 What is fastly? Do so fastly is like uh an 0:13:06.960 --> 0:13:11.040 interphase that lives between the website you're trying to access, 0:13:11.120 --> 0:13:14.480 Let's say a Pinterest or an Amazon dot com. So 0:13:14.520 --> 0:13:18.000 this is a cashing service that sits between the user 0:13:18.200 --> 0:13:22.160 when they requested you are and they basically authenticate the 0:13:22.240 --> 0:13:24.240 user to say this is not a box, this is 0:13:24.280 --> 0:13:28.000 a real user. This is somebody who's trying to access Amazon, 0:13:28.440 --> 0:13:31.439 and it's a legitimate user based on the IP address. 0:13:31.520 --> 0:13:34.840 Now what they do is they have these data centers 0:13:34.880 --> 0:13:37.640 across the bold, so no matter where you are accessing 0:13:38.000 --> 0:13:41.320 website from, they will make sure you will have a 0:13:41.320 --> 0:13:44.400 good experience. Even if you are somewhere in Africa or 0:13:44.440 --> 0:13:48.200 you know, Brazil or any other country, you will have 0:13:48.240 --> 0:13:50.960 the same kind of experience because they have data centers 0:13:51.000 --> 0:13:54.960 across the globe, which is why these popular platforms use 0:13:55.080 --> 0:13:57.880 this cd AND service because of the cashing mechanism, the 0:13:57.960 --> 0:14:01.839 security it keeps it secured well. I think one thing 0:14:01.840 --> 0:14:04.280 that was particularly striking about this morning's outage was the 0:14:04.280 --> 0:14:07.360 fact that it was so widespread. Why did it affect 0:14:07.480 --> 0:14:12.440 websites that range that don't normally go down, but range 0:14:12.480 --> 0:14:15.599 from government websites to to media property. So the websites 0:14:15.679 --> 0:14:18.480 didn't go down, it's just that when you were trying 0:14:18.520 --> 0:14:23.960 to access the website, those websites weren't accessible because Fastly, 0:14:24.080 --> 0:14:27.240 like I said, sits between the time when you try 0:14:27.280 --> 0:14:29.600 to access a U r L to the time it 0:14:29.720 --> 0:14:33.040 hits the server off that end website beat an Amazon 0:14:33.240 --> 0:14:36.160 or a pinterest, So really the cashing field which is 0:14:36.160 --> 0:14:39.360 why you couldn't access that website. But they were those 0:14:39.400 --> 0:14:43.080 those websites became inaccessible because they used Fastly as a 0:14:43.160 --> 0:14:45.800 client or they are clients of fastlies, right, they are 0:14:45.840 --> 0:14:47.800 clients so fastly, so an easy way for us to 0:14:47.800 --> 0:14:50.360 figure out who pays what cd N was to figure 0:14:50.360 --> 0:14:53.640 out who was down this morning. Yes, that's one way 0:14:53.760 --> 0:14:57.080 because these were the common thread was these all these 0:14:57.120 --> 0:15:00.480 websites for using Fastly as a cd N, which is 0:15:00.520 --> 0:15:06.320 why these websites became inaccessible. I do wonder about redundancy here, 0:15:06.320 --> 0:15:08.160 and it's a question that I asked you earlier on picktape, 0:15:08.200 --> 0:15:11.480 because you do wonder if something like this can take 0:15:11.480 --> 0:15:15.160 down such a I shouldn't say takedown, make in unavailable 0:15:15.240 --> 0:15:18.040 such a large number of websites, why isn't there redundancy 0:15:18.040 --> 0:15:21.520 in place? So the redundancy can be Amazon or Pinterest 0:15:21.600 --> 0:15:25.200 can say we want to use Fastly cd in as 0:15:25.200 --> 0:15:28.000 well as cloud Flare or any other CD AND provider 0:15:28.080 --> 0:15:32.239 because Fastly it is just one of the cd and providers. 0:15:32.320 --> 0:15:35.720 Having redundancy within Fastly isn't going to solve the problem 0:15:35.840 --> 0:15:39.600 Like Fastly obviously made a code change that affected their 0:15:39.800 --> 0:15:44.000 entire city and service. Having I think something that was 0:15:44.120 --> 0:15:47.480 redundant wouldn't have helped in this case. Yes, as a 0:15:47.560 --> 0:15:51.120 large company you can use multiple cd and providers, but 0:15:51.160 --> 0:15:52.680 then at the end of the day you have to 0:15:52.800 --> 0:15:56.440 judge like them based on the up time. So in 0:15:56.480 --> 0:15:59.720 this particular case, if you are using one CD and 0:15:59.760 --> 0:16:02.640 which is fastly, you can't use an alternative seed and 0:16:02.680 --> 0:16:05.440 you can flip the switch, but it's gonna take time. 0:16:05.680 --> 0:16:07.640 You can't have to going at the same time, basically 0:16:07.720 --> 0:16:10.120 what you're saying, So it's like a backup battery. You 0:16:10.160 --> 0:16:12.840 still have to make the switch will take time, so 0:16:12.920 --> 0:16:15.400 you will have a thirty second or one minute outage 0:16:15.440 --> 0:16:17.600 at least, you know, or if not half an hour, 0:16:17.760 --> 0:16:19.680 which was the case here. It doesn't feel like that 0:16:19.840 --> 0:16:23.720 this kind of incident an outage happens often, is that fair? 0:16:24.120 --> 0:16:27.360 So cloud Flare, which is a competitor or fastly, also 0:16:27.440 --> 0:16:30.680 had a similar outage last year and that was just 0:16:30.800 --> 0:16:33.280 a one off. So after that, no one cared about 0:16:33.560 --> 0:16:35.920 hit a button wrong. Somebody was drinking coffee and like 0:16:35.960 --> 0:16:39.360 spilled it on a button. What these companies make changes 0:16:39.440 --> 0:16:43.520 through their code literally every week. Now, you don't know, 0:16:43.880 --> 0:16:48.040 because we're in an environment where you know, things are 0:16:48.040 --> 0:16:52.400 so interconnected that developers don't always realize what they're changing. 0:16:52.480 --> 0:16:55.080 And you know, in this case, I'm sure there will 0:16:55.080 --> 0:16:57.600 be a post mortem as to why that code was moved. 0:16:57.720 --> 0:17:00.280 It just seems like a major like I mean, these 0:17:00.320 --> 0:17:03.280 are major sites. Yeah. I mean I'm not just saying 0:17:03.280 --> 0:17:06.120 because it's Bloomberg major site though too. But I mean 0:17:06.440 --> 0:17:08.800 we're talking about the UK government, We're talking about the like, 0:17:08.920 --> 0:17:12.240 these are things that people just expect to be well. 0:17:12.440 --> 0:17:14.359 I was watching the equity market reaction as this was 0:17:14.400 --> 0:17:16.760 playing out, and in pre market trading, Fastly was taken 0:17:16.760 --> 0:17:18.439 a serious tumble. I mean it was down four or 0:17:18.440 --> 0:17:20.760 five at a certain point. You look right now it's 0:17:20.840 --> 0:17:24.320 higher by nine percent. What gives well in this case, 0:17:24.520 --> 0:17:27.400 I think there's an acknowledgement from the investors that, look, 0:17:27.440 --> 0:17:29.960 there are only three or four companies that provide the 0:17:30.040 --> 0:17:34.800 CD AND service, and today didn't we they're running critical infrastructure. 0:17:34.960 --> 0:17:39.520 So suddenly everyone knows about Fastly. Previously Fastly was in 0:17:39.560 --> 0:17:42.560 the background. It was a background service that no one 0:17:42.640 --> 0:17:45.280 really it wasn't a household name. Suddenly it is, and 0:17:45.320 --> 0:17:48.080 it's providing a very important service. It reminds me of 0:17:48.119 --> 0:17:50.959 I remember the Bloomberg story years ago where people were like, 0:17:51.000 --> 0:17:53.680 if you were streaming I want to say, I don't know, Sopranos, 0:17:54.320 --> 0:17:56.160 what it was you were streaming such and such last 0:17:56.240 --> 0:17:59.040 night watching it? You were doing it through an Amazon server, like, 0:17:59.080 --> 0:18:01.600 all of a sudden, we learned about Amazon Web services 0:18:01.600 --> 0:18:03.960 in just the streaming world, and I feel like that's 0:18:03.960 --> 0:18:05.920 what's happening with fast because you said there's only three 0:18:06.000 --> 0:18:08.720 or four companies that do this. Yes, yes, and look, 0:18:09.119 --> 0:18:11.840 at the end of the day, an outage can happen 0:18:11.880 --> 0:18:15.080 to any company. It happened to Netflix, it happened to Amazon. 0:18:15.840 --> 0:18:18.520 I think in this case they fixed it quickly. I'm 0:18:18.520 --> 0:18:20.439 sure they will have to give a reason as to 0:18:20.480 --> 0:18:22.520 what happened, but most likely it will be a co 0:18:22.720 --> 0:18:25.120 change and investors will move on and they say they'll 0:18:25.160 --> 0:18:27.440 be like, yeah, this is important in deep We talked 0:18:27.440 --> 0:18:31.000 about the Colonial pipeline hacker earlier today on on this show, 0:18:31.359 --> 0:18:34.520 and I think a lot of people's brains went right 0:18:34.560 --> 0:18:37.719 to a hack. What does that say about the environment 0:18:37.760 --> 0:18:40.800 that we're in right now. There's a lot of state 0:18:40.880 --> 0:18:44.080 sponsored activity going on, given you know what's going on 0:18:44.160 --> 0:18:49.400 with China, Russia, and these hackers are very sophisticated. They've 0:18:49.440 --> 0:18:53.520 got deep pockets, so they are trying to find every 0:18:53.560 --> 0:18:56.600 possible vulnerability point and we should know if there's no 0:18:56.640 --> 0:18:58.840 indication at this point that this was any sort of 0:18:58.840 --> 0:19:02.720 nefarious activity. This one, this one. Yeah, we don't know. 0:19:02.920 --> 0:19:05.320 I think the company will come out if there was 0:19:05.520 --> 0:19:08.240 a hack, they will come out. Otherwise, you know, you 0:19:08.320 --> 0:19:10.840 will see a big tumble off this for the stock. 0:19:10.920 --> 0:19:13.160 Yeah right, I was just gonna say, we still don't 0:19:13.200 --> 0:19:15.800 know exactly what happened, or if again somebody's build a 0:19:15.880 --> 0:19:19.280 cup of coffee or you know, um fascinating world we're 0:19:19.320 --> 0:19:20.800 living in. Like I said, it just feels like our 0:19:20.840 --> 0:19:23.680 digital world. It's like poking holes or maybe we're getting 0:19:23.680 --> 0:19:26.480 a clearer picture of how it all works. Mandy, Thank 0:19:26.520 --> 0:19:29.560 you explain it all so well. Mandyep saying, we senior 0:19:29.560 --> 0:19:32.880 tech industry analysta Bloomberg Intelligence in our interactive broker studio. 0:19:33.440 --> 0:19:36.240 Wild world. Huh, wild world. All right, it is time 0:19:36.280 --> 0:19:38.800 for the Bloomberg Big Take. It's on our radar Biogen's 0:19:38.880 --> 0:19:41.600 news tim of the FDA granting approval of the company's 0:19:41.600 --> 0:19:46.520 Alzheimer's drug, and it looks like, man, there's some longer 0:19:46.640 --> 0:19:49.960 term repercussions out of this. Yeah, there certainly are joining 0:19:50.040 --> 0:19:52.680 us now is Bob Langred, healthcare reporter for Bloomberg News. 0:19:52.680 --> 0:19:55.160 He joins us on the phone from New Jersey. So, Bob, 0:19:55.400 --> 0:19:57.639 for people who haven't been following this space as closely 0:19:57.680 --> 0:19:59.480 as you have. Take us back a couple of years 0:19:59.520 --> 0:20:02.320 about the at that Biogen made on the drug that 0:20:02.359 --> 0:20:05.960 was approved by regulators yesterday. Yeah, so all you know, 0:20:06.200 --> 0:20:09.080 researchers have been trying to design a drug to a 0:20:09.160 --> 0:20:13.240 target the pathology behind Alzheimer's disease UH for decades, and 0:20:13.320 --> 0:20:16.680 drug after drug after drug has failed. Uh. And Biogen's 0:20:16.760 --> 0:20:19.040 drug just two years ago it looked like just the 0:20:19.119 --> 0:20:21.200 latest in a long line of failure as they stopped 0:20:21.200 --> 0:20:23.159 their trials earlier they said they didn't look like they 0:20:23.160 --> 0:20:26.840 were going to work. And then eight months later they 0:20:26.840 --> 0:20:30.639 shocked everyone. Uh, they said they reanalyzed the data and 0:20:30.680 --> 0:20:32.639 looked like one of the trials that might have worked, 0:20:32.760 --> 0:20:35.159 and we're gonna apply for approval. Change our mind, We're 0:20:35.160 --> 0:20:37.200 gonna apply for approval, and we think we get this 0:20:37.240 --> 0:20:40.640