Speaker 1: Welcome to tech Stuff, a production from I Heart Radio.
Speaker 1: Hey there, and welcome to tech Stuff. I'm your host,
Speaker 1: Jonathan Strickland. I'm an executive producer with I Heart Radio.
Speaker 1: And how the tech are you. It's time for the
Speaker 1: tech News for Tuesday, December twenty twenty two, and we've
Speaker 1: got a lot of updates on big stories today. It's
Speaker 1: gonna be I think a chunker of an episode. So first,
Speaker 1: let's tackle the total mess that is the collapse of
Speaker 1: f t X and the consequences that collapse has had
Speaker 1: in the world of finance in general and cryptocurrency in particular,
Speaker 1: and co founder Sam Bankman freed specifically. But first, in
Speaker 1: case you're not familiar with f t X, I'll set
Speaker 1: a little foundation. So f t X was the second
Speaker 1: largest cryptocurrency exchange in the world. So a cryptocurrency exchange
Speaker 1: is an organization designed to take currency in one form
Speaker 1: and exchange it for an almost equal value in some
Speaker 1: other form, just like you would do if you were
Speaker 1: to visit a foreign country and you wanted to swap
Speaker 1: out your native cash for the cash of the country.
Speaker 1: And I say almost equal value because the exchange, of
Speaker 1: course takes a little cut of each transaction. That's one
Speaker 1: way that the exchange makes money. And like a lot
Speaker 1: of exchanges, customers can also choose to store their currency
Speaker 1: in whatever digital form it might be in within the
Speaker 1: exchange itself, rather than extracting the money to put into
Speaker 1: a separate digital wallet. Sometimes taking money out also means
Speaker 1: that you get a cut taken out of it. So
Speaker 1: once those cuts start adding up, a lot of customers say,
Speaker 1: you know what, I'll just leave it in there, so
Speaker 1: that way I'm not losing more money by taking it
Speaker 1: out of the system. So, as I said, f t
Speaker 1: X was the second largest cryptocurrency exchange. It was behind
Speaker 1: another company called Finance, which we are also going to
Speaker 1: talk about in this episode. And f t X also
Speaker 1: issued its own cryptocurrency token that was called f t T.
Speaker 1: And yes, one major problem with this story is that
Speaker 1: we use a lot of initialisms and it stinks and
Speaker 1: I'm sorry, but that's just how it is. So f
Speaker 1: t X the exchange would award f t T tokens
Speaker 1: to customers, and you could also trade your money in
Speaker 1: for f t T. You could actually just cash into
Speaker 1: f t T if you wanted to, and you can
Speaker 1: use f t T to hold your wealth. Now, while
Speaker 1: ft t was native to f t X is exchange,
Speaker 1: it was also an accepted token on other exchanges. Now,
Speaker 1: one of the co founders of f t X, as
Speaker 1: I said, was Sam Bankman freed or s b f
Speaker 1: as a was known in the crypto world, and I
Speaker 1: hate that. So I'm just calling him Sam so that
Speaker 1: we don't just have initials everywhere. Before co founding f
Speaker 1: t X, Sam had also co founded a hedge fund
Speaker 1: that focused on crypto. He did this a couple of
Speaker 1: years previously. That company was called Alamator Research. Well. Back
Speaker 1: in November, a crypto news outlet called coin Desk published
Speaker 1: a leaked records sheet that indicated that f t X
Speaker 1: was funneling money from exchange customers to go to Alamator
Speaker 1: Research in order to cover investment losses and loans and
Speaker 1: things like that, which is kind of like robbing Peter
Speaker 1: to pay Paul. You take cash that isn't yours from
Speaker 1: one source in order to cover debts that are yours elsewhere.
Speaker 1: The publication of that leaked record sheet led to a
Speaker 1: full on collapse of f t X, which was exacerbated
Speaker 1: first when financed chairman Cheung Peng c z Jo, we'll
Speaker 1: just called Chong Peng said that Finance, which had been
Speaker 1: an early investor in f t X, was dumping its
Speaker 1: holdings of f t T. So Binance had millions of
Speaker 1: f t T tokens that it kept as a result
Speaker 1: of being an early investor in f t X. So
Speaker 1: Binance says, we're dumping it, We're getting ready, we're cashing out.
Speaker 1: That sent the value of f t T into the crapper. Right,
Speaker 1: if you flood a market with an asset, the value
Speaker 1: of that asset decreases. So then Binance said, you know what,
Speaker 1: we're gonna help you out. We're gonna buy f t X,
Speaker 1: and then almost immediately backed out of that non binding agreement,
Speaker 1: which really it was like a shot to the heart,
Speaker 1: and Finance was to blame. So f t X really
Speaker 1: took it that time. And there's also the question of
Speaker 1: hundreds of millions of dollars of f t X customer
Speaker 1: funds having just gone missing. You know, there are there
Speaker 1: are records of transactions that happened that went to some
Speaker 1: mysterious recipient, where all this money that should have belonged
Speaker 1: to ft X customers was essentially at least by appearance stolen,
Speaker 1: and there are a lot of people who suspect that
Speaker 1: either Sam or one of as many crypto bros took
Speaker 1: the money before things totally fell apart. The collapse of
Speaker 1: f t X, which was already coming at a time
Speaker 1: when crypto was having a rough go of it sent
Speaker 1: a huge ripple out in the crypto world, and we
Speaker 1: saw investors start to lose even more confidence in crypto
Speaker 1: and values would drop across the board. Pretty much. That's
Speaker 1: our foundation. Now we can actually talk about what's happened recently.
Speaker 1: So first up, Sam's headquarters for f t X was
Speaker 1: in the Bahamas over the last year or two. So
Speaker 1: a lot of these crypto exchanges maintain their headquarters overseas
Speaker 1: and places that have let's say, relaxed laws and regulations
Speaker 1: regarding financial institutions somewhere that's out of the purview of
Speaker 1: major financial regulators, like like what we have here in
Speaker 1: the United States. But you know, rich people they really
Speaker 1: hate it when someone else steals their money or causes
Speaker 1: them to lose money. So rich people will go to
Speaker 1: really great links in order to get justice, as opposed
Speaker 1: to say, if a poor person is robbed, you don't
Speaker 1: see nearly as much effort to help that person. Yes,
Speaker 1: this is commentary, but it's also true. Okay, so yeah,
Speaker 1: it stinks anyway. In the wake of this collapse, with
Speaker 1: all these rich people losing lots of money and then
Speaker 1: the revelations about f t X and alimated research, the
Speaker 1: police in the Bahamas launched an investigation into f t
Speaker 1: X and our buddy Sam. Folks over here in the
Speaker 1: United States were likewise eager to look into the matter,
Speaker 1: and the Senate Banking Committee wished to hold a hearing
Speaker 1: about f t X this week. In fact, it was
Speaker 1: supposed to happen today, and they wanted Am to testify
Speaker 1: at this hearing. Sam reportedly declined to acquiesce to their request, so,
Speaker 1: in other words, he told him to pound sand and
Speaker 1: senators said they had offered two different dates for Sam.
Speaker 1: They had included the option for him to attend virtually
Speaker 1: where he wouldn't have to actually travel to the United States,
Speaker 1: and he still declined, and his attorney said he had
Speaker 1: no intention of obeying any subpoenas that the Senate might request.
Speaker 1: So it sounded like Sam was really holding out to
Speaker 1: avoid being pinned down. But that would not last because
Speaker 1: while we were hearing about Sam deciding not to appear
Speaker 1: before the Senate. The Bahamanian authorities were preparing to arrest him,
Speaker 1: and they did on Monday evening. So last night, the
Speaker 1: U S. Attorney for the Southern District of New York
Speaker 1: indicted Sam and sent the sealed indictment to the Bahamanian
Speaker 1: authorities and they acted upon it. So presumably this also
Speaker 1: sets the stage to extradite Sam from the Bahamas to
Speaker 1: the United States, where he will face new risk charges.
Speaker 1: Now this is a separate but parallel effort with what
Speaker 1: we're hearing about the Senate hearings. In fact, senators were
Speaker 1: surprised to learn of Sam's arrest and some have expressed
Speaker 1: disappointment that he will not appear before the Senate to
Speaker 1: explain the situation that led to f t x's collapse.
Speaker 1: As for the charges that Sam faces, they reportedly include
Speaker 1: counts of securities fraud, conspiracy, securities fraud itself, wire fraud conspiracy,
Speaker 1: wire fraud itself, and money laundering. Yeah, rich people really
Speaker 1: don't like it when folks take their money. The U S.
Speaker 1: Securities and Exchange Commission, or SEC, accuses Samba committing a
Speaker 1: quote years long fraud end quote, meaning this isn't just
Speaker 1: about the months that led up to f t x's demise. Essentially,
Speaker 1: the SEC seems to be saying that f t X
Speaker 1: was really not so much a cryptocurrency exchange as it
Speaker 1: was a funnel that would collect money from customers and
Speaker 1: then send that to Alimated Research in order to fund
Speaker 1: trades and real estate deals and to give out massive
Speaker 1: loans to the company's founders, including Sam, who, according to
Speaker 1: the SEC, borrowed a staggering one point three three eight
Speaker 1: billion dollars from Alameda. That's a lot of money to borrow.
Speaker 1: Right on top of the SEC's charges against Sam, there
Speaker 1: are other agencies waiting to get in line to take
Speaker 1: their shot. They include the U. S. Attorney's Office for
Speaker 1: the Southern District of New York, which we mentioned earlier,
Speaker 1: and also the Commodity Futures Trading Commission or c f TC.
Speaker 1: Sam will appear in court in the Bahamas today. He
Speaker 1: does not have the luxury of saying no to that appointment,
Speaker 1: and the Bahamanian government is pretty darn eager to talk
Speaker 1: to Sam outside his discussions with the US because the
Speaker 1: government very much wants to reclaim more than two hundred
Speaker 1: fifty million dollars worth of Bahamas property that Sam and
Speaker 1: f t X executive Ryan Salami. Um, it's maybe it's Salame.
Speaker 1: It's s A L A M E that I'm gonna
Speaker 1: say Salami anyway, Ryan, I'll say Ryan and Sam purchased
Speaker 1: two million plus dollars of Bahama, Bahamas property in the past.
Speaker 1: That's actually thirty five different properties across New Providence, Bahamas.
Speaker 1: Those properties have been tangled up in the bankruptcy proceedings
Speaker 1: for f t X because uh, you know, ft X
Speaker 1: brought in a new CEO in order to oversee the
Speaker 1: company going into bankruptcy. But the Bahamanian government says that
Speaker 1: one having a U S court handled Bahamanian property is
Speaker 1: inefficient because it could be done much more smoothly in
Speaker 1: the Bahamas. So it's a waste of resources, is what
Speaker 1: they're saying. But more importantly to having a foreign court
Speaker 1: handled that sort of thing is illegal by Bahamanian law anyway,
Speaker 1: That it's against the law in the Bahamas for property
Speaker 1: in the Bahamas to be handled by a foreign you know,
Speaker 1: legal system essentially, is what it comes down to. I
Speaker 1: only include this part of the story to show how
Speaker 1: incredibly complicated. This whole crypto issue has become because it
Speaker 1: affects both digital and real world assets. Current fd X
Speaker 1: CEO John I, dismantled in Ron Ray, probably doesn't want
Speaker 1: any of that to happen. He doesn't want the properties
Speaker 1: to be relegated over to the Bahamanian authorities because it's
Speaker 1: his job to try and squeeze as much out of
Speaker 1: the corpse of f t X in order to return
Speaker 1: assets to investors as he possibly can, So surrendering two
Speaker 1: million bucks worth of real estate doesn't really fit in
Speaker 1: with that plan. And y'all, I cannot wait for the
Speaker 1: flood of TV series and films that will cover this
Speaker 1: mess in the future. Now, before I go to break
Speaker 1: and then move on to a related topic, I have
Speaker 1: one last thing to say about f t X. The
Speaker 1: Australian Financial Review reports that an inner circle I called
Speaker 1: it a cabal, but an inner circle running f t X,
Speaker 1: had created a secret chat group in the days leading
Speaker 1: up to the collapse, and that chat group had the
Speaker 1: name according to the Australian Financial Review of wire Fraud. Now,
Speaker 1: that seems like it's a supremely stupid thing to do
Speaker 1: to me, Like I just I just can't see why
Speaker 1: anyone would make a chat group called wire Fraud. I mean,
Speaker 1: maybe it was gallows humor, right, maybe it was done
Speaker 1: as a tongue in cheek, snarky way of of trying
Speaker 1: to deal with the situation, because otherwise you're you're leaving
Speaker 1: a smoking gun laying around on purpose. But then the
Speaker 1: group was also using Signal, which is a messaging and
Speaker 1: chat at that's known for you know, secrecy and encrypted messaging.
Speaker 1: So it's possible that wire Fraud wasn't meant to be
Speaker 1: humorous or ironic or or sarcastic. It was just you know,
Speaker 1: to get everyone on the same page. Now, Sam for
Speaker 1: his part, denies knowing of such a group and said
Speaker 1: that if it does exist, he was not in it.
Speaker 1: Uh yeah, wild, Okay, we're gonna take a quick break.
Speaker 1: When we come back, we'll talk about some other issues
Speaker 1: in the crypto world and a couple of other stories,
Speaker 1: but first let's go to these messages. Okay, we are
Speaker 1: done talking about the recent developments with f t X
Speaker 1: and Sam Bankman Freed, But now let's talk about Finance,
Speaker 1: the largest cryptocurrency exchange in the world. Uh. The former
Speaker 1: investor into f t X, and then arguably slayer of
Speaker 1: f t X, and now it is at the center
Speaker 1: of its own turmoil. Although to say now is being unfair,
Speaker 1: because it turns out Finance has been under serious investigation
Speaker 1: for years, well before the collapse of f t X.
Speaker 1: The Wall Street Journal reports that Finance has been trying
Speaker 1: to mollify customers and reassure them that unlike f t X,
Speaker 1: Finance has the reserves to cover all customer funds that
Speaker 1: are stored within the exchange, and then a little extra
Speaker 1: as a reserve. But the journal sites and accounting professor
Speaker 1: named Douglas Carmichael, which side note, if you have the
Speaker 1: name Douglas Carmichael, I think it's the law that you
Speaker 1: have to be an accounting professor. Anyway, He says that
Speaker 1: the quote unquote proof that Finance has offered so far
Speaker 1: is probably not sufficient to back up what the company
Speaker 1: is claiming. It's probably not going to be enough for
Speaker 1: serious investors to feel comfortable with the situation. Shan Now,
Speaker 1: it's not necessarily the case that Finance doesn't actually have
Speaker 1: the funds, but so far the evidence being shared is
Speaker 1: not enough to support the claim that everything is hunky dory.
Speaker 1: And the proof so far is a single report which
Speaker 1: is more like a five page letter from a quote
Speaker 1: partner at the South African affiliate of the global accounting
Speaker 1: firm Mazaars end quote in the county in the Land
Speaker 1: of Oz. According to the journal, the report included three
Speaker 1: whole numbers in it an exhaustive report of finances, systems
Speaker 1: and policies. No, it was not that, obviously, um, it
Speaker 1: was not an audit report. It did not actually go
Speaker 1: into what control systems, if any, that finance uses. Uh So,
Speaker 1: in other words, a lot of stuff that investors might
Speaker 1: want access to, a lot of transparency did not come
Speaker 1: forward in this letter, in this report. So that's part
Speaker 1: of why Carmichael says investors are probably not really satisfied
Speaker 1: with this report because all they got were these three numbers.
Speaker 1: Two of those numbers also had a bit of concern
Speaker 1: to them. So one of the numbers is about how
Speaker 1: much total currency in bitcoins are in the exchange, and
Speaker 1: the other numbers how many total bitcoins customers held in
Speaker 1: the exchange. So, in other words, let's say you all
Speaker 1: bank at the same place, does the bank actually have
Speaker 1: enough money so that if every single person who had
Speaker 1: an account came in and withdrew all of their money,
Speaker 1: the bank would be able to cover it in this case.
Speaker 1: You know, what Finance had been saying is, yes, we
Speaker 1: have a one to one cover for all currency held
Speaker 1: in our exchange. But as it turns out, those numbers
Speaker 1: are not the same. They the currency actually has few
Speaker 1: were bitcoins in its reserves than customers have quote unquote
Speaker 1: held in the exchange, by the tune of our almost
Speaker 1: well actually a little bit more than fifteen thousand bitcoins. Now,
Speaker 1: this is an exchange that has more than half a
Speaker 1: million of those ding dang darn things. So it's not
Speaker 1: like it's not like fifteen thousand represents a huge percentage, right,
Speaker 1: But it's still concerning. Right if if everyone suddenly got
Speaker 1: nervous and decided to withdraw their money out of the exchange, Well,
Speaker 1: based upon this, the exchange does not have the currency
Speaker 1: to cover all of that, and that was one of
Speaker 1: the big concerns with f t X and really lead
Speaker 1: to its collapse. However, Finance also says, hey, the reason
Speaker 1: for this is that we also issue loans to customers,
Speaker 1: you know, loans of cryptocurrency. So some of the money
Speaker 1: that belongs to US is outstanding. It's not it's not
Speaker 1: currently in our reserves, but it's where we hold it
Speaker 1: in the form of loans that have been is you
Speaker 1: to customers, and those loans will be repaid with interest,
Speaker 1: which means ultimately, yes, we can cover everything. In fact,
Speaker 1: we have one collateral. Our collateralization is really what we
Speaker 1: call it. It's just that right now, technically they don't
Speaker 1: have it. So things are just kind of shaky on
Speaker 1: an investor front. But uh, that's not the end of
Speaker 1: finance's troubles by a long shot. So the U s
Speaker 1: Department of Justice has actually been actively investigating finance for years,
Speaker 1: particularly in realms of money laundering and processing payments that
Speaker 1: sidestep international sanctions, such as money that gets funneled to
Speaker 1: places like Iran uh where which should otherwise be subjected
Speaker 1: to UH two sanctions. Reuter's reports that Binance has been
Speaker 1: responsible for processing ten billion dollars in illegal payments this year,
Speaker 1: and that does not sound good. Apparently, the US government
Speaker 1: has even been in discussions with finances legal teams over
Speaker 1: the matter of plea deals. You know, when you start
Speaker 1: talking plea deals, that's just things are starting to build
Speaker 1: up against the crypto exchange here in the States at least.
Speaker 1: But Reuters also reports that the various departments within the
Speaker 1: d o J that are involved in this investigation, and
Speaker 1: there are three major departments that are part of this,
Speaker 1: they aren't completely aligned on when to move forward with
Speaker 1: any charges filed, and some of those departments have a
Speaker 1: more methodical approach than others. So by that, I mean
Speaker 1: there are divisions within the d o J that are
Speaker 1: very thorough when they build a case, which can be
Speaker 1: frustrating to other departments that tend to act more aggressively.
Speaker 1: And I think there are valid arguments for both approaches. Right,
Speaker 1: being methodical leads to building a better case against a
Speaker 1: suspect if in fact, you determine that there is a
Speaker 1: case to be made, or it might save you lots
Speaker 1: of time and money if you realize, oh, you know,
Speaker 1: there's not enough there there. Meanwhile, being aggressive can mitigate
Speaker 1: ongoing harm, right You can cut off the harm that
Speaker 1: is happening right now by acting faster. That is, assuming
Speaker 1: of course, that the case has merit. If the case
Speaker 1: doesn't have merit, then being aggressive can cause more harm. Obviously, anyway,
Speaker 1: there's no telling where this is going to end up
Speaker 1: in the long run yet, but it does mean things
Speaker 1: are increasingly chaotic, so much so that Finance temporarily halted
Speaker 1: withdrawals of U s d C earlier today in an
Speaker 1: effort to stem a transactional problem on the platform. So
Speaker 1: U s d C is a stable coin that is
Speaker 1: linked to the US dollar. UH. Investors sometimes use us
Speaker 1: DC to swap one form of cryptocurrency to another without
Speaker 1: actually having to convert it to real US dollars. Uh.
Speaker 1: It's just you know, a digital version of the US
Speaker 1: dollar in in many ways, it's a stable coin, is
Speaker 1: what's called. Anyway. The issue, according to Chung paying himself,
Speaker 1: is that if a Binance customer wants to convert p
Speaker 1: a X or b U s D into USDC, so
Speaker 1: in other words, these specific forms of crypto into the
Speaker 1: stable coin U s DC, that process requires routing through
Speaker 1: a bank that's in New York, and at the time
Speaker 1: where people were trying to do this, the bank had
Speaker 1: not yet opened. So Binance decided to clamp down on
Speaker 1: those transactions in an effort to swap out a different
Speaker 1: token two facilitate these switches from one cryptocurrency to another.
Speaker 1: In the meantime, over the last twenty four hours, Binance
Speaker 1: has seen customers would draw more than one point six
Speaker 1: billion dollars worth of assets from the exchange. So even
Speaker 1: if all these investigations ultimately lead nowhere Finance, this situation
Speaker 1: right now is a bit rocky because investors have freaked
Speaker 1: out due to multiple red flags. So crypto is in
Speaker 1: a really delicate place right now. I'm not suggesting that
Speaker 1: crypto is gonna completely collapse and that it will no
Speaker 1: longer be the grand experiment that it was, but rather
Speaker 1: it's in for a real hard time in the at
Speaker 1: least the short term, if not the long term, as
Speaker 1: these major exchanges that have kind of built themselves up
Speaker 1: into being pillars of the crypto community, a community that
Speaker 1: infamously values itself on being decentralized, are now in potential
Speaker 1: jeopardy either because of a lack of investor confidence or
Speaker 1: in the case of Finance, being the active subject of
Speaker 1: massive investigations into money laundering and other violations. Like that's
Speaker 1: bad news. That does not necessarily mean that there would
Speaker 1: be a direct effect on the cryptocurrency values themselves, but
Speaker 1: frequently what you'll see is investors get worried, they start
Speaker 1: pulling their investments, they convert it back into a different
Speaker 1: form of currency, and in some cases they may just
Speaker 1: cash out entirely and say you know what, Uh, this
Speaker 1: was an interesting approach, it's not for me. I'm done,
Speaker 1: and that ultimately ends up hurting the entire crypto community. Personally,
Speaker 1: I think that crypto is not great. I think there
Speaker 1: are a lot of reasons why crypto is not great.
Speaker 1: I think that the the selling point of it being
Speaker 1: decentralized is a smoke screen. It's really just centralized in
Speaker 1: a different way, um, and that it consolidates wealth in
Speaker 1: a different group of people than what we saw before.
Speaker 1: So it's not like it's I wouldn't say it's worse
Speaker 1: than what we already have, but I wouldn't say it's
Speaker 1: better either. It's just different, um, and different in a
Speaker 1: way that's very unstable. So I am very much against
Speaker 1: the whole crypto thing from that perspective. Maybe it survives
Speaker 1: all of these trials and tribulations, it will mature to
Speaker 1: a stage that is more reliable, less volatile, more acceptable
Speaker 1: as an actual currency as opposed to a commodity. But
Speaker 1: that's all. Those are a lot of ifs, and I
Speaker 1: remained skeptical. I'd love to be proven wrong. It's just
Speaker 1: I suspect I will not be all right, that's enough
Speaker 1: of that. We're gonna take another quick break when we
Speaker 1: come back. We've got a few more tech stories to cover.
Speaker 1: Quite a few actually, as I look at my lineup,
Speaker 1: but they're shorter as they involve lots of other stuff.
Speaker 1: So we're gonna take a break, come back and tackle
Speaker 1: those in just a moment. Okay, we're back. So one
Speaker 1: ongoing story we have talked about several times on this
Speaker 1: show is Microsoft's bid to acquire the video game company
Speaker 1: at division Blizzard, and of course, Activision Blizzard itself is
Speaker 1: the source of lots of stories, many of them dark ones.
Speaker 1: But anyway, the US Federal Trade Commission, or FTC, has
Speaker 1: sued Microsoft. In fact, it did this last week in
Speaker 1: an effort to block this acquisition, and has called the
Speaker 1: merger and anti competitive move that or reduce competition in
Speaker 1: the video games market. Now, The New York Times predicts
Speaker 1: that this is going to be a very tough case
Speaker 1: for the FTC to prove in court because courts typically
Speaker 1: see companies like Microsoft and Activision Blizzard as being distinct
Speaker 1: and they are not necessarily companies that compete directly with
Speaker 1: one another. Therefore, when companies that don't directly compete merge,
Speaker 1: you don't have a reduction in competition because the two
Speaker 1: companies didn't represent competing entities in the first place. So
Speaker 1: that's the logic that the New York Times is using.
Speaker 1: They're they're thought of as a vertical mergers, and that
Speaker 1: you know, usually such a merger isn't viewed as having
Speaker 1: a measurable impact on competition. As a result. Now, it
Speaker 1: may turn out that the FTC is going to just
Speaker 1: completely fail in this effort, but we are seeing this
Speaker 1: kind of resistance to that specific merger of Microsoft and
Speaker 1: Activision Blizzard happening around the world. In some cases, we've
Speaker 1: seen it where it appears that Sony representatives have played
Speaker 1: a part in sowing UH distrust in the acquisition, suggesting
Speaker 1: that Microsoft is kind of locking video game publishers and
Speaker 1: developers away behind their own corporate UH boundaries and that
Speaker 1: ultimately that will cut off access to competitors like Sony.
Speaker 1: So the long story short, the argument is that hey,
Speaker 1: if if Microsoft buys Activision Blizzard, then in the future,
Speaker 1: Sony is not gonna be able to get access to
Speaker 1: Activision Blizzard titoles, something that Microsoft reps have said multiple
Speaker 1: times is just not what's going to happen um Anyway,
Speaker 1: It's really interesting to see the FTC push hard against
Speaker 1: moves that it sees as potentially being anti competitive, because
Speaker 1: here in the US for the last several decades that
Speaker 1: just hasn't been the case. There's been a very lass
Speaker 1: a fair approach which was really infamous in the eighties
Speaker 1: that allowed companies to kind of consolidate and grow larger
Speaker 1: and buy up their competition with really no resistance from
Speaker 1: the US government. That is changing, but it does mean
Speaker 1: that the FTC is going to have a very long
Speaker 1: list of battles to fight. And also Microsoft has a
Speaker 1: history of getting out of these kind of situations. At
Speaker 1: one point, courts had ruled that Microsoft was to break
Speaker 1: apart into different companies, but ultimately that decision was reversed
Speaker 1: and so the company continued as as we know it.
Speaker 1: So I I suspect this is probably not going to
Speaker 1: succeed in court based upon just how long a shot
Speaker 1: it is. But I also feel that consolidation in general
Speaker 1: typically is not the best for the end consumer in
Speaker 1: most cases, So uh, and also big tech getting bigger
Speaker 1: is not something I'm terribly interested in seeing. It's just
Speaker 1: that I think there are other battles into space that
Speaker 1: are more important. Okay, we're not done yet. We got
Speaker 1: some Twitter and some Tesla news. Of course we do,
Speaker 1: because you can't get away from me. On Musk. On Sunday,
Speaker 1: he tweeted, quote, the boats are in for a surprise
Speaker 1: tomorrow end quote. And turns out so was most of
Speaker 1: Southeast Asia. You see, Musk had promised to rid Twitter
Speaker 1: of bots. That was like one of his big things
Speaker 1: when he was first being so braggish about buying Twitter,
Speaker 1: before he decided that he didn't want to buy Twitter,
Speaker 1: before he decided, yeah, no, I will buy Twitter. So anyway,
Speaker 1: the solution that he and his team apparently came up
Speaker 1: with was not to identify bots on the platform and
Speaker 1: then block those bots. Instead, it was to cut off
Speaker 1: access to entire mobile networks that had been known to
Speaker 1: carry bought traffic on them. But these networks are also
Speaker 1: used by you know, real human beings who actually use
Speaker 1: and in some cases rely upon Twitter. So Twitter essentially
Speaker 1: cuts access off from these networks, and that left tons
Speaker 1: of legitimate users unable to access Twitter on their devices,
Speaker 1: and then in came a flood of complaints and requests
Speaker 1: for help. So what did Twitter do well? It did
Speaker 1: the exact same thing we saw when the company rolled
Speaker 1: out the paid for blue verification check marks last month.
Speaker 1: It subsequently rolled the decision back. This time, Twitter reps
Speaker 1: actually claimed the whole problem was due to quote routing
Speaker 1: configuration changes end quote, which sounds to me like it's
Speaker 1: just a lie to cover up the fact that the
Speaker 1: company made a unilateral move that affected both bots and
Speaker 1: real people equally, then had to back pedal. I want
Speaker 1: to stress it sounds to me like a lie. I'm
Speaker 1: not saying it is a lie, it just sounds like one.
Speaker 1: Now one might start to call in the question Musk's
Speaker 1: reputation for being a genius at this point, you know,
Speaker 1: just from based upon recent evidence. That is, if the
Speaker 1: person had not already dismissed such an idea years ago.
Speaker 1: Many of you out there, I'm sure, are in that
Speaker 1: camp already. And last week three members of Twitter's Trust
Speaker 1: and Safety Council resigned. They said that under Musk, Twitter's
Speaker 1: users safety is on the decline and that the council
Speaker 1: isn't being listened to, and that Twitter is actively becoming
Speaker 1: a more dangerous place instead of a safer one, particularly
Speaker 1: for really houlnerable people like kids. As such, these council
Speaker 1: members have decided that if they cannot do anything about it,
Speaker 1: and if Musk is not going to listen to them,
Speaker 1: there's no reason to stay. They are not authorized to
Speaker 1: make the changes needed to improve safety, and Twitter does
Speaker 1: not really have the resources needed to make such a
Speaker 1: thing possible, now that so many people have left the
Speaker 1: company somewhere around by some estimations, and it sounded pretty
Speaker 1: darn grim. There's also news about Tesla's UH advertising woes.
Speaker 1: Obviously those continue. I'm not going to go into great
Speaker 1: detail because those numbers are changing so fast. By the
Speaker 1: time you listen to this it will be out of
Speaker 1: date anyway. But let's just say that Twitter is UH
Speaker 1: is having real problems on the advertiser front, and the
Speaker 1: hope that subscriptions to Twitter Blue is somehow going to
Speaker 1: counteract that, I think is optimistic. Say, Tesla is facing
Speaker 1: a class action lawsuit that claims the company has engaged
Speaker 1: in fraud. Now, Tesla's lawyers are saying, quote mere failure
Speaker 1: to realize a long term aspirational goal is not fraud
Speaker 1: end quote, and they're asking a judge to dismiss this case. Now,
Speaker 1: those of y'all who have listened to tech stuff for
Speaker 1: a while, you likely know my thoughts about this. Yes,
Speaker 1: Tesla has failed to realize a long term aspirational goal
Speaker 1: in the form of creating a truly autonomous vehicle, and no,
Speaker 1: failure is not fraud. However, during that time, Tesla has
Speaker 1: also marketed products called autopilot and full self driving, which,
Speaker 1: if we are to assume that you know, words mean things,
Speaker 1: suggests that the vehicle should be capable of operating all
Speaker 1: on their own and yes, on its web pages if
Speaker 1: you go and read it, Tesla has repeatedly said it
Speaker 1: that it's advanced driver assist features are not a substitute
Speaker 1: for a human driver. They are not an autonomous system. However,
Speaker 1: the company continues to market those tools with names that
Speaker 1: suggest otherwise. On top of that, Elon Musk has repeatedly
Speaker 1: proclaimed we're just a year or two away from full
Speaker 1: on robo taxis, where you'll be able to turn your
Speaker 1: car into a revenue generator. And this isn't something he's
Speaker 1: only said recently. He's been saying it over the years,
Speaker 1: and each year comes and goes and they don't achieve
Speaker 1: that goal. And again that's not necessarily fraud on its own.
Speaker 1: But when you start taking into these into consideration, a
Speaker 1: combination of all this with the marketing and the naming conventions,
Speaker 1: things get a lot more muddy. I mean, if I
Speaker 1: were to sell you a bottle of flying potion, and
Speaker 1: you were to drink the bottle of potion and then
Speaker 1: you break your leg as you jumped off a tree
Speaker 1: limb when you fell to the ground, I couldn't just say, oh, well,
Speaker 1: I just failed to get the potion right. It's an
Speaker 1: aspirational goal. No, you would say I committed fraud because
Speaker 1: I sold you a potion that doesn't do the thing
Speaker 1: that I said it does. Now, if I left a
Speaker 1: little label on that potion that said does not actually
Speaker 1: give you flying powers, I might have a pretty decent argument.
Speaker 1: I'd probably be called a scumball for legitimate reasons, But
Speaker 1: I have an argument to say, like, hey, no, no, no,
Speaker 1: I have a disclaimer here. So we'll have to wait
Speaker 1: and see if courts agree with Tesla's lawyers on the
Speaker 1: matter or if it will proceed. Because I just don't
Speaker 1: know I mean, you could and you you can't say
Speaker 1: legitimately that Tesla said on its web page this is
Speaker 1: not an autonomous system. But again, the marketing and naming
Speaker 1: makes it difficult. Right, It's a very muddy sort of
Speaker 1: thing to look at. Now, there were some other news
Speaker 1: items I had originally lined up to talk about that
Speaker 1: I I was going to include, but it would have
Speaker 1: made this episode run super long. It involved stuff like
Speaker 1: there were worries about surveys that show Tesla's brand image
Speaker 1: has taken a real nose dive. It's gone into negative territory,
Speaker 1: which is not completely on the company itself, although partly,
Speaker 1: I mean, there are a lot of people complaining about
Speaker 1: things like build quality of Tesla vehicles, but it also
Speaker 1: obviously takes into consideration things like Ellen Must's behavior on Twitter,
Speaker 1: which really has no, you know, direct relationship with Tesla,
Speaker 1: but still is having an impact on people's perception of it.
Speaker 1: Then I also had a story about um Meta cutting
Speaker 1: back on rideshare allowances as a part of cost cutting measures.
Speaker 1: But I feel like we've done enough bad news. Let's
Speaker 1: end with something that's actually kind of amazing. Although we're
Speaker 1: also going to take a step back and a little
Speaker 1: reality pill in the process. We're going to talk about
Speaker 1: fusion and a breakthrough at the Lawrence Livermore National Laboratory
Speaker 1: in California. First, let's give a quick rundown on nuclear fusion.
Speaker 1: The nuclear power that we use around the world right
Speaker 1: now in order to generate electricity is fission. That's where
Speaker 1: you harvest energy that's generated upon the splitting of heavy atoms.
Speaker 1: This splitting perpetuates a series of reactions that keeps things going,
Speaker 1: and when you use this with careful controls, you can
Speaker 1: release tons of energy in the form of heat that
Speaker 1: you can then harness to generate electricity. However, the fission
Speaker 1: process creates dangerous nuclear waste that you have to figure
Speaker 1: out what to do with, whether that's to process it
Speaker 1: further or to you know, bury it somewhere or whatever.
Speaker 1: And there are other dangers involved, including the possibility of
Speaker 1: accidents like we've seen at sites like Three Mile Island
Speaker 1: or Chernobyl or Fukushima. Those dangers range from releasing radioactive
Speaker 1: material into the environment all the way up to nuclear meltdown.
Speaker 1: So there are some big challenges with fission to do
Speaker 1: it in a way that is not just safe but
Speaker 1: people feel comfortable with it, right, So that's that's part
Speaker 1: of it. There is another nuclear process called fusion, and
Speaker 1: fusion we have to light atoms that fuse together. This
Speaker 1: process also releases energy, but it also requires a good
Speaker 1: amount of energy to get the reaction going in the
Speaker 1: first place. Because atoms don't want to get that close, right,
Speaker 1: They don't want to fuse together like this. You have
Speaker 1: to force them to do it, and that means you
Speaker 1: have to exert energy to make it happen. Once they
Speaker 1: do it, they release energy, but you've gotta spend energy first.
Speaker 1: So fusion is the nuclear process that occurs in stars,
Speaker 1: where you know, gravitational forces and pressure are providing the
Speaker 1: energy needed to generate and sustain fusion. That's not something
Speaker 1: we can easily replicate here on Earth, right, we can't
Speaker 1: just make a man your star. So the sun generates
Speaker 1: the light we see through fusion as high erogen combines
Speaker 1: to form a type of helium at a temperature of
Speaker 1: millions of degrees. Shout out to they might be giants.
Speaker 1: If we can harness the power of fusion in a
Speaker 1: way where we can release sustainable energy that we can
Speaker 1: convert into electricity, that would be a tremendous breakthrough. It
Speaker 1: would totally revolutionize the energy economy. It's the kind of
Speaker 1: thing that could provide a way to entirely ditch fossil
Speaker 1: fuels and things like internal combustion engines and switch to
Speaker 1: electric motors because electricity would be plentiful, it would be cheap,
Speaker 1: it would be environmentally friendly, it would not produce things
Speaker 1: like the dangerous nuclear waste that fission plants do, and
Speaker 1: the fuel we'd be using would be among the most
Speaker 1: plentiful in the universe. Kind Of there's an asterisk by that,
Speaker 1: but I'm not going to go into great detail about
Speaker 1: that anyway. A huge obstacle to fusion has been finding
Speaker 1: a way to initiate reaction so that the net output
Speaker 1: of energy is greater than the net input we used
Speaker 1: to get the reaction going. So if you have to
Speaker 1: spend more energy to get things moving then you get
Speaker 1: out of the process, that's a net loss. You get
Speaker 1: yourself a nonstarter. It doesn't make sense. You're just gonna
Speaker 1: be losing energy in the in the whole system. So
Speaker 1: the researchers at Livermore have managed to initiate a reaction
Speaker 1: and get more energy out then was put in with
Speaker 1: their lasers. And to be clear, I'm not saying they
Speaker 1: created energy. You cannot create energy. Rather, the energy needed
Speaker 1: to start a process was less than what the process released.
Speaker 1: It's kind of like how if you were to light
Speaker 1: a pool of fuel with a match, the energy given
Speaker 1: off by the burning fuel would be way bigger than
Speaker 1: the energy you use to light the match itself. You
Speaker 1: didn't generate it, it's just the process that's releasing that energy. Now,
Speaker 1: there are are some asterisks that we have to address
Speaker 1: before we can say all our energy concerns are behind us.
Speaker 1: For one thing, we do get a net positive amount
Speaker 1: of energy out of this reaction only if we're just
Speaker 1: considering how much energy the lasers were directing to the
Speaker 1: fuel source. So in that sense, it took two point
Speaker 1: zero five mega jewels from lasers to start a process
Speaker 1: that ultimately released three point one five mega jewels of energy.
Speaker 1: So yeah, more energy out than what you put in. However,
Speaker 1: to power those lasers would require more than just two
Speaker 1: point oh five mega jewels because these pew pew laser
Speaker 1: beams are not efficient. In fact, they are far from it.
Speaker 1: They are very inefficient. It took three hundred mega jewels
Speaker 1: to power the lasers, then the lasers generate that two
Speaker 1: point oh five mega jewle beam. So yeah, if we
Speaker 1: factor in that the three hundred mega jules we needed
Speaker 1: to power the system, well, releasing three point one five
Speaker 1: mega jeweles is not a Grand Slam home run, right However,
Speaker 1: it is a step forward, and there are other methods
Speaker 1: we can use besides lasers to initiate fusion. Some of
Speaker 1: them may prove to be far more efficient in the
Speaker 1: long run. So this is a good development, right it is.
Speaker 1: It is something we should celebrate. It is not an
Speaker 1: earth shattering breakthrough because we still have some massive hurdles
Speaker 1: to overcome and we are not going to be switching
Speaker 1: over to fusion power right away, but we are a
Speaker 1: little closer to that goal. So that is something I
Speaker 1: think we need to be excited about. It's just important
Speaker 1: that we also understand the limitations that still stand in
Speaker 1: our way, because my fear is that if we don't
Speaker 1: acknowledge those things, then people start to get upset when
Speaker 1: a year or two or five later they're saying, where
Speaker 1: the heck are these fusion reactors we were supposed to have? Right,
Speaker 1: Everyone's like well, I heard that there was a ether.
Speaker 1: Why don't we have them yet? We have to understand
Speaker 1: what the challenges are, the engineering challenges, the science that
Speaker 1: needs to be perfected in order for us to be
Speaker 1: able to create an efficient system, so that we have
Speaker 1: a realistic expectation of how far along we are and
Speaker 1: how far away our goal is. And that way we
Speaker 1: don't get discouraged, because if we do get discouraged, then
Speaker 1: funding gets cut, and if funding gets cut, we never
Speaker 1: get to where we want to go. Okay, that's it.
Speaker 1: This was a super long news episode. Hopefully Thursdays will
Speaker 1: be much shorter. Hope you are well. If you have
Speaker 1: suggestions for future topics of tech Stuff, please get in
Speaker 1: touch with me. You can leave me a voice message
Speaker 1: on the I Heart radio app. It's free to download
Speaker 1: and use. You can just navigate on over tech Stuff,
Speaker 1: use that little microphone icon, leave a voice message up
Speaker 1: to thirty seconds, end lengths, and you're good to go.
Speaker 1: Let me know if you would like me to use
Speaker 1: in the future episode. I only do it if you
Speaker 1: tell me to Otherwise, if you for you can hop
Speaker 1: on over to Twitter and send me a message. The
Speaker 1: handle for the show is tech Stuff hs W and
Speaker 1: I'll talk to you again really soon. Yea. Tech Stuff
Speaker 1: is an I heart Radio production. For more podcasts from
Speaker 1: my heart Radio, visit the i heart Radio app, Apple Podcasts,
Speaker 1: or wherever you listen to your favorite shows.