Good thing I did not invest much in Bitcoin...

...and by that, I mean either my money or my self-esteem.

Today, BTC China, China's largest bitcoin exchange, was shut down by the Chinese government. And this is after the government already announced on December 5 that its financial institutions were no longer allowed to deal in Bitcoin, its first attempt to regulate the currency. As of today, the People's Bank of China has informed 10 of the PRC's largest third-party payment processing companies that they were required to cease all Bitcoin transactions, or else.

Not surprisingly, Business Insider's Joe Weisenthal is delighted that he now gets to gloat in front of all the people who sent him death threats and made fun of his sexuality. He's happy to point out that since BTC China announced it would no longer be accepting deposits, the value of a Bitcoin has more than halved, from $1000 to $500.

The first time I ever posted about Bitcoin, one of the questions I asked myself was whether Bitcoin would really prove to be immune to government control and currency manipulation. I subsequently wondered what it meant that the Chinese had embraced Bitcoin, since they're the most notorious currency-manipulators in the world. Well, here are some reasons another author has suggested that Bitcoin took off in China in the first place:

• They’ve already done the whole virtual currency thing—with Q Coin.
• As a medium of exchange, Bitcoin could help Chinese people evade currency controls.
• Insane speculation schemes aren’t so crazy to many Chinese people. 
• PCs abound.
• Chinese techies are used to spending an ungodly amount of time mining virtual coins in online games.
• The government can’t track it, can’t block it, and can’t crack down on it.

All of these are, of course, very good reasons why venture capitalists in China would be happy to throw a ton of money behind Bitcoin. Then there's the possibility that by investing in Bitcoin, China is boosting Bitcoin's potential to displace the U.S. dollar as the reserve currency - a goal that the Chinese government shares with Bitcoin's founders and fanboys.

But remember that in China, the purpose of economic growth (along with almost any other government initiative, like defense modernization) is to maintain social stability and the legitimacy of the Communist Party, as we are constantly reminded by the party's own leadership. When a currency's biggest public selling point is that it's immune to government control, it should figure that the Chinese government is going to start getting nervous once reality sets in and they realize that yes, in fact, Bitcoin might in fact be something even they can't control. What's happening is that the need to make money is not always compatible with the need for control, as Quartz's Adam Pasick points out:

"Ultimately China had little choice but to crack down on bitcoin, because it made it all too easy for Chinese investors to evade already- porous currency controls and anonymously move their funds out of the country. More generally, Beijing had an aversion to a volatile, decentralized and possibly destabilizing digital currency that it could not control...By shunning bitcoin, China...may be passing up the chance to leapfrog the rest of the world by fostering the growth of bitcoin-esque digital currencies and the secure, efficient payments that they may enable. But when a country is simultaneously trying to grow, reform, and maintain tight control of its economy, something’s gotta give."

But...this is where things get a whole lot more interesting. As I was sitting down to write this blog post, I saw some new articles pop up in my Twitter feed. It seems that Bitcoin hackers have retaliated by launching DDOS attacks against the People's Bank of China web site. So just in case we (and the CCP) forgot, take note: Bitcoin isn't just an Internet currency; it's also an Internet movement with a cyber-army of hacktivists that don't take kindly to Chinese au-thor-i-tah. Now, let's see what the Bitcoin army is capable of doing; presumably, Joe Weisenthal is relieved that they've got someone to hate more than himself.

20 years of DOOM!

I'm still trying to overcome my continued posting drought and motivate myself to write again. My job/internship search is really difficult right now, so I spend more time checking Indeed.com and the Brad Traverse Group than writing (and that's when I'm not watching funny videos to ease the anxiety of being on the job market). But let me indulge in my nerd side and reminisce about Doom, which celebrated its 20th birthday this month - on December 10, to be exact. I might have forgotten about this momentous occasion had I not read an interesting little Ars Technia article in which the editors reflected on how Doom changed video gaming forever. Most people who were playing games on their personal computers in the 1990s became addicted to first-person shooters (FPS) after playing Doom, and that includes myself.

Actually, I didn't start getting into Doom until the release of the sequel in 1994, which I first played at a friend's house. Previously, I had once watched one of my Dad's graduate students playing Wolfenstein 3D, but had never been allowed to play, because this student wasn't sure I should be playing something so violent*. So one of my earliest and fondest gaming memories was when I took control of the keyboard and mouse in Doom II and scored my first chainsaw kill against a zombie. It only got more exciting once I got my hands on the game's shotgun and started capping Imps. At the time, I had seen nothing like it, and the semi-3D graphics engine seemed amazing to me back then (The Division be damned!) Unfortunately, back then, nobody I knew had even a 28.8 bps modem, so I never got to experience the online play, which is undoubtedly the single greatest contribution that Doom made to gaming (its significance was not that it was the first FPS, or even the Id Software team's first FPS.) I did try Doom online, about a decade later, but by that point, I had been playing Counter-Strike for so long that there was no way I'd ever enjoy it.

There's another, military/political science-y reason I'm reflecting on Doom: I wonder how many young men from my generation would have ever even considered serving their country had they not spent years playing FPS descendants of Doom? I know I can attribute my own interest in the military to the years I spent playing the aforementioned Counter-Strike, as well as DoD's own FPS recruitment tool, America's Army, during my teen years. There are already political scientists who have studied the effects of war toys and war movies on the militarization of the United States: See, for instance, the ironically-named Patrick Regan's groundbreaking 1994 study on this topic for the Journal of Peace Research. Personally, I'm still waiting for them to update Waltz' Man, the State, and War to think about where the popularity of FPS games falls into IR theory (I would imagine that it affects both the second-image and third-image factors in Waltz' theory). This article in the European Journal of American Studies is the closest thing I've seen to an attempt, but the journal seems a bit too Euro-lefty to be credible. I also found this article by two professors at Fordham University to be interesting, but not theoretical enough for my purposes. And that's all that Google Scholar has found for me; I guess I'll have to check out DTIC next to see what's been published.

Hopefully, Doom's next major anniversary (25th, 30th?) will provide occasion to re-visit this topic and see new scholarship on FPS games, cultural militarism, and IR theory, because I imagine there is a lot of good work to be done on this topic. When even the PLA starts getting into the gaming biz, I think it's time to regard FPS popularity as a cultural factor that can't be ignored.





*Interesting tidbit: The student in question, who was then getting his Ph.D in my Dad's research group at Duke, was none other than Carl Schnurr, who eventually became a gaming pioneer himself as the lead designer for Rainbow Six, the first "tactical shooter" FPS.

Getting back into action

I know, I know...I've been gone for way too long. I had intended to write a blog post for Veteran's Day, but I backed off, mostly because I wasn't satisfied with how it was turning out or what I had to say on the topic (here comes my perfectionist side again). Then I got really busy with my hopefully soon-to-be-published paper for work, and then I was off on Thanksgiving break. I told myself I'd catch up on reading and writing over the break, but I lied to myself. There was a lot I wanted to cover during my hiatus. But for now, I am going to briefly touch on the debate over force readiness.

Army Chief of Staff General Ray Odierno has been lamenting for quite some time that the Army is at "the lowest readiness levels I’ve seen within our Army since I’ve been serving for the last 37 years", as he did again earlier this month. This warning comes on top of the Army's move towards Progressive/Tiered Readiness earlier this year, which was itself controversial.

Some of my immediate thoughts on this topic:

1. Readiness is based upon fulfillment of troop strength, budgetary allocation, and training (among other things). As the article cited above mentions, Larry Korb over at the Center for American Progress has blamed the mechanism of sequestration for the Army's financial difficulties: "The Pentagon’s problems are not caused by the amount of money that is available under sequestration but by the process that requires them to cut all items in the budget, other than military personnel, by an equal amount."
2. Defense News had a really interesting article pointing out that this is not the first time we've heard the force readiness siren from top brass; indeed, I recall that in 2006, the Democrats even tried to use the detrimental effect on readiness to argue against the wars in Iraq and Afghanistan.
3. Gauging force readiness is not the same now that the Brigade Combat Team replaced the division as the primary deployable unit in the Army; this makes me wonder whether we should  re-visit the criticisms of Lt. Col. Stephen Melton from 2005 during the force transformation process. Among other things, Melton complained about the larger staffing/C2 requirements for BCTs; one can imagine how much readiness will suffer in an austere fiscal climate if there are more people to train/mentor, more technology to master, and fewer resources by which to do it all. And since, as Larry Korb points out, the budget cuts do not affect actual military personnel, it should follow that BCTs have created more soldiers who get more entitlements - which leaves less money for equipment and training and anything else that a BCT needs that might affect its readiness for combat.
4. Bottom line: Yes, the Army might very well have far lower readiness on paper, and it might even be the "lowest in 37 years". But from where I'm standing, the real issue here is that the Army is suffering from an unanticipated side effect of the modular force transformation, rather than budgetary constraints per se.

A different kind of Bitcoin war

Two days ago, Business Insider's Joe Weisenthal published an article in which he argued that Bitcoin is actually a bubble that will eventually burst. See that article here. Salient points:

• Yes, a Bitcoin is now gaining value rapidly (the last report as of this writing is that it's now worth over $300). Folks as respected as the Washington Post's Timothy Lee are now asking whether Bitcoin critics who called it a bubble need to admit that they were wrong.
• Weisenthal's insistence: This doesn't matter in the long run. "Bitcoin is not the currency of the future. It has no intrinsic value."
• Unlike the dollar, "If people lose faith in it, it's over. Bitcoin is fiat currency in the most literal sense of the word." And worse: It's a "speculative vehicle."

The response from the Internet? Scorn. Weisenthal has written another piece demonstrating some of the most amusing reactions to his original article:

 

Whoa, chill pill, buddy.

OK, so this one is actually pretty funny and inspired.

It's never a good sign when advocates of a person or thing start investing their self-esteem into it, which means that they become hostile whenever somebody questions it. When something attracts those types of people, it says a lot about the thing itself: It means that the thing isn't just a person or a product, it's a way of life.

It's official: The administration is considering splitting up the NSA and CyberCom

At this point, I've already devoted two entries to the question of whether the NSA and Cyber Command should be split up once Gen. Keith Alexander retires next year (see my posts here and here). Now, however, it look as though the debate is heating up on the Hill:

"No formal decision has been made yet, but the Pentagon has already drawn up a list of possible civilian candidates for the next NSA director, the former official told The Hill. A separate military officer would head up Cyber Command, a team of military hackers that trains for offensive cyberattacks and protects U.S. computer systems.

The administration might also decide to have two military officers lead the two agencies. 

The fact that the administration is considering whether to split the commands isn’t a direct response to the revelations about the NSA’s surveillance operations, but it does reflect growing concern over the power of the NSA director and a shortage of oversight of the position."

I'm pretty skeptical about the last part: As I argued in my last post, it is preferable to allow Cyber Com to flourish without being tainted by the same controversy that surrounds the NSA and Gen. Alexander himself. But, one cannot expect the administration to admit that they share this perspective. And anyway, keeping Cyber Com free of controversy isn't the best (let alone the sole) argument for separating it from the NSA: I think Jason Healey has the right perspecitve:

"[Cyberspace] is too important to grant one person have a near-monopoly on threat intelligence while simultaneously conducting active espionage, directing military force, and advising on policy...Yes, General Alexander is a cyber expert and an intelligence hero whose work has saved hundreds of American lives. But this does not make him irreplaceable. The U.S. military has had generals in charge of combined offensive and defensive joint cyber commands since 1998; fifteen years should be enough time to develop a sufficient bench."

All things considered, there are still some larger issues at stake here, and the biggest is whether cyberspace is truly a military domain at all. Making it a separate combat command means that we are acknowledging that cyberspace is already a domain of warfare, and there are plenty of people prepared to argue against that assumption. Indeed, cyber espionage and IP theft are arguably the most exigent concern for policymakers right now, and those are not military concerns.

Questioning the "big scary number" approach to Somali piracy

After all the cyber talk that permeates this blog, it's time for me to turn my attention to something else. Arbitrarily, I choose...Somali piracy.

Actually, not so arbitrarily: The World Bank and the United Nation Office of Drugs and Crime have just put out a brand-new and eye-opening report on the financial costs of Somali piracy to the world economy. Much like recent reports on the cost of Intellectual Property theft in cyber space, this report provides policymakers with some enormous dollar values to quote in Congressional/Parliamentary testimony: According to UN data, pirates operating off the coast of Somalia and the Horn of Africa received $400 million USD in ransom payments between 2005 and 2012, and the total costs of piracy to the global economy (in terms of trade costs and countermeasure spending) so far have reached $18 billion USD. Those are the kinds of "big scary numbers" that are meant to spur action, and naturally imply that anything and everything we're doing to stem the "piracy tide" right now is inadequate. In other words, garden-variety alarmism.

This fellow here earned $10 million USD by capturing this beached ship, armed only with his trusty (and rusty) AK. Oh, and tourism on this beach decreased 60% by the following month.

The problem with studies like this - and numbers like the ones quoted above - is that one must always have a good idea of how the costs were calculated, and be ready to ask hard questions about where those numbers really originated. Whenever someone attempts to put a solid dollar value on the economic costs of some type of transnational criminal activity that's blowing up news headlines and Twitter feeds, it's not uncommon to find that there's a serious attribution problem going around. For instance, the Obama administration has been fond of claiming that cyber-crime costs the global economy $1 trillion USD, with intellectual property theft taking $250 billion USD out of the U.S. economy. As it turns out, those numbers came from misinterpreting a 2009 McAfee report whose authors have denied that they ever intended to make such an unsubstantiated claim. (And now an obscure cybersecurity consulting firm, which I discussed in another post, is playing the "big scary number" game in a desperate publicity stunt by claiming that cyber theft costs us $5 trillion per year.)

Then there are the methodology issues. Ostensibly, this is where my previously used cyber espionage cost analogy falls apart: It is, after all, much easier to count ships hijacked by pirates and tally up the cost of each ransom paid, whereas the costs of cyber IP theft is far, far more difficult to quantify for a whole litany of complicated reasons. But actually, calculating economic costs of piracy poses it owns challenges: Witness, for example, last year's report by Oceans Beyond Piracy, which has been harshly rebuked by analysts at SomaliaReport. As SomaliaReport points out, OBP already revised their scary number for the costs of Somali piracy twice: First they estimated the cost at $7 to $12 billion USD, and then revised that figure down to $6.6-$6.9 billion. And this was deduced by lumping together government costs for security (a bill footed by taxpayers), elective insurance costs (passed on to consumers), and opportunity costs (i.e. declining tourism in neighboring countries like Kenya). SomaliaReport points out that this approach has serious flaws:

• The counter-piracy industry, which includes the hiring of private security contractors and installation of safety counter-measures on ships, is now an industry that brings in $52 million per month. Talk about economic stimulus; that's money going into local economies that OBP is ignoring!
• OBP's estimates of the insurance costs are just that...woefully inaccurate estimates, which is a huge problem given that insurance brokers do not tend to give out this kind of information.
• The tourism costs claim is just flat-out wrong; SomaliaReport points out that in the case of Kenya, which was OBP's most specific example, tourism increased by 32% in 2011 alone.
• There's also a lack of contextualization in OBP's report: They ignore, for example, the fact that $10-$15 billion was stolen from U.S. ports in 2003 alone, and 10,000 shipping containers get lost at sea every year due to stormy weather - losses that far outstrip Somali piracy.

"Captain, we've got a huge problem!""You mean the fact that we're listing to starboard and about to dump $20 million worth of cargo in the drink?" "No, sir, worse than that: there's a Somali pirate ship approaching from port!"

Given the controversy surrounding the Oceans Beyond Piracy report, I am inclined to approach this new study by the World Bank and UN with an equally skeptical eye, especially when I see their big scary numbers. Reading the methodology section of the report makes me suspicious about their findings because, as they admit, data is scarce, and their sources don't appear credible: Among others, they interviewed (1.) former Somali pirates, (2.) local law enforcement and military, (3.) piracy victims, (4.) local officials, and (5.) local banks. These are not sources I would expect to be either reliable or honest. They also use event data on piracy that also comes from the UNODC Counter-Piracy Programme, but I wouldn't trust them, either; they have motive to exaggerate the problem, given that the program reportedly has a budget of only $55 million.

Better analysts than myself will have to consider the new report on its merits, but as a rule, I think it's time that we admitted that big scary number studies of complex security issues are, by their nature, untrustworthy. Alas, we live in a policy-making world where sources are often not vetted for credibility, so I am expecting to hear some Senator or high-ranking military officer mention the $18 billion number in a future Congressional testimony within the next couple months. If I ever have a career as a management consultant or think tank analyst who puts out studies for government and public consumption, one of the cardinal rules of my work will be: "Thou shalt not make any preposterous claims backed by dubious big scary statistics."

Another thought for today...

I'm rarely inspired to "pursue greatness" (or whatever) by the self-help/inspirational articles I see circulated by people on my LinkedIn network, but there are occasionally diamonds in the rough. In today's feed, "Why Being a Perfectionist Can Harm Your Productivity" was one of those few articles that spoke to me. The title says it all: Perfectionism becomes a disorder when it becomes an impediment to completing a task. In my case, I have found that perfectionism often gives me a natural anxiety about even getting started. It's the reason that my professional journal contains countless ideas for paper topics that I have yet to pursue, and why I have often been unable to finish any project that doesn't have a deadline attached (i.e. papers for classes). I cannot count the number of times that I've done an examination of scholarship on a given topic in foreign policy, and I find myself obsessing over whether I am including enough (or all) of the most important preceding journal articles on the subject, lest I come across as ignorant of the debate. The single scariest thought to me in writing a paper is that I might not sound like an expert on something because I haven't read everything ever written about it, and I am not sure why I feel this way.

So, in my own (endless) pursuit of perfection, I suppose that I would do well to mull over this quote from David Burns quoted at the end of the aforementioned piece:

"There are two doors to enlightenment. One is marked, 'Perfection' and the other is marked, 'Average.' The ‘Perfection’ door is ornate, fancy, and seductive… So you try to go through the 'Perfection' door and always discover a brick wall on the other side… On the other side of the 'Average' door, in contrast, there’s a magic garden. But it may have never occurred to you to open the door to take a look."

And because I haven't quoted Shakespeare in a while...

"All lovers swear more performance than they are able, and yet reserve an ability that they never perform; vowing more than the perfection of ten, and discharging less than the tenth part of one."

Consider this blog my attempt at making peace with my inability to be perfect: It's better for me to be writing something rather than absolutely nothing.