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All posts by Daniel Castro

Book Review of “Big Data: A Revolution That Will Transform How We Live, Work and Think”

There have been a number of attempts to chronicle exactly what is “big data” and why anyone should care.  Last year’s The Human Face of Big Data by Rick Smolan and Jennifer Erwitt focused on telling the personal stories behind big data (and accompanied these stories with some great photographs). The year before, James Gleick wrote The Information: A History, A Theory, A Flood which chronicled how information (and not just big data) has changed our world. The latest entrant is Big Data: A Revolution That Will Transform How We Live, Work and Think by Viktor Mayer-Schönberger and Kenneth Cukier which focuses heavily on explaining some of the more interesting impacts of living in a big data world. (Personally, I’m still not a fan of the term big data because 1) the term scares off people who think this is equivalent to “Big Oil” and 2) the term underrepresents the innovation happening around “small” data. But since this is the term used in the book, I’ll stick with it for this review.)

The first part of this book provides a fairly compelling vision of how big data is changing how

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Bitcoin "coin" with other currency

What is the tipping point for Bitcoin adoption?

I had the pleasure of participating in a debate on the merits of Bitcoin—the increasingly popular open-source, peer-to-peer, digital currency—on Russia Today’s Crosstalk last week. One of the guests on the show was dismissive of Bitcoin and basically called it a nerd’s fantasy that would never amount to anything. I understand why some people might think this. First, whether fair or not, Bitcoin has gotten a somewhat sullied reputation because of its use for illicit transactions, such as the online black market Silk Road. Second, the stability of Bitcoin has been called into question in recent months by the somewhat volatile exchange rates whose fluctuations have been driven by speculators. Third, previous efforts in this area—such as the start-ups DigiCash and e-gold—never amounted to anything. Finally, government regulators may try to shut it down—either directly or indirectly. Last month the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) issued new guidelines on virtual currencies which resulted in three U.S. exchanges for Bitcoin shutting down.

However, there are legitimate responses to each of these criticisms. Yes, Bitcoin is used for illegal transactions, but so are fiat currencies (and

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Attorney General Asks for More Tools to Combat IP Infringement

Yesterday the House Judiciary Committee held an oversight hearing where Committee Members grilled Attorney General Eric Holder on recent controversies. However, lost in the coverage of the heated moments and verbal slip-ups (including Rep. Gohmert’s gem that “The attorney general will not cast aspersions on my asparagus”), was an excellent exchange between Rep. Mel Watt and the Attorney General on the problem of copyright infringement and online streaming.

During this exchange, the Attorney General notes that the Department of Justice is limited in its ability to prosecute criminal organizations or terrorists who would use illegal online streaming to finance their operations and called on Congress to create stiffer penalties for these violations. Right now, the Department of Justice can only bring up misdemeanor charges for these violations. It’s worth remembering that Congress already tried to fix this loophole once. In 2011, Sen. Klobuchar introduced S. 978 which made it a criminal offense to engage in large-scale, for-profit piracy using online streaming. Opponents of the legislation launched an outlandish (but unfortunately successful) smear campaign in which it accused Sen. Klobuchar of wanting to put Justin Beiber in jail.

If you

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Caught on Camera: The Inconsistency of Privacy Advocates on Surveillance Technology

In the aftermath of the Boston Marathon bombing, we’ve seen a lot of discussion about the crucial role that the abundance of surveillance cameras and smartphones played in finding the suspects. The general consensus seems to be that these technologies were useful. For example, New York Mayor Michael Bloomberg said, “The Boston bombing is a terrible reminder of why we’ve made these investments—including camera technology that could help us deter an attack, or investigate and apprehend those involved.” And Chicago Mayor Rahm Emanuel similarly endorsed surveillance cameras when he said, “I will say, as I always have, because we have continued to put cameras throughout the city for security … purposes, they serve an important function for the city in providing the type of safety on a day-to-day basis—not just for big events like a marathon, but day-to-day purposes.”

Not surprisingly privacy advocates worry that such a high-profile display of the benefits of these camera systems will lead to more public acceptance and adoption, and so they are trying to minimize the value of these systems by arguing that this is a rare event. Jeff Chester, the executive director of

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How Did You Sign Your Taxes This Year? Not with an Electronic ID

I had the opportunity to speak at the Bahrain International e-Government Forum this year—an annual conference which promotes the development of e-government in Bahrain. As part of the event, numerous Bahrain government agencies participated in an expo where they showcased their latest e-government services. One of the most impressive aspects of e-government in Bahrain is its successful deployment of electronic IDs.

I’ve written quite a bit about electronic ID systems in other countries, the benefits that they provide, and how the United States can more aggressively pursue this goal. The ability to securely identify users is a prerequisite to many e-government and e-commerce services, and the lack of a common identity platform raises costs for both the public and private sectors who must establish their own one-off systems for identification and authentication. Given how much the United States has been lagging on this technology, it was a real pleasure to have the opportunity to visit a country that has implemented an advanced electronic ID system.

The smart card IDs in Bahrain replaced a paper-based ID card system developed in the 1980s. Cards are valid for five years, and they are

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Capitol Records v. ReDigi and Selling “Used” Digital Goods

I recently wrote about the potential impact on differential pricing caused by the Supreme Court decision in Kirtsaeng v. John Wiley and Sons which found that the first sale doctrine applies to copyrighted works lawfully made abroad. I noted in that article that since most digital goods are licensed, not sold, differential pricing is still possible for digital goods, but that licensing has had side effects, such as limiting the ability of consumers to resell their digital goods in the used goods market.

Generally, consumers are allowed to legally buy and sell used goods. For example, if you buy a music CD, you can listen to it as many times as you want and then, if you don’t plan to listen to it again and you haven’t made any copies, legally sell the CD. But the same isn’t true of digital goods that the consumer does not own but instead has only received a licensed to use.

For example, Amazon’s MP3 store license agreement includes the following restrictions:

“You must comply with all applicable copyright and other laws in your use of the Music Content. Except as set forth in

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Price Discrimination for Copyrighted Works Post-Kirtsaeng

The Supreme Court ruled 6-3 this week in Kirtsaeng v. John Wiley and Sons in favor of Supap Kirtsaeng, a college student from Thailand who was challenging a copyright infringement charge for textbooks he bought overseas and resold in the United States. The publishers argued that the first-sale doctrine, which allows legally-acquired copyrighted works to be resold without the permission of the copyright owner, does not apply to goods made abroad. The heart of the case depended on the court’s interpretation of the meaning of the term “lawfully made.” Does it mean “made in the United States” (i.e. where Congress has jurisdiction) or “made according to copyright laws” (i.e. not a counterfeit copy)?  Ultimately, the majority opinion rejected the geographical interpretation put forth by the publishers and found that the first sale doctrine applies to copies of copyrighted works lawfully made abroad.

The majority opinion acknowledged potential difficulties that could arise if it ruled in favor of the publishers, such as requiring libraries to get permission to lend books that were printed overseas or requiring owners of foreign-made cars to get permission from the copyright holders of the software in

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The Cost of Privacy: Netflix – Three Years & Three-Quarters of a Million Dollars

I’ve written before about how well-intentioned privacy laws and regulations can come at the expense of innovation and harm consumers (see here, here, and here), but there is not a lot of data available to show the exact impact. However, a new feature on Netflix provides a good case study of the impact on innovation of at least one of these privacy rules.

First, some background. Today, Netflix announced a new feature—“Netflix Social”—which lets users share the TV shows and movies they watch on Netflix with their friends on Facebook. As Cameron Johnson, the director of product innovation, at Netflix explains on the official Netflix blog:

By default, sharing will only happen on Netflix. You’ll see what titles your friends have watched in a new “Watched by your friends” row and what they have rated four or five stars in a new “Friends’ Favorites” row. Your friends will also be able to see what you watch and rate highly… You are in control of what gets shared. You can choose not to share a specific title by clicking the “Don’t Share This” button in the player.

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The FTC’s Top Consumer Priority Should be Identity Theft

The past two weeks have seen two important announcements come out of the Federal Trade Commission (FTC). First, Commissioner Edith Ramirez was designated to replace outgoing Commissioner Jon Leibowitz as Chairman. Second, identity theft has been reported as the top consumer complaint to the FTC for the 13th year in a row.

Why are these two announcements related? It’s simple. As Chairwoman Ramirez considers how she will lead the FTC throughout her term, it’s worth looking at where the FTC can help Americans the most, particularly in an era of limited budgets. And the most recent data from the FTC overwhelmingly shows that the top priority for the Commission should be on identity theft.

The latest data on identity theft comes from the FTC’s recently released Consumer Sentinel Network Data Book for 2012. The Consumer Sentinel Network (CSN) is a database of consumer complaints received by a variety of sources including the FTC, state law enforcement agencies, state attorneys general, the FBI, the Consumer Financial Protection Bureau, the U.S. Postal Inspection Service, and the Better Business Bureau. While there are limits to how the data should be used

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5 Q’s on Data Innovation with Sharon Biggar

Sharon Biggar is the CEO of Path Intelligence, a company which is bringing online analytics to the offline world by providing retailers with real-time intelligence about how people move within buildings. I asked Sharon to share with me her thoughts on how this type of data will improve offline experiences for consumers.

Castro: You have an incredibly novel product with FootPath.  Can you briefly explain what it does?

Biggar: FootPath enables retailers and malls to optimize their space to improve shopper profitability.  Until now it has been challenging for shopping centers and retailers to understand and quantify how shoppers moved through their physical spaces, but with our FootPath solution retailers and malls can understand how many shoppers there are, how long they stay and where they go within the mall or store. For example, if shoppers visit the menswear section do they also visit kids wear?  Or if they visit Gap do they also visit Sears?  What happens if the mall or store owner moves these products or stores, how do shoppers react?  Our solution helps retailers and malls to answer those questions.

Castro: What do retailers do with

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