Aadhaar and signing a blank sheet of paper redux

The Aadhaar abuse that I described a year ago as a hypothetical possibility a year ago has indeed happened in reality. In July 2017, I described the scenario in a blog post as follows: That is when I realized that the error message that I saw on the employee’s screen was not coming from the…

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In the sister blog during December 2017 and January 2018

The following posts appeared on the sister blog (on Financial Markets and their Regulation) during December 2017 and January 2018. Regulation as Pigouvian stealth taxation Financial Crisis and Response History Why Intel investors should subscribe to the Linux Kernel Mailing List or at least LWN (Cross-posted on this blog as well) Madness on both sides…

Why Intel investors should subscribe to the Linux Kernel Mailing List or at least LWN

On January 3 and 4, 2018 (Wednesday and Thursday), the Intel stock price dropped by about 5% amidst massive trading volumes after The Register revealed a major security vulnerability in Intel chips on Tuesday evening (the Meltdown and Spectre bugs were officially disclosed shortly thereafter). But a bombshell had landed on the Linux Kernel on…

In the sister blog during August-November 2017

The following posts appeared on the sister blog (on Financial Markets and their Regulation) during August-November 2017. Large asset auctions: Russian versus East Asian models The Indian retail credit boom Bitcoin as a way to short bad things Building credit bureaus that have no personal information (Cross-posted on this blog as well) Credit bureaus as…

Building credit bureaus that have no personal information

In two blog posts (here and here), I have argued that in an era of widespread hacking, the credit bureau’s business model is unsustainable because it requires storing enormous amounts of confidential information on tens of millions of individuals who are not even its customers. However, these bureaus serve a useful function of aggregating information…

In the sister blog during January-July 2017

The following posts appeared on the sister blog (on Financial Markets and their Regulation) during January-July 2017. Equity Derivatives versus Cash Equities in India The SEC and The DAO Libor and Nash Equilibria Why Aadhaar transaction authentication is like signing a blank paper (Cross-posted on this blog as well) Secret deals between exchanges and traders:…

Why Aadhaar transaction authentication is like signing a blank paper

Using Aadhaar (India’s biometric authentication system) to verify a person’s identity is relatively secure, but using it to authenticate a transaction is extremely problematic. Every other form of authentication is bound to a specific transaction: I sign a document, I put my thumb impression to a document, I digitally sign a document (or message as…

The blockchain as an ERP for a whole industry

In the eight years since Satoshi Nakomoto created Bitcoin, there has been a lot of interest in applying the underlying technology, the blockchain, to other problems in finance. The blockchain or the Distributed Ledger Technology (DLT) as it is often called brings benefits like Byzantine fault tolerance, disintermediation of trusted third parties and resilience to…

In the sister blog during September-December 2016

The following posts appeared on the sister blog (on Financial Markets and their Regulation) during September-December 2016. Financial crises prior to the typewriter Euro Introduction as Demonetization A digital device for every Indian More on cash alternatives Cash and credit redux Why not a helicopter drop of new rupee notes? It is not money but…

How to make the banks paranoid about security?

(Cross posted from my Financial Markets Blog) All online businesses are highly vulnerable to hacking, but the business response to this threat ranges from paranoia to complacency. Banks are among those that are most complacent, and there is a lot that regulators can and should do to change that. Let me start with an example…