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MasterCard, Visa plan group focused on security
March 08, 2014, 05:00 AM The Associated Press

NEW YORK — Visa and MasterCard are forming a group that’s intended to help the retail and banking industries come together on more-secure credit card payments.

Credit card breaches at Neiman Marcus, Target and other retailers have put a spotlight on the weak spots in the security of credit card payments.

Visa and MasterCard, which run the networks that carry the payments, said Friday the new group will include banks, retailers, the makers of credit card readers, and others with an interest in credit card security.

The group’s initial focus will be on chips embedded in newer credit cards that make them more secure. Those chips are optional for U.S. credit card issuers and retailers now, but changes in liability are going to make them nearly mandatory for retailers next year. However, some retailers have resisted the switch because they’ll be forced to buy newer, more expensive credit card readers.

Hackers stole the information for some 40 million credit cards from Target. While it’s not clear yet whether some of the new security measures, such as chips, would have prevented the breach, experts have said the chips make it harder for thieves to make counterfeit cards using stolen credit card numbers.

The new group will also look at other security ideas such as using one-time numbers to add a layer of security to online sales, and better encryption.

“One of the critical roles we play is to protect consumers and businesses against criminals and fraudsters,” said Chris McWilton, president of North American Markets at MasterCard. “Only through industry collaboration and cooperation will we address the real and immediate issue of security and maintain consumer confidence and trust.” He called the chip-embedded cards the “next step in these efforts, alongside enhanced security solutions for online and mobile channels.”

y of the details in Newsweek’s report are correct, including that he once worked for a defense contractor, and that his given name at birth was Satoshi. But he strongly disputed the magazine’s assertion that he is “the face behind bitcoin.”

“I got nothing to do with it,” he said, repeatedly.

Newsweek stands by its story, which kicked off the relaunch of its print edition after 15 months and reorganization under new ownership.

Since bitcoin’s birth in 2009, the currency’s creator has remained a mystery. The person — or people — behind the digital currency’s inception have been known only as “Satoshi Nakamoto,” which many observers believed to be a pseudonym.

Bitcoin has become increasingly popular among tech enthusiasts, libertarians and risk-seeking investors because it allows people to make one-to-one transactions, buy goods and services and exchange money across borders without involving banks, credit card issuers or other third parties. Criminals like bitcoin for the same reasons.

For various technical reasons, it’s hard to know just how many people worldwide own bitcoins, but the currency attracted outsize media attention and the fascination of millions as an increasing number of large retailers such as Overstock.com began to accept it.

Speculative investors have jumped into the bitcoin fray, too, sending the currency’s value fluctuating wildly in recent months. In December, the value of a single bitcoin hit an all-time high of $1,200. It was around $665 on Thursday, according to the website bitcoincharts.com. Bloggers have speculated that bitcoin’s creator is worth hundreds of millions of dollars in bitcoin.

After Newsweek posted the story on its website early Thursday, Nakamoto said his home was bombarded by phone calls. By mid-morning, a dozen reporters were waiting outside the modest two-story home on the residential street in Temple City, Calif., where he lives. He emerged shortly after noon saying he wanted to speak with one reporter only and asked for a “free lunch.”

During a car ride and then later over sushi lunch at the AP bureau in downtown Los Angeles, Nakamoto spoke at length about his life, career and family, addressing many of the assertions in Newsweek’s piece.

He also said a key portion of the piece — where he is quoted telling the reporter on his doorstep before two police officers, “I am no longer involved in that and I cannot discuss it” — was misunderstood.

Nakamoto said he is a native of Beppu, Japan who came to the U.S. as a child in 1959. He speaks both English and Japanese, but his English isn’t flawless. Asked if he said the quote, Nakamoto responded, “no.”

“I’m saying I’m no longer in engineering. That’s it,” he said of the exchange. “And even if I was, when we get hired, you have to sign this document, contract saying you will not reveal anything we divulge during and after employment. So that’s what I implied.”

“It sounded like I was involved before with bitcoin and looked like I’m not involved now. That’s not what I meant. I want to clarify that,” he said.

Newsweek writer Leah McGrath Goodman, who spent two months researching the story, told the AP: “I stand completely by my exchange with Mr. Nakamoto. There was no confusion whatsoever about the context of our conversation —and his acknowledgment of his involvement in bitcoin.”

The magazine pulled together its thesis on the creator’s identity by matching Nakamoto’s name, educational history, career, anti-government bent and writing style to the alleged creator of bitcoin. It also quoted Nakamoto’s estranged wife and other family members who said they weren’t sure he is the creator.

Several times during the interview with AP, Nakamoto mistakenly referred to the currency as “bitcom,” and as a single company, which it is not. He said he’s never heard of Gavin Andresen, a leading bitcoin developer who told Newsweek he’d worked closely with the person or entity known as “Satoshi Nakamoto” in developing the system, but that they never met in person or spoke on the phone.

When shown the original bitcoin proposal that Newsweek linked to in its story, Nakamoto said he didn’t write it, and said the email address in the document wasn’t his.

“Peer-to-peer can be anything,” he said. “That’s just a matter of address. What the hell? It doesn’t make sense to me.”

Asked if he was technically able to come up with the idea for bitcoin, Nakamoto responded: “Capability? Yes, but any programmer could do that.”

The nearest Nakamoto has come to working on a financial system, he said, was a project for Citibank with a company called Quotron, which provided real-time stock prices to brokerage firms. Nakamoto said he worked on the software side for about four years starting in 1987.

“That had nothing to do with skipping financial institutions,” he said.

Nakamoto said he believes someone either came up with the name or specifically targeted him to be the fall guy for the currency’s creation.

He also said he doesn’t discuss his career because in many cases, his work was confidential. When he was employed by Hughes Aircraft starting around 1973, he worked on missile systems for the U.S. Navy and Air Force.

He said he also worked for the Federal Aviation Administration starting around 1999, but was laid off following the Sept. 11, 2001 attacks.

Getting hired by a military contractor was the reason he applied for and received American citizenship. He decided around that time to change his name, adding “Dorian Prentice” to Satoshi Nakamoto, partly to sound more Western. He said he picked “Dorian” because he says it meant “a man of simplicity” and referred to the ancient Greek people. “Prentice” alluded to his affinity for learning, he said.

As he pored over the Newsweek story with a reporter, Nakamoto repeatedly said “oh jeez,” as he read private details about himself, quotes from family members and even specifics from his medical history.

“How long is this media hoopla going to last?” he said.

 

 

Tags: nakamoto, bitcoin, credit, security, retailers, newsweek,


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