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Apple’s new phones, Bitcoin growth, and Equifax’s enormous data hacking and what you and I can do about our new vulnerability

I apologize. Today’s blog is long, but important. I compare the new iPhones. I warn against Bitcoin and ICOs (initial coin offerings) and I have some ideas about the disaster called Equifax and its 143 million records (yours and mine) that were hacked.

Apple’s new iPhones

I’m not blown away with Apple’s new iPhones — the 8, 8 plus and X.

But they’ll sell  and Apple’s stock will continue to rise. I remain a holder and a buyer.

The key takeaway: Everything about the new iPhones is better, faster and prettier (i.e. screens).

I’ll probably get the plain iPhone 8, not because I’m cheap. (I am.) But I simply don’t savor carrying the big bulky 8 plus and X around. I don’t need a laptop in my pocket.

I stole comparisons from Apple’s Web site:

ApplePHones1ApplePHones3 ApplePHones2

The BIG difference between the models is the pixel count. The iPhone X has 2.74 million pixels, the iPhone 8 plus has 2.07 million and iPhone 8 has one million, the same as the iPhone 6 which I have. To figure which one you want, you need to check the screens out side-by-side in a local Apple store.

I’m not considering the new Samsung phones — not because they’re bad. They’re not. They’re great. But because everybody in the extended Newton family has an iPhone and that means Facetime and the Photostream, on which I receive daily updates on my grandchildren’s every breath. Those are key to a doting grandfather’s life.

Important, but unmentioned at Apple’s lovefest yesterday:

+ The iPhone is, at heart, a phone. The 8, 8 plus and X,  may be better phones. But they don’t seem to be. That obviously depends on carriers, like Verizon, AT&T, T-Mobile. The next generation of faster cellular speed is called 5G. When we’ll see it, who knows. Sometime around 2019, I’m guessing.

+ The new iPhones are powered by a much faster microprocessor, called the A11. That will be great for photographs and gaming. But faster for emails, texts, etc.? Again that depends on the carriers. And that miserable bunch were all conspicuously absent from Apple’s lovefest yesterday.

+ Whichever phone you use — iPhone or Samsung — make sure that you have Wi-Fi Calling turned on. That’s the major way to improve your smartphone calls today. Perhaps the only way. Wi-Fi Calling works fine on most older phones — like all 6 and 7 models. Without Wi-Fi calling, cell phone calls would sound like they did ten years ago — screechy, droppy, non-existent, yuchy.

Apple’s phone comparisons are here.

Equifax should close or be closed.

Remember the Enron mess? Enron’s auditor Arthur Anderson was convicted of obstruction of justice for shredding and doctoring documents related to Enron audits. Afterward, Andersen told the SEC it would cease auditing public companies. And it went out of business.

Equifax reports a enormous data breach impacting up to 143 million people — the largest ever. Guess which data was grabbed by the hackers? Social security numbers, birth dates, drivers licenses, credit card numbers, home addresses, credit card history. In short enough information on you and me to steal our identify, steal money in our bank accounts and borrow money in our names. A total disaster.

What can we do? Basically nothing. Except, CHECK. CHECK. CHECK.

My motto says check every email or paper mail from every bank, credit card company or mortgage company in your life. Don’t respond to anyone’s offer to help. Think Hurricane Harvey and how many scams that produced. This will be larger. Several companies have already offered to “help” me.

Don’t respond to any Equifax offers to help. This is a company with zero morality and even fewer skills. What other conclusion can we come to from Equifax allowing their executives to sell their Equifax shares after the 143 million record breach, but before it was publicly revealed. If this isn’t insider trading, tell me what is.

Here’s the last five days in Equifax stock:


Equifax has now become the classic cockroach stock. I bet it will halve (i.e. drop to under $60) before this mess is finished.

What’s happening with bitcoin?

Yesterday CNBC asked the famed investor Julian Robertson, 85,what he thought of bitcoin? He said he hadn’t a clue. A week ago, Robert Shiller said bitcoin is the ‘best example right now’ of a bubble. Jamie Dimon called bitcoin a “fraud.”

China has banned future ICOs — initial coin offerings. An “initial coin offering” or ICO lets investors buy an entry in a computer ledger issued by a startup. In return, they do not get equity in the company, butthey get the wild hope that the “coin” will eventually rise in value. ICOs have already raised more than $2 billion.

The Economist has just done a piece:

ICO stands for Investor Caution Obligatory
Regulators signal alarm at a frenzied investment craze

HERE is the deal. You can buy an entry in a computer ledger issued by a startup company on the basis of an unregulated prospectus. It is called an “initial coin offering” or ICO. But though the ledger entry is called a coin, you cannot spend it in any shop. And whereas the use of the term ICO makes it sound like an IPO (initial public offering), the process whereby a firm lists on a stockmarket, coin ownership does not necessarily get you equity in the company concerned.

This sounds like the kind of bargain that would appeal only to people who reply to e-mails from Nigerian princes offering to transfer millions to their accounts. But ICOs may well be the most popular investment craze since the dotcom boom of 1999-2000; even Paris Hilton, a celebrity heiress, has jumped on the bandwagon. The list of active, upcoming and recent ICOs on the website “ICO alert” covers 31 pages of A4 paper and includes around 600 companies. More than $2bn has been raised in total.

There is a serious side to the craze, just as there was with the dotcom boom. The technology that underpins digital currencies-the blockchain-is an important development. This is a secure, decentralised ledger that everyone can inspect but that no single user controls. It seems likely to be adapted for use across the financial system-to record property transactions, for example.

Many ICOs are designed to finance applications that will make use of the blockchain-for trading currencies, lending money or searching for jobs. In some cases, the “coins” can be exchanged for services on the site. In a way, this is like selling air miles in a startup airline; investors can either use the miles for flights or hope they can trade them at a profit. For the business, it is also a way of creating demand for the product they are selling.

But in plenty of cases, an ICO is just a way of raising capital without all the hassle of meeting regulatory requirements, or the burden of paying interest to a bank. Businesses are able to achieve this feat because investors hope that the coins will rise rapidly in value, as has been the case with bitcoin or ethereum, the best-known digital currencies, which have seen stellar gains in the past year. Nothing makes individuals more willing to take risks than the sight of other people getting rich.

But bitcoin is also different from ICOs. Its appeal is as a digital currency that can be used in a broad range of transactions. And the supply of bitcoin is designed to be limited, meaning some people regard it as an electronic version of gold.

So there is a chance that bitcoin or ethereum will come into widespread use, although their function as a means of exchange is undermined by the volatility of their price. Currencies must be stores of value, at least in the short term. If you think a digital currency is going to rise 20% tomorrow, you won’t want to swap it for goods and services; if you think it is going to fall 20% you won’t want to accept it.

It is also worth remembering that governments set the rules regarding the nature of legal tender within their borders. They will always have the whip-hand when it comes to issuing currency. If they believe that a digital currency is being used for widespread tax evasion, or is distorting the financial system, they will crack down hard.

As far as business-related ICOs are concerned, a few may succeed. Investors may well be taking the “lottery ticket” approach, hoping that one big winner will offset a large number of losses. In a sense investors are acting like venture capitalists. But the sultans of Silicon Valley’s VC industry insist on a wide range of rights before they invest their capital, including protection against dilution of their stakes and (sometimes) the right to nominate board members. Investors in ICOs have nothing like that level of protection.

In the circumstances, it is hardly surprising that regulators are getting involved. In America, the Securities and Exchange Commission has ruled that these coins may, in some cases, be securities and thus subject to regulation. A British regulator, the Financial Conduct Authority, this week warned investors about the risks involved. The Chinese authorities have gone a lot further, declaring that ICOs are simply illegal.

It is not easy to draw a line between financial innovation and reckless speculation. Perhaps an ICO will finance some breakthrough that boosts economic efficiency. If you work in the tech sector, you may be able to spot the occasional grain of wheat among the pile of chaff. Everyone else should assume that ICO stands for “It’s Completely Off-limits”.

This week’s New Yorker column called Brave New World Dept. has this:

A Bitcoin A.T.M. Comes to a New York Deli
Coinsource persuaded the owner of Mario’s Gourmet Deli to give the new machine a try.

A bitcoin A.T.M.-a machine with the body of a regular A.T.M. but the soul of a lottery terminal-was recently wheeled into Mario’s Gourmet Deli, on the corner of Amsterdam Avenue and 106th Street. Mason Yang, an A.T.M. technician wearing a jade stone around his neck and black latex gloves, was pushing the handcart; Josiah Hernandez, the chief strategy officer of Coinsource, which owns and operates a hundred and twenty-seven bitcoin A.T.M.s nationally-making the company the market leader-held open the door. He had a Ferrari-branded bag over his shoulder. The two young men had been discussing a news story: in South Texas, a technician had locked himself into a space behind a bank’s A.T.M.; he had eventually been rescued after pushing a handwritten note, pleading for help, through the machine’s receipt slot. “Someone actually stopped!” Yang said. “In New York, no way someone would stop, no way.”

At the back of Mario’s, past the grill, there were a few shelves of groceries and a conventional A.T.M. Coinsource, fast expanding in the city, had persuaded the store to add a second machine, but the man behind the counter hadn’t been told, and was bemused. He called his boss. Hernandez and Yang waited. Yang said he was disappointed that the unlucky technician in Texas had remained anonymous. “I’d release my name if I got locked into an A.T.M.,” he said.

A Coinsource A.T.M. accepts dollars and in return adds the bitcoin equivalent (less Coinsource’s seven per cent) to a customer’s digital wallet. A year ago, one bitcoin was worth six hundred dollars. This summer, the value passed four thousand dollars. Coinsource’s typical customer, Hernandez said, was someone of modest means, with limited or no access to traditional banking, making an experimental investment of twenty or thirty dollars. “With a Lotto ticket, it’s a very binary outcome,” he said. “This leads to something less binary.”

Kalpesh Patel, the owner of the deli, and of two others, in Brooklyn, arrived. He explained that a manager who was away that morning had made the Coinsource decision. Patel was good-humored but skeptical. “It’s legal, right?” he asked.

Hernandez promised that it was.

“You’re going to pay now?” Patel asked. A typical convenience-store A.T.M. pays a commission on transactions, but Coinsource pays a flat monthly fee that starts at three hundred dollars.

“I can get it today,” Hernandez said.

“No contract, right? Month by month?”

Hernandez told Patel that his manager had, in fact, signed a contract: “It’s very basic, it’s one page.”

“Is it legal?” Patel asked again.

They agreed that the new machine should go alongside the existing A.T.M. Patel asked an employee to clear the shelves that it would be blocking; the man grumbled as he dropped ramen and cans of soup into milk crates. “And maybe move the Goya a little bit?” Hernandez said, referring to jars of adobo seasoning. The man didn’t reply.

Yang used to be the head teller in a bank. “They’re taking away human banking even though they’re trying to promote human banking,” he said. “So I thought, Why not be a technician, fixing the machines?” It was important to know how to repair machinery, “in case the world goes bad, and ends,” he said. He turned his baseball cap to the back and took out his drill. “I always drill these into the ground. Even if the store owner says no, don’t do it, I strongly advise them. Because New York never sleeps.” He drilled, at first cautiously, through terra-cotta tile.

Fifteen minutes later, the machine was ready to be turned on. A line of text on the screen read “The last attempt to resume the system from its previous location failed. Attempt to resume again?”

“A software issue, yes,” Hernandez said. Customers reached around him for tuna fish.

He needed to press Enter, but to do that he needed a keyboard. Patel didn’t have one. Hernandez and Yang discussed whether RadioShack still existed. Hernandez asked, “You think a GameStop would have one?” He called; they didn’t.

Hernandez went outside. Across Amsterdam Avenue, there was a branch of La Nacional, the money-transfer chain.

“How’s it going?” Hernandez asked a clerk, through glass. “Weird question, is there any chance I could use your keyboard for five minutes?”

The woman looked apologetic.

“I could pay you. For five minutes. It’s right across the street.”

“No, I don’t think so.”

“I understand, I understand,” Hernandez said. But, once more: “It’s an A.T.M. that’s broken, I need to fix it, but I need a keyboard to fix it.”

She shook her head.

“Lo siento, lo siento,” he said. “Gracias.”

She buzzed him out the door. “So close and so far,” he said quietly.

Favorite Warning Labels:

Marks & Spencer Bread Pudding: Product will be hot after heating.

Nytol sleep aid: May cause drowsiness.

Japanese food processor: Not to be used for the other use.

Sainsbury’s peanuts: Warning: contains nuts.

Korean kitchen knife: Warning keep out of children.

Helmet mounted mirror used by us cyclists: Remember, objects in the mirror are actually behind you.

New Zealand insect spray: This product has not been tested on animals.

Cardboard windshield sun shade: Warning: Do Not Drive With Sun Shield in Place.

Bottle of shampoo for dogs: Caution: The contents of this bottle should not be fed to fish.

Hair Dryer. Do not use in shower.

Hand-held Massaging Device. Do not use while sleeping or unconscious.

Pair of shin guards made for bicyclists. Shin pads cannot protect any part of the body they do not cover.

13-inch wheel on a wheelbarrow: Not intended for highway use.

Can of self-defense pepper spray. May irritate eyes.

Toilet bowl cleaning brush. Do not use orally.

Harry Newton, who took this cute photo last week of granddaughter Sophie, 3, dressed for her first day of school. Camera: Canon G5X. Still my favorite camera.


Anyone who has a grandkid roughly this age, you’ll be pleased to know that Newton Enterprises (i.e. me) is marketing a pill — called Stay Forever Young — which keeps grandchildren at this glorious age forever. It’s made from the retinal gland of a rare Australian jellyfish. Stay Forever Young is  completely safe, completely unregulated and marketed as a dietary supplement. There are no long-term effects that we’re willing to disclose, because we can’t disclosed them. Equifax’s auditors shredded all our research studies. We will take bitcoin and real cash, i.e. U.S. dollars. Send unmarked cash in unmarked brown paper bags.

P.S. Sophie’s school does not accept bitcoin.

  • donald l boyd

    Do not forget # 4. Innovis!

  • JimBobToo

    I’m all in on the SFY supplement. Are you offering any Grandparent’s special?

  • Lucky

    EQUIFAX…being old and retired I do not expect to need anymore credit checks so I simply froze both Equifax and Esperion accounts at a cost of $5.00 each. I was not able to freeze Trans Union, however, I was able to set-up an automatic notification of anyone seeking my credit information. If I ever have a need in the future I am supposed to be able to UN-freeze the accounts for another $5.00 charge. Hopefully this will prevent anyone from getting a mortgage on any of my properties…or whatever else the bad guys try to do.