Smart phones were designed to spy on you. Standard windows boxes are easily infected. According to McAfee any of the free porn sites will infect you with a key logger. He suspects the hackers behind this are waiting to commit a big score rather than dribble hack everyone to death to avoid security measures being implemented before they can pull much money.
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I'm John McAfee I have no I have no clue what I'm going to talk about today I've spoken to many of you starting last night at at the dinner and what I thought I might talk about I think it's totally lost now based on the input that I've received from from any of you what I'd really like to talk about is my traveler's guide to Central America because that was suggested by a couple of you but I will not since it sounds inappropriate so I want to talk about security and security i think is something very very germane very central to every aspect of the block chain and a Bitcoin and and here is why if you if you're a hacker and you're stealing information up to this point you have had to find a third party to sell that information to and depending upon the type of information the third party a pool gets smaller and smaller if I'm stealing the design for a new stealth bomber from the Pentagon then who are my potential buyers is a very slim pool it's a very risky thing to do so information it has valuer has had value based only on who it could be sold to and what the information was on stealing a bunch of passwords then I've got to use those some Russian hacking pool that's going to put them up on the the dark web and we'll sell you a hundred thousand passwords for a thousand dollars or whatever the prices but what about bitcoin bitcoin is the information is it not it the value of the information is inherent in the information itself they want a boon to hackers now what has happened so far has been trivial I promise you to what is going to be happening very soon because hackers do one thing very well they sniff out their target they study their target they analyze their target and when they strike they strike in a very big way you've had a few big strikes already the third largest Bitcoin exchange nearly 100 million dollars is out the window the Dow 65 million dollars even though that was unwound through a hard fork which I totally disagreed with by the way there are some thinkers in the room I love that so it's going to get worse and worse and worse and what we have not seen yet and that does not mean it has not happened is we have not seen the individual users wallets hacked now had it happened how are we ever going to find out and we were in an anonymous field now are we not it's not like that someone's got a good god forward five that find lost five thousand dollars in bitcoins where did it go well it could have gone anywhere if I we're looking at a number of potential alt currency exchanges for possible acquisitions so I've been spending a lot of time converting bitcoins to a theory amanda theorem to dow and steam and you name it i frequently will lose three to four thousand dollars in one night simply because i'm tired think about that no really so when you're doing a currency exchange you've got your bitcoin wallet you've got to exchange wallet and then you've got you receive wallet in whatever currency it's going to be let's say it's it's athyrium so I've got three things I've gotta juggle and after I've done this a hundred times my brain gets juggled trying to get my wallets confused and then what happens that money disappears well it doesn't actually disappear the exchange is usually the beneficiary but I there's no way to recover this no way so and if I can lose the money I promise you other people can too so that's one thing and that's that's losing it through stupidity but I think what is far more serious is losing it through hacking and how does that happen I know people especially in California a lot of strange people in California they have a hundred thousand dollars or more on their smartphones wherever my smartphone is I know I have one anyway a hundred thousand on a smartphone and they said well i'm using i'm using of the mycelium wallet then it's secure over the secure give me your phone number and in five minutes i will have all of your bitcoins now you think that's that's bragging it is not how do you do it there are at least a hundred million telephones in this world that have spyware on it including keyloggers how do you get that has anybody ever visited a porn site none of the people here good but those outside who have I promise you I don't care which one you visited you have a keylogger on your on your phone how if it's an android the first thing that happens is when you when you first do a drive by the site it sets the download authorized applications flag on your phone the first click if you're having to see something that might be interested i think i'd like to watch that you now have the spyware on your phone you all do if you've been there know who's watching I have no clue Janice is there any water anywhere on that runs here sorry who's watching I have no clue but neither do you but whoever it is it's not anyone who has your best interests at heart and what can you do with that spyware well not just the key loggers but also screen capture so what can you do let's assume you've got the spyware and you have a whole group of hackers somewhere Russia the Ukraine China Kansas City I have no clue but there somewhere and they're monitoring all of these tens of millions of phones and suddenly you're into bitcoins new download my Sicilian wallet or some other wallet well what's the first thing that happens what are your seed keys where is it displayed now let's forget about encryption let's effect we get about how secure everybody says these wallets are to get your seed keys you have to read them from a screen do you not where is that screen is on your phone whereas that phone bin maybe to a porn site all right so now you have an infected device and someone is watching and they have a piece of software in their key logger who's that says wait for anybody downloading any one of these 25 wallets as soon as that happens get ready as soon as you run it it'll say the first screen it comes up we'll say do you want your seed keys yes no whatever as soon as that click happens the very next screen is captured those are your keys I now have your keys if it's me I'm not saying it's not me or it is me but of whoever it is has your seed keys what does that give them the power to do pardon take all of your money all the assets go yet I lost my wallet here's my seed keys we do it oh good lord I have a hundred bitcoins i forgot that i want them all now in fact convert them to my athyrium account immediately and i'm going to convert that to something else and pretty soon you can't trace it you will never find it and you will never recover it now has that been happening I don't know if it hasn't i would certainly be surprised but I promise you this just like a massive hack of an exchange or the dowel there will come one day where simultaneously everybody's wallets is emptied now then that will make the news but by then what it's too late because it's always too late when we find out about a heck the office of personnel management and America was hacked in 2015 by somebody who took the records of 23 million employees of every employee of the US government for the past 50 years including all of our top-secret cleared employees that hack began in 2013 was discovered in 2015 this is the problem and so why am I even into the Bitcoin arena number one because I see where we're all Karen seas are going crypto currencies are here to stay they will not go away it is Pandora's box for good or ill you will not shove this back in the box it does not matter what governments want to do and we all know what they want to do number one is collect taxes well that's really hard in the Bitcoin arena isn't it very difficult to do and some other currency is even more difficult but governments will have to bite the bullet eventually because you cannot suppress it it is like trying to suppress drinking alcohol no matter how illegal you want to make it people will drink alcohol or smoke weed or whatever it is they want to do and now that the box has been opened and we are using it it will not go away so it's here it's here to stay and I know that and I see that it will become if not Bitcoin it will be some old currency that will become the standard for the world at some point and I believe that will be at some point in the near future in its current state we will have chaos absolute chaos not because we don't understand it or we can't understand the math or it's not adopted properly no because there is no security whatsoever I started a very small mining pool in the state of Washington right next to a hydroelectric dam through my company MGT it's a very state-of-the-art facility is very small we have 400 s lines currently we will be upping that many times so currently read about five pet hash and why did I do that because mining is the record-keeping of Bitcoin it is the backbone there's not just the thing which spits out bitcoins it is the thing which keeps a tally and lets the math of this process unfold securely so we have to have mine now Bitcoin miners oh you think perhaps you are immune to hacking because you're a minor no absolutely not you might have a competitor I think there are competitors and these competitors might like to know exactly what you're doing exactly how many bitcoins is spitting out when what magic are you using and so on so the first thing I did is we rewrote all of the software everything because what is out there now I promise you I promise you is the most insecure piece of software I have ever seen it's got nothing to do with encryption it's got nothing to do with anonymity it has to do with a lack of knowledge as to how software interfaces with hardware and what is hardware hardware is your Ethernet connection it's your printer and in this day and age it might even be your refrigerator and don't laugh at this because just last week or two weeks ago the dyn was hacked and half of America's Internet simply disappeared you know who hacked it a collection of printers CCTV cameras refrigerators and routers why because they're now smart and they're connected to the Internet and there is no security for these things my biggest fear right now is not that someone is going to hack into a mining company or an exchange or whatever and take a few hundred million my biggest fear is that the people who created the software called me I by the way mm I Rai that goes out and finds these things as soon as he gets in it shuts down all of the communications so you can remove it the only way to remove it is to is to reboot the system and then within a few seconds re infected again why because every infected system has a log an entry in a massive database that the hacker maintains and says what for three seconds I haven't heard from this this refrigerator reinfected now Mariah was used specifically for one purpose that is d dos attacks distributed denial of service what if someone said I'm not interested in that I'm interested in mining bitcoins and it doesn't matter the thing is low power I have four point nine billion devices to work with that's how many were connected to the internet last year I suspect that number it has doubled next year it will certainly a double so maybe ten billion devices billion devices so I don't care about your asic processes you can sit there in process all day long it you know five pedda hash I've got 300 billion pedda hash out there why because it's a lot of computers and I've infected them all illegally and your computer on your refrigerator which is sending you emails once a week when you're on vacation the rest of that time its mining bitcoins for me excuse me now you're laughing at this but you see how trivial because this Mariah bot infects at a rate of about fifty thousand new devices per day fifty thousand I could own the Bitcoin world by sitting back in my room and paying no money and spending about a week recoding the more I bought and then have everybody mining bitcoins for me now is that illegal from Bitcoin Sam what it's not proof of work does not say you had to use of a bit main machine in a fixed location paying X cents per kilowatt-hour of you know being cooled but no it doesn't say anything like that it says proof of work did you get the nonce here it is thank you very much well I want you getting 10 per second what's that going to do it's going to change the economy isn't it so this is not pie in the sky paranoid thinking although I will not deny being paranoid it's impossible to be in my food you know seriously you can't be a computer security person and not be paranoid because what's the first thing I look at people people today at least 10 people said look at this new idea my first thing is not oh that's great my first thing is you know I can get in here I get over here and this doesn't work and 50 hacker is going to take all your money within 30 seconds that's the first thing that enters my mind because that is my job so I knew something for you to consider so wants to be done in my mining Center we have written our own software in addition we have a piece of hardware as I mentioned the the hack of the Office of Personnel Management started in 2013 it was discovered in 2015 that's typical you find out about hacks after everything is gone not when it first starts the dell the gentleman who came up for the clever idea of having recursive subroutines create child dowels I mean that seemed to be pretty legal according to the rules nothing happened until after he'd gotten 100 million dollars there's a little late don't you think so that's typical for all hackers why because hackers get into a system they don't immediately break into your network and steal all of your money that's impossible they first get in they then have to find out what's connected and what's connected might be a printer or refrigerator and by the way printers are the most insecure devices and the ones that most hackers use because they're so easy to break into and plant softer on once I've done it I've got somebody on the inside your printer is monitoring everybody else and telling me what's going on think about the Internet of Things so hacks don't happen instantly they come in they first find out what's nected they start sniffing around they start looking where's your password file where's your financial file where you are indeed file and so on takes months and sometimes yours so we have a device on our system and it's connected now called Sentinel which I designed and we created that plugs in right in front of your router and also you can plug it behind the router that sniffs everything that happens and within milliseconds of a hacker getting in we identify it not after he is broken in and after he's found your files and after he's figured out everything and then stolen your Bitcoin snow within milliseconds and we do it through anomalies I mean for example there are thousands of anomalies we look for plus there's artificial intelligence within the device an anomaly would be an IP address comes in and it immediately accesses every single device on the net well that's strange that's an anomaly if you're in finance you're not trying to find out what's happening on the rd computer does not happen so that's an example of the thousands of anomalies that we look for when an anomaly happens we immediately notify whoever like RIT RIT head you can do it through a DM or through email or what have you saying there's an anomaly here based on our analysis it looks like it might be Bureau 121 in Korea it's done this okay which of the korean national hacking group or based on our analysis we don't know but we do know a hacker is in within milliseconds then you can make a choice you can shut down port 80 or tue 23 or whatever he came in on or you can choose to do nothing but watch because i want to know if it's one of my competitors which one of you bastards is doing this so i can then but i have full control writing at that point slap honey pox honey pots all over the place that will keep you engaged for weeks trying to figure out what's really there i could call the FBI or the interpol and say look this is happening i could do any number of things or i could just get back to business shut you down shut down the port get your IP address and make sure anything else that comes from that area when I let you in so you now have control so you've known about this before anything happens so that's going to be on our mindful cool and by the way we as we announced last week we're doing a joint venture with bit main and they'll be using our facility in Washington with our security and our software as a joint venture pool and in fact I'm going of tomorrow to meet with ji hyun-woo and his full team in Miami that we met a few months ago in China when I was speaking in Beijing so this is what all of you're going to have to be doing otherwise you are opening yourselves up to a nightmare and people don't realize what a nightmare is even the most the things that you would think have no value Ashley Madison the Canadian company was hacked last year in twenty three or four million records of members that Ashley Madison is it was a dating site for married people looking to have affairs of interest is there were 20 no there's 27 million men and 12,000 women on that site and thousands of bots that were talking through email and DM with mail users thinking they were talking to women it's tragic affair and all those twelve thousand women 9,000 work for Ashley Madison so you know if you're a guy learned something from that anyway a hacker who happened to be a woman working for Ashley Madison posted all of those records on the internet there are at least 10 recorded suicides why because people took that information is to make money said for twenty-five dollars you can we will allow you to search the database to see if your husband or your wife is looking to have an affair they made a lot of money too so hacking is something that and by the way Ashley Madison no longer exists it's gone there was the three billion dollar your company that's no longer here you don't want to be that you don't to be Ashley Madison you don't want to to wake up some morning where the world is fine and our margins are high and everybody's rolling in dough and suddenly your company is gone and so is your reputation and you have shaken not just your company in reputation with the entire Bitcoin community and the price drops because really that's what will happen you have to take security seriously you have to it has to be in my experience it has to be the very first thing you think about because we're living in a dangerous world there has always been a dangerous role but it's more dangerous now because your enemies then the threats to your system are invisible and unknown enemies of your state if you if you have some enemies in the world and they have names that's pretty good you can watch them if you see them you can shut your door or pull out your gun or run or try to make friends with them again but what you do in the hacking world an invisible ghost trying to steal everything that you have and you have no way of even knowing that they are there that has to change you have to know that they're there the instant they arrive and you have to take precautions and I'm done let me take questions there's going to be questions out there yes sir well yeah education is one thing the question is that the one of the solutions and the gentleman said that certainly number one is education and that's correct but that's what's been happening up here in within the past 25 minutes as I've been trying to educate but beyond that you must take steps once you're educated to the fact that you're living in an insecure world and who your enemies may or may not be you then have to do something now I will make a statement with that will be unpleasant and unacceptable to many of you there will never be a software wallet that is secure it cannot happen never not as long as you're using mobile devices and why is that because mobile devices were not designed to secure you they were not designed to hide your location your friends your voice your image were they designed for that oh no they were designed for the opposite they were designed to spy on you but but not for bad purposes to know where you are who your friends are your contacts what color shoes you just purchased or sweater they're designed to turn on the microphone to listen to you so that they can make your life easier and instead of having to type you can dictate they were designed to turn on the camera and the video I'm sorry I'm running out of time okay here we go so no they are insecure devices designed to spy on you so that people can sell you shit as long as other people can can sell you things through it they can hack you through those same facilities so there won't be one hardware wallets that is the only way well I'm not gonna touting anyone but res r has one with its own screen you have to have a separate screen on the hardware device otherwise why bother keeping your coins in a hardware wallet when they have use where they have your seed keys through software anyway my apologies I ran over time sorry [Applause] [Applause] you
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