iTunes Gift Certificates Reverse Engineered
A Chinese website is selling iTunes gift cards that are worth up to $200 for as low as $3.
How is this possible? Chinese hackers managed to reverse engineer the algorithms responsible for creating iTunes voucher codes, creating fully legitimate codes that are redeemable via the iTunes store into a customer's account. The hackers have now made key generators to actually create the codes on the fly. Unfortunately for them, the codes only work in the U.S. iTunes store.
Which is why the codes are now being sold on Taobao, the largest auction site in China.
At this time, Apple hasn't made any public comments on the situation, most likely because its working on a solution to invalid the codes. Unfortunately, the codes are legitimate and are based on Apple's own algorithm for generating codes, so any attempt to alter the codes would potentially hurt all the existing cards in stores.
The cards are now starting to also appear on eBay, but for much more--around $40 for a $200 card.
What do you think of the situation? Do you feel that $0.99 is already a fair asking price for a single song and that the hackers are stepping way out of line?

You are so damn right
I bought "Revolutionary Vol.2" for $12, and it had 18 songs on it. That's less than $0.67 per song, not including the art that went into creating the case, and the fold out pages with lyrics. Not to mention the fact that the quality is much higher and that I can rip it into any format of my choice.
$0.99 for some relatively low quality file seems like a huge rip to me.
Why don't they use their skills to create something useful?
But seriously though, Chinese hackers can reverse engineer anything these days! It's only matter of time until they crack other, more serious things too...
-> http://www.securityfocus.com/brief/711
I bought "Revolutionary Vol.2" for $12, and it had 18 songs on it. That's less than $0.67 per song, not including the art that went into creating the case, and the fold out pages with lyrics. Not to mention the fact that the quality is much higher and that I can rip it into any format of my choice.
$0.99 for some relatively low quality file seems like a huge rip to me.
Anyone else old enough to remember "them" telling us that CDs were going to eventually sell for $5 each because they'd be cheap to replicate, etc, etc? Well the record companies kept the prices up all these years to keep profits high. They got what they deserved when file sharing took off, and I think that Apple is seeing the business end of the whip, too.
When you run a business, there's always a point where you must change or die. Basically, you adapt to the market, or you close up and fail. It's time for change... higher bitrates, lower prices... whatever. Change, or fail.
You are so damn right
At 99c, I think i'll get my music "elsewhere".
hehehehehe
Here I've googled it for you all: http://tinyurl.com/chtc8s
Decent hardware, but their "image," is trite and haughty, just like many of their user base. Better or worse, Apple will always be alive and well b/c there's too many people that wanna pretend to be "better" or more "informed" than the rest of "us." Go APPLE! HAHAHA
Nagh you forgot another option: Change, Fail... or CONTROL the "market!" Control it and thus you have no reason to "change," even if that's what the consumers demand/need/everyone would benefit from. The RIAA/MPAA are trying their best to maintain CONTROL Vs change. "Change," scares big business, and COSTS them "PROFIT." lol... They'll resist change as long as they can maintain control... same old news.
Next would be the Credit Card banks. They are actively suppressing the independent security research on RFID credit cards. Before you know someone will put small device next to the door of the big store and copy everyone's card even if it is into their pocket. That is what happens when our politicians votes for laws that protect old dinosaurs.
While I agree Apple shares some of the blame for using an algorithm alone (versus an algorithm for 'fast processing' followed by verification in a database), it does not make the criminal act any less so. If you walk into a convenience store and do not see an attendant, it does not mean you are free to grab whatever is close by and leave legally.
As to the price per song, that's a bit more complicated. The lack of physical media and warehouse/distribution chains reduce costs, but maintaining servers and paying bandwidth probably eat much of that up. Thus, for individual DRM-free songs I think $0.99 is reasonable. If you buy a whole set of songs at the same time, it should cost no more than the marketed package (either the cost of the CD or the multi-CD set at MSRP). For songs with DRM on it, the $0.99 price should be reduced to reflect the restricted nature of the product.
Would I pay $0.99 per song? No. I believe that the artists of the songs should be the main recipients of the income, much in the same way that I believe that farmers should be the recipients of the cost of food I purchase. Next should come the retailers of the product who act as "intermediary" purchasers - sine they should assume a risk if the product does not sell. Last should come the supplemental manufacturing chains - such as the studios that maintain the costly equipment to record the songs and pay the engineers to make it sound perfect. The current system does not support this pricing structure.
Of course, the RIAA tactics have prevented me from buying music for several years. I will not buy original CDs, used CDs (which helps drive the original CD markets), or digital songs due to what I view as criminal extortion (the 'settle for $3k or we'll sue and cost you more than $3k in legal fees' tactic). Honestly, its not all that bad - I've rediscovered the pleasure of reading again... that, and I now have time to come to Tom's and post!
Don't know what they were thinking at Apple, but, relying on an algorithm to verify authenticity of a code, but not to check them up from a database called for the trouble. It's plain stupid.