Data is quickly becoming the currency of the digital society, of which we are all now citizens. Let’s call that “Digitopia.”
In Digitopia, companies and governments just can’t get enough data. There is real data obsession, which is directly leading to an unprecedented loss of privacy. And, that has been going on for a long time — certainly since 9/11. Now a backlash is underway with increasing signs of a groundswell of people wanting their privacy back. This privacy movement is about digital anonymity. It is real, and particularly acute in Europe. However, the extremely powerful forces of governments and corporations will fight the desire for personal privacy revanchism at every turn. What seems likely is that those with financial means (i.e. 1%-ers) will be at the forefront of demanding and retrieving privacy and anonymity; subsequently, anonymity could easily become the new luxury item. Ironically, digital invisibility could be the highest form of status.
Let’s explore what is creating the growing demand for a return to some anonymity. The main driver is the collective realization of just how vulnerable we all are to data breaches and snooping — thanks to Edward Snowden’s NSA revelations, Russian Cyber-Vor hacker gangs stealing passwords, Unit 61318 of the People’s Liberation Army creating all kinds of infrastructure, commercial and military mischief, the Syrian Electronic Army conducting cyber attacks, Anonymous, Heatbleed, Shellshock, Target and Home Depot credit card number breaches among countless other instances of real digital danger.
What all this means is that everyone is a potential victim, and that is the big collective “ah-ha” moment for digital security. (Maybe it’s more of an “oh-no!” moment?) As illustrated by the chart below, the magnitude, types and sheer number of recent attacks should make anyone feel a sense of unease about their own digital exposure. Why is this dangerous to everyone? Well, because data now literally translates into money. And I literally mean literally. Here’s why…
Bitcoin Exposes the Dirty Little Secret About Money
Bitcoin is a great starting point because it’s the poster child of the data = money equation. Bitcoin currency is nothing more than authenticated data, and completely disposes any pretense of money being physical. It is this ephemeral-by-design nature of Bitcoin that, in fact, exposes the dirty little secret about all money, which is that without gold, silver or other tangible backing, dollars, the Euro, Renmimbi, Yen, Won, Franc, Pound, Kroner, Ruble and everything else is nothing but data. Money is a manmade concept — really just an idea.
How this works can best be described by putting it into cryptographic engineering terms. Governments are the “issuing certification authority” of money. Each country or monetary union (e.g. EU) with a currency of their own is literally an “issuer.” All roads lead back to the issuer’s central bank via a type of authentication process to prove that the transaction is based upon the faith and credit of the issuer.
Banks are the links on that authentication/certification chain back that leads back to the issuer. Each link on the chain (or each bank) is subject to strict rules (i.e. laws) and audits established by the issuer about exactly how to deal with the issuer, with other banks in the system, with the currencies created by other issues (i.e. other countries), with customers, and how to account for transactions. Audits, laws, and rules are therefore an authentication process. Consumers’ bank accounts and credit cards are the end-client systems. Those end-client systems are linked back through the chain of banks via the authentication process (rules, etc.) to the issuer of the money. That linkage is what creates the monetary system.
Bitcoin was built precisely and purposefully upon cryptographic authentication and certification. It is cryptography and nothing more. There is no central issuing authority and it remains peer-to-peer on purpose. Bitcoin bypasses banks precisely so that no overseer can control the value (i.e. create inflation and deflation at their political whim). This also preserves anonymity.
The bottom line is that the modern banking system has been based upon “fiat money” since the Nixon Administration abandoned the gold standard. The Latin word “fiat” means “arbitrary agreement” and that is what money is: an arbitrary agreement that numbers in a ledger have some type of value and can act as a medium of exchange. Note that physical money (paper and coins) is only an extremely small fraction of the world’s money supply. The bulk of the world’s money is comprised of nothing more than accounting entries in the ledgers of the world’s banking system.
See? Money = Data. Everything else is window dressing to make it appear more than that (e.g. marble columned bank buildings, Fort Knox, Treasury agents with sunglasses and guns, engraved bonds, armored cars, multi-colored paper currency, coins, etc.).
So, if money equals data, then thieves will not rob banks as often; however, those who can will raid data bases instead, despite what Willie Sutton said. Data bases are where the money is now.
By now, the problem should be obvious to anyone who is paying attention — data of any kind is vulnerable to attack by a wide variety of antagonists from hacker groups and cyber-criminals to electronic armies, techno-vandals and other unscrupulous organizations and people. The reason is simple. Yes, you guessed it: It is because data = money. To make it worse, because of the web of interconnections between people, companies, things, institutions and everything else, everyone and everything digital is exposed.
Big Data. Little Freedom.
The 800-pound gorillas of Digitopia are without a doubt governments. Governments mandate that all kinds of data be presented to them at their whim. Tax returns, national health insurance applications, VA and student loan applications, and other things loaded with very sensitive personal data are routinely demanded and handed over. Individuals and corporations cannot refuse to provide data to the government if they want the monopolized “services” governments provide (or to stay out of jail). And, that is just the open side of the governmental data collection machine.
The surreptitious, snooping side is even larger and involves clandestine scanning of personal conversations, emails, and many other things. However, there is another, non-governmental component to data gathering (I will not use the term “private sector” because it is way too ironic). Companies are now becoming very sophisticated at mining data and tracking people, and getting more so every day. This is the notion of “big data,” and it is getting bigger and bigger all the time.
The Economist recently articulated how advertisers are tracking people to a degree once reserved for fiction. (Think George Orwell’s 1984.) Thousands of firms are now invisibly gathering intelligence. Consumers are being profiled with skills far exceeding that of FBI profilers. When consumers view a website, advertisers compete via a hidden bidding process to show them targeted ads based on the individual’s profile. These ads are extremely well focused due to intensive analytics and extensive data collection. These auctions take milliseconds and the ads are displayed when the website loads. We have all seen these ads targeted at us by now. This brave new advertising world is a sort of a cross between Mad Men and Minority Report with an Orwellian script.
The Personalization Conundrum
There is a certain seductiveness associated with consumer targeting. It is the notion of personalization. People tend to like having a certain level of personalized targeting. It makes sense to have things that you like presented to you without any effort on your part. It is sort of an electronic personal shopping experience. Most people don’t seem to mind the risk of having their preferences and habits collected and used by those they don’t even know. Consumers are complicit and habituated to revealing a great deal about themselves. Millennials have grown up in a world where the notion of privacy is more of a quaint anachronism from days gone by. But, that is all likely to change as more people get hurt.
Volunteering information is one thing, but much of the content around our digital selves is being collected automatically and used for things we don’t have any idea about. People are increasingly buying products that track their activities, location, physical condition, purchases and other things. Cars are already storing data about our driving habits and downloading that to other parties without the need for consent. So, the question is becoming at point does the risk of sharing too much information outweigh the convenience? It is likely that point has already been reached, if you ask me at least.
The Need for a Digital Switzerland
With the unholy trinity of governmental data gathering, corporate targeting, and cyber-criminality, the need for personal data security should be more than obvious. Yet, the ability to become secure is not something that individuals will be able to make happen on their own. Data collection systems are not accessible, and they are not modifiable by people without PhDs in computer science.
With privacy being compromised every time one views a webpage, uses a credit card, pays taxes, applies for a loan, goes to the doctor, drives on a toll way, buys insurance, gets into a car, or does a collection of other things, it becomes nearly impossible to preserve privacy. The central point here is that privacy is becoming scarce, and scarcity creates value. So, we could be on the verge of privacy and anonymity becoming a valuable commodity that people will pay for. A privacy industry will arise. Think of a digital Pinkerton’s.
It is likely that those who can afford digital anonymity will be the first to take measures to regain it. To paraphrase a concept from a famous American financial radio show host, privacy could replace the BMW as the modern status symbol. The top income earners who want to protect themselves and their companies will be looking for a type of digital Switzerland.
Until now a modicum of privacy had been attainable from careful titling and sequestering of assets (i.e. numbered bank accounts, trusts, shell corporations, etc.). That is not enough anymore. The U.S. Patriot Act, European Cybercrime Convention, and EU rules on data retention are the first stirrings concerning a return to the right to anonymity. These acts will apply pressure to the very governmental agencies that are driving privacy away. Dripping irony…
Legal, investigational, and engineering assets will need to be brought to bear to provide privacy services. It will take a team of experts to find where the bits are buried and secure them. Privacy needs do not stop at people either. Engineers will have to get busy to secure things as well.
The Internet of Things
Everything said until this point about the loss of personal privacy also applies to the mini-machines that are proliferating in the environment and communicating with each other about all kinds of things. The notion of the Internet of Things (IoT) is fundamentally about autonomous data collection and communication and it is expected that tens of billions of dispersed objects will be involved in only a few years form now. These numerous and ubiquitous so-called things will typically sense data about their surroundings, and that includes sensing people and what those people are doing. Therefore, these things have to add security to keep personal information out of the hands of interlopers and to keep the data from being tampered with. This is called data integrity in cryptographic parlance.
What Can be Done?
To ensure that things are what they say they are, it is necessary to use authentication. Authentication, in a cryptographic sense, requires that a secret or private key be securely stored somewhere for use by a system. If that secret key is not secret then there is no such thing as security. That is a simple point but of paramount importance.
The most secure way to store a cryptographic key is in secure hardware that is designed to be untamperable and impervious to a range of attacks to get at it. Atmel has created a line of products called CryptoAuthentication precisely for this purpose. Atmel CryptoAuthentication products — such as ATSHA204A, ATECC108A and ATAES132 — implement hardware-based key storage, which is much stronger then software based storage because of the defense mechanisms that only hardware can provide against attacks. Secure storage in hardware beats storage in software every time.
It is most likely that as we citizens of Digitopia continue to realize how dependent we are on data and how dependent those pieces of data are on real security, there will be a powerful move towards the strongest type of security that can be achieved. (Yes, I mean hardware.)
In the future, the most important question may even become, “Does your system have hardware key storage?” We should all be asking that already and avoiding those systems that do not. Cryptography is, as Edward Snowden has said, the “defense against the dark arts for the digital realm.” We should all start to take cover.