For those who are struggling to understand the impact of a pandemic, and struggle even more with the measures taken against it (“lockdown” – “shelter-in-place” – “Ausgangs-Sperre”), this comparison may help a bit:
In a distributed Denial-of-Service (dDoS) attack, many clients at once overwhelm a service (such as a webserver).
The service was built to serve the expected number of requests, and it works like a charm.
The service has also some elastic reserves (cloud) to deal with sudden popularity.
But when a tital wave of requests for service come in (such as from a botnet, aimed at overwhelming the system), then the entire service breaks down, and only very few requests end up being served in the end.
The measures taken to slow down this sudden tital wave of requests is nothing else but slowing and channelizing the requests, so that requests get “queued” (valid requests within available capacities) and “triaged” (eliminate the botnet requests). The valid requests can thus be served individually, just as it was meant to be.
After the attack is over, a post-mortem analysis is performed, and measures taken to detect this kind of attack early, the services are improved to deal with this procedure better the next time of a dDoS attack, and measures are taken to prevent this particular attack if possible.
In a pandemic, similar patterns can be observed, and similar measures are taken to deal with it:
Health care systems are built, equipped, and staffed for the normal amount of patients to be served.
Health care systems also have some reserves built-in, and governments have some stock pile reserves for unexpected surges of needs.
But a pandemic infects people so quickly, that an explosive demand is created, and the system gets overwhelmed with 100 time or 1,000 times normal demand, and only a few of those end up being treated.
The measures taken to slow down this sudden demand is aimed at slowing the infection rate, so that incoming requests to do over-stress available capacities. Triage is performed on those who require service, to separate higher from lower priorities. This way everyone who is infected, can get the proper care and treatments, increasing the survivial rate.
After the pandemic is over, a post-mortem analysis is performed, to develop vaccines for this particular virus, and system improvements are made to make this entire process better for the next pandemic.
As much as denial-of-services are a nightmare to deal with, have great impact on the services offered, and cost the operators of the attacked service revenue, reputation, and other damages during the attack and the recovery period, when services are restored, pandemics are also a nightmare to deal with, have great impact on the affected population, and cause significant damages.
We have won the fight against pandemics, with ever improving results. The “Spanish Flu” (influenza, which started in Kansas USA with ‘patient zero’) caused 50 million deaths, and took a while to get under control. We have won the fight against virii such as the measels (“Masern”, with a very high infection rate of 15) and were able to prevent a global pandemic with smallpoc (“Pocken”) successfully.
For an excellent explanation of Corona / Covid-19, scientifically and easy to understand, watch this piece of the “Harald Lesch’s Kosmos” series (in German), broadcast on March 24th, 2020 in the ZDF TV channel (geoblocking to Germany applies – this may soon also be available on their Youtube channel). If you understand German, this is currently (during the Corona – Covid-19 pandemic) the best 43 minutes you can spend while locked down at your house, to appreciate science and why you are contained at home:
… and a subtle bonus: today’s Dilbert also shows how facts, research, and correct documentation overcome “alternative facts”, anti-vaccination campaigns, “fake news”, and the various cream puffs (“Windbeutel”) blubbering incoherently and without any proof — may they be orange (you know who) or brown (AfD). Hopefully all those can be helped if it is explained just right for their limited horizons:
Ein Satz des Ökonomie-Urvaters Adam Smith: „Die Verachtung der Gefahr und die dreiste Hoffnung des Gelingens sind in keinem Teil des Lebens wirksamer als zu der Zeit, da junge Leute sich ihre Berufsarten wählen.“
An investigative report by The Washington Post and ZDF – published 11 FEB 2020.
For more than half a century, governments all over the world trusted a single company to keep the communications of their spies, soldiers and diplomats secret.
The company, Crypto AG, got its first break with a contract to build code-making machines for U.S. troops during World War II. Flush with cash, it became a dominant maker of encryption devices for decades, navigating waves of technology from mechanical gears to electronic circuits and, finally, silicon chips and software.
The Swiss firm made millions of dollars selling equipment to more than 120 countries well into the 21st century. Its clients included Iran, military juntas in Latin America, nuclear rivals India and Pakistan, and even the Vatican.
But what none of its customers ever knew was that Crypto AG was secretly owned by the CIA in a highly classified partnership with West German intelligence [BND]. These spy agencies rigged the company’s devices so they could easily break the codes that countries used to send encrypted messages.
The decades-long arrangement, among the most closely guarded secrets of the Cold War, is laid bare in a classified, comprehensive CIA history of the operation obtained by The Washington Post and ZDF, a German public broadcaster, in a joint reporting project.
The account identifies the CIA officers who ran the program and the company executives entrusted to execute it. It traces the origin of the venture as well as the internal conflicts that nearly derailed it. It describes how the United States and its allies exploited other nations’ gullibility for years, taking their money and stealing their secrets.
The operation, known first by the code name “Thesaurus” and later “Rubicon,” ranks among the most audacious in CIA history.
“It was the intelligence coup of the century,” the CIA report concludes. “Foreign governments were paying good money to the U.S. and West Germany for the privilege of having their most secret communications read by at least two (and possibly as many as five or six) foreign countries.”
From 1970 on, the CIA and its code-breaking sibling, the National Security Agency, controlled nearly every aspect of Crypto’s operations — presiding with their German partners over hiring decisions, designing its technology, sabotaging its algorithms and directing its sales targets.
Then, the U.S. and West German spies sat back and listened.
The program had limits. America’s main adversaries, including the Soviet Union and China, were never Crypto customers. Their well-founded suspicions of the company’s ties to the West shielded them from exposure, although the CIA history suggests that U.S. spies learned a great deal by monitoring other countries’ interactions with Moscow and Beijing.
There were also security breaches that put Crypto under clouds of suspicion. Documents released in the 1970s showed extensive — and incriminating — correspondence between an NSA pioneer and Crypto’s founder. Foreign targets were tipped off by the careless statements of public officials including President Ronald Reagan. And the 1992 arrest of a Crypto salesman in Iran, who did not realize he was selling rigged equipment, triggered a devastating “storm of publicity,” according to the CIA history.
But the true extent of the company’s relationship with the CIA and its German counterpart was until now never revealed.
The German spy agency, the BND, came to believe the risk of exposure was too great and left the operation in the early 1990s. But the CIA bought the Germans’ stake and simply kept going, wringing Crypto for all its espionage worth until 2018, when the agency sold off the company’s assets, according to current and former officials.
The company’s importance to the global security market had fallen by then, squeezed by the spread of online encryption technology. Once the province of governments and major corporations, strong encryption is now as ubiquitous as apps on cellphones.
This story is based on the CIA history and a parallel BND account, also obtained by The Post and ZDF, and interviews with current and former Western intelligence officials as well as Crypto employees. Many spoke on the condition of anonymity, citing the sensitivity of the subject.
It is hard to overstate how extraordinary the CIA and BND histories are. Sensitive intelligence files are periodically declassified and released to the public. But it is exceedingly rare, if not unprecedented, to glimpse authoritative internal histories of an entire covert operation. The Post was able to read all of the documents, but the source of the material insisted that only excerpts be published.
The CIA and the BND declined to comment, though U.S. and German officials did not dispute the authenticity of the documents. The first is a 96-page account of the operation completed in 2004 by the CIA’s Center for the Study of Intelligence, an internal historical branch. The second is an oral history compiled by German intelligence officials in 2008.
The overlapping accounts expose frictions between the two partners over money, control and ethical limits, with the West Germans frequently aghast at the enthusiasm with which U.S. spies often targeted allies.
But both sides describe the operation as successful beyond their wildest projections. At times, including in the 1980s, Crypto accounted for roughly 40 percent of the diplomatic cables and other transmissions by foreign governments that cryptanalysts at the NSA decoded and mined for intelligence, according to the documents.
All the while, Crypto generated millions of dollars in profits that the CIA and BND split and plowed into other operations.
Crypto’s products are still in use in more than a dozen countries around the world, and its orange-and-white sign still looms atop the company’s longtime headquarters building near Zug, Switzerland. But the company was dismembered in 2018, liquidated by shareholders whose identities have been permanently shielded by the byzantine laws of Liechtenstein, a tiny European nation with a Cayman Islands-like reputation for financial secrecy.
Two companies purchased most of Crypto’s assets. The first, CyOne Security, was created as part of a management buyout and now sells security systems exclusively to the Swiss government. The other, Crypto International, took over the former company’s brand and international business.
Each insisted that it has no ongoing connection to any intelligence service, but only one claimed to be unaware of CIA ownership. Their statements were in response to questions from The Post, ZDF and Swiss broadcaster SRF, which also had access to the documents.
CyOne has more substantial links to the now-dissolved Crypto, including that the new company’s chief executive held the same position at Crypto for nearly two decades of CIA ownership.
A CyOne spokesman declined to address any aspect of Crypto AG’s history but said the new firm has “no ties to any foreign intelligence services.”
Andreas Linde, the chairman of the company that now holds the rights to Crypto’s international products and business, said he had no knowledge of the company’s relationship to the CIA and BND before being confronted with the facts in this article.
“We at Crypto International have never had any relationship with the CIA or BND — and please quote me,” he said in an interview. “If what you are saying is true, then absolutely I feel betrayed, and my family feels betrayed, and I feel there will be a lot of employees who will feel betrayed as well as customers.”
The Swiss government announced on Tuesday that it was launching an investigation of Crypto AG’s ties to the CIA and BND. Earlier this month, Swiss officials revoked Crypto International’s export license.
The timing of the Swiss moves was curious. The CIA and BND documents indicate that Swiss officials must have known for decades about Crypto’s ties to the U.S. and German spy services, but intervened only after learning that news organizations were about to expose the arrangement.
The histories, which do not address when or whether the CIA ended its involvement, carry the inevitable biases of documents written from the perspectives of the operation’s architects. They depict Rubicon as a triumph of espionage, one that helped the United States prevail in the Cold War, keep tabs on dozens of authoritarian regimes and protect the interests of the United States and its allies.
The papers largely avoid more unsettling questions, including what the United States knew — and what it did or didn’t do — about countries that used Crypto machines while engaged in assassination plots, ethnic cleansing campaigns and human rights abuses.
The revelations in the documents may provide reason to revisit whether the United States was in position to intervene in, or at least expose, international atrocities, and whether it opted against doing so at times to preserve its access to valuable streams of intelligence.
Nor do the files deal with obvious ethical issues at the core of the operation: the deception and exploitation of adversaries, allies and hundreds of unwitting Crypto employees. Many traveled the world selling or servicing rigged systems with no clue that they were doing so at risk to their own safety.
In recent interviews, deceived employees — even ones who came to suspect during their time at Crypto that the company was cooperating with Western intelligence — said the revelations in the documents have deepened a sense of betrayal, of themselves and customers.
“You think you do good work and you make something secure,” said Juerg Spoerndli, an electrical engineer who spent 16 years at Crypto. “And then you realize that you cheated these clients.”
Those who ran the clandestine program remain unapologetic.
“Do I have any qualms? Zero,” said Bobby Ray Inman, who served as director of the NSA and deputy director of the CIA in the late 1970s and early 1980s. “It was a very valuable source of communications on significantly large parts of the world important to U.S. policymakers.”
A denial operation
This sprawling, sophisticated operation grew out of the U.S. military’s need for a crude but compact encryption device.
Boris Hagelin, Crypto’s founder, was an entrepreneur and inventor who was born in Russia but fled to Sweden as the Bolsheviks took power. He fled again to the United States when the Nazis occupied Norway in 1940.
He brought with him an encryption machine that looked like a fortified music box, with a sturdy crank on the side and an assembly of metal gears and pinwheels under a hard metal case.
It wasn’t nearly as elaborate, or secure, as the Enigma machines being used by the Nazis. But Hagelin’s M-209, as it became known, was portable, hand-powered and perfect for troops on the move. Photos show soldiers with the eight-pound boxes — about the size of a thick book — strapped to their knees. Many of Hagelin’s devices have been preserved at a private museum in Eindhoven, the Netherlands.
Sending a secure message with the device was tedious. The user would rotate a dial, letter by letter, and thrust down the crank. The hidden gears would turn and spit out an enciphered message on a strip of paper. A signals officer then had to transmit that scrambled message by Morse code to a recipient who would reverse the sequence.
Security was so weak that it was assumed that nearly any adversary could break the code with enough time. But doing so took hours. And since these were used mainly for tactical messages about troop movements, by the time the Nazis decoded a signal its value had probably perished.
Over the course of the war, about 140,000 M-209s were built at the Smith Corona typewriter factory in Syracuse, N.Y., under a U.S. Army contract worth $8.6 million to Crypto. After the war, Hagelin returned to Sweden to reopen his factory, bringing with him a personal fortune and a lifelong sense of loyalty to the United States.
Even so, American spies kept a wary eye on his postwar operations. In the early 1950s, he developed a more advanced version of his war-era machine with a new, “irregular” mechanical sequence that briefly stumped American code-breakers.
Marc Simons, co-founder of Crypto Museum, a virtual museum of cipher machines, explains how secret messages were created using the Hagelin CX-52. (Stanislav Dobak/The Washington Post)
Alarmed by the capabilities of the new CX-52 and other devices Crypto envisioned, U.S. officials began to discuss what they called the “Hagelin problem.”
These were “the Dark Ages of American cryptology,” according to the CIA history. The Soviets, Chinese and North Koreans were using code-making systems that were all but impenetrable. U.S. spy agencies worried that the rest of the world would also go dark if countries could buy secure machines from Hagelin.
The Americans had several points of leverage with Hagelin: his ideological affinity for the country, his hope that the United States would remain a major customer and the veiled threat that they could damage his prospects by flooding the market with surplus M-209s from the war.
The United States also had a more crucial asset: William Friedman. Widely regarded as the father of American cryptology, Friedman had known Hagelin since the 1930s. They had forged a lifelong friendship over their shared backgrounds and interests, including their Russian heritage and fascination with the complexities of encryption.
There might never have been an Operation Rubicon if the two men had not shaken hands on the very first secret agreement between Hagelin and U.S. intelligence over dinner at the Cosmos Club in Washington in 1951.
The deal called for Hagelin, who had moved his company to Switzerland, to restrict sales of his most sophisticated models to countries approved by the United States. Nations not on that list would get older, weaker systems. Hagelin would be compensated for his lost sales, as much as $700,000 up front.
It took years for the United States to live up to its end of the deal, as top officials at the CIA and the predecessor to the NSA bickered over the terms and wisdom of the scheme. But Hagelin abided by the agreement from the outset, and over the next two decades, his secret relationship with U.S. intelligence agencies deepened.
In 1960, the CIA and Hagelin entered into a “licensing agreement” that paid him $855,000 to renew his commitment to the handshake deal. The agency paid him $70,000 a year in retainer and started giving his company cash infusions of $10,000 for “marketing” expenses to ensure that Crypto — and not other upstarts in the encryption business — locked down contracts with most of the world’s governments.
It was a classic “denial operation” in the parlance of intelligence, a scheme designed to prevent adversaries from acquiring weapons or technology that would give them an advantage. But it was only the beginning of Crypto’s collaboration with U.S. intelligence. Within a decade, the whole operation belonged to the CIA and BND.
A brave new world
U.S. officials had toyed since the outset with the idea of asking Hagelin whether he would be willing to let U.S. cryptologists doctor his machines. But Friedman overruled them, convinced that Hagelin would see that as a step too far.
The CIA and NSA saw a new opening in the mid-1960s, as the spread of electronic circuits forced Hagelin to accept outside help adapting to the new technology, or face extinction clinging to the manufacturing of mechanical machines.
NSA cryptologists were equally concerned about the potential impact of integrated circuits, which seemed poised to enable a new era of unbreakable encryption. But one of the agency’s senior analysts, Peter Jenks, identified a potential vulnerability.
If “carefully designed by a clever crypto-mathematician,” he said, a circuit-based system could be made to appear that it was producing endless streams of randomly generated characters, while in reality it would repeat itself at short enough intervals for NSA experts — and their powerful computers — to crack the pattern.
Two years later, in 1967, Crypto rolled out a new, all-electronic model, the H-460, whose inner workings were completely designed by the NSA.
The CIA history all but gloats about crossing this threshold. “Imagine the idea of the American government convincing a foreign manufacturer to jimmy equipment in its favor,” the history says. “Talk about a brave new world.”
The NSA didn’t install crude “back doors” or secretly program the devices to cough up their encryption keys. And the agency still faced the difficult task of intercepting other governments’ communications, whether plucking signals out of the air or, in later years, tapping into fiber optic cables.
But the manipulation of Crypto’s algorithms streamlined the code-breaking process, at times reducing to seconds a task that might otherwise have taken months. The company always made at least two versions of its products — secure models that would be sold to friendly governments, and rigged systems for the rest of the world.
In so doing, the U.S.-Hagelin partnership had evolved from denial to “active measures.” No longer was Crypto merely restricting sales of its best equipment but actively selling devices that were engineered to betray their buyers.
The payoff went beyond the penetration of the devices. Crypto’s shift to electronic products buoyed business so much that it became addicted to its dependence on the NSA. Foreign governments clamored for systems that seemed clearly superior to the old clunky mechanical devices but in fact were easier for U.S. spies to read.
German and American partners
By the end of the 1960s, Hagelin was nearing 80 and anxious to secure the future for his company, which had grown to more than 180 employees. CIA officials were similarly anxious about what would happen to the operation if Hagelin were to suddenly sell or die.
Hagelin had once hoped to turn control over to his son, Bo. But U.S. intelligence officials regarded him as a “wild card” and worked to conceal the partnership from him. Bo Hagelin was killed in a car crash on Washington’s Beltway in 1970. There were no indications of foul play.
U.S. intelligence officials discussed the idea of buying Crypto for years, but squabbling between the CIA and NSA prevented them from acting until two other spy agencies entered the fray.
The French, West German and other European intelligence services had either been told about the United States’ arrangement with Crypto or figured it out on their own. Some were understandably jealous and probed for ways to secure a similar deal for themselves.
In 1967, Hagelin was approached by the French intelligence service with an offer to buy the company in partnership with German intelligence. Hagelin rebuffed the offer and reported it to his CIA handlers. But two years later, the Germans came back seeking to make a follow-up bid with the blessing of the United States.
In a meeting in early 1969 at the West German Embassy in Washington, the head of that country’s cipher service, Wilhelm Goeing, outlined the proposal and asked whether the Americans “were interested in becoming partners too.”
Months later, CIA Director Richard Helms approved the idea of buying Crypto and dispatched a subordinate to Bonn, the West German capital, to negotiate terms with one major caveat: the French, CIA officials told Goeing, would have to be “shut out.”
West Germany acquiesced to this American power play, and a deal between the two spy agencies was recorded in a June 1970 memo carrying the shaky signature of a CIA case officer in Munich who was in the early stages of Parkinson’s disease and the illegible scrawl of his BND counterpart.
The two agencies agreed to chip in equally to buy out Hagelin for approximately $5.75 million, but the CIA left it largely to the Germans to figure out how to prevent any trace of the transaction from ever becoming public.
A Liechtenstein law firm, Marxer and Goop, helped hide the identities of the new owners of Crypto through a series of shells and “bearer” shares that required no names in registration documents. The firm was paid an annual salary “less for the extensive work but more for their silence and acceptance,” the BND history says. The firm, now named Marxer and Partner, did not respond to a request for comment.
A new board of directors was set up to oversee the company. Only one member of the board, Sture Nyberg, to whom Hagelin had turned over day-to-day management, knew of CIA involvement. “It was through this mechanism,” the CIA history notes, “that BND and CIA controlled the activities” of Crypto. Nyberg left the company in 1976. The Post and ZDF could not locate him or determine whether he is still alive.
The two spy agencies held their own regular meetings to discuss what to do with their acquisition. The CIA used a secret base in Munich, initially on a military installation used by American troops and later in the attic of a building adjacent to the U.S. Consulate, as the headquarters for its involvement in the operation.
The CIA and BND agreed on a series of code names for the program and its various components. Crypto was called “Minerva,” which is also the title of the CIA history. The operation was at first code-named “Thesaurus,” though in the 1980s it was changed to “Rubicon.”
Each year, the CIA and BND split any profits Crypto had made, according to the German history, which says the BND handled the accounting and delivered the cash owed to the CIA in an underground parking garage.
From the outset, the partnership was beset by petty disagreements and tensions. To CIA operatives, the BND often seemed preoccupied with turning a profit, and the Americans “constantly reminded the Germans that this was an intelligence operation, not a money-making enterprise.” The Germans were taken aback by the Americans’ willingness to spy on all but their closest allies, with targets including NATO members Spain, Greece, Turkey and Italy.
Mindful of the limitations to their abilities to run a high-tech company, the two agencies brought in corporate outsiders. The Germans enlisted Siemens, a Munich-based conglomerate, to advise Crypto on business and technical issues in exchange for 5 percent of the company’s sales. The United States later brought in Motorola to fix balky products, making it clear to the company’s CEO this was being done for U.S. intelligence. Siemens declined to comment. Motorola officials did not respond to a request for comment.
To its frustration, Germany was never admitted to the vaunted “Five Eyes,” a long-standing intelligence pact involving the United States, Britain, Australia, New Zealand and Canada. But with the Crypto partnership, Germany moved closer into the American espionage fold than might have seemed possible in World War II’s aftermath. With the secret backing of two of the world’s premier intelligence agencies and the support of two of the world’s largest corporations, Crypto’s business flourished.
A table in the CIA history shows that sales surged from 15 million Swiss francs in 1970 to more than 51 million in 1975, or $19 million. The company’s payroll expanded to more than 250 employees.
“The Minerva purchase had yielded a bonanza,” the CIA history says of this period. The operation entered a two-decade stretch of unprecedented access to foreign governments’ communications.
The NSA’s eavesdropping empire was for many years organized around three main geographic targets, each with its own alphabetic code: A for the Soviets, B for Asia and G for virtually everywhere else.
By the early 1980s, more than half of the intelligence gathered by G group was flowing through Crypto machines, a capability that U.S. officials relied on in crisis after crisis.
In 1978, as the leaders of Egypt, Israel and the United States gathered at Camp David for negotiations on a peace accord, the NSA was secretly monitoring the communications of Egyptian President Anwar Sadat with Cairo.
A year later, after Iranian militants stormed the U.S. Embassy and took 52 American hostages, the Carter administration sought their release in back-channel communications through Algeria. Inman, who served as NSA director at the time, said he routinely got calls from President Jimmy Carter asking how the Ayatollah Khomeini regime was reacting to the latest messages.
“We were able to respond to his questions about 85 percent of the time,” Inman said. That was because the Iranians and Algerians were using Crypto devices.
Inman said the operation also put him in one of the trickiest binds he’d encountered in government service. At one point, the NSA intercepted Libyan communications indicating that the president’s brother, Billy Carter, was advancing Libya’s interests in Washington and was on leader Moammar Gaddafi’s payroll.
Inman referred the matter to the Justice Department. The FBI launched an investigation of Carter, who falsely denied taking payments. In the end, he was not prosecuted but agreed to register as a foreign agent.
Throughout the 1980s, the list of Crypto’s leading clients read like a catalogue of global trouble spots. In 1981, Saudi Arabia was Crypto’s biggest customer, followed by Iran, Italy, Indonesia, Iraq, Libya, Jordan and South Korea.
To protect its market position, Crypto and its secret owners engaged in subtle smear campaigns against rival companies, according to the documents, and plied government officials with bribes. Crypto sent an executive to Riyadh, Saudi Arabia, with 10 Rolex watches in his luggage, the BND history says, and later arranged a training program for the Saudis in Switzerland where the participants’ “favorite pastime was to visit the brothels, which the company also financed.”
At times, the incentives led to sales to countries ill-equipped to use the complicated systems. Nigeria bought a large shipment of Crypto machines, but two years later, when there was still no corresponding payoff in intelligence, a company representative was sent to investigate. “He found the equipment in a warehouse still in its original packaging,” according to the German document.
In 1982, the Reagan administration took advantage of Argentina’s reliance on Crypto equipment, funneling intelligence to Britain during the two countries’ brief war over the Falkland Islands, according to the CIA history, which doesn’t provide any detail on what kind of information was passed to London. The documents generally discuss intelligence gleaned from the operation in broad terms and provide few insights into how it was used.
Reagan appears to have jeopardized the Crypto operation after Libya was implicated in the 1986 bombing of a West Berlin disco popular with American troops stationed in West Germany. Two U.S. soldiers and a Turkish woman were killed as a result of the attack.
Reagan ordered retaliatory strikes against Libya 10 days later. Among the reported victims was one of Gaddafi’s daughters. In an address to the country announcing the strikes, Reagan said the United States had evidence of Libya’s complicity that “is direct, it is precise, it is irrefutable.”
The evidence, Reagan said, showed that Libya’s embassy in East Berlin received orders to carry out the attack a week before it happened. Then, the day after the bombing, “they reported back to Tripoli on the great success of their mission.”
Reagan’s words made clear that Tripoli’s communications with its station in East Berlin had been intercepted and decrypted. But Libya wasn’t the only government that took note of the clues Reagan had provided.
Iran, which knew that Libya also used Crypto machines, became increasingly concerned about the security of its equipment. Tehran didn’t act on those suspicions until six years later.
The irreplaceable man
After the CIA and BND acquisition, one of the most vexing problems for the secret partners was ensuring that Crypto’s workforce remained compliant and unsuspecting.
Even while hidden from view, the agencies went to significant lengths to maintain Hagelin’s benevolent approach to ownership. Employees were well paid and had abundant perks including access to a small sailboat on Lake Zug near company headquarters.
And yet, those who worked most closely with the encryption designs seemed constantly to be getting closer to uncovering the operation’s core secret. The engineers and designers responsible for developing prototype models often questioned the algorithms being foisted on them by a mysterious external entity.
Crypto executives often led employees to believe that the designs were being provided as part of the consulting arrangement with Siemens. But even if that were so, why were encryption flaws so easy to spot, and why were Crypto’s engineers so routinely blocked from fixing them?
In 1977, Heinz Wagner, the chief executive at Crypto who knew the true role of the CIA and BND, abruptly fired a wayward engineer after the NSA complained that diplomatic traffic coming out of Syria had suddenly became unreadable. The engineer, Peter Frutiger, had long suspected Crypto was collaborating with German intelligence. He had made multiple trips to Damascus to address complaints about their Crypto products and apparently, without authority from headquarters, had fixed their vulnerabilities.
Frutiger “had figured out the Minerva secret and it was not safe with him,” according to the CIA history. Even so, the agency was livid with Wagner for firing Frutiger rather than finding a way to keep him quiet on the company payroll. Frutiger declined to comment for this story.
U.S. officials were even more alarmed when Wagner hired a gifted electrical engineer in 1978 named Mengia Caflisch. She had spent several years in the United States working as a radio-astronomy researcher for the University of Maryland before returning to her native Switzerland and applying for a job at Crypto. Wagner jumped at the chance to hire her. But NSA officials immediately raised concerns that she was “too bright to remain unwitting.”
The warning proved prescient as Caflisch soon began probing the vulnerabilities of the company’s products. She and Spoerndli, a colleague in the research department, ran various tests and “plaintext attacks” on devices including a teletype model, the HC-570, that was built using Motorola technology, Spoerndli said in an interview.
“We looked at the internal operations, and the dependencies with each step,” Spoerndli said, and became convinced they could crack the code by comparing only 100 characters of enciphered text to an underlying, unencrypted message. It was an astonishingly low level of security, Spoerndli said in an interview last month, but far from unusual.
“The algorithms,” he said, “always looked fishy.”
In the ensuing years, Caflisch continued to pose problems. At one point, she designed an algorithm so strong that NSA officials worried it would be unreadable. The design made its way into 50 HC-740 machines rolling off the factory floor before company executives discovered the development and stopped it.
“I just had an idea that something might be strange,” Caflisch said in an interview last month, about the origin of her suspicions. But it became clear that her probing wasn’t appreciated, she said. “Not all questions appeared to be welcome.”
The company restored the rigged algorithm to the rest of the production run and sold the 50 secure models to banks to keep them out of the hands of foreign governments. Because these and other developments were so hard to defend, Wagner at one point told a select group of members of the research and development unit that Crypto “was not entirely free to do what it wanted.”
The acknowledgment seemed to subdue the engineers, who interpreted it as confirmation that the company’s technology faced constraints imposed by the German government. But the CIA and BND became increasingly convinced that their routine, disembodied interference was unsustainable.
Crypto had become an Oz-like operation with employees probing to see what was behind the curtain. As the 1970s came to a close, the secret partners decided to find a wizard figure who could help devise more advanced — and less detectable — weaknesses in the algorithms, someone with enough cryptological clout to tame the research department.
The two agencies turned to other spy services for potential candidates before settling on an individual put forward by Sweden’s intelligence service. Because of Hagelin’s ties to the country, Sweden had been kept apprised of the operation since its outset.
Kjell-Ove Widman, a mathematics professor in Stockholm, had made a name for himself in European academic circles with his research on cryptology. Widman was also a military reservist who had worked closely with Swedish intelligence officials.
To the CIA, Widman had an even more important attribute: an affinity for the United States that he had formed while spending a year in Washington state as an exchange student.
His host family had such trouble pronouncing his Swedish name that they called him “Henry,” a moniker he later used with his CIA handlers.
Officials involved in Widman’s recruitment described it as almost effortless. After being groomed by Swedish intelligence officials, he was brought to Munich in 1979 for what purported to be a round of interviews with executives from Crypto and Siemens.
The fiction was maintained as Widman faced questions from a half-dozen men seated around a table in a hotel conference room. As the group broke for lunch, two men asked Widman to stay behind for a private conversation.
“Do you know what ZfCh is?” asked Jelto Burmeister, a BND case officer, using the acronym for the German cipher service. When Widman replied that he did, Burmeister said, “Now, do you understand who really owns Crypto AG?”
At that point, Widman was introduced to Richard Schroeder, a CIA officer stationed in Munich to manage the agency’s involvement in Crypto. Widman would later claim to agency historians that his “world fell apart completely” in that moment.
If so, he did not hesitate to enlist in the operation.
Without even leaving the room, Widman sealed his recruitment with a handshake. As the three men joined the rest of the group at lunch, a “thumbs up” signal transformed the gathering into a celebration.
Crypto installed Widman as a “scientific advisor” reporting directly to Wagner. He became the spies’ hidden inside agent, departing Zug every six weeks for clandestine meetings with representatives of the NSA and ZfCh. Schroeder, the CIA officer, would attend but tune out their technical babble.
They would agree on modifications and work up new encryption schemes. Then Widman would deliver the blueprints to Crypto engineers. The CIA history calls him the “irreplaceable man,” and the “most important recruitment in the history of the Minerva program.”
His stature cowed subordinates, investing him “with a technical prominence that no one in CAG could challenge.” It also helped deflect the inquiries of foreign governments. As Widman settled in, the secret partners adopted a set of principles for rigged algorithms, according to the BND history. They had to be “undetectable by usual statistical tests” and, if discovered, be “easily masked as implementation or human errors.”
In other words, when cornered, Crypto executives would blame sloppy employees or clueless users.
In 1982, when Argentina became convinced that its Crypto equipment had betrayed secret messages and helped British forces in the Falklands War, Widman was dispatched to Buenos Aires. Widman told them the NSA had probably cracked an outdated speech-scrambling device that Argentina was using, but that the main product they bought from Crypto, the CAG 500, remained “unbreakable.”
“The bluff worked,” the CIA history says. “The Argentines swallowed hard, but kept buying CAG equipment.”
Widman is long-retired now and living in Stockholm. He declined to comment. Years after his recruitment, he told U.S. officials that he saw himself as “engaged in a critical struggle for the benefit of Western intelligence,” according to the CIA document. “It was, he said, the moment in which he felt at home. This was his mission in life.”
That same year, Hagelin, then 90 years old, became ill on a trip to Sweden and was hospitalized. He recovered well enough to return to Switzerland, but CIA officials became worried about Hagelin’s extensive collection of business records and personal papers at his office in Zug.
Schroeder, with Hagelin’s permission, arrived with a briefcase and spent several days going through the files. To visitors, he was introduced as a historian interested in tracing Hagelin’s life. Schroeder pulled out the documents “that were incriminating,” according to the history, and shipped them back to CIA headquarters, “where they reside to this day.”
Hagelin remained an invalid until he died in 1983. The Post could not locate Wagner or determine whether he is still alive. Schroeder retired from the CIA more than a decade ago and teaches part-time at Georgetown University. When contacted by a reporter from The Post, he declined to comment.
The Hydra crisis
Crypto endured several money-losing years in the 1980s, but the intelligence flowed in torrents. U.S. spy agencies intercepted more than 19,000 Iranian communications sent via Crypto machines during that nation’s decade-long war with Iraq, mining them for reports on subjects such as Tehran’s terrorist links and attempts to target dissidents.
Iran’s communications were “80 to 90 percent readable” to U.S. spies, according to the CIA document, a figure that would probably have plunged into the single digits had Tehran not used Crypto’s compromised devices.
In 1989, the Vatican’s use of Crypto devices proved crucial in the U.S. manhunt for Panamanian leader Manuel Antonio Noriega. When the dictator sought refuge in the Apostolic Nunciature — the equivalent of a papal embassy — his whereabouts were exposed by the mission’s messages back to Vatican City.
In 1992, however, the Crypto operation faced its first major crisis: Iran, belatedly acting on its long-standing suspicions, detained a company salesman.
Hans Buehler, then 51, was considered one of the company’s best salesmen. Iran was one of the company’s largest contracts, and Buehler had traveled in and out of Tehran for years. There were tense moments, including when he was questioned extensively in 1986 by Iranian officials after the disco bombing and U.S. missile strikes on Libya.
Six years later, he boarded a Swissair flight to Tehran but failed to return on schedule. When he didn’t show, Crypto turned for help to Swiss authorities and were told he had been arrested by the Iranians. Swiss consular officials allowed to visit Buehler reported that he was in “bad shape mentally,” according to the CIA history.
Buehler was finally released nine months later after Crypto agreed to pay the Iranians $1 million, a sum that was secretly provided by the BND, according to the documents. The CIA refused to chip in, citing the U.S. policy against succumbing to ransom demands for hostages.
Buehler knew nothing about Crypto’s relationship to the CIA and BND or the vulnerabilities in its devices. But he returned traumatized and suspicious that Iran knew more about the company he worked for than he did. Buehler began speaking to Swiss news organizations about his ordeal and mounting suspicions.
The publicity brought new attention to long-forgotten clues, including references to a “Boris project” in Friedman’s massive collection of personal papers, which were donated to Virginia Military Institute when he died in 1969. Among the 72 boxes delivered to Lexington, Va., were copies of his lifelong correspondence with Hagelin.
In 1994, the crisis deepened when Buehler appeared on Swiss television in a report that also featured Frutiger, whose identity was concealed from viewers. Buehler died in 2018. Frutiger, the engineer who had been fired for fixing Syria’s encryption systems years earlier, did not respond to requests for comment.
Michael Grupe, who had succeeded Wagner as chief executive, agreed to appear on Swiss television and disputed what he knew to be factual charges. “Grupe’s performance was credible, and may have saved the program,” the CIA history says. Grupe did not respond to requests for comment.
Even so, it took several years for the controversy to die down. In 1995, the Baltimore Sun ran a series of investigative stories about the NSA, including one called “Rigging the Game” that exposed aspects of the agency’s relationship with Crypto.
The article reported NSA officials had traveled to Zug in the mid-1970s for secret meetings with Crypto executives. The officials were posing as consultants for a front company called “Intercomm Associates” but then proceeded to introduce themselves by their real names — which were recorded on notes of the meeting kept by a company employee.
Amid the publicity onslaught, some employees began to look elsewhere for work. And at least a half-dozen countries — including Argentina, Italy, Saudi Arabia, Egypt and Indonesia — either canceled or suspended their Crypto contracts.
Astonishingly, Iran was not among them, according to the CIA file, and “resumed its purchase of CAG equipment almost immediately.”
The main casualty of the “Hydra” crisis, the code name given to the Buehler case, was the CIA-BND partnership.
For years, BND officials had recoiled at their American counterpart’s refusal to distinguish adversaries from allies. The two partners often fought over which countries deserved to receive the secure versions of Crypto’s products, with U.S. officials frequently insisting that the rigged equipment be sent to almost anyone — ally or not — who could be deceived into buying it.
In the German history, Wolbert Smidt, the former director of the BND, complained that the United States “wanted to deal with the allies just like they dealt with the countries of the Third World.” Another BND official echoed that comment, saying thatto Americans, “in the world of intelligence there were no friends.”
The Cold War had ended, the Berlin Wall was down and the reunified Germany had different sensitivities and priorities. They saw themselves as far more directly exposed to the risks of the Crypto operation. Hydra had rattled the Germans, who feared the disclosure of their involvement would trigger European outrage and lead to enormous political and economic fallout.
In 1993, Konrad Porzner, the chief of the BND, made clear to CIA Director James Woolsey that support in the upper ranks of the German government was waning and that the Germans might want out of the Crypto partnership. On Sept. 9, the CIA station chief in Germany, Milton Bearden, reached an agreement with BND officials for the CIA to purchase Germany’s shares for $17 million, according to the CIA history.
German intelligence officials rued the departure from an operation they had largely conceived. In the German history, senior intelligence officials blame political leaders for ending one of the most successful espionage programs the BND had ever been a part of.
With their departure, the Germans were soon cut off from the intelligence that the United States continued to gather. Burmeister is quoted in the German history wondering whether Germany still belonged “to this small number of nations who are not read by the Americans.”
The Snowden documents provided what must have been an unsettling answer, showing that U.S. intelligence agencies not only regarded Germany as a target but monitored German Chancellor Angela Merkel’s cellphone.
Alive and well
The CIA history essentially concludes with Germany’s departure from the program, though it was finished in 2004 and contains clear indications that the operation was still underway.
It notes, for example, that the Buehler case was “the most serious security breach in the history of the program” but wasn’t fatal. “It did not cause its demise,” the history says, “and at the turn of the century Minerva was still alive and well.”
In reality, the operation appears to have entered a protracted period of decline. By the mid-1990s, “the days of profit were long past,” and Crypto “would have gone out of business but for infusions from the U.S. government.”
As a result, the CIA appears to have spent years propping up an operation that was more viable as an intelligence platform than a business enterprise. Its product line dwindled and its revenue and customer base shrank.
But the intelligence kept coming, current and former officials said, in part because of bureaucratic inertia.Many governments just never got around to switching to newer encryption systems proliferating in the 1990s and beyond — and unplugging their Crypto devices. This was particularly true of less developed nations, according to the documents.
Most of the employees identified in the CIA and BND histories are in their 70s or 80s, and some of them have died. In interviews in Switzerland last month, several former Crypto workers mentioned in the documents described feelings of unease about their involvement in the company.
They were never informed of its true relationship to intelligence services. But they had well-founded suspicions and still wrestle with the ethical implications of their decisions to remain at a firm they believed to be engaged in deception.
“Either you had to leave or you had to accept it in a certain way,” said Caflisch, now 75, who left the company in 1995 but continues to live on the outskirts of Zug in a converted weaving factory where she and her family for many years staged semiprofessional operas in the barn. “There were reasons I left,” she said, including her discomfort with her doubts at Crypto and her desire to be home more for her children. After the latest revelations, she said, “It makes me wonder whether I should have left earlier.”
Spoerndli said he regrets his own rationalizations.
“I told myself sometimes it may be better if the good guys in the United States know what is going on between these Third World dictators,” he said. “But it’s a cheap self-excuse. In the end, this is not the way.”
Most of the executives directly involved in the operation were motivated by ideological purpose and declined any payment beyond their Crypto salaries, according to the documents. Widman was among several exceptions. “As his retirement drew near, his covert compensation was substantially increased,” the CIA history says. He was also awarded a medal bearing the CIA seal.
After the BND’s departure, the CIA expanded its clandestine collection of companies in the encryption sector, according to former Western intelligence officials. Using cash amassed from the Crypto operation, the agency secretly acquired a second firm and propped up a third. The documents do not disclose any details about these entities. But the BND history notes that one of Crypto’s longtime rivals — Gretag AG, also based in Switzerland — was “taken over by an ‘American’ and, after a change of names in 2004, was liquidated.”
Crypto itself hobbled along. It had survived the transitions from metal boxes to electronic circuits, going from teletype machines to enciphered voice systems. But it struggled to maintain its footing as the encryption market moved from hardware to software. U.S. intelligence agencies appear to have been content to let the Crypto operation play out, even as the NSA’s attention shifted to finding ways to exploit the global reach of Google, Microsoft, Verizon and other U.S. tech powers.
In 2017, Crypto’s longtime headquarters building near Zug was sold to a commercial real estate company. In 2018, the company’s remaining assets — the core pieces of the encryption business started nearly a century earlier — were split and sold.
The transactions seemed designed to provide cover for a CIA exit.
CyOne’s purchase of the Swiss portion of the business was structured as a management buyout, enabling top Crypto employees to move into a new company insulated from the espionage risks and with a reliable source of revenue. The Swiss government, which was always sold secure versions of Crypto’s systems, is now CyOne’s only customer.
Giuliano Otth, who served as CEO of Crypto AG from 2001 until its dismemberment, took the same position at CyOne after it acquired the Swiss assets. Given his tenure at Crypto, it is likely he was witting to the CIA ownership of the company, just as all of his predecessors in the job had been.
“Neither CyOne Security AG nor Mr. Otth have any comments regarding Crypto AG’s history,” the company said in a statement.
Crypto’s international accounts and business assets were sold to Linde, a Swedish entrepreneur, who comes from a wealthy family with commercial real estate holdings.
In a meeting in Zurich last month, Linde said he had been drawn to the company in part by its heritage and Hagelin connection, a past that still resonates in Sweden. Upon taking over operations, Linde even moved some of Hagelin’s historic equipment from storage into a display at the factory entrance.
When confronted with evidence that Crypto had been owned by the CIA and BND, Linde looked visibly shaken, and said that during negotiations he never learned the identities of the company’s shareholders. He asked when the story would be published, saying he had employees overseas and voicing concern for their safety.
In a subsequent interview, Linde said his company is investigating all the products it sells to determine whether they have any hidden vulnerabilities. “We have to make a cut as soon as possible with everything that has been linked to Crypto,” he said.
When asked why he failed to confront Otth and others involved in the transaction about whether there was any truth to the long-standing Crypto allegations, Linde said he had regarded these as “just rumors.”
He said he took assurance from the fact that Crypto continued to have substantial contracts with foreign governments, countries he assumed had tested the company’s products vigorously and would have abandoned them if they were compromised.
“I even acquired the brand name, ‘Crypto,’ ” he said, underscoring his confidence in the company’s viability. Given the information now coming to light, he said, this “was probably one of the most stupid decisions I’ve ever made in my career.”
The company’s liquidation was handled by the same Liechtenstein law firm that provided cover for Hagelin’s sale to the CIA and BND 48 years earlier. The terms of the 2018 transactions have not been disclosed, but current and former officials estimated their aggregate value at $50 million to $70 million.
For the CIA, the money would have been one final payoff from Minerva.
Reporting for this article was done in collaboration with Peter F. Mueller, a journalist and documentary filmmaker based in Cologne, Germany. Julie Tate in Washington contributed to this report.
Greg Miller is a national security correspondent for The Washington Post and a two-time winner of the Pulitzer Prize. He is the author of “The Apprentice,” a book on Russia’s interference in the 2016 U.S. presidential race and the fallout under the Trump administration.
More sensors mean more data. Today’s battlefield is networked with sensors at an unprecedented scale. It is the Internet of Battlefield Things (IoBT) that encompasses drone payloads, video cameras, signal and radio sensors, cyber sensors and scores of other devices. This cohesive network increases situational awareness, risk assessment, and response time. At the tactical level, IoBT networks connect combat gear embedded with biometric wearables to help soldiers identify the enemy, perform better in battle, and access devices and weapons systems using speedy edge computing.
In fact, the global battlefield management systems market will reach $26.24 billion by 2027, with a CAGR growth rate of 6.4% over the period 2019-2027, according to reportlinker.com.
This state of affairs is by and large enabled by artificial intelligence which is increasingly critical for tapping into data acquired by the exploding volume and diversity of sensors as well as to power emerging applications that rely on this data. AI technologies are expected to shift the burden from human to machine so that only the most relevant and timely data reaches those who need it.
According to C4ISRnet.com, AI can make sense of sensor data in six major aspects:
Video processing with analytics, object and threat detection – for example, the US DoD’s Project Maven has leveraged Google’s TensorFlow AI systems to analyze U.S. drone footage, detect objects of note, and then pass them on to analysts.
Automated cyber security operations – to maintain an edge over cyber adversaries, tapping AI to automate cyber security operations is critical.
Sensor fusion, soldier health monitoring, and augmented reality
EW signal processing and signal intelligence – EW sensors can generate a lot of false signals, or noise. In order to make sense of the data and convert it to actionable information. AI technologies can filter noise and classified signals, reducing the warfighter “cognitive load” when it comes to signal detection.
Predictive maintenance – to prevent the high costs of military vehicle and equipment breakdowns, sensors can supply real-time AI-based data, e.g. a U.S. Army program which uses AI to improve combat readiness for its fleet of Bradley tanks.
Battlefield situational awareness and decision support – Advanced Battle Management Systems (ABMS) was designed to connect technology across US military services to better address increasingly sophisticated adversarial threats. The ABMS field test, which linked communications and sensor data collected by Air Force and Navy fighters, a naval destroyer, and an Army unit, is part of a new warfighting concept that envisions coordinated combat that spans the five warfare domains: land, sea, air, space, and cyberspace.
Experts in this field claim that a human still has a role at the battlefield, but the challenges t would be very different from what we have known – his situational awareness, adversary identification capabilities, real-time intelligence, forces location, etc. – all these will be at the tip of his fingers.
Interested in learning more about the role of AI in tactical systems? Attend i-HLS’s InnoTech Expo in Tel Aviv – Israel’s largest innovation, HLS, and cyber technologies expo – on November 18-19, 2020 at Expo Tel Aviv, Pavilion 2.
Oracle VP highlights what happens when data leaves your devices.
No SIM card, no browser or app open, only the WiFi connection enabled: Android constantly transmits: GPS location, time & date, movement, temperature, atmospheric pressure, other smartphones and WiFi hotspots nearby — all to Google, to the tune of 4 megabytes each hour.
During a keynote presentation at the Competitive Carriers Association’s Mobile Carriers Show, Oracle Vice President of Strategic Initiatives Peter Lord provided an illuminating look at the amount and specificity of data sent from Android-based smartphones to Google, which created the pervasive mobile operating system.
He prefaced the presentation by noting, “This is not a magic show,” then explained how Oracle became interested in how Google uses data to conduct ad targeting. Engineers used an out-of-the-box Android device, coupled with a network tap and other monitoring tools, to understand the process.
“Android has taken over global compute,” Lord said, noting the OS runs more than 70% of global computing. “These devices are data collection devices. As a network provider, you get some information about your calls you’re making and what not. But information about the user and the data from that device, that goes to Google.” Same with sensor data, application data and more. “These devices…they know who you are.”
Lord said the demo phone, configured to default settings, sent 4.2 megabytes of upstream data compared to 150 kilobytes of downstream data when not in use for a period of time.
He said information leaving the phone is “probably for someone else’s benefit. If I’m roaming on your network, I’m paying Google. I’m subsidizing Google with my cell subscriber plan. That information…is not something that I thought I was sharing with anyone. Moreover, I didn’t think I was actually having to pay for it.”
Running through where the data was going, Lord pointed out a number of Google destinations as well as Facebook, which wasn’t even running on the phone. “We haven’t signed into Facebook. Why is this phone talking to Facebook? They’re actually trying to figure out the network quality and screen size of this device. They’re trying to give themself a fast lane on this device. That’s without me launching the app. It’s really curious for us as to why that’s actually happening.”
For a look at Lord’s full presentation, check out this video from CCA:
Normally creating a traffic jam takes actual traffic, like the cars seen here. With a wagon full of smartphones, a traffic jam can be created without the need for a long line of cars. (EveryPicture, via Wikimedia Commons CC-BY-SA-3.0)
A single red wagon, hand pulled down the middle of a lightly traveled street, is an odd delivery mechanism for an electronic warfare attack.
It is only slightly less unusual as a kind of art exhibit. But the wagon’s payload, and its artist brush, is the same: 99 second-hand smartphones, all opened to Google Maps.
In a simple demonstration, Berlin-based artist Simon Weckert rolled the wagon full of phones through several streets and, in so doing, created virtual traffic jams as Google Maps interpreted the phones as slow-moving cars. Screen captures of the demonstration, paired with video from the street, show the traffic mapper interpreting the wagon phones as first nothing, then as a slowdown, and then in a deep red line painted over the virtual road, as a rush hour-esque standstill.
It is not that often that a Berlin digital arts experiment has lessons for electronic warfare and digital manipulation, but with the greater proliferation of virtual environments its worth pulling a few principles from this wagon of tricks.
First: identify how the default use of a system can be actively gamed.
Basing traffic density algorithms on the number of smartphones geolocated to a path along a street is, by and large, an effective short-hand for mapping traffic density in an era where cars themselves do not broadcast their location. Faking traffic, as done in real life by Weckert here or as explored within the code of the navigation apps as with this Waze demonstration from 2014, is a risk, but one that mostly requires deliberate action, and which can be checked against in-person observation, if needed.
Second: virtual hacks mostly cause real-life obstacles for people who rely on them.
Without having been in Berlin as Weckert rolled his wagon down the street, it’s hard to conclusively say what effect the virtual traffic jam had. For people already on the road, the new route information may have redirected them elsewhere, but only if they were also using a traffic-navigation aide.
As the military adopts tools like ATAK, the Android Team Awareness Kit, for tracking and coordinating movement in a virtual environment, planners and commanders should be aware of the possibility that additional, misleading information is pumped into the same system. Hiding the location of a formation of troops, or creating a false impression of a team in a vital overwatch position, are ways a spoofed virtual environment could lead to disaster.
Third: the existence of tracking data from commercial smart devices is only going to complicate the future.
Weckert’s demonstration used phones to simulate cars in a civilian street. That alone could be a means for forcing a reroute of a target and laying an ambush, should a malicious actor decide to do so. (And if Google doesn’t respond to mitigate how the map hack worked.) In a future where infantry carry personnel trackers, spoofed Fitbits attached to a drone could allow an adversary to create a false impression of peril far from where they want to act, pulling needed resources away from a fight on a virtual snipe chase.
Because virtual environments are used in real-time to understand and interpret the world, manipulating effects in a virtual space can spill over to real-world consequences.
New research from IOActive has found that “blindly” trusting the encryption of the widely adopted device protocol can lead to DDoS, sending of false data and other cyber attacks.
The LoRaWAN protocol has become standard in the world of industrial IoT because of its support for low-power wireless devices over long distances and its end-to-end encryption technology. However, bad implementations and security flaws make the protocol a real blind spot in the fraught world of IoT security, as LoRaWAN is easily susceptible to threats that could cause widespread disruption and even destruction if it’s not implemented correctly, IOActive researchers have found.
LoRaWAN, or Long Range Wide Area Networking protocol, allows low-powered devices to communicate with internet-connected applications over long-range wireless connections. Users and developers of IoT devices in smart cities, industrial IoT, smart homes, smart utilities, vehicle tracking and healthcare have widely embraced the protocol because of the false sense of security its encryption provides, according to a report by IOActive released Tuesday.
In reality, LoRaWAN encryption keys are easily obtained by a savvy hacker to conduct DDoS attacks and send false data to networks, researchers have found. Moreover, it’s currently impossible for organizations to know if a LoRaWAN network is under attack or if an encryption key has been compromised, making defending such attacks perilous, they said.
Indeed, it’s the perception that LoRaWAN is inherently secure that makes it so dangerous, noted Cesar Cerrudo, CTO at IOActive, the lead author of the report, “LoRaWAN networks susceptible to hacking: Common cyber security problems, how to detect and prevent them.”
“The LoRaWAN protocol is advertised as having ‘built-in encryption’ making it ‘secure by default,’” he wrote in the report. “As a result, users are blindly trusting LoRaWAN networks and not paying attention to cyber security; however, implementation issues and weaknesses can make these networks easy to hack.”
The LoRaWAN protocol defines two layers of security: one at the network level and another at the application level, researchers described in the report.
The network-level security ensures the authenticity of the device in the network, providing integrity between the device and the network server, they wrote. The application-layer security is responsible for confidentiality with end-to-end encryption between the device and the application server, preventing third parties from accessing the application data being transmitted.
Each layer of protection depends on the security of two encryption keys–the Network Session Key (NwkSKey) and the Application Session Key (AppSKey), both of which are 128 bits long. These keys are “the source of the network’s only security mechanism, encryption,” and thus, once cracked, basically give hackers an open invitation to the devices and networks being protected by them, researchers noted.
The problem with this architecture is that the keys are surprisingly easy to obtain for people who aren’t supposed to have access to the network or devices, researchers found, who outline numerous ways bad actors can obtain the keys to LoRaWAN networks.
These methods include: using reverse engineering to “sniff” keys from devices; obtaining keys from device tags displaying the code administrators forgot to remove before a device was placed in its final location; stealing source code for a device from open-source repositories or vendors websites; guessing keys that show lack of sufficient randomness; or cracking a network with default or weak credentials or other security vulnerabilities and stealing the keys from these servers.
Other ways hackers can obtain encryption keys to LoRaWAN networks include by compromising the system of the device manufacturer responsible for installing the firmware with device keys; hacking the devices or computers of technicians responsible for deploying devices where the keys might be stored; obtaining the keys from flash drives or emails of clients or device manufacturers where they were disclosed and shared; breaching a service provider who had keys stored in their backups or databases; or obtaining an AppKey in a dictionary or brute-force attack, researchers wrote.
Once bad actors obtain the encryption keys for a LoRaWAN network, they have a number of attack options available “to compromise the confidentiality and integrity of the data flowing to and from connected devices,” IOActive researchers wrote. These include conducting DDoS attacks that can disrupt communications between connected devices and the network server so companies can’t receive any data.
Attackers also can use the keys to intercept communications and replace these with false data, such as fake sensor and meter readings. In this way, bad actors can hide malicious activity or cause industrial equipment to damage itself, which could not just cause company disruption but potentially destruction of infrastructure or facilities if this occurs at a power plant or in the location of other critical infrastructure, researchers said.
The potential for these attacks is especially troubling since companies have no way to currently detect them, researchers noted. To help solve this issue, IOActive has released a LoRaWAN Auditing Framework on GitHub to help security administrators to audit and pentest the security of their LoRaWAN implementations.
Above all, researchers recommend that those implementing LoRaWAN networks make protecting security keys a top priority in the security of their implementations. Easy ways to do this include replacing keys provided by vendors with random keys; using different keys for different devices; auditing the root keys used to detect weak keys; and making sure service providers follow security best practices and have a secure infrastructure, they said.
In Deutschland wird derzeit diskutiert, ob der Staat genug in Infrastruktur und Bildung investiert. Wie die Statista-Grafik auf Basis einer Auswertung des Handelsblatts zeigt, ist das Volumen nicht abgerufener Fördergelder beträchtlich. So sind die Gelder der beiden Fonds, mit denen besonders finanzschwache Kommunen gefördert werden sollen, bis Ende letzten Jahres zu rund 44 Prozent bzw. 92 Prozent noch nicht abgerufen worden. Mit den beiden so genannten Kommunalinvestitionsförderungsfonds sollen unter anderem Krankenhäuser oder Straßen saniert werden.
Ähnlich ist die Lage beim Digitalfonds, wo nur ein Bruchteil des Gesamtvolumens geflossen sind. Der Fond besteht allerdings auch erst seit letztem Jahr. Mit dem Fonds sollen der Breitbandausbau und die Digitalisierung von Schulen gefördert werden. Mit dem Kita-Ausbaufonds sollen 100.000 zusätzliche Betreuungsplätze für Kinder im Alter von drei Jahren geschaffen werden. Das Investitionsprogramm wurde 2017 ins Leben gerufen und soll 2020 abgeschlossen sein. Derzeit sind jedoch erst 0,25 von 1,1 Milliarden Euro abgerufen worden. Auch die Gelder des Ausbauhilfefonds Hochwasser sind noch nicht komplett geflossen. Mit den Mitteln sollen die Schäden der Hochwasserkatastrophe des Jahres 2013 beseitigt werden. Betroffen sind 11 der 16 Bundesländer.
Dies wirft die Frage auf, ob der Investitionsstau in Deutschland tatsächlich mit mehr finanziellen Mitteln zu lösen ist. Eine Untersuchung des IW Köln (PDF-Download) aus dem Jahr 2017 weist auf einen wichtigen Grund für die unbefriedigende Situation hin: so bestünde im Bereich Infrastruktur in vielen Bundesländern ein Mangel an baufähigen Projekten. Das bedeutet, bei diesen Vorhaben besteht kein sofortiges Baurecht. Die Gelder würden dann vielfach an die Bundesländer fließen, die über Projekte verfügen, die baureif sind. Im Bereich Verkehrsinfrastruktur hätte hiervon vor allem Bayern profitiert. Der Mangel an baufähigen Projekten bestehe hauptsächlich aufgrund von Kapazitätsengpässen in Baubehörden, die durch Personalabbau zustande gekommen seien.
Die Digitalwirtschaft des Silicon Valley konnte ihre weltweite Vormachtstellung weiter ausbauen. Plattform-Unternehmen wie Apple, Microsoft, Amazon, Facebook oder Google, dessen Mutterkonzern Alphabet als vierter US-Konzern eine Börsenbewertung von mehr als einer Billion Dollar erreichte, dominieren die westliche Welt und treffen nur in Asien auf ebenbürtige Konkurrenten. Europa ist abgemeldet.
Shipping at only $149, Brave Heart is a fully open-source smartphone running Linux.
Pine64’s open source PinePhone runs Linux and is designed for developers and early-adopters.
Computer and developer-board maker Pine64 has started shipping the first edition of its much-anticipated – at least in the open-source community – PinePhone, after pre-orders sold out. Dubbed “Brave Heart”, the device is indeed designed only for the keener hobbyists.
Shipping at only $149.99, Brave Heart is a fully open-source smartphone running Linux, which the company claims was developed “with the community for the community”, which means with developers and early adopters, and for developers and early adopters; and in this case, preferably for those who have extensive Linux experience.
In a departure from Android and iOS, Pine’s new project provides a platform for customers to develop Linux-on-phone projects. It does not come with a pre-installed OS, but supports all major Linux phone projects such as Ubuntu Touch, Sailfish OS and Plasma Mobile.
Although buyers get to choose their OS, it will be up to them to upload the platform to the Pine Phone – meaning the device is not designed for the average Joe.
“The “BraveHeart” Edition PinePhone does not come with default OS build installed, user needs to install their own favorite build. Most of the OS builds are still in beta stage,” it notes: “Only intend for these units to find their way into the hands of users with extensive Linux experience and an interest in Linux-on-phone.”
The company has been selling single-board computers and notebook computers, initially to compete with Raspberry Pi, since 2016. The devices are designed for developers who are interested in free and open-source software (FOSS) to work on applications. “Regardless of if you want to sequence DNA, build a robot or kill space invaders, we’ve got you covered,” says Pine64 on its website.
Powered by the same signature quad-core ARM64 found in Pine’s A64 single-board computers, the new phone’s specs are promising. Brave Heart has 2GB of RAM, 16GB of storage, a 5MP rear camera and a 2MP front one. There is also a headphone jack, a USB-C port and a Micro-SD slot.
Keeping in line with the company’s objectives, Pine64 also includes strong privacy settings in the new device. Under the removable back, for example, are six dip switches that let users kill the modem, GPS, WiFi, Bluetooth, microphone and cameras.
Pine64 has called the Brave Heart device a “milestone” for the company and the phone has certainly generated a lot of enthusiasm among developers. Although the early version of the Pine Phone is only shipping to the select few, the company says a consumer-ready version will be available from Spring 2020.
The manufacturer is also working on an open-source Linux tablet with a detachable keyboard, as well as on a smartwatch, so watch this space for more.
The “BraveHeart” Limited Edition PinePhones are aimed solely for developer and early adopter. More specifically, only intend for these units to find their way into the hands of users with extensive Linux experience and an interest in Linux-on-phone.
The “BraveHeart” Edition PinePhone does not come with default OS build installed, user needs to install their owns favorite build. Most of the OS builds are still in beta stage.
Estimate dispatch in mid January 2020
Dimensions: 160.5mm x 76.6mm x 9.2mm
Weight: 185 grams
Type: HD IPS capacitive touchscreen, 16M colors
Size: 5.95 inches
Resolution: 1440×720 pixels, 18:9 ratio
OS: Various open source mainline Linux or BSD mobile OSes
Chipset: Allwinner A64
CPU: 64-bit Quad-core 1.2 GHz ARM Cortex A-53
Internal Flash Memory: 16GB eMMC
System Memory: 2GB LPDDR3 SDRAM
Expansion: micro SD Card support SDHC and SDXC, up to 2TB
Privacy Switches: LTE (include GPS), Wifi/BT, Mic, and Camera
Removable Li-Po 2750-3000 mAh battery
Charging: USB type-C, 15W – 5V 3A Quick Charge, follows USB PD specification
USB-A to USB-C charging cable
Warranty: 30 days
The “BraveHeart” Limited Edition PinePhones are aimed solely for developer and early adopter. More specifically, only intend for these units to find their way into the hands of users with extensive Linux experience and an interest in Linux-on-phone.
Due to Lithium-ion battery in PinePhone, the shipment of PinePhone orders will be handled differently from other Pine64 products, that’s the reason we didn’t allow to combined PinePhone order with other Pine64 products. Sorry for any inconvenience caused.
Small numbers (1-3) of stuck or dead pixels are a characteristic of LCD screens. These are normal and should not be considered a defect.
When fulfilling the purchase, please bear in mind that we are offering the PinePhone at this price as a community service to PINE64, Linux and BSD communities. If you think that a minor dissatisfaction, such as a dead pixel, will prompt you to file a PayPal dispute then please do not purchase the PinePhone. Thank you.
Fazit: Herbert Diess, der von BMW zu Volkswagen kam, hielt eine Sturmrede, die helfen soll den Nokia-Moment zu vermeiden. Er hat erkannt, dass die größte Gefahr für die deutsche Volkswirtschaft in einer stolzen Vergangenheit und den saftigen Gewinnen der Gegenwart liegt.
Gerade an der Spitze der altehrwürdigen Unternehmungen werden jetzt keine Manager gebraucht, sondern Revolutionäre. Die großen Familienunternehmer des Landes, die Familien von Siemens, Henkel, Haniel, von Holtzbrinck, Merck, Quandt und Albrecht, die Schaefflers, die Porsches und die Wackers sollten ihre Denkroutinen durchbrechen, bevor die ihnen anvertrauten Unternehmungen von der Moderne geflutet werden.
Peter Sloterdijk hat in „Die schrecklichen Kinder der Neuzeit“ präzise beschrieben, was die Selbstgewissen und Schläfrigen erwartet:
„Vergangenheit und Gegenwart bilden die Inkubationszeit eines Ungeheuers,
das unter einem trügerisch harmlosen Namen am Horizont auftaucht: das Neue.“
Morgen stellt Microsoft den Support für Windows 7 ein.
Das Betriebssystem ist derzeit laut NetMarkeShare mit einem Desktop-Marktanteil von 26,6 Prozent die Nummer zwei hinter Windows 10. Das heißt, dass ab Dienstag weltweit Dutzende Millionen Menschen keine Updates mehr für ihr Betriebssystem bekommen. Damit wird die 2010 erschienene Windows-Version für Anwender zum Sicherheitsrisiko.
Das gilt vor allem für Privatpersonen. Unternehmen und Behörden erhalten gegen Bezahlung drei weitere Jahre Support. Wer dennoch weiter auf Windows 7 benutzt, sollte sich der Gefahren bewusst sein. Dazu das Bundesamt für Sicherheit in der Informationstechnik: “Da öffentlich bekannte Schwachstellen nicht mehr geschlossen werden, birgt die weitere Nutzung von Windows 7 hohe Risiken für die IT-Sicherheit”.
Researchers have managed to quantum teleport information between two computer chips for the first time
Scientists at the University of Bristol and the Technical University of Denmark have achieved quantum teleportation between two computer chips for the first time. The team managed to send information from one chip to another instantly without them being physically or electronically connected, in a feat that opens the door for quantum computers and quantum internet.
This kind of teleportation is made possible by a phenomenon called quantum entanglement, where two particles become so entwined with each other that they can “communicate” over long distances. Changing the properties of one particle will cause the other to instantly change too, no matter how much space separates the two of them. In essence, information is being teleported between them.
Hypothetically, there’s no limit to the distance over which quantum teleportation can operate – and that raises some strange implications that puzzled even Einstein himself. Our current understanding of physics says that nothing can travel faster than the speed of light, and yet, with quantum teleportation, information appears to break that speed limit. Einstein dubbed it “spooky action at a distance.”
Harnessing this phenomenon could clearly be beneficial, and the new study helps bring that closer to reality. The team generated pairs of entangled photons on the chips, and then made a quantum measurement of one. This observation changes the state of the photon, and those changes are then instantly applied to the partner photon in the other chip.
“We were able to demonstrate a high-quality entanglement link across two chips in the lab, where photons on either chip share a single quantum state,” says Dan Llewellyn, co-author of the study. “Each chip was then fully programmed to perform a range of demonstrations which utilize the entanglement. The flagship demonstration was a two-chip teleportation experiment, whereby the individual quantum state of a particle is transmitted across the two chips after a quantum measurement is performed. This measurement utilizes the strange behavior of quantum physics, which simultaneously collapses the entanglement link and transfers the particle state to another particle already on the receiver chip.”
The team reported a teleportation success rate of 91 percent, and managed to perform some other functions that will be important for quantum computing. That includes entanglement swapping (where states can be passed between particles that have never directly interacted via a mediator), and entangling as many as four photons together.
Information has been teleported over much longer distances before – first across a room, then 25 km (15.5 mi), then 100 km (62 mi), and eventually over 1,200 km (746 mi) via satellite. It’s also been done between different parts of a single computer chip before, but teleporting between two different chips is a major breakthrough for quantum computing.
Top 10 Breaches and Leaky Server Screw Ups of 2019
From massive credential spills on the Dark Web and hacked data to card-skimming and rich profiles exposed by way of cloud misconfigurations, 2019 was a notable year for data breaches. Big names like Capital One, Macy’s and Sprint were impacted, as was the entire country of Ecuador and supply-chain companies like the American Medical Collection Agency. Here are our Top 10 data leak moments of the year.
Collections 1-4 Spill Millions of Credentials on the Dark Web
The year started out with a bang when a huge trove of data – containing 773 million unique email addresses and passwords – was discovered on a popular underground hacking forum. The credential spill was dubbed “Collection #1” and totaled 87 GB of data, with records culled from breaches that occurred as far back as 2010, including the well-known compromise of Yahoo. It was one of the largest jackpots ever seen when it comes to account-compromise efforts. Collections 2-4 soon followed, and ultimately more than 840 million account records from 38 companies appeared for sale on the Dark Web in February.
AMCA Supply-Chain Breach Impacts 20.1 Million
A hack of the American Medical Collection Agency (AMCA), a third-party bill collection vendor, impacted 20.1 million patientsover the summer, exposing personally identifiable information such as names, addresses and dates of birth, and also payment data. Three clinical laboratories offering blood tests and the like that relied on AMCA to process a portion of their consumer billing were hit: 12 million patients from Quest Diagnostics, another 7.7 million patients from LabCorp and 400,000 victims from OPKO Health.
Capital One: Another Year, Another Major FinServ Breach
In July, a massive breach of Capital One customer data hit more than 100 million people in the U.S. and 6 million in Canada. Thanks to a cloud misconfiguration, a hacker was able to access credit applications, Social Security numbers and bank account numbers in one of the biggest data breaches to ever hit a financial services company — putting it in the same league in terms of size as the Equifax incident of 2017. The FBI arrested a suspect in the case: A former engineer at Amazon Web Services (AWS), Paige Thompson, after she boasted about the data theft on GitHub. Researchers said that Capital One victims are going to be phished for years to come – long after their 12 months’ of credit monitoring is done.
Facebook ‘s Year of Breach Problems
Facebook had a bad year for breaches, including the December emergence of a hacked database containing the names, phone numbers and Facebook user IDs of 267 million platform users. The data may have been stolen from Facebook’s developer API before the company restricted API access to phone numbers and other data in 2018. And in September, an open server was discovered leakinghundreds of millions of Facebook user phone numbers. In April, researchers found two separate datasets, held by two app developers (Cultura Colectiva and At the Pool). The actual data source for the records (like account names and personal data) in these databases was Facebook.
Deep Profiles for the Entire Population of Ecuador Are Exposed
In September it came to light that the entire population of Ecuador (as well as Julian Assange) had been impacted by an open database with rich, detailed life information collected from public-sector sources by a marketing analytics company. The trove of data offered any attacker the ability to cross-reference and combine the data into a highly personal, richly detailed view of a person’s life. The records, for 20 million individuals, were gleaned from Ecuadorian government registries, an automotive association called Aeade, and the Ecuadorian national bank. Ecuador has about 16.5 million citizens in total (some of the entries were for deceased persons).
1.2B Rich Profiles Exposed By Data Brokers
In a similar incident to the Ecuador debacle, an open Elasticsearch server emerged in December that exposed the rich profiles of more than 1.2 billion people. The database consisted of scraped information from social media sources like Facebook and LinkedIn, combined with names, personal and work email addresses, phone numbers, Twitter and Github URLs and other data. Taken together, the profiles provide a 360-degree view of individuals, including their employment and education histories. All of the information was unprotected, with no login needed to access it. The data was linked to People Data Labs (PDL) and OxyData.io
Security Specialist Imperva Smarts from Cloud Misconfiguration
In an ironic turn of events, cybersecurity company Imperva allowed hackers to steal and use an administrative Amazon Web Services (AWS) API key in one of Imperva’s production AWS accounts, thanks to a cloud misconfiguration. Hackers used Imperva’s Cloud Web Application Firewall (WAF) product to access a database snapshot containing emails, hashed and salted passwords, and some customers’ API keys and TLS keys. Because the database was accessed as a snapshot, the hackers made off with only old Incapsula records that go up to Sept. 15, 2017. However, the theft of API keys and SSL would allow an attacker to break companies’ encryption and access corporate applications directly.
Sprint Contractor Lays Open Phone Bills for 260K Subscribers
A cloud misconfig was also behind hundreds of thousands of mobile phone bills for AT&T, Verizon and T-Mobile subscribersbeing exposed to the open internet in December, thanks to the oversight of a contractor working with Sprint. More than 261,300 documents were stored – mainly cell phone bills from Sprint customers who switched from other carriers. Cell phone bills are a treasure trove of data, and include names, addresses and phone numbers along with spending histories and in many cases, call and text message records.
Magecart Siphons Off Millions of Payment Card Details
Magecart, the digital card-skimming collective encompassing several different affiliates all using the same modus operandi, is now so ubiquitous that its infrastructure is flooding the internet, researchers said earlier this year. Magecart attacks, which involve inserting virtual credit-card skimmers into e-commerce check-out pages, affected a range of companies throughout 2019; these included bedding retailers MyPillow and Amerisleep, the subscription website for the Forbes print magazine, at least 80 reputable brands in the motorsports industry and luxury apparel segments, popular skin care brand First Aid Beauty, Macy’s and streaming video and podcast content company Rooster Teeth.
Equifax Settlement Rankles Consumers
Equifax made notable news this year when it agreed to pay as much as $700 million to settle federal and state investigations on the heels of its infamous 2017 breach, which exposed the data of almost 150 million customers. That includes $300 million to cover free credit monitoring services for impacted consumers, $175 million to 48 states in the U.S, and $100 million in civil penalties. Some consumers are furious over what they view as an unfair settlement though, with 200,000 of them signing a petition against the deal. The petition argues that very little of that cash will trickle down to those who actually suffered because of the breach.
Coinfloor’s CEO Explains Decision to Delist All Crypto but Bitcoin
London-based cryptocurrency exchange Coinfloor will delist all cryptocurrencies but Bitcoin (BTC) to focus on Bitcoin only services in January.
The United Kingdom’s oldest crypto exchange will delist all cryptos including the second-biggest altcoin Ether (ETH) and Bitcoin Cash (BCH) in conjunction with the 11th anniversary of Bitcoin’s launch on Jan. 3, 2020, Coinfloor said in a blog post on Dec. 17.
Bitcoin is the only cryptocurrency that is proven so far, Coinfloor CEO says
Obi Nwosu, CEO and founder of Coinfloor, said that Coinfloor’s move comes in line with the company’s vision to focus on cryptocurrencies that are “proven” so far.
In an interview with Cointelegraph on Dec. 17, Nwosu argued that Bitcoin is the “only game in town,” because the major cryptocurrency is doing great with its mission to provide a new form of store of value, or digital gold.
According to the executive, Ethereum technology has not been proven to date because it has yet to overcome major changes including the network’s transition to Ethereum 2.0, which is also expected to take place in January 2020. In the interview, Nwosu said that he believes that the single fact that Ethereum core developers are working on Ethereum 2.0 to replace Ethereum 1.0 shows that Ethereum is not proven. Nwosu said:
“Purely objectively speaking, if the developers are working on a replacement to Ethereum, they don’t believe that it currently solves the problem it is meant to solve.”
In contrast, Bitcoin is “already solving the problem today” despite the continuing efforts by developers to improve the major cryptocurrency, according to Nwosu:
“People are looking at improving Bitcoin, but to be clear, the view is right now Bitcoin is already a good solution to the problem. Everything else is cream on top of the coffee. It is already solving the problem today.”
Coinfloor may bring Ether back as soon as it becomes proven
As soon as Coinfloor becomes a Bitcoin-only exchange in January, its customers will not be able to deposit, purchase or sell Ether on the platform. However, Ether custody and withdrawals will still be supported after the date at an increased “administrative fee,” according to an official announcement.
As Coinfloor is about to delist Ether after listing it in January 2019, the exchange might consider relisting the altcoin as soon as the cryptocurrency becomes “proven” in future, Nwosu noted.
In the interview, the Coinfloor CEO also suggested that Coinfloor is the first crypto exchange to become crypto monogamous because they realized that Bitcoin is “way ahead of everyone else.” Nwosu added that he anticipates more exchanges following their decision in the near future.
3D printing has proven itself useful in so many industries that it’s no longer necessary to show off, but some people just can’t help themselves. Case in point: this millimeter-tall rendition of Michelangelo’s famous “David” printed with copper using a newly developed technique.
It was created using Exaddon’s “CERES” 3D printer, which lays down a stream of ionized liquid copper at a rate of as little as femtoliters per second, forming a rigid structure with features as small as a micrometer across. The Tiny David took about 12 hours to print, though something a little simpler in structure could probably be done much quicker.
As it is, the level of detail is pretty amazing. Although, obviously, you can’t recreate every nuance of Michelangelo’s masterpiece, even small textures like the hair and muscle tone are reproduced quite well. No finishing buff or support struts required.
Of course, we can create much smaller structures at the nanometer level with advanced lithography techniques, but that’s a complex, sensitive process that must be engineered carefully by experts. This printer can take an arbitrary 3D model and spit it out in a few hours, and at room temperature.
But the researchers do point out that there is some work involved.
“It is more than just a copy and downsized model of Michelangelo’s David,” said Exaddon’s Giorgio Ercolano in a company blog post. “Our deep understanding of the printing process has led to a new way of processing the 3D computer model of the statue and then converting it into machine code. This object has been sliced from an open-source CAD file and afterwards was sent directly to the printer. This slicing method enables an entirely new way to print designs with the CERES additive micromanufacturing system.”
Much smaller than that doesn’t work, though — Micro-David starts looking like he’s made of Play-Doh snakes. That’s fine, they’ll get there eventually.
The team published the details of their newly refined technique (it was pioneered a few years ago but is much better now) in the journal Micromachines.
The old dream of an internet run in the public interest has long dissipated under pressure from huge corporations seeking to profit from what has become a worldwide information utility.
But one corner of the web seemed to maintain its character as a preserve for public service — the .org domain, which since its creation has been reserved for nonprofit organizations and has become something of a badge of honor of noncommercial activity.
That’s why many in the nonprofit world were startled by the announcement on Nov. 13 that the .org registry had been sold to a private equity firm, Ethos Capital. The seller was the Internet Society, a nonprofit that plays an important role in creating and maintaining internet engineering standards, but has been mostly the guardian of the .org domain. The price, as was revealed more than two weeks later, was a stunning $1.135 billion.
A private equity firm has an incentive to sell censorship as a service.
Mitch Stoltz, Electronic Frontier Foundation
In the original announcement, Internet Society Chief Executive Andrew Sullivan called the sale “an important and exciting development” and described Ethos as “a strong strategic partner that understands the intricacies of the domain industry.”
Others are not so sure. Ethos didn’t even exist until earlier this year, and currently appears to have only two employees, including Erik Brooks, its founder.
Brooks listed his investment principles for me as “intellectual honesty, humility and respect and believing that prosperity can be built together.” But a week after the sale announcement, it emerged that the financial backers of Ethos included several firms with more conventional investment approaches, including funds associated with the families of H. Ross Perot, Mitt Romney and the Johnsons, owners of Fidelity Investments.
Brooks says Ethos is committed to running the .org registry in accordance with principles followed by the Internet Society, but hasn’t made that commitment in writing.
At stake are internet addresses ending in “.org” used by some 10 million organizations. The .org designation, or domain, is one of the oldest on the internet, along with .com (for commercial businesses), .edu (educational institutions), .gov (government agencies) and a handful of others.
Not every dot-org meets the public service standard, since applicants aren’t screened. Websites for political fronts, such as the Koch network’s Americans for Prosperity, carry the .org label. So do sites for neo-Nazi hate groups.
But for the most part, organizations genuinely aimed at doing good tend to choose .org addresses. And, for that matter, so do Democratic and Republican party websites.
The domain holds a special place in the hearts of internet users; environmentalist and internet activist Jacob Malthouse calls .org a “digital Yosemite,” evoking the reverence naturalists such as John Muir felt for the real thing.
I’m very concerned about the sale of .org to a private company. If the Public Interest Registry ends up not being required to act in the public interest, it would be a travesty. We need an urgent explanation.#SaveDotOrg
During a recent online discussion on the sale, Jon Nevett, chief executive of the Public Interest Registry, or PIR, the Internet Society unit that manages .org and is the entity being sold to Ethos, called it “the crown jewel of the domain name system, full stop.”
The sale, which is expected to close in the first quarter of next year, could be derailed only by two entities. One is the Internet Corp. for Assigned Names and Numbers, or ICANN, the web’s Playa Vista-based governing body, which could rule on the transfer any day now. The other is Pennsylvania Orphans Court, which has jurisdiction because PIR is a nonprofit incorporated in that state.
In the meantime, the deal has drawn brickbats from several internet luminaries.
The parties involved in the sale have tried to tamp down the controversy, without notable success. On Nov. 29, Sullivan and Gonzalo Camarillo, the Internet Society chairman, held a conference call with users to defend the deal.
That was followed by a web discussion on Dec. 5 hosted by NTEN, an advocacy group for nonprofits, at which Sullivan was joined by Brooks and Nevett.
Brooks said he was committed to operating PIR in the dot-org community’s interest but was vague about the “mechanism” that would be established to do so. He said Ethos would not be making its financial data public, unlike the Internet Society, which issues an annual financial disclosure.
The dot-org community has two main concerns about the sale. One is that Ethos will jack up the registration fee for .org websites, which is currently about $10 per year and has been subject to a traditional limit on increases of 10% a year.
More important may be Ethos’ ability to facilitate more censorship of .org websites by allowing third parties more latitude to object to content on those sites and prompt their shutdown.
“The .org registry is a point of control on the internet,” says Mitch Stoltz, an attorney at the Electronic Frontier Foundation, which has launched a campaign protesting the deal. “A private equity firm has an incentive to sell censorship as a service.”
Already, registrars of other domains have cut agreements with corporate players, such as the Motion Picture Assn. of America, giving them the authority to order shutdowns of sites they claim are infringing on copyrights without affording site owners the opportunity to appeal.
As founding chairman of#ICANN, I’m appalled… This is not what we were working for. ICANN races towards regulatory [and financial] capture: the great .ORG heisthttps://t.co/LvNYnsyEk4
Academic publishers such as Elsevier have won court rulings aimed at shutting down Sci-Hub, a web service that offers free access to copyrighted scientific research — but it’s up to registries to decide whether to comply with the court orders. And repressive governments such as Turkey and Saudi Arabia have worked through internet intermediaries to censor information on the web.
As the owner of the .org domain, Stoltz observes, Ethos could “enforce any limitations on nonprofits’ speech.” Since many nonprofit organizations “are engaged in speech that seeks to hold governments and industry to account, those powerful interests have every incentive to buy the cooperation of a well-placed intermediary, including an Ethos-owned PIR.”
Brooks said during the NTEN forum that Ethos would take steps to ensure that “.org is a domain that’s open and free and not curated or censored in any way, shape or form.” But he stopped short of agreeing to a legally binding undertaking.
Adding to misgivings about the sale is its chronology. Talks between Ethos and the Internet Society began only weeks after June 30, when ICANN removed price restrictions on the .org domain and made it easier for PIR to take down sites that were the subject of third-party complaints about content.
Brooks says the end of the price caps had nothing to do with the sale, which he would have pursued anyway. But the deal’s critics point out that nonprofits with .org addresses are a “captive audience” for the domain’s owner. Once an organization has begun operating as a dot-org, changing to a different domain would be horrifically costly. Followers would have to be notified of the internet name change, email addresses reconfigured, and so on.
That would give Ethos considerable latitude to raise prices, notwithstanding Brooks’ promise to limit increases to 10% a year.
Sullivan and Camarillo said in their conference call that they had not been planning to put PIR up for sale, but Ethos’ bid was so large “we couldn’t just say no without considering” it.
Since the announcement, Ethos and the Internet Society have been stingy with details of the deal and its goals. Only on Nov. 20 — a week after the sale was announced — did Sullivan reveal, in an email to insiders, that the financial backers of Ethos included Perot Holdings, which is the investment arm of the late Ross Perot’s family; FMR LLC, which owns Fidelity Investments and is privately controlled by the Johnson family of Boston; and Solamere Capital, which was co-founded by Tagg Romney, son of Mitt Romney (who was himself a Solamere partner until he joined the U.S. Senate this year).
One open question is what Ethos expects to gain from its purchase. Domain registries such as PIR are responsible chiefly for maintaining a database of registrations and collecting annual fees. That makes the job “pretty much a license to print money,” Stoltz says.
Will Ethos and its private financial backers be satisfied with running a demure internet registry in the public interest, as opposed to squeezing their $1.135-billion investment for every penny?
Brooks told me by email that he expects PIR to invest in “growth initiatives” to “provide Ethos with a good return on its investment.” Yet there doesn’t seem to be much scope for turbocharging demand for the .org domain, which largely sells itself. That means the opportunity for generating more revenue could hinge on raising the annual fee, unless the firm has other new ideas.
As for the Internet Society, its interest seemed to be stabilizing its finances by replacing the revenue from .org fees — which reached $44.4 million last year, about 85% of its total revenue — with income from a professionally managed $1.135-billion endowment. “Responsibly invested and managed,” Sullivan told listeners on the Nov. 29 conference call, the society could replicate its annual take from .org fees “in perpetuity.”
Sullivan’s words point to what may really be roiling the dot-org community about the deal. That’s the transformation of what was one of the last vestiges of the web’s image as a public utility managed informally in the public interest, immune from commercial or government control, into just another asset to be monetized.
During the conference call and in other forums, Sullivan and Camarillo talked about the need to “diversify” the Internet Society’s revenue stream rather than relying for revenue on “one company in one industry,” which made them sound a bit like the CEO of a washing machine company pondering whether to branch out into refrigerators and cooktops.
Commerce has infiltrated virtually every corner of the web except, up to now, the nonprofit corner represented by dot-orgs. The implication of the .org sale is that no piece of the internet is, in fact, immune from the world of getting and spending — everything is for sale, the public interest be damned.
Jill Carson is co-founder of the Open Money Initiative, a non-profit research organization working to guarantee the right to a free and open financial system, and co-host of the What Grinds My Gears podcast. She also works as an advisor and consultant for startups including Algorand, Risk Labs, dYdX, CoinList, and Tezos.
Why hasn’t cryptocurrency gone mainstream?
“It doesn’t scale.”
“It’s hard to use.”
Or maybe it was never supposed to go mainstream.
This is not to say cryptocurrency is any less important, meaningful, or useful. Rather, I think perhaps we have been judging cryptocurrencies’ success (or lack thereof) according to a false metric. We would not judge a fish by its ability to climb a tree.
By design, cryptocurrency does not solve mainstream problems.
Scale, speed, and cost are all examples of mainstream problems within finance, from main street to Wall Street. Credit card networks go down. Stock trades take days to clear. Wire transfers are expensive. In some situations, cryptocurrencies may offer marginal improvements on any of these issues, but more often blockchain-based systems will fail when compared to more conventional, centralized solutions.
This does not represent a design flaw. In fact, this is an intentional trade off.
Decentralized systems forsake scale, speed, and cost in favor of one key feature: censorship resistance. Cryptocurrency solves problems faced by the censored who, by definition, are not the mainstream.
In particular, cryptocurrency enables individuals and organizations to make censored transactions. Procuring drugs on the internet. That’s an example of a censored transaction. Buying US dollars in Argentina is another example. Paying a sex worker. Sending money to a friend in Iran. Making an online purchase as an unbanked individual. Selling cannabis as a dispensary. Getting money out of Venezuela. Supporting dissidents in Hong Kong. The primary utility of cryptocurrency lies in engaging in financial activity that is otherwise suppressed or prohibited.
This is the stated intent of cryptocurrency. Satoshi Nakamoto, the creator of bitcoin, described cryptocurrency as a tool of freedom. He compared it to other peer to peer networks like Tor which are similarly resilient to censorship. If we look at the anecdotal evidence, we can see that this is indeed how bitcoin is being used from China to Palestine. Furthermore, what little quantitative data we have also suggests that cryptocurrency use is higher in countries with financial restrictions. These results line up with predictions around cryptocurrency adoption that have existed for years. It is time to face this potentially uncomfortable reality: cryptocurrency is most useful when breaking laws and social constructs.
I, for one, do not want to live in a world where cryptocurrency has found mainstream use.
There exists a long history of censorship resistant and privacy preserving technologies: Signal for messaging, Bittorrent for file-sharing, Tor for web browsing. Like bitcoin, these tools are not built for the mainstream. Most people would rather use faster, slicker, glossier centralized alternatives like Facebook Message, Dropbox, and Google Chrome. But for censored people and organizations, decentralized technologies have always provided an escape hatch. For as long as they have existed, these tools have brought with them a certain level of societal discomfort. This discomfort stems not from these platforms being lawless domains — regulations exist on the dark web as much as they do in any jurisdiction – but rather from the difficulty these platforms present in enforcing these government policies and social norms. These technologies render censored activities more difficult to stop.
Decentralized technologies can be used for good, for evil, and for everything in between. From Hammurabi’s Code through to the Patriot Act, the morality of laws has been a matter of debate for as long as they have existed. The laws of one jurisdiction are often deemed unethical and unacceptable by its citizens and those of other geographies. To say that cryptocurrency is used primarily to engage in illegal or socially unacceptable activities is not a normative statement. It is used by freedom fighters and terrorists, by journalists and dissidents, by scammers and black market dealers, by revolutionaries and government officials. It is used by civilians to break unjust laws and escape humanitarian crisis, and it is used by the policymakers who write those very same laws. And of course, the same statements can all be made regarding the original decentralized payment system: cash.
As an industry, we spend a lot of time considering how to drive mainstream adoption of cryptocurrency. I, for one, do not want to live in a world where cryptocurrency has found mainstream use. For if it has, that world is a very scary place indeed.
This is not to discourage or devalue any of the work that is being done to improve decentralized technologies. Many projects in the industry are working toward optimizing away shortcomings in the technology. Layer 2 protocols promise to speed things up. New consensus mechanisms and forms of sybil resistance expect to improve scalability and reduce infrastructure costs. A myriad of applications are building more user-friendly wallets, on-ramps, exchanges, and other tools. All of these developments are important but they may never result in mass adoption. Improvements in scalability, speed, cost, volatility, and user experience may, however, make the critical difference for those who are users, no matter how fringe: the young woman in Venezuela surviving on bitcoin or the Chinese businessman using Tether for cross-border trade.
To judge cryptocurrency based on mainstream adoption is to judge it on a metric it was never designed to achieve.
This post is part of CoinDesk’s 2019 Year in Review, a collection of 100 op-eds, interviews and takes on the state of blockchain and the world.
The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.