Bitcoin: A Modern Security Parable (on the Value of Trust)
Mar 14, 2014
First, the disclaimer: I don’t own any bitcoins and I never have. Moreover, I am neither a Bitcoin admirer nor detractor, merely a fascinated onlooker.
Unless you live on Mars or have zero interest in current affairs, it’s been almost impossible to avoid the “drip, drip, drip” effect of the Bitcoin stories in the past few weeks and months. And just like any classic soap opera, there is a potent mix of human tragedy, humour (often black), intrigue and storylines that amaze and shock in equal measure and which are interwoven with a very interesting cyber security subplot.
Created in January 2009, Bitcoin is the most ambitious and potentially revolutionary development in finance and payment systems in over 100 years. If you’re not sure about this claim, then please consider this, the bitcoin was the first crypto currency to be traded and, unlike every other form of legal tender, it is stateless!
The potential impact of this stateless currency cannot be understated. You only have to look back to the financial crash of 2008 to understand the critical role a nation’s central bank plays in regulating money supply, rate of interest and, in turn, inflation, job creation, etc. When the proverbial hit the fan in 2008, the world’s leading central banks had to work together to coordinate monetary policy with an aim of bringing order to a chaotic situation.
The 64-million-bitcoin question though: “What has this to do with cyber security?”
The simple answer: everything.
If you’re embarking on such a grand and revolutionary new currency project, the very first thing you need to do is build trust. Developing trust in the bitcoin was always going to take time, money and a lot of focus. Trust in a currency is a stepping stone to fiscal credibility. Without trust and credibility, any currency will fail. Oh and if your currency just happens to be the world’s first crypto currency, then good governance, clear regulation and rock-solid cyber security are the foundations upon which you must build the necessary trust in your new crypto currency.
The cyber threat to any new stateless crypto currency is huge. Just think about it. Any and everyone currently benefitting from the existing financial payments status quo could potentially win if a new stateless currency were to fail. This has guaranteed that Bitcoin systems have been and continue to be “stress tested”—in many cases, by some of the most sophisticated hackers out there.
Unfortunately for Bitcoin and its investors, the link between cyber security and developing and maintaining trust has never been fully appreciated or funded. As result, Bitcoin has suffered one successful cyber attack after another.
In the past few weeks alone, the whole future of Bitcoin has been called into question by a number of headline security breaches. In fact, as I write, you could flip a coin (ironically, not a bitcoin) as to whether Bitcoin will survive.
By the looks of what’s being said in the press (BBC, CNBC, Huffington Post, CBC), I have my doubts. If Bitcoin does fail, I hope any successor learns from its many mistakes regarding cyber security because in today’s 24 x7 always on digital society the best cyber defence is the only cyber defence!
And that is the Juniper Security Business Unit’s objective—to develop the very best cyber security portfolio, one that is differentiated, intelligent and most importantly, highly efficient in providing the very best defence 24x7x365. No matter what.