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Addressing the Two Paramount Crises of the World Economy

My crypto-savvy reader Brad impugned my claim of the “unhackable” Cryptocosm, as expressed in my last Prophecy on David Kruger’s “Inherently Safer Computing.”

Even after the Cryptocosm is in place, he wrote, the net will “still subject to wetware hacks.”

Wetware! That’s us! These include:

  1. Spear phishing — targeted campaigns against specific institutions, such as government bodies, whereby hackers send SPAM to induce imprudent users to execute or download malware
  2. Simple passwords
  3. Passwords on post-its
  4. And other user mistakes.

Brad concluded: “It might protect against a direct attack, but not an indirect one.”

He’s right for a simple deployment of universal encryption. But he did not come to terms with the total architectural change implied by rebooting the net.

A Safer Computing System Underway

Toward the end of the Obama Presidency, the Army Military Intelligence tested and tentatively adopted “Inherently Safe Computing” for secure tactical battlefield communications. The Army’s use-case called for a server on a Humvee or mine-protected light vehicle towing a wireless cell tower, connecting to soldiers with smartphones or other devices.

A crucial requirement was quick and easy-to-deploy communications systems that could survive capture, malware, or Brad’s wetware errors of careless or malign users.

Loss of the server or tower could not prevent soldiers from reaching their data or cause them to lose crucial information. All cryptographic operations had to run on the end devices in the hands of soldiers. Everything everywhere needed to be encrypted all the time.

These requirements meant mastering the “second device problem” — controlling what could be done with the data even after it fell into enemy hands. Sent to the server would only be encrypted data, encrypted keys, and metadata with encrypted cross-device controls managing the second device problem.

Kruger wrote:

“Data and cross-device controls metadata had to be cryptographically bound to each other, so second device control over what the software could or could not do with the information could be maintained after the data was decrypted.” 

For example, control of the second device could be restricted to a biometrically authenticated user, on a known computer in a known “state,” using cryptographically signed software, under a host of other specified conditions. If the data were shared in error, the cross-device controls could delete it from all recipient devices.

Meeting the stringent demands of the battlefield gives the inherently safer computing system a unique robustness and capability. These advances befit it today for an embattled internet subject to billions of hacks a year. Reinforced with an immutable blockchain store for identities, titles, pointers, and other crucial ground state security, the Kruger system may provide at last a path to an essentially safe new internet architecture.

Benefiting from this breakthrough is Kruger’s Absio corporation, at first more descriptively titled “Internet Phase 3”. With 44 employees in the US and a team in the Ukraine working on user interfaces, Absio was launching a potential new architecture for all communications systems.

But first, the Army program was shut down by a congressional sequester. Then Kruger’s twin brother and co-inventor Dan was killed in a freak accident with a pistol in a shoulder holster that he was wearing in a project defending garbage against bears.

Now Absio is down to five engineers and stepping up to the larger problem of an internet reboot based on his Software-defined Distributed Key Cryptography (SDKC). It addresses the key problem of the existing net: uncontrolled data that cannot be controlled once it’s shared and that is dependent on internet protocols that were not designed to be secure.

Such a drastic change will affect every information company in an information economy estimated to reach $15 trillion in value this year. But the attack potential on the net (the attack surface times attack vectors) grows geometrically in accord with Metcalfe’s Law. Meanwhile, the existing layered point defenses grow additively.

This means the more we spend on the existing security architecture the more vulnerable it gets.

Today’s Prophecy

Targeting this failed paradigm is the Cryptocosm. It is addressing the two paramount crises of the world economy — constant attacks and hacks on the internet, and constant attacks and hacks of monetary systems.

The internet may be hacked by criminals and the monetary systems may be hacked by central bankers. But they share the same essential problem and the same cryptocosmic solutions. Thus, this security challenge is the largest opportunity in the world economy today.

I’ll be identifying the companies that can prosper in this new world of information security and sound money in later Prophecies.

Regards,

George Gilder
Editor, Gilder’s Daily Prophecy

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George Gilder

George Gilder is the most knowledgeable man in America when it comes to the future of technology — and its impact on our lives.

He’s an established investor, writer, and economist with an uncanny ability to foresee how new breakthroughs will play out, years in advance.

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