Revisiting Israel’s Key Role in American Economies

As tensions continue to rise in the Middle East, I’d like to revisit a previous Daily Prophecy regarding Israel and the Cryptocosm…

The Cryptocosm of ubiquitous encryption: where all data starts private and is released only under software control, with titles and identities inscribed and time-stamped on a blockchain.

It’s data with roots and branches that can be hidden or harvested by its owners at will.

James Comey rails against it. Other once and current Federal top cops, from James Clapper and John Brennan to Trump’s man Christopher Wray, all believe it poses an appalling threat.

Its technical form is SDKC — software-defined distributed key cryptography — now improved with blockchain.

The more exalted the constabulary, the more vehement the denunciation.

It is said to aid terrorists, pedophiles, pornographers, drug and human traffickers, hate speakers and news fakers, boycott evaders and nuclear infiltrators.

Hey, anyone you don’t like will likely be helped by SDKC, or more simply summarized, by ubiquitous cryptography — the Cryptocosm.

So why am I for it? I must be a bad guy, right?

Restoring Integrity to Information Systems

Let’s return to the themes of this Daily Prophecy — wealth is knowledge, growth is learning, money is time — and add a further canonical principle: knowledge cannot be reversed or abolished. If it is denied to the forces of good, it will be relinquished to the forces of evil.

Encryption is merely applied mathematics. The two most established forms in the US — AES and SHA256 — both originated overseas. It is not ours and cannot be controlled by us.

My readers will recall the test of a failed paradigm: the more we spend the worse the results.

Today we spend billions annually on post-hack security patches and point solutions. The paradigm is called “Defense in Depth” where data-defenses are layers of specific cybersecurity measures designed to respond to specific vectors of attack: intrusion detection systems, virus scans, malware scouts, firewalls, security patches, all reacting to attacks and assuming them.

Though supported by the NSA and most of the other experts, the flaws of “Defense in Depth” are both fatal and mathematically inexorable. The potential for attacks grows according to Metcalfe’s Law: essentially by the square of the number of devices attached to the network (the extent of the attack surface multiplied by all the potential attack vectors or sources).

But the “Defense in Depth” applied in response grows only additively, one patch at a time. There is no way on earth the good guys can keep up.

The only solution is to encrypt everything before it goes on the net. The only remedy for uncontrollable data is to render it controllable data, integrated with software in a way that removes all the so-called attack surfaces at once.

As David Kruger, co-inventor of the most fully developed Cryptocosmic system writes in his new manifesto, Inherently Safer Computing:

“Will Inherently Safer Computing dry up our signals intelligence and offensive cyber capability? is the wrong question to ask. The right question is will Inherently Safer Computing dry up everyone’s signals intelligence and offensive cyber capability.”

That means stopping anyone from hacking our data and software and money and internet routers. As a side effect, this will mean we can’t hack Iran or China. But if they cannot hack us, or their people, why do we care?

The question is: can our computer architectures be rendered un-hackable?

The answer is yes, that is what crypto and blockchain does. In the process of restoring integrity to information systems, we can provide a firm foundation for an information age and internet architecture for civilized societies with real property rights and appropriate privacy.

We can overcome the current catastrophe of an Internet that no one trusts, where we cower in fear of slant-eyed routers from Huawei. We can reform a trading system fraught with ignorance and paranoia, where we feel threatened by investors or even students from abroad. We can fix a monetary system so compulsively hacked and manipulated by governments that it can no longer provide meaningful or rational prices for itself: stable currencies or real interest rates.

The Cryptocosm outrages police around the world by allegedly enabling “warrant proof” encryption, beyond the realm of the law. But this is a misconception. Warrants can be served and enforced the same as always. Whether the data was encrypted before or after it went on the net is irrelevant to the issue of whether it must be divulged under a legitimate court order.

But software-controllable data does create problems for surveillance states and surveillance companies everywhere. That is the source of the resistance to it. Established powers have become used to uncontrolled data that can be copied and distributed without limitations, with every copy usable by every single user in the world who can access the software for whatever nefarious or predatory purpose.

This condition offers an irresistible temptation to tyrants everywhere. But it is not natural or inevitable. It can be changed through a new security architecture that renders data controllable by software bound to it.

Today’s Prophecy

My readers know Peter Drucker’s rule: “Don’t solve problems. Pursue opportunities.”

At the same time that it sows problems for the existing power establishment, the Cryptocosm creates the world’s largest opportunity today, Life After Google. It simultaneously puts the Internet on a new secure foundation and renews world money as a useful guide for enterprise.

What we currently imagine to be political, economic, and even military threats, in fact, reflect a broken technology paradigm. Information does not want to be free. It wants to be property. It wants to be defensible. It wants to be useful.

One of the possible uses is to publish it freely across the net. But the idea that this is the established form of information and all controls must be bolted on afterward has caused the current crisis of our increasingly vulnerable computer systems underlying our increasingly afflicted civilization.

On to the Cryptocosm! It is the only path to an internet of things or an internet of free people, rather than merely free bits and bytes.


George Gilder
Editor, Gilder’s Daily Prophecy

You May Also Be Interested In:

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.

And he’s certainly no stranger to the financial newsletter...

View More By George Gilder