Blog The shock of cash

A young relative of mine was coerced into spending this last week end at an English holiday camp resort. When she got there she was shocked to discover that, for whatever reason, they were cash only for the weekend! All over the complex were “cash only” signs! Remember, these signs are completely unfamiliar to anyone under the age of 30, especially from the South East of the country where Transport for London triggered the contactless revolution, because this a debit card generation in a country where more than half of card transactions are already contactless. Signs like this one would be invisible to her!

Cashless in London//embedr.flickr.com/assets/client-code.js

So here’s a normal young person, all of her money is in the bank and she never goes to ATMs, so imagine her further horror of having to use an ATM on site to get cash which then charged her £1.50 to get her own money. Even more punishing was the fact she had to go back to the ATM again for more cash so yet another £1.50 charge!!!

Cash Only in London//embedr.flickr.com/assets/client-code.js//embedr.flickr.com/assets/client-code.js

The question she asked over and over again during her stay was why in this day and age would such a large complex be cash only? Doesn’t anyone there have an iZettle or a PayPal account? That doesn’t seem like much of an investment when surely with so much cash around it could mean some staff creaming it off? A temptation surely. In this situation cash is expensive for the individual but it is also expensive for the organisation as a whole! Especially when you remember that cash has a lot of other hidden costs: armoured cars taking money to banks, the extra hour for workers to reconcile the till, robberies.

There’s no excuse for making people use cash in 2019. 

 

POST Identity and equality

While I was thinking about this, I happened on an article in The New Yorker that really made me think about the importance of virtual identities, the practical impact of personae. The article concerned X Anderson, the Chair of the University of Michigan’s department of philosophy and a “champion of the view that equality and freedom are mutually dependent”. Her thinking encapsulates and enlightens some of my long-held view on the need for transactional interaction via multiple virtual identities. She says that “people now have the freedom to have crosscutting identities in different domains”. What she refers to her as domains are the different contexts in which transactions occur. As she goes on to day, “At church, I’m one thing. At work, I’m something else. I’m something else at home, or with my friends”.

The ability to manage these separate identities and partition their use across domains is, she argues, utterly vital. The ability “to be able to slip in and adopt whatever values and norms are appropriate while retaining one’s identities in other domains” she says, “is what it is to be free”.

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The Philosopher Redefining Equality | The New Yorker

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“At fifty-nine, Anderson is the chair of the University of Michigan’s department of philosophy and a champion of the view that equality and freedom are mutually dependent,”

From “The Philosopher Redefining Equality | The New Yorker”.

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“‘People now have the freedom to have crosscutting identities in different domains. At church, I’m one thing. At work, I’m something else. I’m something else at home, or with my friends. The ability not to have an identity that one carries from sphere to sphere but, rather, to be able to slip in and adopt whatever values and norms are appropriate while retaining one’s identities in other domains?’ She paused. ‘That is what it is to be free.’”

From “The Philosopher Redefining Equality | The New Yorker”.

 

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Bitcoin and the Promise of Independent Property Rights — a reply

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“I think it’s useful to distinguish two kinds of crypto-asset. Let us call these ‘imitative’ and ‘entitative’ respectively. An entitative crypto-asset (ECA) is an asset that only exists on a blockchain e.g. ‘bitcoins’ themselves (UTXO), or cryptokitties. An imitative crypto-asset (ICA) is an asset that exists on a blockchain, but which is intended to represent an asset that has an existence outside of the Blockchain e.g. a tokenised ‘e-key’ that controls a car.”

From “Bitcoin and the Promise of Independent Property Rights — a reply”.

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Cashing In: How to Make Negative Interest Rates Work – IMF Blog

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“The proposal is for a central bank to divide the monetary base into two separate local currencies—cash and electronic money (e-money). E-money would be issued only electronically and would pay the policy rate of interest, and cash would have an exchange rate—the conversion rate—against e-money.”

From “Cashing In: How to Make Negative Interest Rates Work – IMF Blog”.

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Scan my license? You must be joking

When I was in New York a couple of weeks ago I had to visit a couple of different buildings for various meetings. At the first building, I was asked for identification. As I am English and not North Korean, I don’t carry identification papers with me when I walk down the street and my British passport and British driving licence (neither of which the security guard could have verified even I had shown them to him) were locked up securely back in the hotel safe, so I presented my standard US identification document. This an old building pass from the previous Consult Hyperion office in midtown. It expired a couple of years ago, but it has my picture on it and it says David Birch it was accepted without question and I was allowed in.

When I went into second building, I was asked to scan my driver’s license! They had a scanner on the counter to read the barcode on the back of US driver’s licenses. Obviously I don’t have a US driver’s license, so I showed them my expired building pass again, I was given entry to the building.

If I did have the US driver’s license, then there’s no way I would have let them scan it.

Apart from the obvious fact that my ability to drive is unrelated to whether I have been invited to a meeting or not, nothing that is on my driving licence (except perhaps my name, which had already told the guy on the desk) is any of their business and by handing over my personal information to yet another random database held by yet another random company, I was vastly increasing the chance of my licence data and my personal details being being stolen.

POST April 2022 What is Cyberspace (Commemorative web reprint)

This is a web reprint of the article “What is Cyberspace” by David Birch and Peter Buck. This article appeared three decades ago in the Computer Law & Security Review, Volume 8, Issue 2, March–April 1992, Pages 74-76. Here it is, updated with hyperlinks and pictures for a new generation of readers…

Introduction

In a recent issue of the Computer Law & Security Report  [Zajac. Ethics & Computing (Part II) in Computer Law and Security Report, )] , Bernard Zajac suggested that readers might want to peruse some of the “cyberpunk” novels—in particular the works of William Gibson—in order to gain an insight into the organisation and behaviour of hackers. While wholly commending the incitement to read Gibson’s work, we feel that this view understates the breadth of vision of the cyberpunk genre and could mislead, because the “console men” and “keyboard cowboys” of Gibson’s works are not really the same people as the hackers of today.

We thought it might therefore be both entertaining and stimulating to provide readers with an overview of the world of cyberspace and to draw attention to some elements of the works where we feel that there are indeed some points worth further analysis and discussion. Is it possible that, like Arthur C. Clarke’s much vaunted prediction of the communication satellite [Clarke. Extraterrestrial Relays in Wireless World, October 1945)], Gibson has produced works which are not so much science fiction as informed prediction? Gibson is not the only cyberpunk author, but he has become probably the most well–known. Essential reading includes his books Count Zero [Gibson. Count Zero in Grafton (London, )] , Neuromancer [Gibson. Neuromancer in Ace (New York, )] , Burning Chrome [Gibson. Burning Chrome in Ace (New York, )] and Mona Lisa Overdrive [Gibson. Mona Lisa Overdrive in Grafton (London, ) . For readers new to the subject, Mirrorshades [Sterling. Mirrorshades in Paladin (London, )] is an excellent anthology of cyberpunk short stories which gives an overview of the spectrum of cyberpunk writing.

Cyberspace Description

Cyberspace is an extension of the idea of virtual reality. Instead of seeing computer data converted into pictures that come from human experience (as in a flight simulator), or extensions from human experience (such as the “desktop” metaphor used with personal computers), cyberspace comprises computers, telecommunications, software and data in a more abstract form. At the core of cyberspace is the matrix or the Net: “The Net… joins all of the computers and telephones on Earth. It is formed by radio, telephone and cellular links with microwave transmitters beaming information into orbit and beyond. In the 20th century, the Net was only accessible via a computer terminal, using a device called a modem to send and receive information. But in 2013, the Net can be entered directly using your own brain, neural plugs and complex interface programs that turn computer data into perceptual events” View From the Edge [View from the Edge—The Cyberpunk Handbook in R. Talsorian Games Inc. )].

In several places, reference is made to the military origin of the cyberspace interfaces: “You’re a console cowboy. The prototypes of the programs you use to crack industrial banks were developed for [a military operation]. For the assault on the Kirensk computer nexus. Basic module was a Nightwing microlight, a pilot, a matrix deck, a jockey. We were running a virus called Mole. The Mole series was the first generation of real intrusion programs.” Neuromancer. “The matrix has its roots in primitive arcade games… early graphics programs and military experimentation with cranial jacks.” Neuromancer. Gibson also assumes that in addition to being able to “jack in” to the matrix, you can go through the matrix to jack in to another person using a “simstim” deck. Using the simstim deck, you experience everything that the person you are connected to experiences: “Case hit the simstim switch. And flipped in to the agony of a broken bone. Molly was braced against the blank grey wall of a long corridor, her breath coming ragged and uneven. Case was back in the matrix instantly, a white–hot line of pain fading in his left thigh.” Neuromancer.

The matrix can be a very dangerous place. As your brain is connected in, should your interface program be altered, you will suffer. If your program is deleted, you would die. One of the characters in Neuromancer is called the Dixie Flatline, so named because he has survived deletion in the matrix. He is revered as a hero of the cyber jockeys: “‘Well, if we can get the Flatline, we’re home free. He was the best. You know he died braindeath three times.’ She nodded. ‘Flatlined on his EEG. Showed me the tapes.’” Neuromancer. Incidentally, the Flatline doesn’t exist as a person any more: his mind has been stored in a RAM chip which can be connected to the matrix.

Operation

So how does cyberspace work? As noted previously, you connect to the matrix through a deck which runs an interface program: “A silver tide of phosphenes boiled across my field of vision as the matrix began to unfold in my head, a 3–D chessboard, infinite and perfectly transparent. The Russian program seemed to lurch as we entered the grid. If anyone else had been jacked in to that part of the matrix, he might have seen a surf of flickering shadow ride out of the little yellow pyramid that represented our computer.” Burning Chrome. “Tick executed the transit in real time, rather than the bodyless, instantaneous shifts ordinarily employed in the matrix. The yellow plain, he explained, roofed the London Stock Exchange and related City entities… ‘That’s White’s,’ Tick was saying, directing her attention to a modest grey pyramid, ‘the club in St. James’. Membership directory, waiting list…” Mona Lisa Overdrive. Is this view of operating computers and communications networks by moving around in an ethereal machine–generated world really that far–fetched? When the first virtual reality (VR) units for personal computers will probably be in the shops by next Christmas? If you still think that VR is science fiction, note that British television viewers will shortly be tuning in to a new game show (called “CyberZone”) where the digital images of teams of players equipped with VR helmets, power gloves and pressure pads will fight it out in a computer–generated world (built using 16 IBM PCs fronting an ICL master computer).

Cyber World Organisation

The world of cyberpunk is near future (say, 50 years at the maximum) Earth. Nation states and their governments are unimportant and largely irrelevant. The world is run by giant Japanese–American–European multinational conglomerates, the zaibatsu. Gibson frequently uses Japanese words and Japanese slang to reinforce the expanding role of Japan in the world and in society. In the same way that business has agglomerated on a global scale, the mafia have merged with the Japanese gangs, the yakuza. The zaibatsu are in constant conflict and the yakuza are their agents: “Business has no stake in any political system per se. Business co–operates to the extent that co–operation furthers its own interests. And the primary interest of business is growth and dominance. Once the establishment of Free Enterprise Zones freed corporations from all constraints, they reverted to a primal struggle, which continues to this day.” Stone Lives [Fillipo. Stone Lives in Mirrorshades, Paladin (London, )]. Far fetched? Again, not really. Even as we sat down to write this article, the Chairman and Vice–Chairman of Nomura (the world’s largest financial institution) were resigning because of their links with organised crime: “Sceptics say that four decades of accommodation between police, politicians and yakuza will not be overturned simply by new legislation. There are believed to be almost 100,000 full–time gangsters in Japan, a quarter of whom belong to the Yamaguchi–Gumi, a mammoth organisation with 900 affiliates and a portfolio of operations ranging from prostitution, drugs and share speculation to run–of–the mill protection rackets” [Japan s Mafia Takes on a £6bn Business in The Guardian, (London, 24th July 1991)].

Herein lies a major feature of Gibson’s books. The cyber jockeys are not student pranksters or teenage hackers messing about with other peoples’ computers for fun or mischief [Girvan and Jones. The Lord of the Files in Digital Dreams, New English Library (London, )]: by and large they are either working for the zaibatsu or the yakuza and their (for profit) activities revolve around industrial espionage and sabotage.

Information

A fundamental theme running through most cyberpunk literature is that (in the near future Earth) commodities are unimportant. Since anything can be manufactured, very cheaply, manufactured goods (and the commodities that are needed to create them) are no longer central to economic life. The only real commodity is information. In fact, in many ways, the zaibatsu are the information that they own: “But weren’t the zaibatsu more like that, or the yakuza, hives with cybernetic memories, vast single organisms with their DNA coded in silicon?” Neuromancer. Naturally, with information so vital, the zaibatsu go to great lengths to protect their data. In Johnny Mnemonic, one of Gibson’s short stories, the eponymous “hero” has data hidden in his own memory to keep it safe from the yakuza: “The stored data are fed in through a series of microsurgical contraautism prostheses.’ I reeled off a numb version of my standard sales pitch. ‘Client’s code is stored in a special chip… Can’t drug it out, cut it out, torture it out. I don’t know it, never did.” Johnny Mnemonic [Gibson. Johnny Mnemonic in Burning Chrome, Ace (New York, )].

With information so fundamental to the business world, the mechanics of business are vastly different from those we know at present. In our current product– and service–based business world, we are used to dealing with items that can be stamped, traced, taxed, counted and measured. When the primary commodity is information, these attributes no longer apply and the structure of the business world is different. This has already been recognised by many people, including the well–known management consultant Peter Drucker [Cane. Differences of Culture and Technology in The Financial Times, (London, 11th March 1991)] : “So far most computer users still use the new technology only to do faster what they have done before, crunch conventional numbers. But as soon as a company takes the first tentative steps from data to information, its decision processes, management structure and even the way it gets its work done begin to be transformed.”

Net Running

Hacking is too trivial and undescriptive a term to use for the unauthorised and illegal activities of the cyber jockeys in cyberspace. A much better terms is “Net running”. “They found their ‘paradise’… on the jumbled border of a low security academic grid. At first glance it resembled the kind of graffiti student operators sometimes left at the junction of grid lines, faint glyphs of coloured light that shimmered against the confused outlines of a dozen arts faculties. ‘There,’ said the Flatline. ‘the blue one. Make it out? That’s an entry code for Bell Europa. Fresh, too.” Neuromancer. Everywhere in the Net, there is “ice”. Ice is security countermeasures software. The Net runners spend most of their time in the matrix encountering, evaluating and evading these countermeasures. The encounters with ice are brilliantly described in many of Gibson’s books: “We’ve crashed her gates disguised as an audit and three subpoenas, but her [the organisation being attacked] defences are specifically geared to deal with that kind of intrusion. Her most sophisticated ice is structured to fend off writs, warrants, subpoenas. When we breached the first gate, the bulk of her data vanished behind core command ice… Five separate landlines spurted May Day signals to law firms, but the virus had already taken over the perimeter ice… The Russian program lifts a Tokyo number from unscreened data, choosing it for frequency of calls, average length of calls, the speed with which [the organisation] returned those calls. ‘Okay,’ says Bobby, ‘we’re an incoming scrambler call from a pal of hers in Tokyo. That should help.’ Ride ‘em cowboy.” Burning Chrome.

The best ice contains elements of artificial intelligence (AI): “‘That’s it huh? Big green rectangle off left?’ ‘You got it. Corporate core data for [another organisation] and that ice is generated by their two friendly AIs. On par with anything in the military sector, looks to me. That’s king hell ice, Case, black as the grave and slick as glass. Fry your brains as soon as look at you.” Neuromancer. These descriptions cannot be seen as predictions: they are just straightforward extrapolations based on current technology and trends.

Predictions

So what are the core “predictions” of cyberpunk and do they have relevance to security strategies today? Computer and communications technology is already at a point where the Net is only a few years away. Charles L. Brown, the CEO of AT&T, put it like this: “The phone system, when coupled with computer technology, permits a person almost anywhere to plug in to a world library of information… Just around the bend is an information network that would increase the range of perception of a single individual to include all of the information available anywhere in the network’s universe.” [Wurman. Information Anxiety in Pan (London, )] . The development of the corporate world so that information becomes the primary commodity is already underway. This does have implications for planning, because too many existing risk management policies are asset–based. As it is easier to value a computer than value the information it holds, too much effort has gone into valuing and protecting physical assets rather than information assets. Already, there is a good argument for saying that the information assets are the key ADDIN ENRef [Toffler. Total Information War in Power Shift, Bantam Books (London, )] : “A new concept of business is taking shape in response to the info–wars now raging across the world economy. As knowledge becomes more central to the creation of wealth, we begin to think of the corporation as an enhancer of knowledge.” How will the information assets be valued? How will the world of mergers and acquisitions deal with the problem of rate of return on “intangible” assets. An interesting parallel can be drawn with the relatively recent attempts to value brand names and include the brand names as assets on balance sheets.

The legal sector is probably even further behind than the security sector. With the legal system already struggling to catch up with the developments in computer and communications technology, it is hard to imagine how it could come to terms with cyberspace: “As communications and data processing technology continues to advance at a pace many times faster than society can assimilate it, additional conflicts have begun to occur on the border between cyberspace and the physical world.” ADDIN ENRef [Barlow. Coming in to the Country in Communications of the ACM, )] . In fact, these conflicts are already causing many problems as evidenced by recent events and court cases in the U.S. ADDIN ENRef [Elmer Dewitt. Cyberpunks and the Constitution in Time, 8th April 1991)] . “Do electronic bulletin boards that may list stolen access codes enjoy protection under the First Amendment?” “How can privacy be ensured when computers record every phone call, cash withdrawal and credit–card transaction. What “property rights” can be protected in digital electronic systems that can create copies that are indistinguishable from the real thing.” “ Ten months after the Secret Service shut down the [electronics bulletin boards], the Government still has not produced any indictments. And several similar cases that have come before the courts have been badly flawed. One Austin–based game publisher whose bulletin board system was seized last March is expected soon to sue the Government for violating his civil liberties.”

Summary

We hope that this brief overview of the world of cyberpunk has done justice to the excellent books from which we have quoted and encouraged some readers to dip into the collection. So is Gibson’s work an example of a science fiction prediction that will prove to be as accurate as Clarke’s prediction of the communications satellite? Not really: the world that Gibson writes about is more a well thought out extension of the situation at present than a radical prediction. After all, as Gordon Gekko (the character played by Michael Douglas) says in the film Wall Street, “The most valuable commodity I know of is information. Wouldn’t you agree?” 

Cashing Out: The hidden costs and consequences of moving to a cashless society – RSA

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Substantial numbers still rely heavily on cash: 3.4 million people in the UK rarely use cash, but 2.2 million people rely almost wholly on cash, up from only 1.6 million people in 2014.

From Cashing Out: The hidden costs and consequences of moving to a cashless society – RSA.

It struck me as quite interesting that the number of people relying almost wholly on cash has gone up. I assumed that this was something to with “austerity”

QuadrigaCX Owes Customers $190 Million, Court Filing Shows – CoinDesk

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She added that Cotten held “sole responsibility for handling the funds and coins,” and the remaining team members have had no luck accessing the exchange’s cold wallets since.

From QuadrigaCX Owes Customers $190 Million, Court Filing Shows – CoinDesk.

Cold wallets, as I was just reading in a new book “Blockchain and Decentralised Systems” by Pavel Kravchenko (et al),

A cold wallet is a digital wallet where private keys are stored and processed only on devices that do not have the ability to directly connect to the global internet.

A simple example of deep cold storage is opening a safe deposit box and putting a USB stick containing an encrypted wallet file in it. The public (sending) addresses can be used any time to send additional bitcoins to the wallet, but spending the bitcoins would require physical access to the box (in addition to knowledge of the encryption password).

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