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Date: 18/05/2020

Title: Cyber? What Cyber?

Teaser: While digitalization makes us better informed and faster, it also leaves us more vulnerable, because every new technology, like everything else, brings both opportunities and risks. But the risks in this particular case aren’t just accidents. They also include deliberate criminal acts.

Button: The global damage from cyber attacks

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Cyber? What Cyber?

For most people, the digitalization of the world began with the first pocket calculators, say in the early 1970s. They were told that the technology was a by-product of manned space travel. Since then we’ve seen rapid developments in many areas, all of which have had the same driving force: digitalization.

Author: Roland Voggenauer

In communications we’ve seen letters and postcards replaced by the phone, telegrams becoming telex, and telex becoming fax. Email has been superseded by messenger services and «twittering.»

In music, some might even remember shellac; a few still know vinyl; a few more are familiar with magnetic cassettes and how they interacted with pencils; and everyone still knows what to do with CDs, even if they prefer streaming. In writing, we saw the typewriter being replaced by the PC and the notebook, and then the advent of tablets and the smartphone. The lists go on.

All of us have gotten used to this rapid change and probably appreciate most of these developments. While some of us might reminisce with sadness, most of us certainly don't want to go back, because it’s hard to imagine life before the iPhone; and for the millennial generation, smartphone deprivation is probably worse than imprisonment.

New technology brings both opportunities and risks

The thing is that while all of this makes us better informed and faster, it also leaves us more vulnerable, because every new technology, like everything else, brings both opportunities and risks. But the risks in this particular case aren’t just accidents. They also include deliberate criminal acts.

Some examples of the downside are plain funny. But others are serious, and many develop – or can potentially develop – into disasters. A hacked Facebook account, for example, is a stolen personality, and can be used to make all your «friends» send the most embarrassing of your photos to «you,» the intruder. Such seemingly funny incidents, however,  can have – and have had – far-reaching consequences.

The «I love you» virus spread explosively as a computer worm in 2000, attacking thousands of computers and mail servers. Even though it only renamed and hid files, the damage went into the billions.

Worse than that was «NotPetya,» so-called ransomware in the form of a blackmail Trojan that encrypted entire hard drives. The hackers demanded «ransoms» from the victims to release the «kidnapped» data. Here too, the damage went into the billions, and large companies such as Beiersdorf, Merck, and FedEx were affected.

In addition to such economically motivated attacks, we have also seen attacks on political bodies like the United Nations, which fell victim in the summer of 2019. It doesn’t take a lot of imagination to recognize the potential for terrorists to adopt the same tactics. If hackers managed to seize control of a dam, they could flood entire cities, or – worse – a nuclear power plant, and they could trigger a disaster like Chernobyl. Scenarios in which hackers take over two states and make them declare war on each other are still inconceivable. But as is so often the case, what can be imagined is also possible.

The global damage from cyber attacks is huge

It’s difficult to quantify the actual damage caused by previously known attacks. We know that in Switzerland, for example, 2 out of 5 companies have experienced cyber attacks, Germany had over 100,000 recorded attacks in 2018, and the global damage from cyber attacks is already estimated at USD 500 billion; that’s five times greater than the property damage caused by the biggest natural disaster to date, Hurricane Katrina.

The danger has grown unnoticed, but steadily. And as is so often the case, we experience a latent, gradually growing danger to be less threatening than one that occurs drastically and suddenly. The frog in a water bath that slowly heats up stays put. But if you throw it into the hot water, it jumps out. A sudden virus outbreak is perceived as a greater threat than gradual poisoning from environmental toxins.

What’s more, if the pleasant effects predominate, people tend to ignore the hazard, or at least downplay it. There are many examples from history. The automobile, for example, is for the most part recognized as having brought us benefits, and our great-grandparents soon learned to live with the fact that these «horseless carriages» could also cause damage − albeit unintentionally and not with criminal intent. They protected themselves from the danger by introducing a then new form of insurance: automobile third party liability. As traffic grew with the number of vehicles, more roads were built, whereupon more vehicles found space: an interaction that we observe in many systems. Another feature of growing systems is that the dependencies between the elements and structures, and the interactions, increase. All of this generally also increases the susceptibility to errors and the risk of failure. This is something we’ve observed in road traffic over the years, and it’s something we’re also seeing in the digital world, which is much more interconnected than the road system − not just locally, but globally, across borders that are uncontrollable.

Again, it doesn’t take much imagination to see the potential dangers inherent in this situation. The digital world as we know it is a recipe for disaster. If we don’t tackle its challenges, it carries the seed for catastrophes that could be greater than all the climatic and natural risks put together.

One response might be insurance. But history suggests that it won’t be a known or even a classic form of insurance: after all, the early motor insurance against car accidents and third party liability worked differently than the accident insurance that had existed before.

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Roland Voggenauer

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