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Author Topic: Do internet blackouts highlight a potentially fatal flaw in cashless societies  (Read 152 times)
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January 22, 2019, 10:55:41 AM
Merited by hatshepsut93 (1)
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The rise in internet blackouts shows that the internet is becoming more centralized—and increasingly vulnerable to manipulation.

On the first day of the new year, the Democratic Republic of Congo cut internet connections and SMS services nationwide—for the second day in a row. The reason? To avoid the “chaos” that might result from its presidential election results. Not even a week later, on Jan. 7, Gabon’s government did the same after an attempted coup. On Tuesday, Zimbabwe cut off social media and internet access. The government restored much of the internet Wednesday but kept a WhatsApp ban in place. And it’s unlikely that these will be the last “internet blackouts” we hear about over the coming months. (All three of these incidents, ironically, took place after I outlined this piece.)

In fact, we’ll likely see a rise in internet blackouts in 2019, for two reasons: countries deliberately “turning off” the internet within their borders, and hackers disrupting segments of the internet with distributed denial-of-service attacks. Above all, both will force policymakers everywhere to reckon with the fact that the internet itself is increasingly becoming centralized—and therefore increasingly vulnerable to manipulation, making everyone less safe.

The first method—states deliberately severing internet connections within their country—has an important history. In 2004, the Maldivian government caused an internet blackout when citizens protested the president; Nepal similarly caused a blackout shortly thereafter. In 2007, the government of Myanmar apparently damaged an underwater internet cable in order to “staunch [sic] the flow of pictures and messages from protesters reaching the outside world.” In 2011, Egypt cut most internet and cell services within its borders as the government attempted to quell protests against then-President Hosni Mubarak. Libya then did the same after its own unrest. In 2014, Syria had a major internet outage amid its civil war. In 2018, Mauritania was taken offline entirely for two days when undersea submarine internet cables were cut, which was around the same time Sierra Leone’s government may have imposed an internet blackout in the same region.

When we think about terms like cyberspace and internet, it can be tempting to associate them with vague notions of a digital world we can’t touch. And while this is perhaps useful in some contexts, this line of thinking forgets the very real wires, servers, and other hardware that form the architecture of the internet. If these physical elements cease to function, from a cut wire to a storm-damaged server farm, the internet is affected, too. More than that, if a single entity controls—or can at least access—that hardware for a region or an entire country, government-caused internet blackouts are a tempting method of censorship and social control.

Which is to say: As countries around the world tighten control of the internet within their borders, we can expect to see some governments with relatively centralized internets—particularly authoritarians or those with authoritarian leanings—literally disconnect their domestic internet networks from the rest of the globe during unrest or other incidents.

As for the second method, we can expect a rise in distributed denial of service attacks against internet infrastructure as millions of wildly insecure Internet of Things devices—from smart thermostats to water-pressure sensors—are linked online. As many studies have documented, IoT devices typically have terrible security features, such as basic passwords and minimal encryption. Put another way, they’re not hard to hack. So, by compromising these devices en masse and turning them into a “botnet” army, hackers can completely overwhelm segments of the internet, channeling traffic to a single service until it’s overwhelmed and can no longer function.

If that sounds far-fetched, recall what happened in 2016, when the Mirai botnet took over hundreds of thousands of IoT devices, spread across multiple continents, and used them to flood traffic to the servers of the American internet company Dyn. At the time, it was the largest known DDoS attack on Earth; Twitter, Spotify, SoundCloud, Reddit, and a number of other sites were temporarily unavailable as a result. In other words, Mirai effectively took down part of the American internet.

Democratic governments in the United States, Europe, and elsewhere typically don’t exert control over major internet gateways or servers. It’d therefore be quite unlikely for them to cause a partial internet blackout themselves. Add to this the fact that the internet in the United States isn’t as centralized as it is in other countries, and it becomes clear why it’s harder to control all its major gateways to the global network at once, like Egypt did in 2011.

But even if a government can’t easily disconnect its whole country from the worldwide internet, Mirai demonstrated just how effectively third-party malicious actors can take down segments of a country’s internet.

In principle, policymakers have long argued that neither of the aforementioned scenarios were possible due largely to the internet’s decentralization. More and more, though, the internet has become centralized in countries where the government has controlled the buildout of infrastructure and where there’s little market competition for internet services. Even in countries with better market competition for internet services and with less government control of infrastructure, there are still pockets that remain centralized and vulnerable—as demonstrated by the Mirai botnet attack against Dyn.

All this matters for a few reasons. For one, democratic policymakers, in particular, will have to think more about cyber norms in the context of internet manipulation (i.e., disconnecting your country from the global network), not just offensive cyberoperations (i.e., hacking into another nation’s computer systems). Several events in 2018 already made this fact clear, like when American internet traffic was once again routed through China and Russia and underscored the vulnerability of core internet functions to manipulation. A sovereign and controlled model of the internet is spreading, and democracies must effectively fight it through, among other things, norms on and around the internet.

Two, the rising threat of botnets will create more pressure within the United States to generate technical standards for smart devices. Currently, there exist virtually no consensus rules for “minimum security” on these devices, which means that many industry organizations and government agencies are using IoT systems that have terrible security; this not only poses vulnerability to connected infrastructure systems and opens wearable-wearing government personnel to real-time GPS tracking, but it also means that the IoT market is flooded with devices that can be easily hijacked in service of DDoS attacks. Building these standards will give companies and government agencies guidance in building and acquiring smart devices, which in turn will bolster their security.

Finally, countries will have to take greater international action against botnets as a cybersecurity threat. As Jason Healey and Robert K. Knake wrote in a recent Council on Foreign Relations report, DDoS attacks via scores of hijacked smart devices can “cause serious harm by allowing foreign governments to stifle free speech abroad and enabling them to shut down countries’ domestic networks or even the internet globally.” Further, explains a report from the Council to Secure the Digital Economy, these incidents undermine “fundamental confidence and trust in the digital economy”—which depends on reliable availability and performance of internet services.

So, whether national or regional, caused by governments or hackers, internet blackouts are likely going to increase in frequency over the coming months, and their harms will take many forms. But recent hacks, a history of internet disconnections around the world, and an even longer history of distributed denial of service attacks, collectively, give us a sign of what’s to come. Policymakers would be wise to pay attention.

https://slate.com/technology/2019/01/internet-blackouts-government-drc-zimbabwe-gabon.html

....

This could highlight one key reason why paper money might never disappear: consumers and businesses need an alternate currency to serve as a last resort in the event of the internet being compromised or shut down. Even a few hours lapse in electronic payment availability could be disastrous for the economy of a nation. Uptime and reliability of paper money carries a potential to rival any purported advantages people associate with a cashless society.

We've all read countless threads and posts on crypto forums posing the question: "when will bitcoin replace paper money". While mainstream bitcoin adoption could benefit many of us HODL'ers the answer to this question could be: never. Electronic currencies may never be 100% reliable or guaranteed availability around the clock. They are vulnerable to disruptions in service which could carry catastrophic consequences.

If supporters of cashless societies disagree with this base assessment, I would be curious to hear their reasons.

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January 22, 2019, 11:56:29 AM
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This could highlight one key reason why paper money might never disappear: consumers and businesses need an alternate currency to serve as a last resort in the event of the internet being compromised or shut down. Even a few hours lapse in electronic payment availability could be disastrous for the economy of a nation. Uptime and reliability of paper money carries a potential to rival any purported advantages people associate with a cashless society.


But at the same time many governments seriously hate cash and are actively taking measures against it. A lot of countries have banned high-denomination notes and imposed restrictions on cash transactions. They think that cashless society will help them defeat money laundering once and for all, which means less crime and especially less tax evasion. And I have a feeling that they all are willing to take the risks of cashless society that you've described, because it means more control over the population.

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January 22, 2019, 12:26:22 PM
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....

This could highlight one key reason why paper money might never disappear: consumers and businesses need an alternate currency to serve as a last resort in the event of the internet being compromised or shut down. Even a few hours lapse in electronic payment availability could be disastrous for the economy of a nation. Uptime and reliability of paper money carries a potential to rival any purported advantages people associate with a cashless society.

We've all read countless threads and posts on crypto forums posing the question: "when will bitcoin replace paper money". While mainstream bitcoin adoption could benefit many of us HODL'ers the answer to this question could be: never. Electronic currencies may never be 100% reliable or guaranteed availability around the clock. They are vulnerable to disruptions in service which could carry catastrophic consequences.

If supporters of cashless societies disagree with this base assessment, I would be curious to hear their reasons.

Your point is not valid. There are many ways to do transactions offline if "Internet shutdowns" is the case and the most important problem you are referring to.
There is a need for electronic currencies and a cashless society as we are now making more international transactions than ever. We need a solution to do it more efficient and faster.

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January 22, 2019, 12:37:11 PM
 #4

shutting down internet is only a temporary measure that any country can take, it is not a permanent solution. There are drawbacks of cashless society but benefits more from perspective of the government, as an individual you may have more to lose than gain but I think we're still far from cashless society at least for another decade.








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January 22, 2019, 12:48:55 PM
Merited by dbshck (4)
 #5

Bitcoin in theory can use any network medium.
Internet happens to be the one we choose.

Maybe I should start a satellite network for Bitcoin/altcoin transactions only Smiley (<= I claim copyright Smiley)

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January 22, 2019, 01:08:42 PM
Merited by dbshck (4)
 #6

Maybe I should start a satellite network for Bitcoin/altcoin transactions only Smiley (<= I claim copyright Smiley)
Actually, this idea already discussed Smiley
https://www.youtube.com/watch?v=4ny1EQo7p5k


Anyway, in general, we don't have to worry about internet blackout. The probability of that happen (globally) is so minuscule. Shit happens in countries like Zimbabwe but doesn't mean we have to worry about it too much. Nevertheless, I agree with some fail-safe mechanism just in case of internet blackout.

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January 22, 2019, 02:50:37 PM
 #7

Your point is not valid. There are many ways to do transactions offline if "Internet shutdowns" is the case and the most important problem you are referring to.

Yes there are other ways to make transactions, using unique codes, but the article borders on the importance of cash in our rapidly digitalizing world.

In sense when you talk about centralization of the internet (which I should note is only happening in few countries and far between), the governemt also has influence in banks and the distribution of fiat currencies.

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January 22, 2019, 03:15:25 PM
 #8



I don't think a government can stand without internet for just the whole week, it will crash its economy since banking system rely to the connections. Bitcoin doesn't aim to eliminate paper money, its always going to be there no matter what. Our money has the photos of important people in the history, we can't just throw that away.

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January 22, 2019, 03:18:16 PM
 #9

Internet is part of freedom, try to black it out to the world today and we will have World War III just kidding I might be but the impact of internet today is quiet bigger than before almost every institutions involved. Before internet was being criticised until it proved a lot, same thing will happen to crypto I’m pretty that we can have our cashless society in the near future.

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January 22, 2019, 03:25:58 PM
 #10

Even without internet blackouts, blockchain technology and fiat money will exist simultaneously. Blockchain technology will revolutionize significant transactions and processes but not all. This is the reason why fiat will still exist.
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January 22, 2019, 03:27:57 PM
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Trust me a lot of more important things depend on the internet compared to cryptocurrencies. With the internet shutting down the most worst thing could happen is that majority of  the countries' economy will fall. I didn't mean cryptos are not important but what I mean about that is by the time a blackout happens the government will already be busy having a solution to fix it because a lot of their activities depend on it which mostly can affect their economy and that is counting the digital assets you are concerned about.

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January 22, 2019, 04:02:08 PM
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Quote
This could highlight one key reason why paper money might never disappear:

never say never. cash will also become obsolete some day as the ancestors it replaced. it has its own flaws too. and it is harming the planet as we need to keep cutting trees to print more of it!

besides the world is moving towards digitalization, it is not just money. cash may not be replaced by bitcoin but it will be fully digitized soon. heck it has already started. i can't remember last time i paid for something with cash!

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January 22, 2019, 09:30:11 PM
 #13

This could highlight one key reason why paper money might never disappear: consumers and businesses need an alternate currency to serve as a last resort in the event of the internet being compromised or shut down. Even a few hours lapse in electronic payment availability could be disastrous for the economy of a nation. Uptime and reliability of paper money carries a potential to rival any purported advantages people associate with a cashless society.

We've all read countless threads and posts on crypto forums posing the question: "when will bitcoin replace paper money". While mainstream bitcoin adoption could benefit many of us HODL'ers the answer to this question could be: never. Electronic currencies may never be 100% reliable or guaranteed availability around the clock. They are vulnerable to disruptions in service which could carry catastrophic consequences.

If supporters of cashless societies disagree with this base assessment, I would be curious to hear their reasons.
I am more worried about the electric grid shutting down than the internet, losing the Internet for a few days will terrible for the economy but things will go back to normal, losing the electric grid will put at risk the survival of the human civilization, however I agree that for now a form of money that we can touch is necessary which is why governments still print paper money even if they have wanted to make it disappear for decades.



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January 22, 2019, 11:20:07 PM
 #14


This could highlight one key reason why paper money might never disappear: consumers and businesses need an alternate currency to serve as a last resort in the event of the internet being compromised or shut down. Even a few hours lapse in electronic payment availability could be disastrous for the economy of a nation. Uptime and reliability of paper money carries a potential to rival any purported advantages people associate with a cashless society.


But at the same time many governments seriously hate cash and are actively taking measures against it. A lot of countries have banned high-denomination notes and imposed restrictions on cash transactions. They think that cashless society will help them defeat money laundering once and for all, which means less crime and especially less tax evasion. And I have a feeling that they all are willing to take the risks of cashless society that you've described, because it means more control over the population.

after all we have to choose one that we think is comfortable in its use, not all cash applications must be hated because each place must have different needs, as well as cashless, we only need to adjust according to the needs of the moment.
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January 22, 2019, 11:45:29 PM
Merited by dbshck (4), Harkorede (1)
 #15

But at the same time many governments seriously hate cash and are actively taking measures against it. A lot of countries have banned high-denomination notes and imposed restrictions on cash transactions. <snip>
I don't know about other countries, but the US got rid of denominations over $100 years ago, and as far as I know they don't have any plans to do away with $100 bills.  Hell, they can't even stop minting those stupid pennies and dollar coins that no one uses.  Also, I think the reasoning behind doing away with high-denomination currency is to combat drug money being transported so easily, and probably money laundering to some extent--not because the governments inherently hate cash.

While I support bitcoin fully, I don't want to see an end to physical cash.  One of the reasons is definitely a fear of not being able to pay for something if a store's credit card reader is down, or the electricity goes out, but the main reason for me is that I don't necessarily like my bank (or the government) being able to look at every purchase I make.  Cash is still the most anonymous method of payment I know of--and there may be cryptocurrencies with pretty good anonymity characteristics built into them, try finding a merchant who accepts them as a form of payment. 

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January 23, 2019, 01:36:16 AM
Merited by dbshck (4)
 #16

 Also, I think the reasoning behind doing away with high-denomination currency is to combat drug money being transported so easily, and probably money laundering to some extent--not because the governments inherently hate cash.
 

I've used the word "hate" metaphorically, in a sense that they actively prosecute cash. And I've made exactly the same point in the rest of my post - the governments are trying to curb money laundering and crime.

It does happen in many countries, recently it was the most notably in India when around 100 people died while waiting in line to exchange their cash.

While I support bitcoin fully, I don't want to see an end to physical cash.  One of the reasons is definitely a fear of not being able to pay for something if a store's credit card reader is down, or the electricity goes out, but the main reason for me is that I don't necessarily like my bank (or the government) being able to look at every purchase I make.  Cash is still the most anonymous method of payment I know of--and there may be cryptocurrencies with pretty good anonymity characteristics built into them, try finding a merchant who accepts them as a form of payment. 

I doubt there's many people on this forum who want to see cash gone, but this forum represents only a small part of the population. There are many reports in the media how some cities and regions go 100% cash free, so apparently the idea of cashless society is pretty popular. Payment companies and merchants offer people cashback, miles, discounts for using cards instead of cash, and I have a feeling that those things are way more popular than the ideas of privacy and freedom. And what scares me is that if governments will keep fighting cash, cryptocurrencies might be next.

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January 23, 2019, 02:06:24 AM
Merited by dbshck (4)
 #17

There are many reports in the media how some cities and regions go 100% cash free, so apparently the idea of cashless society is pretty popular. Payment companies and merchants offer people cashback, miles, discounts for using cards instead of cash, and I have a feeling that those things are way more popular than the ideas of privacy and freedom.

Unfortunately, they are. The main reason is that not a lot of people are sensitive to fact they are trading their privacy for these offers, or they just don't care so far they can get the best value for their money with them.


And what scares me is that if governments will keep fighting cash, cryptocurrencies might be next.

I'm not sure, but AFAIK a lot of governments mostly in technologically advanced countries are trying not to get caught in the middle of banning the use or waging war against cryptocurrency. It will be completely hypocritical to promote "cashless" policies all the name of security, then wage war against cryptocurrencies.

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January 23, 2019, 11:48:38 AM
 #18

For now, yes, given that most cashless system networks are fully dependent on the workings on the internet. Should there be a problem on the internet, say the infrastructure has somewhat crumbled due to an unforeseen event, the data for cashless systems would still be intact, however the whole protocol wouldn't be operational given that it relies on the internet to produce or mint new coins and continue the chains of transactions coming in on their network. Good thing though that the internet isn't in a single data center that can be a hotspot for nefarious attackers and such, so it's kinda tricky to take down the whole internet using a single attack.

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January 23, 2019, 02:31:30 PM
 #19

It will be completely hypocritical to promote "cashless" policies all the name of security, then wage war against cryptocurrencies.

Not only that, but most governments don't see crypto as a threat, not even in the slightest possible way. Crypto will only become a threat if it is being adopted as currency by the mass, which isn't likely to happen any time soon. The only thing governments need to do is to advance their fiat system and offer people more speed, convenience, etc. That's more than enough to shake off crypto in its entirety as long as their fiat currencies don't implode.

The very fact that most governments have been surprisingly friendly towards crypto, just shows that they don't see it as a threat. I'm glad for that actually, because the longer they let it grow, the harder it will be to combat whenever they finally start seeing it as a legit threat to their own fiat currencies.

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January 23, 2019, 02:35:47 PM
 #20

If you really want to be worried, think: Solar Flare.

That'll put some fear in you Grin
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