Schneier on Security: Tagged cybercrime

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Cybercrime vs Cyberterrorism

I’ve been saying this for a while now:

Since the outbreak of a cybercrime epidemic that has cost the American economy billions of dollars, the federal government has failed to respond with enough resources, attention and determination to combat the cyberthreat, a Mercury News investigation reveals.

“The U.S. government has not devoted the leadership and energy that this issue needs,” said Paul Kurtz, a former administration homeland and cybersecurity adviser. “It’s been neglected.”

Even as the White House asked last week for $154 million toward a new cybersecurity initiative expected to reach billions of dollars over the next several years, security experts complain the administration remains too focused on the risks of online espionage and information warfare, overlooking the international criminals who are stealing a fortune through the Internet.

This is Part III of a good series on cybercrime. Here are Parts I and II.

Posted on November 28, 2007 at 6:56 AM • View Comments

The biggest problems in discussing cyberwar are the definitions. The things most often described as cyberwar are really cyberterrorism, and the things most often described as cyberterrorism are more like cybercrime, cybervandalism or cyberhooliganism—or maybe cyberespionage.

At first glance there’s nothing new about these terms except the “cyber” prefix. War, terrorism, crime and vandalism are old concepts. What’s new is the domain; it’s the same old stuff occurring in a new arena. But because cyberspace is different, there are differences worth considering.

Of course, the terms overlap. Although the goals are different, many tactics used by armies, terrorists and criminals are the same. Just as they use guns and bombs, they can use cyberattacks. And just as every shooting is not necessarily an act of war, every successful Internet attack, no matter how deadly, is not necessarily an act of cyberwar. A cyberattack that shuts down the power grid might be part of a cyberwar campaign, but it also might be an act of cyberterrorism, cybercrime or even—if done by some 14-year-old who doesn’t really understand what he’s doing—cyberhooliganism. Which it is depends on the attacker’s motivations and the surrounding circumstances—just as in the real world.

For it to be cyberwar, it must first be war. In the 21st century, war will inevitably include cyberwar. Just as war moved into the air with the development of kites, balloons and aircraft, and into space with satellites and ballistic missiles, war will move into cyberspace with the development of specialized weapons, tactics and defenses.

I have no doubt that smarter and better-funded militaries are planning for cyberwar. They have Internet attack tools: denial-of-service tools; exploits that would allow military intelligence to penetrate military systems; viruses and worms similar to what we see now, but perhaps country- or network-specific; and Trojans that eavesdrop on networks, disrupt operations, or allow an attacker to penetrate other networks. I believe militaries know of vulnerabilities in operating systems, generic or custom military applications, and code to exploit those vulnerabilities. It would be irresponsible for them not to.

The most obvious attack is the disabling of large parts of the Internet, although in the absence of global war, I doubt a military would do so; the Internet is too useful an asset and too large a part of the world economy. More interesting is whether militaries would disable national pieces of it. For a surgical approach, we can imagine a cyberattack against a military headquarters, or networks handling logistical information.

Destruction is the last thing a military wants to accomplish with a communications network. A military only wants to shut down an enemy’s network if it isn’t acquiring useful information. The best thing is to infiltrate enemy computers and networks, spy on them, and surreptitiously disrupt select pieces of their communications when appropriate. The next best thing is to passively eavesdrop. After that, perform traffic analysis: analyze the characteristics of communications. Only if a military can’t do any of this would it consider shutting the thing down. Or if, as sometimes but rarely happens, the benefits of completely denying the enemy the communications channel outweigh the advantages of eavesdropping on it.

Cyberwar is certainly not a myth. But you haven’t seen it yet, despite the attacks on Estonia. Cyberwar is warfare in cyberspace. And warfare involves massive death and destruction. When you see it, you’ll know it.

This is the second half of a point/counterpoint with Marcus Ranum; it appeared in the November issue of Information Security Magazine. Marcus’s half is here.

I wrote a longer essay on cyberwar here.

Posted on November 12, 2007 at 7:38 AM • View Comments

Understanding the Black Market in Internet Crime

Here’s a interesting paper from Carnegie Mellon University: “An Inquiry into the Nature and Causes of the Wealth of Internet Miscreants.”

The paper focuses on the large illicit market that specializes in the commoditization of activities in support of Internet-based crime. The main goal of the paper was to understand and measure how these markets function, and discuss the incentives of the various market entities. Using a dataset collected over seven months and comprising over 13 million messages, they were able to categorize the market’s participants, the goods and services advertised, and the asking prices for selected interesting goods.

Really cool stuff.

Unfortunately, the data is extremely noisy and so far the authors have no way to cross-validate it, so it is difficult to make any strong conclusions.

The press focused on just one thing: a discussion of general ways to disrupt the market. Contrary to the claims of the article, the authors have not built any tools to disrupt the markets.

Future of Malware

Excellent three–part series on trends in criminal malware:

When Jackson logged in, the genius of 76service became immediately clear. 76service customers weren’t weren’t paying for already-stolen credentials. Instead, 76service sold subscriptions or “projects” to Gozi-infected machines. Usually, projects were sold in 30-day increments because that’s a billing cycle, enough time to guarantee that the person who owns the machine with Gozi on it will have logged in to manage their finances, entering data into forms that could be grabbed.

Subscribers could log in with their assigned user name and password any time during the 30-day project. They’d be met with a screen that told them which of their bots was currently active, and a side bar of management options. For example, they could pull down the latest drops—data deposits that the Gozi-infected machines they subscribed to sent to the servers, like the 3.3 GB one Jackson had found.

A project was like an investment portfolio. Individual Gozi-infected machines were like stocks and subscribers bought a group of them, betting they could gain enough personal information from their portfolio of infected machines to make a profit, mostly by turning around and selling credentials on the black market. (In some cases, subscribers would use a few of the credentials themselves).

Some machines, like some stocks, would under perform and provide little private information. But others would land the subscriber a windfall of private data. The point was to subscribe to several infected machines to balance that risk, the way Wall Street fund managers invest in many stocks to offset losses in one company with gains in another.

[…]

That’s why the subscription prices were steep. “Prices started at $1,000 per machine per project,” says Jackson. With some tinkering and thanks to some loose database configuration, Jackson gained a view into other people’s accounts. He mostly saw subscriptions that bought access to only a handful of machines, rarely more than a dozen.

The $1K figure was for “fresh bots”—new infections that hadn’t been part of a project yet. Used bots that were coming off an expired project were available, but worth less (and thus, cost less) because of the increased likelihood that personal information gained from that machine had already been sold. Customers were urged to act quickly to get the freshest bots available.

This was another advantage for the seller. Providing the self-service interface freed up the sellers to create ancillary services. 76service was extremely customer-focused. “They were there to give you services that made it a good experience,” Jackson says. You want us to clean up the reports for you? Sure, for a small fee. You want a report on all the credentials from one bank in your drop? Hundred bucks, please. For another $150 a month, we’ll create secure remote drops for you. Alternative packaging and delivery options? We can do that. Nickel and dime. Nickel and dime.

And about banks not caring:

As much as the HangUp Team has relied on distributed pain for its success, financial institutions have relied on transferred risk to keep the Internet crime problem from becoming a consumer cause and damaging their businesses. So far, it has been cheaper to follow regulations enough to pass audits and then pay for the fraud rather than implement more serious security. “If you look at the volume of loss versus revenue, it’s not horribly bad yet,” says Chris Hoff, with a nod to the criminal hacker’s strategy of distributed pain. “The banks say, ‘Regulations say I need to do these seven things, so I do them and let’s hope the technology to defend against this catches up.'”

“John” the security executive at the bank, one of the only security professionals from financial services who agreed to speak for this story, says “If you audited a financial institution, you wouldn’t find many out of compliance. From a legal perspective, banks can spin that around and say there’s nothing else we could do.”

The banks know how much data Lance James at Secure Science is monitoring; some of them are his clients. The researcher with expertise on the HangUp Team calls consumers’ ability to transfer funds online “the dumbest thing I’ve ever seen. You can’t walk into the branch of a bank with a mask on and no ID and make a transfer. So why is it okay online?”

And yet banks push online banking to customers with one hand while the other hand pushes problems like Gozi away, into acceptable loss budgets and insurance—transferred risk.

As long as consumers don’t raise a fuss, and thus far they haven’t in any meaningful way, the banks have little to fear from their strategies.

But perhaps the only reason consumers don’t raise a fuss is because the banks have both overstated the safety and security of online banking and downplayed negative events around it, like the existence of Gozi and 76service.

The whole thing is worth reading.

Posted on October 17, 2007 at 1:07 PM • View Comments

The Storm Worm

The Storm worm first appeared at the beginning of the year, hiding in e-mail attachments with the subject line: “230 dead as storm batters Europe.” Those who opened the attachment became infected, their computers joining an ever-growing botnet.

Although it’s most commonly called a worm, Storm is really more: a worm, a Trojan horse and a bot all rolled into one. It’s also the most successful example we have of a new breed of worm, and I’ve seen estimates that between 1 million and 50 million computers have been infected worldwide.

Old style worms—Sasser, Slammer, Nimda—were written by hackers looking for fame. They spread as quickly as possible (Slammer infected 75,000 computers in 10 minutes) and garnered a lot of notice in the process. The onslaught made it easier for security experts to detect the attack, but required a quick response by antivirus companies, sysadmins and users hoping to contain it. Think of this type of worm as an infectious disease that shows immediate symptoms.

Worms like Storm are written by hackers looking for profit, and they’re different. These worms spread more subtly, without making noise. Symptoms don’t appear immediately, and an infected computer can sit dormant for a long time. If it were a disease, it would be more like syphilis, whose symptoms may be mild or disappear altogether, but which will eventually come back years later and eat your brain.

Storm represents the future of malware. Let’s look at its behavior:

Storm is patient. A worm that attacks all the time is much easier to detect; a worm that attacks and then shuts off for a while hides much more easily.
Storm is designed like an ant colony, with separation of duties. Only a small fraction of infected hosts spread the worm. A much smaller fraction are C2: command-and-control servers. The rest stand by to receive orders. By only allowing a small number of hosts to propagate the virus and act as command-and-control servers, Storm is resilient against attack. Even if those hosts shut down, the network remains largely intact, and other hosts can take over those duties.
Storm doesn’t cause any damage, or noticeable performance impact, to the hosts. Like a parasite, it needs its host to be intact and healthy for its own survival. This makes it harder to detect, because users and network administrators won’t notice any abnormal behavior most of the time.
Rather than having all hosts communicate to a central server or set of servers, Storm uses a peer-to-peer network for C2. This makes the Storm botnet much harder to disable. The most common way to disable a botnet is to shut down the centralized control point. Storm doesn’t have a centralized control point, and thus can’t be shut down that way.
This technique has other advantages, too. Companies that monitor net activity can detect traffic anomalies with a centralized C2 point, but distributed C2 doesn’t show up as a spike. Communications are much harder to detect.

One standard method of tracking root C2 servers is to put an infected host through a memory debugger and figure out where its orders are coming from. This won’t work with Storm: An infected host may only know about a small fraction of infected hosts—25-30 at a time—and those hosts are an unknown number of hops away from the primary C2 servers.

And even if a C2 node is taken down, the system doesn’t suffer. Like a hydra with many heads, Storm’s C2 structure is distributed.
Not only are the C2 servers distributed, but they also hide behind a constantly changing DNS technique called “fast flux.” So even if a compromised host is isolated and debugged, and a C2 server identified through the cloud, by that time it may no longer be active.
Storm’s payload—the code it uses to spread—morphs every 30 minutes or so, making typical AV (antivirus) and IDS techniques less effective.
Storm’s delivery mechanism also changes regularly. Storm started out as PDF spam, then its programmers started using e-cards and YouTube invites—anything to entice users to click on a phony link. Storm also started posting blog-comment spam, again trying to trick viewers into clicking infected links. While these sorts of things are pretty standard worm tactics, it does highlight how Storm is constantly shifting at all levels.
The Storm e-mail also changes all the time, leveraging social engineering techniques. There are always new subject lines and new enticing text: “A killer at 11, he’s free at 21 and …,” “football tracking program” on NFL opening weekend, and major storm and hurricane warnings. Storm’s programmers are very good at preying on human nature.
Last month, Storm began attacking anti-spam sites focused on identifying it—spamhaus.org, 419eater and so on—and the personal website of Joe Stewart, who published an analysis of Storm. I am reminded of a basic theory of war: Take out your enemy’s reconnaissance. Or a basic theory of urban gangs and some governments: Make sure others know not to mess with you.

Not that we really have any idea how to mess with Storm. Storm has been around for almost a year, and the antivirus companies are pretty much powerless to do anything about it. Inoculating infected machines individually is simply not going to work, and I can’t imagine forcing ISPs to quarantine infected hosts. A quarantine wouldn’t work in any case: Storm’s creators could easily design another worm—and we know that users can’t keep themselves from clicking on enticing attachments and links.

Redesigning the Microsoft Windows operating system would work, but that’s ridiculous to even suggest. Creating a counterworm would make a great piece of fiction, but it’s a really bad idea in real life. We simply don’t know how to stop Storm, except to find the people controlling it and arrest them.

Unfortunately we have no idea who controls Storm, although there’s some speculation that they’re Russian. The programmers are obviously very skilled, and they’re continuing to work on their creation.

Oddly enough, Storm isn’t doing much, so far, except gathering strength. Aside from continuing to infect other Windows machines and attacking particular sites that are attacking it, Storm has only been implicated in some pump-and-dump stock scams. There are rumors that Storm is leased out to other criminal groups. Other than that, nothing.

Personally, I’m worried about what Storm’s creators are planning for Phase II.

This essay originally appeared on Wired.com.

EDITED TO ADD (10/17): Storm is being partitioned, presumably so parts can be sold off. If that’s true, we should expect more malicious activitity out of Storm in the future; anyone buying a botnet will want to use it.

Slashdot thread on Storm.

EDITEDT TO ADD (10/22): Here’s research that suggests Storm is shinking.

EDITED T OADD (10/24): Another article about Storm striking back at security researchers.

Posted on October 4, 2007 at 6:00 AM • View Comments

"Cyber Crime Toolkits" Hit the News

On the BBC website:

“They are starting to pop up left and right,” said Tim Eades from security company Sana, of the sites offering downloadable hacking tools. “It’s the classic verticalisation of a market as it starts to mature.”

Malicious hackers had evolved over the last few years, he said, and were now selling the tools they used to use to the growing numbers of fledgling cyber thieves.

Mr Eades said some hacking groups offer boutique virus writing services that produce malicious programs that security software will not spot. Individual malicious programs cost up to £17 (25 euros), he said.

At the top end of the scale, said Mr Eades, were tools like the notorious MPack which costs up to £500.

The regular updates for the software ensure it uses the latest vulnerabilities to help criminals hijack PCs via booby-trapped webpages. It also includes a statistical package that lets owners know how successful their attack has been and where victims are based.

In one sense, there’s nothing new here. There have been rootkits and virus construction kits available on the Internet for years. The very definition of a “script kiddie” is someone who uses these tools without really understanding them. What is new is the market: these new tools aren’t for wannabe hackers, they’re for criminals. And with the new market comes a for-profit business model.

Posted on September 5, 2007 at 7:10 AM • View Comments

New German Hacking Law

There has been much written about the new German hacker-tool law, which went into effect earlier this month.

Dark Reading has the most interesting speculation:

Many security people say the law is so flawed and so broad and that no one can really comply with it. “In essence, the way the laws are phrased now, there is no way to ever comply… even as a non-security company,” says researcher Halvar Flake, a.k.a. Thomas Dullien, CEO and head of research at Sabre Security.

“If I walked into a store now and told the clerk that I wish to buy Windows XP and I will use it to hack, then the clerk is aiding me in committing a crime by [selling me] Windows XP,” Dullien says. “The law doesn’t actually distinguish between what the intended purpose of a program is. It just says if you put a piece of code in a disposition that is used to commit a crime, you’re complicit in that crime.”

Dullien says his company’s BinNavi tool for debugging and analyzing code or malware is fairly insulated from the law because it doesn’t include exploits. But his company still must ensure it doesn’t sell to “dodgy” customers.

Many other German security researchers, meanwhile, have pulled their proof-of-concept exploit code and hacking tools offline for fear of prosecution.

[…]

The German law has even given some U.S. researchers pause as well. It’s unclear whether the long arm of the German law could reach them, so some aren’t taking any chances: The exploit-laden Metasploit hacking tool could fall under German law if someone possesses it, distributes it, or uses it, for instance. “I’m staying out of Germany,” says HD Moore, Metasploit’s creator and director of security research for BreakingPoint Systems.

“Just about everything the Metasploit project provides [could] fall under that law,” Moore says. “Every exploit, most of the tools, and even the documentation in some cases.”

Moore notes that most Linux distros are now illegal in Germany as well, because they include the open-source nmap security scanner tool—and some include Metasploit as well.

The law basically leaves the door open to outlaw any software used in a crime, notes Sabre Security’s Dullien.

Zoller says the biggest problem with the new law is that it’s so vague that no one really knows what it means yet. “We have to wait for something to happen to know the limits.”

Posted on August 28, 2007 at 1:32 PM • View Comments

Cyberwar

I haven’t posted anything about the cyberwar between Russia and Estonia because, well, because I didn’t think there was anything new to say. We know that this kind of thing is possible. We don’t have any definitive proof that Russia was behind it. But it would be foolish to think that the various world’s militaries don’t have capabilities like this.

And anyway, I wrote about cyberwar back in January 2005.

But it seems that the essay never made it into the blog. So here it is again.

Cyberwar

The first problem with any discussion about cyberwar is definitional. I’ve been reading about cyberwar for years now, and there seem to be as many definitions of the term as there are people who write about the topic. Some people try to limit cyberwar to military actions taken during wartime, while others are so inclusive that they include the script kiddies who deface websites for fun.

I think the restrictive definition is more useful, and would like to define four different terms as follows:

Cyberwar—Warfare in cyberspace. This includes warfare attacks against a nation’s military—forcing critical communications channels to fail, for example—and attacks against the civilian population.

Cyberterrorism—The use of cyberspace to commit terrorist acts. An example might be hacking into a computer system to cause a nuclear power plant to melt down, a dam to open, or two airplanes to collide. In a previous Crypto-Gram essay, I discussed how realistic the cyberterrorism threat is.

Cybercrime—Crime in cyberspace. This includes much of what we’ve already experienced: theft of intellectual property, extortion based on the threat of DDOS attacks, fraud based on identity theft, and so on.

Cybervandalism—The script kiddies who deface websites for fun are technically criminals, but I think of them more as vandals or hooligans. They’re like the kids who spray paint buses: in it more for the thrill than anything else.

At first glance, there’s nothing new about these terms except the “cyber” prefix. War, terrorism, crime, even vandalism are old concepts. That’s correct, the only thing new is the domain; it’s the same old stuff occurring in a new arena. But because the arena of cyberspace is different from other arenas, there are differences worth considering.

One thing that hasn’t changed is that the terms overlap: although the goals are different, many of the tactics used by armies, terrorists, and criminals are the same. Just as all three groups use guns and bombs, all three groups can use cyberattacks. And just as every shooting is not necessarily an act of war, every successful Internet attack, no matter how deadly, is not necessarily an act of cyberwar. A cyberattack that shuts down the power grid might be part of a cyberwar campaign, but it also might be an act of cyberterrorism, cybercrime, or even—if it’s done by some fourteen-year-old who doesn’t really understand what he’s doing—cybervandalism. Which it is will depend on the motivations of the attacker and the circumstances surrounding the attack…just as in the real world.

For it to be cyberwar, it must first be war. And in the 21st century, war will inevitably include cyberwar. For just as war moved into the air with the development of kites and balloons and then aircraft, and war moved into space with the development of satellites and ballistic missiles, war will move into cyberspace with the development of specialized weapons, tactics, and defenses.

The Waging of Cyberwar

There should be no doubt that the smarter and better-funded militaries of the world are planning for cyberwar, both attack and defense. It would be foolish for a military to ignore the threat of a cyberattack and not invest in defensive capabilities, or to disregard the strategic or tactical possibility of launching an offensive cyberattack against an enemy during wartime. And while history has taught us that many militaries are indeed foolish and ignore the march of progress, cyberwar has been discussed too much in military circles to be ignored.

This implies that at least some of our world’s militaries have Internet attack tools that they’re saving in case of wartime. They could be denial-of-service tools. They could be exploits that would allow military intelligence to penetrate military systems. They could be viruses and worms similar to what we’re seeing now, but perhaps country- or network-specific. They could be Trojans that eavesdrop on networks, disrupt network operations, or allow an attacker to penetrate still other networks.

Script kiddies are attackers who run exploit code written by others, but don’t really understand the intricacies of what they’re doing. Conversely, professional attackers spend an enormous amount of time developing exploits: finding vulnerabilities, writing code to exploit them, figuring out how to cover their tracks. The real professionals don’t release their code to the script kiddies; the stuff is much more valuable if it remains secret until it is needed. I believe that militaries have collections of vulnerabilities in common operating systems, generic applications, or even custom military software that their potential enemies are using, and code to exploit those vulnerabilities. I believe that these militaries are keeping these vulnerabilities secret, and that they are saving them in case of wartime or other hostilities. It would be irresponsible for them not to.

The most obvious cyberattack is the disabling of large parts of the Internet, at least for a while. Certainly some militaries have the capability to do this, but in the absence of global war I doubt that they would do so; the Internet is far too useful an asset and far too large a part of the world economy. More interesting is whether they would try to disable national pieces of it. If Country A went to war with Country B, would Country A want to disable Country B’s portion of the Internet, or remove connections between Country B’s Internet and the rest of the world? Depending on the country, a low-tech solution might be the easiest: disable whatever undersea cables they’re using as access. Could Country A’s military turn its own Internet into a domestic-only network if they wanted?

For a more surgical approach, we can also imagine cyberattacks designed to destroy particular organizations’ networks; e.g., as the denial-of-service attack against the Al Jazeera website during the recent Iraqi war, allegedly by pro-American hackers but possibly by the government. We can imagine a cyberattack against the computer networks at a nation’s military headquarters, or the computer networks that handle logistical information.

One important thing to remember is that destruction is the last thing a military wants to do with a communications network. A military only wants to shut an enemy’s network down if they aren’t getting useful information from it. The best thing to do is to infiltrate the enemy’s computers and networks, spy on them, and surreptitiously disrupt select pieces of their communications when appropriate. The next best thing is to passively eavesdrop. After that, the next best is to perform traffic analysis: analyze who is talking to whom and the characteristics of that communication. Only if a military can’t do any of that do they consider shutting the thing down. Or if, as sometimes but rarely happens, the benefits of completely denying the enemy the communications channel outweigh all of the advantages.

Properties of Cyberwar

Because attackers and defenders use the same network hardware and software, there is a fundamental tension between cyberattack and cyberdefense. The National Security Agency has referred to this as the “equities issue,” and it can be summarized as follows. When a military discovers a vulnerability in a common product, they can either alert the manufacturer and fix the vulnerability, or not tell anyone. It’s not an easy decision. Fixing the vulnerability gives both the good guys and the bad guys a more secure system. Keeping the vulnerability secret means that the good guys can exploit the vulnerability to attack the bad guys, but it also means that the good guys are vulnerable. As long as everyone uses the same microprocessors, operating systems, network protocols, applications software, etc., the equities issue will always be a consideration when planning cyberwar.

Cyberwar can take on aspects of espionage, and does not necessarily involve open warfare. (In military talk, cyberwar is not necessarily “hot.”) Since much of cyberwar will be about seizing control of a network and eavesdropping on it, there may not be any obvious damage from cyberwar operations. This means that the same tactics might be used in peacetime by national intelligence agencies. There’s considerable risk here. Just as U.S. U2 flights over the Soviet Union could have been viewed as an act of war, the deliberate penetration of a country’s computer networks might be as well.

Cyberattacks target infrastructure. In this way they are no different than conventional military attacks against other networks: power, transportation, communications, etc. All of these networks are used by both civilians and the military during wartime, and attacks against them inconvenience both groups of people. For example, when the Allies bombed German railroad bridges during World War II, that affected both civilian and military transport. And when the United States bombed Iraqi communications links in both the First and Second Iraqi Wars, that affected both civilian and military communications. Cyberattacks, even attacks targeted as precisely as today’s smart bombs, are likely to have collateral effects.

Cyberattacks can be used to wage information war. Information war is another topic that’s received considerable media attention of late, although it is not new. Dropping leaflets on enemy soldiers to persuade them to surrender is information war. Broadcasting radio programs to enemy troops is information war. As people get more and more of their information over cyberspace, cyberspace will increasingly become a theater for information war. It’s not hard to imagine cyberattacks designed to co-opt the enemy’s communications channels and use them as a vehicle for information war.

Because cyberwar targets information infrastructure, the waging of it can be more damaging to countries that have significant computer-network infrastructure. The idea is that a technologically poor country might decide that a cyberattack that affects the entire world would disproportionately affect its enemies, because rich nations rely on the Internet much more than poor ones. In some ways this is the dark side of the digital divide, and one of the reasons countries like the United States are so worried about cyberdefense.

Cyberwar is asymmetric, and can be a guerrilla attack. Unlike conventional military offensives involving divisions of men and supplies, cyberattacks are carried out by a few trained operatives. In this way, cyberattacks can be part of a guerrilla warfare campaign.

Cyberattacks also make effective surprise attacks. For years we’ve heard dire warnings of an “electronic Pearl Harbor.” These are largely hyperbole today. I discuss this more in that previous Crypto-Gram essay on cyberterrorism, but right now the infrastructure just isn’t sufficiently vulnerable in that way.

Cyberattacks do not necessarily have an obvious origin. Unlike other forms of warfare, misdirection is more likely a feature of a cyberattack. It’s possible to have damage being done, but not know where it’s coming from. This is a significant difference; there’s something terrifying about not knowing your opponent—or knowing it, and then being wrong. Imagine if, after Pearl Harbor, we did not know who attacked us?

Cyberwar is a moving target. In the previous paragraph, I said that today the risks of an electronic Pearl Harbor are unfounded. That’s true; but this, like all other aspects of cyberspace, is continually changing. Technological improvements affect everyone, including cyberattack mechanisms. And the Internet is becoming critical to more of our infrastructure, making cyberattacks more attractive. There will be a time in the future, perhaps not too far into the future, when a surprise cyberattack becomes a realistic threat.

And finally, cyberwar is a multifaceted concept. It’s part of a larger military campaign, and attacks are likely to have both real-world and cyber components. A military might target the enemy’s communications infrastructure through both physical attack—bombings of selected communications facilities and transmission cables—and virtual attack. An information warfare campaign might include dropping of leaflets, usurpation of a television channel, and mass sending of e-mail. And many cyberattacks still have easier non-cyber equivalents: A country wanting to isolate another country’s Internet might find a low-tech solution, involving the acquiescence of backbone companies like Cable & Wireless, easier than a targeted worm or virus. Cyberwar doesn’t replace war; it’s just another arena in which the larger war is fought.

People overplay the risks of cyberwar and cyberterrorism. It’s sexy, and it gets media attention. And at the same time, people underplay the risks of cybercrime. Today crime is big business on the Internet, and it’s getting bigger all the time. But luckily, the defenses are the same. The countermeasures aimed at preventing both cyberwar and cyberterrorist attacks will also defend against cybercrime and cybervandalism. So even if organizations secure their networks for the wrong reasons, they’ll do the right thing.

Here’s my previous essay on cyberterrorism.

Posted on June 4, 2007 at 6:13 AM • View Comments

1933 Anti-Spam Doorbell

Here’s a great description of an anti-spam doorbell from 1933. A visitor had to deposit a dime into a slot to make the doorbell ring. If the homeowner appreciated the visit, he would return the dime. Otherwise, the dime became the cost of disturbing the homeowner.

This kind of system has been proposed for e-mail as well: the sender has to pay the receiver—or someone else in the system—a nominal amount for each e-mail sent. This money is returned if the e-mail is wanted, and forfeited if it is spam. The result would be to raise the cost of sending spam to the point where it is uneconomical.

I think it’s worth comparing the two systems—the doorbell system and the e-mail system—to demonstrate why it won’t work for spam.

The doorbell system fails for three reasons: the percentage of annoying visitors is small enough to make the system largely unnecessary, visitors don’t generally have dimes on them (presumably fixable if the system becomes ubiquitous), and it’s too easy to successfully bypass the system by knocking (not true for an apartment building).

The anti-spam system doesn’t suffer from the first two problems: spam is an enormous percentage of total e-mail, and an automated accounting system makes the financial mechanics easy. But the anti-spam system is too easy to bypass, and it’s too easy to hack. And once you set up a financial system, you’re simply inviting hacks.

The anti-spam system fails because spammers don’t have to send e-mail directly—they can take over innocent computers and send it from them. So it’s the people whose computers have been hacked into, victims in their own right, who will end up paying for spam. This risk can be limited by letting people put an upper limit on the money in their accounts, but it is still serious.

And criminals can exploit the system in the other direction, too. They could hack into innocent computers and have them send “spam” to their email addresses, collecting money in the process.

Trying to impose some sort of economic penalty on unwanted e-mail is a good idea, but it won’t work unless the endpoints are trusted. And we’re nowhere near that trust today.

Posted on May 10, 2007 at 5:57 AM • View Comments

Top 10 Internet Crimes of 2006

According to the Internet Crime Complaint Center and reported in U.S. News and World Report, auction fraud and non-delivery of items purchased are far and away the most common Internet crimes. Identity theft is way down near the bottom.

Although the number of complaints last year207,492fell by 10 percent, the overall losses hit a record $198 million. By far the most reported crime: Internet auction fraud, garnering 45 percent of all complaints. Also big was nondelivery of merchandise or payment, which notched second at 19 percent. The biggest money losers: those omnipresent Nigerian scam letters, which fleeced victims on average of $5,100 followed by check fraud at $3,744 and investment fraud at $2,694.

[…]

The feds caution that these figures don’t represent a scientific sample of just how much Net crime is out there. They note, for example, that the high number of auction fraud complaints is due, in part, to eBay and other big E-commerce outfits offering customers direct links to the IC3 website. And it’s tough to measure what may be the Web’s biggest scourge, child porn, simply by complaints. Still, the survey is a useful snapshot, even if it tells us what we already know: that the Internet, like the rest of life, is full of bad guys. Caveat emptor.

Posted on April 24, 2007 at 12:25 PM • View Comments

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Sidebar photo of Bruce Schneier by Joe MacInnis.