Note: Since publishing this post, I have read through parts of the RAND Corporation report and have concluded that the Bitcoin Magazine article disparaging it was unfair. So much so, that I will exercise far greater caution in the future when quoting from this source.
While I will leave the post here for you to read, had I looked at the RAND Corporation report before publishing it, I probably never would have written anything on the subject.
When government devolves into little more than a Banana Republic-style oligarchy burgeoned by a cadre of media propagandists and corrupt politicians, the only objective of said government is to secure, protect and grow its wealth and power. In such circumstances, which are the historical norm not the exception, “the people” come to be seen as the enemy by government and the oligarchy that controls it. Indeed, this is the unfortunate state of affairs in which we find ourselves today.
Decentralized virtual currencies pose a clear threat to government control, which is why their deployment concerns the status quo so much. Some of these concerns were outlined in a recent RAND Corporation report titled, “National Security Implications of Virtual Currency.” Bitcoin Magazine covered some of its more troubling angles in an article published a couple of days ago.
First a little about RAND from Bitcoin Magazine:
The RAND Corporation, an influential global policy think tank with strong defense and homeland security ties, has released a report titled “National Security Implications of Virtual Currency .” The report, freely available online , examines the feasibility for non-state actors, including terrorist and insurgent groups, to increase their political and/or economic power by deploying a virtual currency (VC) for use in regular economic transactions.
The report was sponsored by the U.S. government through the Office of the Secretary of Defense, and the research work was conducted within the International Security and National Security Implications of Virtual Currency Defense Policy Center of the RAND National Defense Research Institute, a federally funded research and development center sponsored by the Office of the Secretary of Defense, the Joint Chiefs of Staff, the Unified Combatant Commands, the Navy, the Marine Corps, the defense agencies and the defense intelligence community.
RAND appears concerned that a proliferation of virtual currencies could undermine state power. Bitcoin Magazine notes…
The RAND report goes one step further and suggests that governments should use advanced technical means to actively disrupt virtual currencies. That includes terrorist groups, but also peaceful deployments of digital currencies by other non-state actors, and a general war on privacy and encryption.
According to the RAND analysts, virtual currencies demonstrate a resilient means of storing data in a highly distributed fashion that is very hard to corrupt and could permit, for instance, information dissemination (blogs, social media, forums, news websites) that is resilient to nation-state interference.
“[Virtual currencies] represent the latest step toward decentralized cyber services,” notes the report. “In particular, the historical trend suggests the development of a resilient public cyber key terrain, which this report defines as the ability of unsophisticated cyber actors to have persistent, assured access to cyber services regardless of whether a highly sophisticated state actor opposes their use.”
The RAND researchers analyze key features of decentralized blockchain-based systems, including but not limited to virtual currencies, of which bitcoin is the best-known example. But non-currency applications of blockchain technology, such as sophisticated systems for encrypted storage and emerging forms of decentralized web and communication services, are seen as equally threatening. In fact, one of the effects of the growing popularity of Bitcoin is an increase in the cryptography awareness and sophistication of the population at large.
“Increased awareness of block-chain technologies has, as a result, increased awareness of sophisticated cryptographic techniques for distributed consensus and computation,” note the analysts. “Venture capitalists now talk about computer-science concepts [that] would never have been the subject of discussion beyond rarefied academic circles.”
Therefore, the RAND report seems to suggest pre-emptive strikes and notes that “perhaps the best strategy for the United States and its allies to thwart a VC [virtual currency] deployment would be to target those properties of a VC that would most increase its acceptance, most notably transaction anonymity, security, and availability.”
Examples of promising cyber attacks against digital currencies and blockchain-based systems for other applications are given.
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