The Bitcoin Analogy: How to Leverage for National Security Data Approaches?

By Ed Timperlake

Every year at the United States Naval Academy, Nobel Laureate Professor Michelson is honored at the Michelson Memorial Lecture Series.

Over the years  many distinguished Nobel Laureates and other prominent world-class scientists provide their insights on critical issues.

The Michelson Memorial Lecture Series commemorates the achievements of Albert A. Michelson, whose experiments on the measurement of the speed of light were initiated while he was a military instructor at the U. S. Naval Academy.

These studies not only advanced the science of physics, but also resulted in his selection as the first Nobel Laureate in science from the United States.

For example, in 2009, Professor Christos Papadimitriou Hogan Professor of Computer Science at University of California Berkeley presented a paper entitled:

“The Algorithmic Lens: How the Computational Perspective is transforming the Sciences” 

From presentations that Professor Papadimitriou gave at Princeton:

Computational research transforms the sciences (physical, mathematical, life or social) not just by empowering them analytically, but mainly by providing a novel and powerful perspective which often leads to unforeseen insights.

Examples abound: quantum computation provides the right forum for questioning and testing some of the most basic tenets of quantum physics, while statistical mechanics has found in the efficiency of randomized algorithms a powerful metaphor for phase transitions.

In mathematics, the P vs. NP problem has joined the list of the most profound and consequential problems, and in economics considerations of computational complexity revise predictions of economic behavior and affect the design of economic mechanisms such as auctions.

Finally, in biology some of the most fundamental problems, such as understanding the brain and evolution, can be productively recast in computational terms. My talk is structured around eight vignettes exemplifying this pattern.

In checking his history of publications, Professor Papadimitriou’s visionary look at database controls was published in 1988: The theory of database concurrency control.

When one of the world’s leading Computer Scientists sees the dynamic of the Algorithmic Lens as transforming science and he had also written on database concurrency control, it would be inevitable that his insights would eventually have an intellectual crossroad with those involved in creation of “bitcoins.”

In the questions, which followed the presentation in 2009, I asked Professor Papadimitriou for his view on which country is advancing computer science the most.

His answer was very direct in stating that with all due respect to his colleagues around the world, he believed that the United States was in a leading position for two simple reasons.

First, America has freedom of expression, which generated a framework for the development of innovative approaches.

And, secondly, the financial support was significant for innovative research and applications as well.

Enter “Bitcoins” and a Global consortium

Wired Magazine is a very well edited magazine and for a time it was actually the penultimate hard copy bulletin board” for a new 21st generation of technology pioneers.

I suspect, slowly then quickly, the generational focus on all things computer (cyber included) is now being more dynamically intellectually addressed on the global internet “commons.”

Of course with the exponential growth of internet “information,” there is a huge signal to noise ratio, but my sense is that smart people can scan a lot of information with very discerning insight.

Professor Papadimitriou’s Michelson Lecture was presented in 2009, a time when the algorithmic “mining” effort to create “bitcoins” was initiated.

A 2011 article in Wired looked at the Bitcoin development.

Transactions would be broadcast to the network, and computers running the software would compete to solve irreversible cryptographic puzzles that contain data from several transactions.

It’s not the individuals behind the code who matter, but the code itself. And while people have stolen and cheated and abandoned the bitcoiners, the code has remained true.

The article is entitled the “Rise and Fall of Bitcoins.” Ironically, embedded in the article is the perfect knockdown of the headline if one believes there is a technological imperative which I do:

Theoretical technology-adoption-and-maturation curve that begins with a “technology trigger,” ascends to a “peak of inflated expectations,” collapses into a “trough of disillusionment,” and then climbs a “slope of enlightenment” until reaching a “plateau of productivity.” 

The author identifies a uniqueness that Bitcoins have which actually may have two factors of value embedded in its creation and circulation.

This is why further research is necessary.

The market value of Bitcoins maybe empowering an ultimate goal of finite global free market currency and that is very significant by itself.

Not only did bitcoin’s public ledger seem to protect against fraud, but the predetermined release of the digital currency kept the bitcoin money supply growing at a predictable rate, immune to printing-press-happy central bankers and Weimar Republic-style hyperinflation.

The second “value” of bitcoins is obvious, when thought about, is that in the actual creation process it is not just “value” but it is also a standalone unique “nugget” of information.

The mathematical protected uniqueness of each bitcoin now may highlight a way of transferring classified information flow in 21st Century war fighting enterprise.

Instead of focusing on “bitcoin” as a unit of value which is a very real attribute, think of creating  mathematically unique  “nuggets” that when ‘spent”  are  used to “buy” or  actually access classified information..

Early 21st Century Thinking

In addition to protecting DOD “information systems” and forging “information security’ programs as Director Technology Assessment, International Technology Security, Office of the Secretary of Defense (2003-January 2009)  I also  tried to understand, as it was evolving,  the security component of the Combat Cloud and it is a difficult and nasty problem.

This line from the Wired Article caught my eye:

Bitcoins can be stored in a variety of places—from a “wallet” on a desktop computer to a centralized service in the cloud.

Consequently, this was my very preliminary research inside a “Tron War” paper:

One additional notation in this research is that there is an emerging focus on the concept of “Combat Cloud” computing for military operations.

It is a debate going in many different directions much like in US “Information War” as initially proposed in “The Revolution of Military Affairs.” Information War (IW) proposed as part of RMA eventually migrated especially in US forces to a very significant focus on “cyber” or computer empowered systems.

The word “cyber” is now covering a multitude of capabilities issues and technological progress

In the late 1990s, Mr. Andrew Marshall Director of Net Assessment, Office of the Secretary of Defense, published his short and very direct paper heralding the advent of a “Revolution in Military Affairs.” The PLA and especially their spymasters were paying close attention as were the Russians.

Andy Marshall’s vision was profoundly simple.

He postulated that technology and war fighting would evolve toward two constantly improving military capabilities.

Precision-guided munitions with remote sensors

Information war (the word “cyber” had not yet come into vogue).

To this day, the PLA never lost sight of the concept of Information War, nor has Putin’s Russia.

In contrast, the U.S. Military rapidly devolved, mostly, into a subset of IW captured by the word “cyber.”

There is a true distinction, because IW can include all forms of communication from personal “denial and deception,” people lying, to print, radio and television messing to subtle agents of influence.

Cyber is simply a means of describing computer based information that is addressed with the question; is the information stored on computer files or being transmitted real time available and accurate?

In developing their “Information War” military doctrine, the PLA was awarding Doctorates in IW to military officers as early as 1998. They and the Russians know very well the distinctions between IW and its sub-set “cyber”

Since that time both Russian and PRC cyber espionage attempts have been growing and are unrelenting

Bitcoin is a technology invention, and since all military technology is relative against a reactive enemy, so far bitcoin may actually prove to finally be an algorithmic absolute.

This makes a “mining process” invaluable for creating essentially National Security “bitcoins” with their only value in the world of classified intelligence.

This approach may show some great promise.

A very smart person who went all in on bitcoins made an excellent case of the total mathematical security of bitcoins.

Cryptologists around the globe have an incentive to attack bitcoins, and so far all attempts have been unsuccessful. I believe so far all successful attacks against bitcoins, sadly like Snowden and Manning in breaching national security systems, have been the human “conning” element as reported in the Wired article.

Bitcoin is more closely aligned to specie than fiat currency, and unlike gold or silver specie bitcoin supply will be finite as opposed to continuous mining of precious metals.

This is perhaps why there is some promise in a detailed studying of the creation and circulation of bitcoins with two potential utility functions.

  • One is to study the algorithmic technology as perhaps having embedded a secure component of numbers to transmit discrete “bits” of national security information. –maybe in the much too hard and complex file.
  • The other utility function is to study the economic transactional nature of bitcoins—they can now buy stuff.

This is when smart people can let their imagination run wild.

There are several examples of unique symbols being used in commerce.

Bitcoins break with the model of being analogues to being considered “chits” since the “chit” system is essentially a bi-lateral transaction vice “bitcoins” being globally fungible and hence being able to be tracked electronically.

A great lesson from my graduate schools days at Cornell is:

“It is very hard to hide large sums of money” Professor Hal Bierman Professor Emeritus Finance, Johnson School Cornell University

Thus there is a difference between Bitcoins and the Chit system. The “Chit system” is more analogues to the dilemma of protecting unique information to transect for something of value often currency across borders.

A very impressive introduction of a “Chit System” is by Sunanda K. Chavan writing for something called “Management Paradise” makes my point about capturing very interesting information in the ever expanding global “web”

ORIGIN OF CHIT SYSTEM – October 11th, 2010

The chit system did not originate with overseas Chinese remittances nor with so-called native banks. Chits are a British colonial invention. The word “chit” itself is the derivative of “chitty”, a word of Anglo-Indian origin borrowed from the Hindi chitthi, meaning a mark. From the late seventeenth century, the word crept into the English usage as meaning a note, pass or certificate given to a servant. 

(Or now a “chit” is essentially clearance document empowering ones access to classified information-ET)

The chitty came to China in the nineteenth century by way of British custom. Foreign residents in the treaty ports found handling strings of Chinese cash or silver ingots a major inconvenience.

A system was devised to eliminate this inconvenience.

Harvard University economist Frank King describes this system as follows:

“The salary of foreign employees was paid by check drawn on the Chinese compradore, who then held the funds against which the employee wrote ‘chits’…memoranda acknowledging debts for retail transactions.

“These were accepted by the shopkeeper and passed for collection to the firm’s compradore.” The Chinese underground banking network is active in China, Taiwan, and throughout Southeast Asia.”

The current classified world of intelligence information is based on essentially a “chit” system and there is nothing wrong with that.

But say US National Security “mining” efforts create their own bitcoin, only this time they can be used in the transactional flow of classified information.

If there is the creation of some form of essentially “information coins” that are invulnerable to being cracked or duplicated then whoever has those “coins” can buy information just like bitcoins can buy things.

After all its been reported that some of the best cryptologists in the world have made a run at stealing bitcoins.

Such a national security  algorithmic creation may have great potential to empower organizations furnishing classified information to validate who ever has such  “coins,” by the simple fact they have the “coins.”

In other words the “value” of their coin is measured by the level of their security classification level up to and including “code word” clearance.

Bitcoins have so far been proven to be very well protected since their current global wealth is reflected in a “Crypto Currency Market Cap”-currently valued at   $163,918,435,320.

In other words national security organizations and warfighters may someday have a very proven secure way to essentially “buy” access to highly classified information being stored in a protected Combat Cloud.

This is very much a work in progress.

This article was first published on October 25, 2017 on the Second Line of Defense Forum.