In two weeks’ time we’re starting an open course in security economics. I’m teaching this together with Rainer Boehme, Tyler Moore, Michel van Eeten, Carlos Ganan, Sophie van der Zee and David Modic.
Over the past fifteen years, we’ve come to realise that many information security failures arise from poor incentives. If Alice guards a system while Bob pays the cost of failure, things can be expected to go wrong. Security economics is now an important research topic: you can’t design secure systems involving multiple principals if you can’t get the incentives right. And it goes way beyond computer science. Without understanding how incentives play out, you can’t expect to make decent policy on cybercrime, on consumer protection or indeed on protecting critical national infrastructure
We first did the course last year as a paid-for course with EdX. Our agreement with them was that they’d charge for it the first time, to recoup the production costs, and thereafter it would be free.
So here it is as a free course. Spread the word!
When Lying Feels the Right Thing to Do reports three studies we did on what made people less or more likely to submit fraudulent insurance claims. Our first study found that people were more likely to cheat when rejected; the other two showed that rejected claimants were just as likely to cheat when this didn’t lead to financial gain, but that they felt more strongly when there was no money involved.
Our research was conducted as part of a broader research programme to investigate the deterrence of deception; our goal was to understand how to design better websites. However we can’t help wondering whether it might shine some light on the UK’s recent political turmoil. The Brexit campaigners were minorities of both main political parties and their anti-EU rhetoric had been rejected by the political mainstream for years; they had ideological rather than selfish motives. They ran a blatantly deceptive campaign, persisting in obvious untruths but abandoning them promptly after winning the vote. Rejection is not the only known factor in situational deception; it’s known, for example, that people with unmet goals are more likely to cheat than people who are simply doing their best, and that one bad apple can have a cascading effect. But it still makes you think.
The outcome and aftermath of the referendum have left many people feeling rejected, from remain voters through people who will lose financially to foreign residents of the UK. Our research shows that feelings of rejection can increase cheating by 15-30%; perhaps this might have measurable effects in some sectors. How one might disentangle this from the broader effects of diminished social solidarity, and from politicians simply setting a bad example, could be an interesting problems for social scientists.
I’m liveblogging the Workshop on Security and Human Behaviour which is being held in Harvard. The programme is here. For background, see the liveblogs for SHB 2008-15 which are linked here and here. Blog posts summarising the talks at the workshop sessions will appear as followups below.
We recently reported that the Commissioner of the Met, Sir Bernard Hogan-Howe, said that banks should not refund fraud victims as this would just make people careless with their passwords and antivirus. The banks’ desire to blame fraud victims if they can, to avoid refunding them, is rational enough, but for a police chief to support them was disgraceful. Thirty years ago, a chief constable might have said that rape victims had themselves to blame for wearing nice clothes; if he were to say that nowadays, he’d be sacked. Hogan-Howe’s view of bank fraud is just as uninformed, and just as offensive to victims.
Our spooky friends at Cheltenham have joined the party. The Register reports a story in the Financial Times (behind a paywall) which says GCHQ believes that “companies must do more to try and encourage their customers to improve their cyber security standards. Customers using outdated software – sometimes riddled with vulnerabilities that hackers can exploit – are a weak link in the UK’s cyber defences.” There is no mention of the banks’ own outdated technology, or of GCHQ’s role in keeping consumer software vulnerable.
The elegant scribblers at the Financial Times are under the impression that “At present, banks routinely cover the cost of fraud, regardless of blame.” So they clearly are not regular readers of Light Blue Touchpaper.
The spooks are slightly more cautious; according to the FT, GCHQ “has told the private sector it will not take responsibility for regulatory failings”. I’m sure the banks will heave a big sigh of relief that their cosy relationship with the police, the ombudsman and the FCA will not be disturbed.
We will have to change our security-economics teaching material so we don’t just talk about the case where “Alice guards a system and Bob pays the costs of failure”, but also this new case where “Alice guards a system, and bribes the government to compel Bob to pay the costs of failure.” Now we know how Hogan-Howe is paid off; the banks pay for his Dedicated Card and Payment Crime Unit. But how are they paying off GCHQ, and what else are they getting as part of the deal?
I will be trying to liveblog Financial Cryptography 2016, which is the twentieth anniversary of the conference. The opening keynote was by David Chaum, who invented digital cash over thirty years ago. From then until the first FC people believed that cryptography could enable commerce and also protect privacy; since then pessimism has slowly set in, and sometimes it seems that although we’re still fighting tactical battles, we’ve lost the war. Since Snowden people have little faith in online privacy, and now we see Tim Cook in a position to decide which seventy phones to open. Is there a way to fight back against a global adversary whose policy is “full take”, and where traffic data can be taken with no legal restraint whatsoever? That is now the threat model for designers of anonymity systems. He argues that in addition to a large anonymity set, a future social media system will need a fixed set of servers in order to keep end-to-end latency within what chat users expect. As with DNS we should have servers operated by (say ten) different principals; unlike in that case we don’t want to have most of the independent parties financed by the US government. The root servers could be implemented as unattended seismic observatories, as reported by Simmons in the arms control context; such devices are fairly easy to tamper-proof.
The crypto problem is how to do multi-jurisdiction message processing that protects not just content but also metadata. Systems like Tor cost latency, while multi-party computation costs a lot of cycles. His new design, PrivaTegrity, takes low-latency crypto building blocks then layers on top of them transaction protocols with large anonymity sets. The key component is c-Mix, whose spec up as an eprint here. There’s a precomputation using homomorphic encryption to set up paths and keys; in real-time operations each participating phone has a shared secret with each mix server so things can run at chat speed. A PrivaTegrity message is four c-Mix batches that use the same permutation. Message models supported include not just chat but publishing short anonymous messages, providing an untraceable return address so people can contact you anonymously, group chat, and limiting sybils by preventing more than one pseudonym being used. (There are enduring pseudonyms with valuable credentials.) It can handle large payloads using private information retrieval, and also do pseudonymous digital transactions with a latency of two seconds rather than the hour or so that bitcoin takes. The anonymous payment system has the property that the payer has proof of what he paid to whom, while the recipient has no proof of who paid him; that’s exactly what corrupt officials, money launderers and the like don’t want, but exactly what we do want from the viewpoint of consumer protection. He sees PrivaTegrity as the foundation of a “polyculture” of secure computing from multiple vendors that could be outside the control of governments once more. In questions, Adi Shamir questioned whether such an ecosystem was consistent with the reality of pervasive software vulnerabilities, regardless of the strength of the cryptography.
I will try to liveblog later sessions as followups to this post.
A very exciting Passwords 2015 is being hosted at the Computer Laboratory from 7 to 9 December. A unique conference that brings together the world’s top password hackers and academics. It is being liveblogged by the participants on Twitter with the hashtag #passwords15. A live feed is available on the Passwords 2015 page.
We know more and more about the financial cost of cybercrime, but there has been very little work on its emotional cost. David Modic and I decided to investigate. We wanted to empirically test whether there are emotional repercussions to becoming a victim of fraud (Yes, there are). We wanted to compare emotional and financial impact across different categories of fraud and establish a ranking list (And we did). An interesting, although not surprising, finding was that in every tested category the victim’s perception of emotional impact outweighed the reported financial loss.
A victim may think that they will still be able to recover their money, if not their pride. That really depends on what type of fraud they facilitated. If it is auction fraud, then their chances of recovery are comparatively higher than in bank fraud – we found that 26% of our sample would attempt to recover funds lost in a fraudulent auction and approximately half of them were reimbursed (look at this presentation). There is considerable evidence that banks are not very likely to believe someone claiming to be a victim of, say, identity theft and by extension bank fraud. Thus, when someone ends up out of pocket, they will likely also go through a process of secondary victimisation where they will be told they broke some small-print rule like having the same pin for two of their bank cards or not using the bank’s approved anti-virus software, and are thus not eligible for any refund and it is all their own fault, really.
You can find the article here or here. (It was published in IEEE Security & Privacy.)
This paper complements and extends our earlier work on the costs of cybercrime, where we show that the broader economic costs to society of cybercrime – such as loss of confidence in online shopping and banking – also greatly exceed the amounts that cybercriminals actually manage to steal.
A lot of people are starting to ask about the security and privacy implications of the “Internet of Things”. Once there’s software in everything, what will go wrong? We’ve seen a botnet recruiting CCTV cameras, and a former Director of GCHQ recently told a parliamentary committee that it might be convenient if a suspect’s car could be infected with malware that would cause it to continually report its GPS position. (The new Investigatory Powers Bill will give the police and the spooks the power to hack any device they want.)
So here is the video of a talk I gave on The Internet of Bad Things to the Virus Bulletin conference. As the devices around us become smarter they will become less loyal, and it’s not just about malware (whether written by cops or by crooks). We can expect all sorts of novel business models, many of them exploitative, as well as some downright dishonesty: the recent Volkswagen scandal won’t be the last.
But dealing with pervasive malware in everything will demand new approaches. Our approach to the Internet of Bad Things includes our new Cambridge Cybercrime Centre, which will let us monitor bad things online at the kind of scale that will be required.
I’m at Decepticon 2015 and will be liveblogging the talks in followups to this post. Up till now, research on deception has been spread around half a dozen different events, aimed at cognitive psychologists, forensic psychologists, law enforcement, cybercrime specialists and others. My colleague Sophie van der Zee decided to organise a single annual event to bring everyone together, and Decepticon is the the result. With over 160 registrants for the first edition of the event (and late registrants turned away) it certainly seems to have hit a sweet spot.
I’m at the fourteenth workshop on the economics of information security at TU Delft. I’ll be liveblogging the sessions in followups to this post.