Cyber-Intrusion, Banking Fragility, & Petro-Dollar Replacement

McAlvany Weekly Commentary

If It's Free To You Online, Realize That "You Are The Product" Banking Crises Are Actually Designed Ahead Of Time Dollar Recycling Being Replaced By Gold "And it just goes to show how vulnerable a lot of this infrastructure is, particularly the internet. When you talk about the internet as we conceive of it, like going to Amazon and buying something, or your mobile phone, going to New York Times, that internet is very much a trust-based cabal of people that for the longest time have just decided there is a decorum that they're going to have about how it's run. But if that changes, then the internet is going to look very different." —Becker Polverini Kevin: Welcome to the McAlvany Weekly Commentary. I'm Kevin Orrick, along with David McAlvany. David, oftentimes you and I, when we go out on Monday nights, we talk about past guests, and we'll say, "Hey, I'm going to go back and listen to that." And it's great for discussion. Last week's program, Peter Zhao, I went back and listened to that. I'm going to listen several more times and I'd like to take our listeners through that process a little bit. David: Yeah, certainly as we look at the fabric that we've created, the tapestry, if you will, of guests that we've had and content that we've created, we refer back to these things as lessons that we've learned, things that we've gained, insights that we've benefited from, and it's a part of our everyday conversation. If a new listener is unfamiliar with some of the most important guests that we've had on the program and content that offers insight that would be outside of a normal expected analysis, it's really important to be familiar— And we're not asking them to go back through the hundreds of guests that we have, but every once in a while we will highlight a few of them for their benefit. Kevin: Well, and the three that we've chosen for today that we wanted to go back and talk about, now think about this crypto week that people are talking about. And we've been talking about AI, all this electronic intrusion. Yes, are we trying to move forward electronically, but what is the cost to doing that? And I go back to 2017, Dave, you interviewed Becker Polverini, and this is a man who spends his entire life in that world, cybersecurity, looking at anything from China, countries who are trying to break into each other's systems, to companies. And I think it would be worth going back to his interview back from 2017. David: Yeah, and just to set it up a little bit more, a part of our conversations in that time frame included an interview with Nazli Choucri, who wrote a book on who controls the internet. And it's important, particularly because we're in a period of time where data is one of the most important assets that exists. And so where is it organized? Who organizes it? How is it sold? What are the means of distribution? This year, we have Nvidia trading in a market capitalization of over $4 trillion, and they're feeding the AI frenzy. And that AI frenzy is really about organizing and distributing the data that already exists. Kevin: Well, and whose information is it? Right? David: That's right. And that's a key point that we get to in the conversation with Becker Polverini. That data is you. You are the asset. Kevin: You are the product. David: What is being sold is the breadcrumbs that you've left, all over. The activity, the searches, you have this profile and you are being monetized. * * * Becker, I have a whole lot of questions for you, and I wondered if you might be able to tell us a little bit about yourself and kind of what puts you in the position to speak to cybersecurity and cryptography and the many other things that you're interested in and an expert with. Becker: Yeah, yeah, sure. So currently I'm the CEO of PKC Security. We're a cybersecurity consultancy south of Los Angeles in Southern California. My background is in really nation-state cyber warfare. So I cut my teeth on China in particular, how China does censorship and surveillance, the algorithms behind it, how it's analyzed, and publish some research in that area. Currently, I do the three pillars, classic pillars of cybersecurity consulting, risk assessments, code audits, and custom software development. Specifically my background's in cryptography, applied cryptography. So designing ciphers and just basically creating secure channels, trying to make sure that the data between point A to point B is as it should be and hasn't been tampered with. So the kind of work we do is we work a lot with companies that have something worth protecting or sometimes that's personnel, sometimes that's intellectual property. But we take the time to understand what's happening with our clients and try to come up with a custom solution for their context, which varies a lot based on region and on industry, and we try to use our knowledge to bear on their context. David: So a conversation I had about two years ago with a gal from MIT, Nazli Choucri, the big question on the table was who controls the internet? And I wonder how you would respond to that. Becker: That's a great question. I'd probably say no one, but if anyone had to control it, I'd probably guess the United States. But that's probably because of the large incumbent tech powers that are right here in Silicon Valley. The real answer, though, I would say is no one, if you really think about it. The technology that undergirds the internet really has no security model to it. So we've started to see now that cyber warfare is kind of becoming mainstream and as nations like Russia are using it in conjunction with kinetic warfare, that the internet was based on a simpler time, a happier time when everyone was an academic and kind of roughly agreed that, hey, we should all follow the rules. And the technologies haven't really changed. It's just been now instead of academics it's internet service providers. But when your government controls the internet service providers, then they become an attack vector for everybody else. And we've already seen this happening. So a key example, I think it was maybe a year or two ago, the People's Republic of China messed with a critical part of internet infrastructure and routed a bunch of traffic from the West Coast through China. And it just goes to show how vulnerable lot of this infrastructure is, particularly the internet. When you talk about the internet as we conceive of it, like going to Amazon and buying something, or your mobile phone, going to New York Times, that internet is very much a trust-based cabal of people that for the longest time have just decided there is a decorum that they're going to have about how it's run. But if that changes, then the internet is going to look very different. David: The internet of things still runs on that same information highway. Becker: Yeah, that's right. That's right. So that gets especially spooky when you start thinking about, well, I got a water filtration plant that's hooked up across the wide internet to maybe some monitoring facility or whatnot. Then you start running into all kinds of different issues. Generally, there's the internet of things, too, where you talk about maybe a security system in your home or your thermostat, it gets spooky when you start thinking about what happens when China can start spamming everybody's home security system and hot-miking their house or something. These scenarios can get pretty apocalyptic. But the truth of the matter is, the internet is not designed for security or privacy really. It's designed for the least amount of work to keep it connected. And I think that's where information security professionals can leverage their skills is trying to make sure that data that's running over this non-secure medium can still do what it's supposed to and not what it's not supposed to. David: So you're a cryptographer. Becker: That's right. David: And you know how to get into things and maybe even protect things, and maybe there's two sides of the same coin. So this is more of a sociological question, but why is there so much privacy indifference today? Becker: That's a great question, and I think it's mostly psychological. I don't think it's technical. And I think it's highly generational. I'm a millennial. When I think of millennials, I think we've grown up in a generation where exchanging privacy for free stuff has been very much in our favor. And I think the Faustian bargain of giving up our privacy, we haven't seen what the other side of that deal is yet. We give up our privacy and we have free Facebook. We give up our privacy we've got free unlimited email with unlimited storage. And we think, boy, these are all fantastic. I mean, it's just my privacy. But I think a generation or two, particularly when millennials are going to try to run for elected office and all of the dumb things they've done have come to the forefront, I think they're going to have a very different attitude, a very different conception of privacy. And I think you're already seeing it with Gen Z, the generation after millennials. They've grown up with social media as just totally omnipresent. So they're much more keenly aware of the fact that there is a trade-off that's being made. Whereas millennials have kind of had the life of Riley in terms of making these privacy trade-offs. David: There's a company I'm familiar with out of Virginia who now is owned by Chase and the predictive technologies that they use kind of gather information and allow for Chase to figure out how to market what products to whom. And it's all commercial, but it's this huge information dragnet. It's very interesting, and it's for commercial purposes. So you think, well, it's benign and maybe it's annoying and maybe it's spam and who cares. But not to go to the dark side,