The Only Way We’ll Ever Protect Ourselves from Hackers

Nosiness is a fundamental human trait.

We love to gather round in circles, some of us talking in hushed voices while others listen with mouths agape, as we discuss the intimate details of the lives of those around us.

As social beings, it’s a cult we all partake in. Scandal gets our hearts racing, gossip sells millions of tabloid magazines, and unfounded rumours increasingly slip into mainstream news.

You could even argue that we thrive off knowing the negative details more than anything else.

The Germans even have a word for it: Schadenfreude — pleasure derived by someone from another person’s misfortune.

So for all of the scathing judgement we pass about the actions of others, it’s almost impossible to argue that the entire process isn’t entertaining. If that was the case, we wouldn’t even bother to turn on the television.

Even at the highest levels of politics, i.e. the President’s love life, nothing is off limits.

If anything, it makes it all the juicier.

Just think of the Stormy Daniels saga, or the gripping fiasco of Bill Clinton’s love affair with Monica Lewinsky. In both cases, the entire world was on the edge of their seats hoping for a taste of the intimate, or perhaps graphic, details.

In this environment, you could argue hackers play an important role. They give us our hit of scandal — an inside peek into information we otherwise wouldn’t have access to.

The entire premise of Wiki Leaks, for example, is to release classified information (often through hacking) in the interest of public knowledge. Without it, we’d never have learned about Hillary Clinton’s private email scandal in 2016. A fact which no doubt aided in Donald Trump’s victory.

But in many cases, hacking goes far beyond mere gossip. And completely undermining national security is the name of the game.

Just this week it was revealed that the computer network of Australia’s major political parties were hacked by a foreign state actor (*cough* China *cough*), allegedly to access classified national information.

Although there was supposedly no electoral interference, the government has ‘stepped up’ cyber security in response. As Scott Morrison stated:

The methods used by malicious actors are constantly evolving and this incident just re-enforces yet again the importance of cyber security as a fundamental part of everyone’s business.’

But what exactly does ‘stepping up security’ entail? Do we have an effective solution?

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We’re being attacked from all corners of the screen

Despite what Hollywood blockbusters would have you believe, hacking doesn’t involve breaking into secured buildings and cracking the main server while wearing a black turtleneck. It’s a remote, wireless and (sometimes) highly sophisticated exercise that can disrupt larges entities when they least expect it.

As testament to that fact, over the past few years we’ve had an influx of headlines slowly chip away at our confidence in cyber security.

The Cambridge Analytica-Facebook scandal of 2018, which saw 50 million user accounts harvested for data, caused mass uncertainty in the security of social media websites. Much in the same way that the Yahoo data breach in 2014 saw three billion user accounts hacked by a state sponsored actor intent on undermining global cyber security.

It seems that we have moved from hackers being lone wolfs operating from their basement into a new era. Hacking is now a daily bombardment of various forces (whether entire organisations or nations) trying to access high-stakes information.

Clearly, the measures most companies and governments currently have in place aren’t foolproof.

So, what’s the solution?

If the tech nerds in Silicon Valley have any insight (and you would argue that they do, since they’re likely to be the ones doing the hacking) blockchain technology is the way of the future.

The hallmark of blockchain is the security and transparency the distributed ledger provides, making it a great counter weight to cyber threats. As it’s based on a peer-to-peer system where data is shared globally on thousands of servers, it makes it extremely difficult for a hacker to gain control of the entire ledger. A feature which keeps both private and public blockchains secure in the face of malicious threats.

This is one of the reasons businesses are adopting the tech in droves. As a report released this year by ABI research confirms, the mass adoption of blockchain in various industries will generate $10.6 billion in revenue by 2023. A number that will only grow as the technology improves and people educate themselves about how it works.

And as Alex Tapscott, the CEO and founder of venture capital firm Northwest Passage Ventures confirms:

To hack it [the blockchain], you wouldn’t just have to hack one system like in a bank…you’d have to hack every single computer on that network, which is fighting against you doing that.

So again, [it’s] not un-hackable, but significantly better than anything we’ve come up with today.’

If you’d like to learn more about blockchain solutions, and all things tech, check out Sam Volkering’s Crypto Tech Investor.

This week in Money Morning

In light of the ASX earnings season report, it’s clear that many of Australia’s biggest companies aren’t doing very well. Telstra and Suncorp were hit particularly hard. But ask how things are going for the small-caps, and it doesn’t look so bad…

To read Harje’s Monday article, click here.

What’s amazing about famous venture capital investor Chris Sacca is how many winners he’s been on the other side of. Chris was in names like Twitter, Google, Facebook and Instagram at early stages. And as Harje wrote on Tuesday, there are many important lessons we can take from his strategy.

To learn more, click here.

This is China’s ‘last chance, says Donald Trump. If they want to avoid more tariffs in the weeks to come, they better get serious on trade. And until that happens Trump is happy to sit back and collect tariff revenues. But as Harje wrote on Wednesday, there could be unintended consequences to this strategy.

To read the full story, click here.

20 years ago there was a popular saying in the investment business. ‘No one ever got fired for buying IBM.’ At the time, IBM was the technology stock to own. But as Harje wrote on Thursday, this herd mentality can often get your portfolio into trouble.

To learn why, click here.

Ask someone their IQ. Most people will tell you it’s 10 points higher than the reality. Elon Musk strikes me as one of these people. He is extremely smart and well accomplished and I wouldn’t be surprised if he had an IQ of 160. But it’s also likely he thinks he has an IQ of 170. But as Harje wrote on Friday, it’s this kind of bravado that will get you killed in the investment game.

To read more, click here.

Until next week,

Katie Johnson,
Editor, Money Weekend

PS: Claim your FREE crypto guide now and learn the five things that every investor must know to capitalise on the $100 billion bitcoin market today. Click here to grab your report now.

Money Morning is Australia’s most outspoken financial news service. Your Money Morning editorial team are not afraid to tell it like it is. From calling out politicians to taking on the housing industry, our aim is to cut through the hype and BS to help you make sense of the stories that make a difference to your wealth. Whether you agree with us or not, you’ll find our common-sense, thought provoking arguments well worth a read.

Money Morning Australia is published by Fat Tail Investment Research, an independent financial publisher based in Melbourne, Australia. As an Australian financial services license holder we are subject to the regulations and laws of Corporations Act and Financial Services Act.

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