Lockstep

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Order emerging from the Blockchain storm

I’ve been a critic of Blockchain. Frankly I’ve never seen such a massed rush of blood to the head for a new technology. Breathless books are being churned out about “trust infrastructure” and an “Internet of Value”. They say Blockchain will keep politicians and business people honest, and enable “billions of excluded people to enter the global economy”.

Most pundits overlook the simple fact that Blockchain only does one thing: it lets you move Bitcoin (a digital bearer token) from one account to another without an umpire. And it doesn’t even do that very well, for the Proof of Work algorithm is stupendously inefficient. Blockchain can't magically make merchants keep up their side of a bargain. Surprise! You can still get ripped off paying with Bitcoin. Blockchain simply doesn’t do what the futurists think it does. In their hot flushes, they tend to be caught in a limbo between the real possibilities of distributed consensus today and a future that no one is seeing clearly.

But Blockchain does solve what was thought to be an impossible problem, and in the right hands, that insight can convert to real innovation. I’m happy to see some safe pairs of hands now emerging in the Blockchain storm.

One example is an investment being made by Ping Identity in Swirlds and its new “hashgraph” distributed consensus platform. Hashgraph has been designed from the ground up to deliver many of Blockchain’s vital properties (consensus on the order of events, and redundancy) in a far more efficient and robust manner.

And what is Ping doing with this platform? Well they’re not rushing out with vague promises to manufacture "trust" but instead they’re making babysteps on real problems in identity management. For starters, they’re applying the new hashgraph platform to Distributed Session Management (DSM). This is the challenge of verifiably shutting down all of a user’s multiple log-on sessions around the web when they take a break, suffer a hack, or lose their job. It's one of the great headaches of enterprise identity administration and is exploited in a great many cyberattacks.

Ping’s identity architects have carefully set out the problem they’re trying to solve, why it’s hard, and how existing approaches don’t deliver the desired security properties for session management. They then evaluated a number of consensus approaches - not just Blockchain but also Paxos and Raft – and discussed their limitations. The Ping team then landed on hashgraph, which appears to meet the needs, and also looks like it can deliver a range of advanced features.

In my view, Ping Identity’s work is the very model of mature security design. It’s an example of the care and attention to detail that other innovators should follow.

Swirld’s founder Dr Leemon Baird will be presenting hashgraph in more detail to the Cloud Identity Summit in New Orleans tomorrow (June 7th).

Posted in Security, Innovation, Identity, Blockchain

What is it about blockchain?

Almost everything you read about the blockchain is wrong. No new technology since the Internet itself has excited so many pundits, but blockchain just doesn’t do what most people seem to think it does. We’re all used to hype, and we can forgive genuine enthusiasm for shiny new technologies, but many of the claims being made for blockchain are just beyond the pale. It's not going to stamp out corruption in Africa; it's not going to crowdsource policing of the financial system; it's not going to give firefighters unlimited communication channels. So just what is it about blockchain?

The blockchain only does one thing (and it doesn’t even do that very well). It provides a way to verify the order in which entries are made to a ledger, without any centralized authority. In so doing, blockchain solves what security experts thought was an unsolvable problem – preventing the double spend of electronic cash without a central monetary authority. It’s an extraordinary solution, and it comes at an extraordinary price. A large proportion of the entire world’s computing resource has been put to work contributing to the consensus algorithm that continuously watches the state of the ledger. And it has to be so, in order to ward off brute force criminal attack.

How did an extravagant and very technical solution to a very specific problem capture the imagination of so many? Perhaps it’s been so long since the early noughties’ tech wreck that we’ve lost our herd immunity to the viral idea that technology can beget trust. Perhaps, as Arthur C. Clarke said, any sufficiently advanced technology looks like magic. Perhaps because the crypto currency Bitcoin really does have characteristics that could disrupt banking (and all the world hates the banks) blockchain by extension is taken to be universally disruptive. Or perhaps blockchain has simply (but simplistically) legitimized the utopian dream of decentralized computing.

Blockchain is antiauthoritarian and ruthlessly “trust-free”. The blockchain algorithm is rooted in politics; it was expressly designed to work without needing to trust any entity or coalition. Anyone at all can join the blockchain community and be part of the revolution.

The point of the blockchain is to track every single Bitcoin movement, detecting and rejecting double spends. Yet the blockchain APIs also allow other auxiliary data to be written into Bitcoin transactions, and thus tracked. So the suggested applications for blockchain extend far beyond payments, to the management of almost any asset imaginable, from land titles and intellectual property, to precious stones and medical records.

From a design perspective, the most troubling aspect of most non-payments proposals for the blockchain is the failure to explain why it’s better than a regular database. Blockchain does offer enormous redundancy and tamper resistance, thanks to a copy of the ledger staying up-to-date on thousands of computers all around the world, but why is that so much better than a digitally signed database with a good backup?

Remember what blockchain was specifically designed to do: resolve the order of entries in the ledger, in a peer-to-peer mode, without an administrator. When it comes to all-round security, blockchain falls short. It’s neither necessary nor sufficient for any enterprise security application I’ve yet seen. For instance, there is no native encryption for confidentiality; neither is there any access control for reading transactions, or writing new ones. The security qualities of confidentiality, authentication and, above all, authorization, all need to be layered on top of the basic architecture. ‘So what’ you might think; aren’t all security systems layered? Well yes, but the important missing layers undo some of the core assumptions blockchain is founded on, and that’s bad for the security architecture. In particular, as mentioned, blockchain needs massive scale, but access control, “permissioned” chains, and the hybrid private chains and side chains (put forward to meld the freedom of blockchain to the structures of business) all compromise the system’s integrity and fraud resistance.

And then there’s the slippery notion of trust. By “trust”, cryptographers mean so-called “out of band” or manual mechanisms, over and above the pure math and software, that deliver a security promise. Blockchain needs none of that ... so long as you confine yourself to Bitcoin. Many carefree commentators like to say blockchain and Bitcoin are separable, yet the connection runs deeper than they know. Bitcoins are the only things that are actually “on” the blockchain. When people refer to putting land titles or diamonds “on the blockchain”, they’re using a short hand that belies blockchain’s limitations. To represent any physical thing in the ledger requires a schema – a formal agreement as to which symbols in the data structure correspond to what property in the real world – and a binding of the owner of that property to the special private key (known in the trade as a Bitcoin wallet) used to sign each ledger entry. Who does that binding? How exactly do diamond traders, land dealers, doctors and lawyers get their blockchain keys in the first place, and how does the world know who’s who? These questions bring us back to the sorts of hierarchical authorities that blockchain was supposed to get rid of.

There is no utopia in blockchain. The truth is that when we fold real world management, permissions, authorities and trust, back on top of the blockchain, we undo the decentralization at the heart of the design. If we can’t get away from administrators then the idealistic peer-to-peer consensus algorithm of blockchain is academic, and simply too much to bear.

I’ve been studying blockchain for two years now. My latest in-depth report was recently published by Constellation Research.

Posted in Security, Internet, Innovation, Identity, Blockchain

Uniquely difficult

I was talking with government identity strategists earlier this week. We were circling (yet again) definitions of identity and attributes, and revisiting the reasonable idea that digital identities are "unique in a context". Regular readers will know I'm very interested in context. But in the same session we were discussing the public's understandable anxiety about national ID schemes. And I had a little epiphany that the word "unique" and the very idea of it may be unhelpful. I wonder if we could avoid using the word "uniqueness" wherever we can.

The link from uniqueness to troublesome national identity is not just perception; there is a real tendency for identity and access management (IDAM) systems to over-identify, with an obvious privacy penatly. Security professionals feel instinctively that they more they know about people, the more secure we all will be.

Whenever we think uniqueness is important, I wonder if there are really other more precise objectives that apply? Is "singularity" a better word for the property we're looking for? Or the mouthful "non-ambiguity"? In different use cases, what we really need to know can vary:

  • Is the person (or entity) accessing service the same as last time?
  • Is the person exercising a credential clear to use it? Delegation of digital identity actually makes "uniqueness" moot)
  • Does the Relying Party (RP) know the user "well enough" for the RP's purposes? That doesn't always mean uniquely.

I observe that when IDAM schemes come loaded with reference to uniqueness, it's tends to bias the way RPs do their identification and risk management designs. There is an expectation that uniqueness is important no matter what. Yet it is emerging that much fraud (most fraud?) exploits weaknesses at transaction time, not enrollment time: even if you are identified uniquely, you can still get defrauded by an attacker who takes over or bypasses your authenticator. So uniqueness in and of itself doesn't always help.

If people do want to use the word "unique" then they should have the discipline to always qualify it, as mentioned, as "unique in a context". But I have to say that "unique is a context" is not "unique".

Finally it's worth remembering that the word has long been degraded by the biometrics industry with their habit of calling most any biological trait "unique". There's a sad lack of precision here. No biometric as measured is ever unique! Every mode, even iris, has a non zero False Match Rate.

What's in a word? A lot! I'd like to see more rigorous use of the word "unique". At least let's be aware of what it means subliminally to the people we're talking with - be they technical or otherwise. With the word bandied around so much, engineers can tend to think uniqueness is always a designed objective, and laypeople can presume that every authentication scheme is out to fingerprint them. Literally.

Posted in Government, Identity, Privacy, Security

Card Not Present Fraud up another 25% YOY

The Australian Payments Clearing Association (APCA) releases card fraud statistics every six months for the preceding 12m period. For a decade now, Lockstep has been monitoring these figures, plotting the trend data and analysing what the industry is doing - and not doing - about Card Not Present fraud. Here is our summary for the financial year 2015 stats.

CNP trends pic to FY 2015

Card Not Present (CNP) fraud has grown over 25 percent year-on-year from FY2014, and now represents 84 percent of all fraud on Australian cards.

APCA evidently has an uneasy relationship with any of the industry's technological responses to CNP fraud, like the controversial 3D Secure, and tokenization. Neither get a mention in the latest payment fraud media release. Instead APCA puts the stress on shopper behaviour, describing the continuing worsening in fraud as "a timely reminder to Australians to remain vigilant when shopping online". Sadly, this ignores that fact that card data used for organised criminal CNP fraud comes from mass breaches of databases, not from websites. There is nothing that shoppers can do when using their cards online to stop them being stolen, because they're much more likely to get stolen from backend systems over which the shoppers have no control.

You can be as careful as you like online - you can even avoid Internet shopping entirely - and still have your card data stolen from a regular store and used in CNP attacks online.

APCA says:

    • "Financial institutions and law enforcement have been working together to target skimming at ATMs and in taxis and this, together with the industry’s progressive roll-out of chip-reading at ATMs, is starting to reflect in the fraud data".

That's true. Fraud by skimming and carding was halved by the smartcard rollout, and has remained low and steady in absolute terms for three years. But APCA errs when it goes on:

    • "Cardholders can help these efforts by always protecting their PINs and treating their cards like cash".

Safeguarding your physical card and PIN does nothing to prevent the mass breaches of card data held in backend databases.

A proper fix to replay attack is easily within reach, which would re-use the same cryptography that solves skimming and carding, and would restore a seamless payment experience for card holders. Apple for one has grasped the nettle, and is using its Secure Element-based Apple Pay method (established now for card present NFC payments) for Card Not Present transactions, in the app.

See also my 2012 paper Calling for a Uniform Approach to Card Fraud Offline and On" (PDF).

Abstract

The credit card payments system is a paragon of standardisation. No other industry has such a strong history of driving and adopting uniform technologies, infrastructure and business processes. No matter where you keep a bank account, you can use a globally branded credit card to go shopping in almost every corner of the world. The universal Four Party settlement model, and a long-standing card standard that works the same with ATMs and merchant terminals everywhere underpin seamless convenience. So with this determination to facilitate trustworthy and supremely convenient spending in every corner of the earth, it’s astonishing that the industry is still yet to standardise Internet payments. We settled on the EMV standard for in-store transactions, but online we use a wide range of confusing and largely ineffective security measures. As a result, Card Not Present (CNP) fraud is growing unchecked.

This article argues that all card payments should be properly secured using standardised hardware. In particular, CNP transactions should use the very same EMV chip and cryptography as do card present payments.

With all the innovation in payments leveraging cryptographic Secure Elements in mobile phones, perhaps at last we will see CNP payments modernise for web and mobile shopping.

Posted in Smartcards, Security, Payments, Innovation, Fraud

Weak links in the Blockchain

One of the silliest things I've read yet about blockchain came out in Business Insider Australia last week. They said that the blockchain “in effect” lets the crowd police the monetary system.

In the rush to make bigger and grander claims for the disruptive potential of blockchain, too many commentators are neglecting the foundations. If they think blockchain is important, then it’s all the more important they understand what it does well, and what it just doesn’t do at all.

Blockchain has one very clever, very innovative trick: it polices the order of special events (namely Bitcoin spends) without needing a central authority. The main “security” that blockchain provides is nottamper resistance or inviolability per se -- you can get that any number of ways using standard cryptography -- but rather it’s the process for a big network of nodes to reach agreement on the state of a distributed ledger, especially the order of updates to the ledger.

To say blockchain is “more secure” is a non sequitur. Security claims need context.

  • If what matters is agreeing ‘democratically’ on the order of events in a decentralised public ledger, without any central authority, then blockchain makes sense.
  • But if you don't care about the order of events, then blockchain is probably irrelevant or, at best, heavily over-engineered.
  • And if you do care about the order of events (like stock transactions) but you have some central authority in your system (like a stock exchange), then blockchain is not only over-engineered, but its much-admired maths is compromised by efforts to scale it down, into private chains and the like, for the power of the original blockchain consensus algorithm lies in its vast network, and the Bitcoin rewards for the miners that power it.

A great thing about blockchain is the innovation it has inspired. But let’s remember that the blockchain (the one underpinning Bitcoin) has been around for just seven years, and its spinoffs are barely out of the lab. Analysts and journalists are bound to be burnt if they over-reach at this early stage.

The initiatives to build smaller, private or special purpose distributed ledgers, to get away from Bitcoin and payments, detract from the original innovation, in two important ways. Firstly, even if they replace the Bitcoin incentive for running the network (i.e. mining or “proof of work”) with some other economic model (like “proof of stake”), they compromise the tamper resistance of blockchain by shrinking the pool. And secondly, as soon as you fold some command and control back into the original utopia, blockchain’s raison d'etre is no longer clear, and its construction looks over-engineered.

Business journalists are supposed to be sceptical about technology, but many have apparently taken leave of their critical faculties, even talking up blockchain as a "trust machine". You don’t need to be a cryptographer to understand the essence of blockchain, you just have to be cautious with magic words like “open” and “decentralised”, and the old saw "trust". What do they really mean? Blockchain does things that not all applications really need, and it doesn't do what many apps do need, like access control and confidentiality.

Didn't we learn from PKI that technology doesn't confer trust? It's been claimed that putting land titles on the blockchain will prevent government corruption. To which I say, please heed Bruce Schneier, who said only amateurs hack computers; professional criminals hack people.

Posted in Security, Payments, Innovation, Blockchain, Trust

A brush with fame (not)

Wired thinks it has unmasked Bitcoin inventor Satoshi Nakamoto as an Australian security personality Craig Wright. Plenty of others beg to differ.

Curiously, I had an ugly argument with Wright and a handful of Bitcoin enthusiasts on Twitter in May 2015.

It started after I asked a simple question about why some people had started advocating blockchain for identity. I didn't get a straight answer, but instead copped a fair bit of abuse. Wright's Twitter account has since been deleted, so it's hard to reconstruct the thread (I'd love it if someone out there knows how to extract a more complete Twitter archive; I don't suppose anyone Storified the thread?).

Reproduced below is one side of the spat. I only have my own archived tweets from the time in question but you should get the gist. Wright could never stick to the point - what does blockchain have to offer identity management? Instead he took all inquiries as an attack. He's passionate about Bitcoin changing the world, and if I recall correctly, boasted of his own enormous wealth from Bitcoin mining (he's no crypto-anarchist, as is clear from his exhorbitant LinkedIn profile, one of the longest you'll ever see). Wright's arguments were all deflections; he even dredged up a PKI project from 17 years ago on which we worked together, where evidently he and I had some difference of opinion, something I honestly can't remember.

10/05/2015 3:32 Blockchain-for-identity proponents: Please set out the problem to be solved, analyse it, state your proposal, and argue its benefits.
11/05/2015 22:52 .@caelyxsec: "Bitcoin is just soft certs" @matthewsinclair < Classic!
11/05/2015 22:56 .@matthewsinclair @caelyxsec "Passport", "no central authority", "no walled gardens". Same old utopian slogans. Plus blockmagic.
11/05/2015 22:57 What does a Onelogin actually mean? It's a nickname. Who vouches for it? @matthewsinclair @caelyxsec
11/05/2015 23:09 .@matthewsinclair: @caelyxsec "what does having my Twitter & GitHub usernames signed into the blockchain actually mean?"; Not much.
15/05/2015 8:20 Seems to be a first-come-first-served nickname and self-certified details saved to the #blockchain. @paulmadsen @iglazer @TechPolicy
15/05/2015 8:24 .@Chris_Skinner "Repeat after me: Bitcoin Bad, Blockchain Good"; But good for what? Time stamped archive.
15/05/2015 9:27 .@craigvallis @paulmadsen @iglazer Very little! I don't see identity specialists advocating #blockchain for pressing identity problems
15/05/2015 10:28 RT @craigvallis: @Steve_Lockstep @paulmadsen @iglazer Heard the same from BitCoin specialists, without the coin blockchain is just a database
15/05/2015 10:31 .@craigvallis Clever contribution of #blockchain is to solve the double spend problem. But not a problem in identity @paulmadsen @iglazer
15/05/2015 21:26 .@Chris_Skinner Sure, I get Bitcoin for some payments, but I don't get #blockchain for anything else.
15/05/2015 22:15 .@Chris_Skinner Nope. Blockchain special properties relate to stopping double spend. I don't see the advantages for eg contract exchange
15/05/2015 22:21 1/2 - Thesis: #blockchain is a bit magical, so some guess it must have potential beyond payments - like identity. We need rigor here
15/05/2015 22:23 2/2 - I liken this to the way some are enamored with Quantum Mechanics to explain eg consciousness. Even magic has limits.
15/05/2015 23:16 Turns out BTC is hard to sustain even for payments. But for non-payments, is there any business model at all? https://t.co/69eHD9ssFi
15/05/2015 23:36 .@Dr_Craig_Wright Actually I always proposed community based PKI http://t.co/DagiIx74la (2003) http://t.co/o6aYQWvqMA (2008). Going strong
15/05/2015 23:40 .@Dr_Craig_Wright There's not much to attack. I still can't find a rigorous explanation of blockchain for identity.
16/05/2015 1:01 .@Dr_Craig_Wright So most people are just guessing that blockchain has potential for identity.
16/05/2015 1:09 .@Dr_Craig_Wright But maybe you can point me to one those many sources to explain the potential of blockchain or whatever for identity?
16/05/2015 1:23 .@BitcoinBelle Please explain what blockchain does that a digital signature chained to eg a bank does not? @Chris_Skinner @Dr_Craig_Wright
16/05/2015 1:27 @Dr_Craig_Wright @BitcoinBelle @Chris_Skinner Explanations please, not abuse.
16/05/2015 1:29 .@BitcoinBelle I get BTC for the unbanked. I do. But I don't get contracts or patents in that setting. @Chris_Skinner @Dr_Craig_Wright
16/05/2015 1:32 @BitcoinBelle Can you follow a thread? Or a line of logic?
16/05/2015 1:34 .@BitcoinBelle So once again, explain please how a timestamp plus tamper resistance is special? @Chris_Skinner @Dr_Craig_Wright
16/05/2015 1:42 1/4: @benmcginnes Proof of what? Someone unilaterally asserted something about themselves? @BitcoinBelle @Chris_Skinner @Dr_Craig_Wright
16/05/2015 1:43 2/4: "Proof" to what standard? That word implies accreditation somewhere. @benmcginnes @BitcoinBelle @Chris_Skinner @Dr_Craig_Wright
16/05/2015 1:44 3/4: Who relies on the proof? ie what's the detailed use case? @benmcginnes @BitcoinBelle @Chris_Skinner @Dr_Craig_Wright
16/05/2015 1:47 4/4: Why/how does interfacing to blockchain give better proof than a PK cert? @benmcginnes @BitcoinBelle @Chris_Skinner @Dr_Craig_Wright
16/05/2015 2:40 .@benmcginnes Math proof in identity is the easy bit. Proof of attributes and rel'ships matters more. @Chris_Skinner @Dr_Craig_Wright
16/05/2015 2:43 .@benmcginnes Oh please. That's why I'm asking people to compare 2 types: blockchain and PK certs. @Chris_Skinner @Dr_Craig_Wright
16/05/2015 2:46 .@Dr_Craig_Wright I mean accred in the broadest sense: a disinterested endorsement. Self asserted means 0 @benmcginnes @Chris_Skinner
16/05/2015 3:18 .@Dr_Craig_Wright Something I said in a PKI advisory 17 years seems to still be eating you Craig. What is it? @benmcginnes
16/05/2015 5:12 .@BitcoinBelle But. Why. Bother? What's better about blockchain, compared with putting your hysterics on Twitter? @el33th4xor
16/05/2015 5:16 So I asked for an explanation of #blockchain for identity. And all I get is hippy nonsense - it's not central, not fiat, not govt.
16/05/2015 8:35 @futureidentity It's certainly the case with Bitcoin that it's more about the people than the technology.
16/05/2015 10:26 @jonmatonis @futureidentity Thanks but sorry, what do you mean by user defined privacy?
16/05/2015 10:27 @jonmatonis @futureidentity Please explain deniability of ownership.
16/05/2015 11:06 .@jonmatonis Thanks. How is that realized with blockchain where all transactions are available for all to see? @futureidentity
16/05/2015 12:10 .@benmcginnes I don't need visuals. I need blockchain-for-identity pundits to set out the problem it solves. @jonmatonis @futureidentity
16/05/2015 19:52 Twitter: Where you can be sure to find all the answers to questions you never asked.
16/05/2015 19:57 .@adam3us But why #blockchain? It was designed to stop double spend. Cheaper ways to hold immutable attributes @jonmatonis @futureidentity
16/05/2015 20:04 RT @adam3us: .@Steve_Lockstep @jonmatonis @futureidentity Well indeed identity does not belong on chain. Payment protocol is offchain
16/05/2015 20:09 .@cdelargy Which id mgt action corresponds to spending? Is it each presentation of "I am Steve"? @adam3us @jonmatonis @futureidentity
16/05/2015 20:18 .@jonmatonis Which is to say identity is not the new form of currency? .@futureidentity
16/05/2015 20:21 .@adam3us Auxillary info meaning the attributes and most importantly who vouches for them? @cdelargy @jonmatonis @futureidentity
16/05/2015 22:00 RT @adam3us: .@Steve_Lockstep @cdelargy @jonmatonis @futureidentity Yes Blockchain hasn't bandwidth for finance app msgs with identity
16/05/2015 22:26 .@Beautyon_ Not at all. I've articulated how I see the main id problem to solve: http://t.co/LPXBHieawT I ask others do the same
16/05/2015 22:31 .@Beautyon_ I'm not anti Bitcoin. I'm pro rigor. Almost nobody weighing in articulates the IDAM problem blockchain supposedly fixes
16/05/2015 22:33 .@Beautyon_ I think I agree. Names per se are not as important as the more general "Here's an attribute about me you can rely on"
16/05/2015 22:36 .@Beautyon_ So I say we need IDAM system to imbue attributes with pedigree and present them so RPs r assured of pedigree and user control
16/05/2015 22:38 .@Beautyon_ If blockchain is involved in every attribute presentation, is bandwidth ok? And isn't the 10 minute reconciliation too long?
16/05/2015 22:40 .@Beautyon_ No, I frame identity as "what do I need to know about you to be able to deal with you?" in a context.
16/05/2015 22:47 .@Beautyon_ In the lingo of IDAM, the holder of the asset you want to access is the Relying Party. They rely on your credential or key.
16/05/2015 23:03 @Beautyon_ No I don't use GPG. Maybe I might still understand if someone offers an explanation.
16/05/2015 23:08 .@Beautyon_ Why the elitism? Why can't blockchain enthusiasts explain themselves to the unwashed? You're like Freemasons
16/05/2015 23:17 .@Beautyon_ 20 years in PKI. I think I got the basics. And an allergy to people who can't explain their craft in natural language.
17/05/2015 3:42 .@WulfKhan IDAM is complicated. Many facets. Many problems. Which are addressed by blockchain? I am not on about BTC. @Beautyon_
17/05/2015 4:22 .@Beautyon_ I advise organisations on non trivial authentication and privacy problems. DIY secrecy is not important in my world.
17/05/2015 4:35 User pseudonymity is a crude fragile measure. Privacy != secrecy. It's about what others do with info about you. https://t.co/VpiKWHTLBH

For what it's worth, in my wildest dreams I can't imagine the confusing, self-important Craig Wright being Nakamoto.

Posted in Blockchain, Security

The Economist's take on blockchain

An unpublished letter to the editor of The Economist.

November 1, 2015

Just as generalists mesmerized by quantum physics are prone to misapply it to broader but unrelated problems, some are making exorbitant claims for the potential of blockchain to change the world ("The trust machine", The Economist, October 31st). Yes, blockchain is extraordinarily clever but it was designed specifically to stop electronic cash from being double spent, without needing central oversight. As a general ledger, blockchain is unwieldy and expensive.

Trust online is all about provenance. How can I be sure a stranger’s claimed attributes, credentials and possessions are genuine? Proving a credit card number, employment status, or ownership of a block of land in a ‘democratic’ peer-to-peer mesh strikes some as utopian, but really it’s oxymoronic. The blockchain is an indelible record of claims, which still need to be vouched for before they are carved forever into mathematical stone.

Steve Wilson
Principal Analyst - Identity & Privacy, Constellation Research.

Posted in Security, Innovation, Blockchain, Trust

Satya Nadella at the security poker table

This morning Microsoft's CEO Satya Nadella gave a global speech about enterprise security. He announced a new Cyber Defense Operations Center, a should-not-be-new Microsoft Enterprise Cybersecurity Group and a not-at-all-new-sounding Enterprise Mobility Suite (EMS). The webcast can be replayed here but don't expect to be blown away. It's all just tablestakes for a global cloud provider.

Security is being standardised all over the place now. Ordinary people are getting savier about security best practice; they know for example that biometrics templates need to be handled carefully in client devices, and that secure storage is critical for assets like identities and Bitcoin. "Secure Element" is almost a lay-person's term now (Apple tried to give the iPhone security chip the fancy name "Enclave" but seem to now regard it as so standard it doesn't need branding).

All this awareness is great, but it's fast becoming hygeine. Like airplane safety. It's a bit strange for corporations to seek to compete on security, or to have the CEO announce what are really textbook security services. At the end of the speech, I couldn't tell if anything sets Microsoft apart from its arch competitors Google or Amazon.

Most of today's CISOs operate at a higher, more strategic level than malware screening, anti-virus and encryption. Nadella's subject matter was really deep in the plumbing. Not that there's anything wrong with that. But it just didn't seem to me like the subject matter for a CEO's global webcast.

The Microsoft "operational security posture" is very orthodox, resting on "Platform, Intelligence and Partners". I didn't see anything new here, just a big strong cloud provider doing exactly what they should: leveraging the hell out of a massive operation, with massive resources, and massive influence.

Posted in Security, Cloud

An identity glut on the Internet of Things

The identerati sometimes refer to the challenge of “binding carbon to silicon”. That’s a poetic way of describing how the field of Identity and Access Management (IDAM) is concerned with associating carbon-based life forms (as geeks fondly refer to people) with computers (or silicon chips).

To securely bind users’ identities or attributes to their computerised activities is indeed a technical challenge. In most conventional IDAM systems, there is only circumstantial evidence of who did what and when, in the form of access logs and audit trails, most of which can be tampered with or counterfeited by a sufficiently determined fraudster. To create a lasting, tamper-resistant impression of what people do online requires some sophisticated technology (in particular, digital signatures created using hardware-based cryptography).

On the other hand, working out looser associations between people and computers is the stock-in-trade of social networking operators and Big Data analysts. So many signals are emitted as a side effect of routine information processing today that even the shyest of users may be uncovered by third parties with sufficient analytics know-how and access to data.

So privacy is in peril. For the past two years, big data breaches have only got bigger: witness the losses at Target (110 million), EBay (145 million), Home Depot (109 million records) and JPMorgan Chase (83 million) to name a few. Breaches have got deeper, too. Most notably, in June 2015 the U.S. federal government’s Office of Personnel Management (OPM) revealed it had been hacked, with the loss of detailed background profiles on 15 million past and present employees.

I see a terrible systemic weakness in the standard practice of information security. Look at the OPM breach: what was going on that led to application forms for employees dating back 15 years remaining in a database accessible from the Internet? What was the real need for this availability? Instead of relying on firewalls and access policies to protect valuable data from attack, enterprises need to review which data needs to be online at all.

We urgently need to reduce the exposed attack surface of our information assets. But in the information age, the default has become to make data as available as possible. This liberality is driven both by the convenience of having all possible data on hand, just in case in it might be handy one day, and by the plummeting cost of mass storage. But it's also the result of a technocratic culture that knows "knowledge is power," and gorges on data.

In communications theory, Metcalfe’s Law states that the value of a network is proportional to the square of the number of devices that are connected. This is an objective mathematical reality, but technocrats have transformed it into a moral imperative. Many think it axiomatic that good things come automatically from inter-connection and information sharing; that is, the more connection the better. Openness is an unexamined rallying call for both technology and society. “Publicness” advocate Jeff Jarvis wrote (admittedly provocatively) that: “The more public society is, the safer it is”. And so a sort of forced promiscuity is shaping up as the norm on the Internet of Things. We can call it "superconnectivity", with a nod to the special state of matter where electrical resistance drops to zero.

In thinking about privacy on the IoT, a key question is this: how much of the data emitted from Internet-enabled devices will actually be personal data? If great care is not taken in the design of these systems, the unfortunate answer will be most of it.

Steve Wilson CISID15 Rationing Identity in IoT (0 4) HANDOUTS  Data flows in Internet of Cars
Steve Wilson CISID15 Rationing Identity in IoT (0 4 1) HANDOUTS  Imposing order IoT PII flows

My latest investigation into IoT privacy uses the example of the Internet connected motor car. "Rationing Identity on the Internet of Things" will be released soon by Constellation Research.

And don't forget Constellation's annual innovation summit, Connected Enterprise at Half Moon Bay outside San Francisco, November 4th-6th. Early bird registration closes soon.

Posted in Security, Privacy, Cloud, Big Data

Good, better, BlackBerry

In the latest course of a 15 month security feast, BlackBerry has announced it is acquiring mobile device management (MDM) provider Good Technology. The deal is said to be definitive, for US$425 million in cash.

As BlackBerry boldly re-positions itself as a managed service play in the Internet of Things, adding an established MDM capability to its portfolio will bolster its claim -- which still surprises many -- to be handset neutral. But the Good buy is much more than that. It has to be seen in the context of John Chen's drive for cross-sector security and privacy infrastructure for the IoT.

As I reported from the recent BlackBerry Security Summit in New York, the company has knitted together a comprehensive IoT security fabric. Look at how they paint their security platform:

BBY Security Platform In Action

And see how Good will slip neatly into the Platform Services column. It's the latest in what is now a $575 million investment in non-organic security growth (following purchases of Secusmart, Watchdox, Movirtu and Athoc).

According to BlackBerry,

    • Good will bring complementary capabilities and technologies to BlackBerry, including secure applications and containerization that protects end user privacy. With Good, BlackBerry will expand its ability to offer cross-platform EMM solutions that are critical in a world with varying deployment models such as bring-your-own-device (BYOD); corporate owned, personally enabled (COPE); as well as environments with multiple user interfaces and operating systems. Good has expertise in multi-OS management with 64 percent of activations from iOS devices, followed by a broad Android and Windows customer base.(1) This experience combined with BlackBerry’s strength in BlackBerry 10 and Android management – including Samsung KNOX-enabled devices – will provide customers with increased choice for securely deploying any leading operating system in their organization.

MyPOV

The strategic acquisition of Good Technology will also give the Identity-as-a-Service sector a big kick. IDaaS is become a crowded space with at least ten vendors (CA, Centrify, IBM, Microsoft, Okta, OneLogin, Ping, Salepoint, Salesforce, VMware) competing strongly around a pretty well settled set of features and functions. BlackBerry themselves launched an IDaaS a few months ago. At the Security Summit, I asked their COO Marty Beard what is going to distinguishe their offering in such a tight market, and he said, simply, mobility. Presto!

But IDaaS is set to pivot. We all know that mobility is now the locus of security , and we've seen VMware parlay its AirWatch investment into a competitive new cloud identity service. This must be more than a catch-up play with so many entrenched IDaaS vendors.

Here's the thing. I foresee identity actually disappearing from the user experience, which more and more will just be about the apps. I discussed this development in a really fun "Identity Innovators" video interview recorded with Ping at the recent Cloud Identity Summit. For identity to become seamless with the mobile application UX, we need two things. Firstly, federation protocols so that different pieces of software can hand over attributes and authentication signals to one another, and these are all in place now. But secondly we also need fully automated mobile device management as a service, and that's where Good truly fits with the growing BlackBerry platform.

Now stay tuned for new research coming soon via Constellation on the Internet of Things, identity, privacy and software reliability.

See also The State of Identity Management in 2015.

Posted in Security, Identity, Federated Identity, Constellation Research, Big Data