Floppy disks, nuclear weapons, and the unspoken dangers of digitization

21

October

2019

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Preceded by the first manned mission to the moon in 1969, the 70s marked a new era, characterized by technological advancement and excitement. Many modern technologies were first developed during this period, and include, for instance: software, mobile phones, video games, portable cassette players, apple computers, and floppy disks.

Today, our society is still very much affected by the technologies that were first introduced in the 70s. However, much progress has been made. Since the 1970s, storage capacity has continuously increased on a yearly basis. To illustrate this, in the past 10 years, the capacity of MicroSD cards increased from 128 megabytes to 128 gigabytes (Mearian, 2014). In contrast, floppy disks had a storage capacity that was limited to a mere 1.44 megabytes (Mearian, 2014). Given their low storage capacity, floppy disks are no longer used; that is, with the exception of the US Air Force, who, up until earlier this year, were still relying on this antiquated technology for the launching of nuclear weapons (Brown, 2019).

Whilst the idea that up until recently, the world’s safety relied on technology which dated to half a century ago may come as a surprise, the rationale behind this practice is somewhat valid. As Lt. Col. Jason Ross, who oversees the system, indicated: “you can’t hack something that doesn’t have an IP address. It’s a very unique system—it is old and it is very good” (Doffman, 2019). This practice is more common than one may expect. In fact, the maintenance of legacy systems in the US is very expensive, costing $61bn per year, which is three times more than the investment on modern IT systems (McKendrick, 2011).

Such practices remain in place due to the dangers of digitization. Gregory Unruh and David Kiron (2018) address this under the context of the movement towards a digital democracy. Indeed, they mention that whilst direct-recording-electronic (DRE) voting machines are becoming increasingly used, these systems are highly vulnerable and can be compromised. This was shown during the 25th annual DEF CON conference, where hackers were able to crack the so-called “secure system” in under two hours. Such unsecure systems consequently pose a threat to national democracy. Whilst there are many benefits that come with digitization, businesses and governments must remain wary of the threats and dangers that could be exploited and would compromise security.

References

Brown, S. (2019). US military finally retires floppy disks used by nuclear weapons system. [online] CNET. Available at: https://www.cnet.com/news/us-military-retires-floppy-disks-used-by-nuclear-weapons-system/ [Accessed 21 Oct. 2019].

Doffman, Z. (2019). U.S. Military To Replace 1970s Floppy Disks Controlling Nuclear Missiles. [online] Forbes.com. Available at: https://www.forbes.com/sites/zakdoffman/2019/10/19/us-military-to-replace-1970s-floppy-disks-controlling-nuclear-missiles/#2352821cd81b [Accessed 21 Oct. 2019].

McKendrick, J. (2011). Study: US government spends $36 billion a year maintaining legacy systems | ZDNet. [online] ZDNet. Available at: https://www.zdnet.com/article/study-us-government-spends-36-billion-a-year-maintaining-legacy-systems/ [Accessed 21 Oct. 2019].

Mearian, L. (2014). Data storage — then and now. [online] Computerworld. Available at: https://www.computerworld.com/article/2473980/data-storage-solutions-143723-storage-now-and-then.html#slide2 [Accessed 21 Oct. 2019].

Unruh, G. and Kiron, D. (2018). The Risks of Digital Democracy. [online] MIT Sloan Management Review. Available at: https://sloanreview.mit.edu/article/the-risks-of-digital-democracy/ [Accessed 21 Oct. 2019].

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Facebook’s Libra: a threat to monetary sovereignty?

15

October

2019

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Earlier this year, Facebook revealed the details of its plan to launch a new cryptocurrency, called ‘Libra’. As with other cryptocurrencies, the Libra allows for almost zero transaction fees (Constine, 2019). However, it is distinct to other popular coins, as it will be backed by a reserve made up of sovereign currencies, with the United States Dollar (USD) accounting for approximately 50% (Escritt, 2019).

Through Facebook, the Libra would become instantly available to billions of people around the world. The idea of a non-sovereign currency with so much reach has reportedly placed central bankers in a defensive stance, and the currency has already been pre-emptively blocked in countries such as Germany and France (Orcutt, 2019).

Countries are becoming increasingly wary of the threats posed by digital currencies. The People’s Bank of China (PBOC) has been researching digital currency since 2014, and have been closely tracking the development of Facbook’s Libra since it was announced. Nations and banks are finding more and more incentives to explore the possibilities of what was once described as non-valuable unchartered territory. For instance, in August 2019, it was reported that the PBOC will soon be ready to launch their own digital currency (Orcutt, 2019).

European finance ministers claim that Facebook cannot be trusted to properly deal with the responsibilities related to security, investor protection, money laundering and terrorist financing, and monetary sovereignty (Orcutt, 2019). National governments and institutions are seeking ways to fight against Facebook’s Libra, and seem to have been successful at deterring the launch of the digital currency. In October, PayPal (who was committed to the development of Libra), announced that it would be withdrawing its participation due to the government’s scrutinization (Feiner, 2019). Later, other participants such as Ebay, Visa, Mastercard, and Swipe followed PayPal, declaring that they would also no longer participate in the project.

As such, the future success of Facebook’s Libra remains to be determined. In any case, the technology’s innovative approach and unquestionable potential impact sheds light on the future challenges that central banks will have to face to maintain monetary sovereignty.

References:

Escritt, T. (2019). U.S. dollar to be main currency underpinning Facebook’s Libra: Spiegel. [online] U.S. Available at: https://www.reuters.com/article/us-facebook-libra-basket/u-s-dollar-to-be-main-currency-underpinning-facebooks-libra-spiegel-idUSKBN1W522K?feedType=RSS&feedName=technologyNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FtechnologyNews+%28Reuters+Technology+News%29 [Accessed 15 Oct. 2019].

Feiner, L. (2019). Facebook’s libra cryptocurrency coalition is falling apart as eBay, Visa, Mastercard and Stripe jump ship. [online] CNBC. Available at: https://www.cnbc.com/2019/10/11/ebay-drops-out-of-facebook-libra-cryptocurrency-one-week-after-paypal.html [Accessed 15 Oct. 2019].

Orcutt, M. (2019). France and Germany have said they will oppose Facebook’s digital currency. [online] MIT Technology Review. Available at: https://www.technologyreview.com/f/614321/facebook-libra-france-and-germany-say-they-will-oppose-facebooks-digital-currency/ [Accessed 15 Oct. 2019].

Orcutt, M. (2019). Should central banks issue digital currency? Suddenly, it’s an urgent question.. [online] MIT Technology Review. Available at: https://www.technologyreview.com/s/614472/should-central-banks-issue-digital-currency-suddenly-its-an-urgent-question/ [Accessed 15 Oct. 2019].

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