Cyberattacks Play into Escalating War Cycles

Cybersecurity has become a booming industry, especially in the wake of May’s WannaCry ransomware attack and last month’s Nuclear 17 attack on more than a dozen U.S. nuclear plants.

The WannaCry outbreak infected more than 200,000 computers across more than 150 countries and came with an estimated price tag of $4 billion.

And this growing threat is very real.

In late June, the Nuclear 17 attack put key U.S. government agencies – including the FBI, Homeland Security and National Security Agency – in hot pursuit of answers.

After all, it’s easy to see how damaging an attack on America’s power grid could be.

The fact is cybersecurity has become a big deal for business. And here’s why…

For example, the classic denial-of-service attack, or DoS, can make a machine or network resource unavailable to intended users.

And one of the most devastating types of DoS is called the distributed-denial-of-service attack, or DDoS.

With a DDoS, hackers can shut down an online service by overwhelming it with traffic from multiple sources.

Shockingly, these wicked DDoS attacks alone have become so common that many digital-security experts consider them Cyber Enemy No. 1.

Recent figures from Cisco Systems estimated that global distributed denial-of-service (DDoS) attacks surged 172% in 2016.

And they anticipate this figure to mushroom by 2.5 times to 3.1 million by 2021. And that might be conservative.

Hackers — both criminals and government operatives — reach out of the “dark web” to attack businesses worldwide.

Meanwhile, longtime leader in DDoS defense, Nexusguard, saw a 380% increase in DDoS attacks in the first-quarter of this year compared with the same period in 2016.

Clearly, data breaches are becoming more frequent … and more expensive.

Research by IBM and the Ponemon Institute showed the average cost of a U.S. data breach in 2014 was $5.85 million. For this year, that number is up 32% to $7.35 million.

Looking at the problem globally, business insurer Hiscox Ltd. estimates cybercrime costs at more than $450 billion in 2016.

Who’s behind these attacks?

There are large numbers of people on the “dark web” plotting different shakedown plots that do not have our best interests in mind. And it’s become easier with cutting-edge technology that is widely accessible.

But some of the more ominous hacking groups are “state sponsored” and have government backing. Russia for example has been blamed for previous cyberattacks, including two attacks on Ukraine’s electric grid and interference with the 2016 U.S. presidential election.

According to sources in government circles, the Russians also possess digital weapons capable of disrupting the electric grids of rival nations.

Even worse is this all dovetails with intensifying war cycles. These cybersecurity breeches go hand and glove with espionage and outright loss of liberty.

And it’s easy to see why other nations with limited military forces might re-direct efforts toward cyberattacks in hopes of destabilizing a region – or at the very least inflicting damage.

And what’s so insidious is that this was exactly what my former colleague Larry Edelson spoke about. A cyberattack could disrupt key U.S. infrastructure, like communication networks, transportation systems, electric power grids or storage for oil and gas.

What can you do?

You can take advantage of this growing threat and the demand for advanced security systems. Just invest in prominent players within the space.

And that’s why I’m looking to accumulate shares of FireEye Inc. (FEYE), Fortinet Inc. (FTNT), and Symantec Corp. (SYMC) on weakness.

Cheers,

John Isaacson

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Comments 3

  1. Robert Schubring July 14, 2017

    The principal weakness in the electric power grid is not the email server of any nuclear power plant. Rather, it is in the synchronization systems that keep every generator and inverter, putting out alternating-current (AC) power, in harmony.

    A power grid is exactly like a group of musicians. When they play in harmony, they make music. When they get out of tune, the noise is disturbing to listen to.

    The difference between music and electric power, is that when humans hear bad music, they leave the performance and demand refunds. When electric generators stop working in harmony and start making disharmony, the disharmony becomes heat, which obstructs the passage of energy through the wires, causing what’s called a Brownout.

    The probability of this disharmony happening, is directly proportional to the total number of generators attached to the grid.

    A country that has one immense nuclear power plant, supplying all energy, will never experience this disharmony. There will either be enough energy, or not.

    Since nobody can predict how much energy a country will ultimately need, no one uses this solution. Instead, numerous smaller generating plants are built, and interconnected on a grid. Each small generator must then be synchronized to the others. But as the number of small generators increases, so does the risk of disharmony.

    California experienced two day-long power outages in the early 1990’s due to disharmony.

    The state had deployed many hundreds of wind turbines, each with an automated synchronization system and no human operator. A design flaw in that synchronization system, enabled the turbines to synchronize exactly ninety degrees out of phase, creating a massive brownout. Thanks to the design flaw, the turbines continued spinning out counter-productive power that made the wires hot and caused consumers to receive no power. And thanks to the absence of human operators, no one could get into the field to shut down the offending generators. The solution California used, came from a meteorologist: Shortly after sunset, the wind was forecast to slow to a stop, and then resume several minutes later, blowing in the opposite direction. California utility operators got their large, human-operated fossil-fired, hydroelectric, and nuclear plants shut off, but ready to start producing power, a few minutes after sunset. When the wind turbines stopped turning, power was restored. The wind resumed blowing, and the automatic synchronizers on the wind turbines got them synchronized, this time, correctly.

    US utilities have since switched to a newer synchronization system, that relies on the rubidium atomic clock aboard our GPS satellites, to provide synchronization data for power plants. The weakness in that system, is that it depends on software. If that software is updated, using e-mail, and someone has hacked into the e-mail and figured out a way to introduce malicious code to one of the updates, the malicious code could be a problem, once the update is installed.

    Calling the recent hacking exercise Nuclear 17 is purely a political ploy. It’s intended to attract support from ignorant people, who imagine that being anti-nuclear somehow equates to making a freer society. It’s actual targets will produce solar and wind power, because that’s where the vulnerability to attack, actually exists.

    Reply

  2. Albert Vannice July 15, 2017

    I have not seen Edelson’s graphs predicting gold and silver prices along with the actual behavior. When will these be shown again — that’s why I subscribed to this letter.

    Reply

    • mssr1966 July 18, 2017

      Please look up The Edelson Institute. Our experts tab next. These men worked with Larry for many years, continuing his teachings. I expect you will find what you seek there. RIP Larry.

      Reply