Global terrorism and cryptoviral extortion may seem unrelated but they both rely on the feasibility of anonymous or encrypted cooperation between non-state actors. Ransomware is made possible not only by asymmetric encryption, which makes kidnapping files possible, but also by anonymous digital money like Bitcoin, which makes illicit payments practical. Terrorism needs secure messaging to reach out to “Lone Wolves.” In their own ways both ISIS and the Petya virus illustrate the weakness of the Westphalian State model by posing challenges that could formerly not be mounted by groups without territory.

The irony is the Bitcoin blockchain itself contains the record of transactions, but ownership of the digital currency is obfuscated by encryption and/or mixing:

Bitcoin was initially conceived as a way for people to exchange money anonymously. But then it was discovered that anyone could track all Bitcoin transactions and often identify the parties involved. Bitcoin operates by giving each user a unique public key, which is a string of numbers. Users can transmit money in the form of digital bitcoins from one public key to another. This is made possible by a system that ensures a user has enough bitcoins in his or her account to make the transfer. The use of the public keys gave users a sense of anonymity, even though all of the transactions were visible on the public Bitcoin blockchain, which lists all transactions. Over time, experts and private companies have developed highly effective methods of de-anonymizing those public keys.

And there are ways to re-anonymize them.

There’s an arms race between the centralized Internet of Things and the decentralized world of peer-to-peer everything, where all parties wear masks. By extension, it is also a contest between one world order and its challenger. It’s a close fight between the decentralizers and the centralizers. There is much good in this: privacy; the gig economy; Jack Ma‘s attempt to create a peer-to-peer business platform “connecting small business enterprises in remote, rural and under-developed regions of China directly to the global market place” to name a few.

Alibaba platforms like Alipay and Ant Financial have indeed revolutionized peer-to-peer sales and micro finance, while ensuring trust and security for billions of daily transactions. Other platforms such as CAINIA seamlessly connect logistics resources and facilitate global trade management for cross border commerce. It’s true that for millions of previously excluded market participants in China, long-standing barriers to entry have been eliminated.

But for all the good it might do, the same technology can power ISIS and cyberwarfare. It cuts in both directions. In good and bad ways the 21st century may see a shift in power between the Westphalian states and individuals/affinity groups, in favor of the latter. Perhaps we’re already seeing this in the fracturing of 20th-century political monoliths like the EU and to some extent, the United States. It is becoming increasingly easy for factions to live among, listen to and do business exclusively among themselves and ignore the others except as they have to trade with them.

Some former state functions — telecommunications and postal services most notably — are no longer the province of the State. The cellphone revolution was the first blow. In time, more traditional public sector roles may migrate in the same way. Perhaps the only residual State function will be the provision of physical security. This will lead to a new political architecture consisting of full countries, part countries and very powerful affinity groups. Countries which ensure peace within their borders will have local sovereignty. States which guarantee the order of the Global Commons, notably the oceans and the information highways, will remain the only true great powers. Countries which cannot provide internal security will effectively cease to be sovereign, though they may fly a flag.

Militarily and economically powerful affinity groups will fall somewhere in between. Soon we may be fighting the unseen. But then, we may be unseen ourselves.

By that standard, the only unambiguous 21st century great State power will be America and possibly China. Many failed Third World states will be demoted by the rise of peer relations and may suffer the fate of Syria. Yet even great states are not wholly safe. They are being forced into an accommodation, or at least a recognition, of anonymous threats. British “Defence secretary Sir Michael Fallon warned on Tuesday that the UK could soon start responding to cyberattacks with military force.”

The Cabinet Minister said that the UK could retaliate with its army, navy, or air force if there is an attack on UK IT systems, according to The Mirror. “We’re building up a new 21st Century Cyber Corps, a band of expert volunteers, leaders in industry, who are going advise us on how to keep ahead in the cyber space race,” Fallon reportedly said. “The price of an online attack could invite a response from any domain — air, land, sea or cyber space,” Fallon told the Chatham House foreign affairs think tank, according to The Mirror.

The threat posed by anonymous violence and money is so great the answer to the question “is terrorism or a cyberattack an act of belligerence” is apparently “yes.” In that respect, the act of responding with violence will be comparatively easy. It is who the State is to bomb that will be problematic.

Follow Wretchard on Twitter

For a list of books most frequently purchased by readers, visit my homepage.

Support the Belmont Club by purchasing from Amazon through the links below.

Books:

Moonwalking with Einstein: The Art and Science of Remembering Everything, by Joshua Foer. This book recounts Foer’s year-long quest to improve his memory under the tutelage of top “mental athletes.” He draws on cutting-edge research, a surprising cultural history of remembering, and venerable tricks of the mentalist’s trade to transform our understanding of human memory. From the United States Memory Championship to deep within the author’s own mind, his journey reminds us that, in every way that matters, we are the sum of our memories.

Magnum! The Wild Weasels in Desert Storm: The Elimination of Iraq’s Air Defence, by Brick Eisel and James Schreiner. This book is based upon a journal Schreiner kept during his deployment to the Persian Gulf region for Operations Desert Shield and Desert Storm. Building on that record and the recollections of other F-4G Wild Weasel aircrew, the authors show a slice of what life and war was like during that time.

Make: Electronics – Learning Through Discovery (2nd edition), by Charles Platt. This book is billed as a “hands-on primer for the new electronics enthusiast”. Second-edition additions include: photographically precise diagrams of breadboarded components, to help you build circuits with speed and precision; a new shopping guide and a simplified range of components to minimize your investment in parts for the projects; a completely new section on the Arduino that shows readers how to write properly structured programs instead of just downloading other people’s code. Full color is used throughout.

For a list of books most frequently purchased by readers, visit my homepage.

Did you know that you can purchase some of these books and pamphlets by Richard Fernandez and share them with your friends? They will receive a link in their email and it will automatically give them access to a Kindle reader on their smartphone, computer or even as a web-readable document.

The War of the Words, Understanding the crisis of the early 21st century in terms of information corruption in the financial, security and political spheres

Rebranding Christianity, or why the truth shall make you free

The Three Conjectures, reflections on terrorism and the nuclear age

Storming the Castle, why government should get small

No Way In at Amazon Kindle. Fiction. A flight into peril, flashbacks to underground action.

Storm Over the South China Sea, how China is restarting history in the Pacific

Tip Jar or Subscribe or Unsubscribe to the Belmont Club