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  • Now this is a very un-TED-like thing to do,

  • but let's kick off the afternoon

  • with a message

  • from a mystery sponsor.

  • Anonymous: Dear Fox News,

  • it has come to our unfortunate attention

  • that both the name and nature of Anonymous

  • has been ravaged.

  • We are everyone. We are no one.

  • We are anonymous. We are legion.

  • We do not forgive. We do not forget.

  • We are but the base of chaos.

  • Misha Glenny: Anonymous, ladies and gentlemen --

  • a sophisticated group

  • of politically motivated hackers

  • who have emerged in 2011.

  • And they're pretty scary.

  • You never know when they're going to attack next,

  • who or what the consequences will be.

  • But interestingly,

  • they have a sense of humor.

  • These guys hacked into Fox News' Twitter account

  • to announce President Obama's assassination.

  • Now you can imagine the panic that would have generated

  • in the newsroom at Fox.

  • "What do we do now?

  • Put on a black armband, or crack open the champagne?"

  • (Laughter)

  • And of course, who could escape the irony

  • of a member of Rupert Murdoch's News Corp.

  • being a victim of hacking for a change.

  • (Laughter)

  • (Applause)

  • Sometimes you turn on the news

  • and you say, "Is there anyone left to hack?"

  • Sony Playstation Network -- done,

  • the government of Turkey -- tick,

  • Britain's Serious Organized Crime Agency -- a breeze,

  • the CIA -- falling off a log.

  • In fact, a friend of mine from the security industry

  • told me the other day

  • that there are two types of companies in the world:

  • those that know they've been hacked, and those that don't.

  • I mean three companies

  • providing cybersecurity services to the FBI

  • have been hacked.

  • Is nothing sacred anymore, for heaven's sake?

  • Anyway, this mysterious group Anonymous --

  • and they would say this themselves --

  • they are providing a service

  • by demonstrating how useless companies are

  • at protecting our data.

  • But there is also a very serious aspect to Anonymous --

  • they are ideologically driven.

  • They claim that they are battling

  • a dastardly conspiracy.

  • They say that governments are trying

  • to take over the Internet and control it,

  • and that they, Anonymous,

  • are the authentic voice of resistance --

  • be it against Middle Eastern dictatorships,

  • against global media corporations,

  • or against intelligence agencies,

  • or whoever it is.

  • And their politics are not entirely unattractive.

  • Okay, they're a little inchoate.

  • There's a strong whiff

  • of half-baked anarchism about them.

  • But one thing is true:

  • we are at the beginning

  • of a mighty struggle

  • for control of the Internet.

  • The Web links everything,

  • and very soon

  • it will mediate most human activity.

  • Because the Internet has fashioned

  • a new and complicated environment

  • for an old-age dilemma

  • that pits the demands of security

  • with the desire for freedom.

  • Now this is a very complicated struggle.

  • And unfortunately, for mortals like you and me,

  • we probably can't understand it very well.

  • Nonetheless,

  • in an unexpected attack of hubris

  • a couple of years ago,

  • I decided I would try and do that.

  • And I sort of get it.

  • These were the various things that I was looking at

  • as I was trying to understand it.

  • But in order to try and explain the whole thing,

  • I would need another 18 minutes or so to do it,

  • so you're just going to have to take it on trust from me on this occasion,

  • and let me assure you that all of these issues

  • are involved in cybersecurity and control of the Internet

  • one way or the other,

  • but in a configuration

  • that even Stephen Hawking would probably have difficulty

  • trying to get his head around.

  • So there you are.

  • And as you see, in the middle,

  • there is our old friend, the hacker.

  • The hacker is absolutely central

  • to many of the political, social

  • and economic issues affecting the Net.

  • And so I thought to myself,

  • "Well, these are the guys who I want to talk to."

  • And what do you know,

  • nobody else does talk to the hackers.

  • They're completely anonymous, as it were.

  • So despite the fact

  • that we are beginning to pour billions,

  • hundreds of billions of dollars,

  • into cybersecurity --

  • for the most extraordinary technical solutions --

  • no one wants to talk

  • to these guys, the hackers,

  • who are doing everything.

  • Instead, we prefer these really dazzling technological solutions,

  • which cost a huge amount of money.

  • And so nothing is going into the hackers.

  • Well, I say nothing,

  • but actually there is one teeny weeny little research unit

  • in Turin, Italy

  • called the Hackers Profiling Project.

  • And they are doing some fantastic research

  • into the characteristics,

  • into the abilities

  • and the socialization of hackers.

  • But because they're a U.N. operation,

  • maybe that's why governments and corporations

  • are not that interested in them.

  • Because it's a U.N. operation,

  • of course, it lacks funding.

  • But I think they're doing very important work.

  • Because where we have a surplus of technology

  • in the cybersecurity industry,

  • we have a definite lack of --

  • call me old-fashioned --

  • human intelligence.

  • Now, so far I've mentioned

  • the hackers Anonymous

  • who are a politically motivated hacking group.

  • Of course, the criminal justice system

  • treats them as common old garden criminals.

  • But interestingly,

  • Anonymous does not make use of its hacked information

  • for financial gain.

  • But what about the real cybercriminals?

  • Well real organized crime on the Internet

  • goes back about 10 years

  • when a group of gifted Ukrainian hackers

  • developed a website,

  • which led to the industrialization

  • of cybercrime.

  • Welcome to the now forgotten realm of CarderPlanet.

  • This is how they were advertising themselves

  • a decade ago on the Net.

  • Now CarderPlanet was very interesting.

  • Cybercriminals would go there

  • to buy and sell stolen credit card details,

  • to exchange information

  • about new malware that was out there.

  • And remember, this is a time

  • when we're seeing for the first time

  • so-called off-the-shelf malware.

  • This is ready for use, out-of-the-box stuff,

  • which you can deploy

  • even if you're not a terribly sophisticated hacker.

  • And so CarderPlanet became a sort of supermarket

  • for cybercriminals.

  • And its creators

  • were incredibly smart and entrepreneurial,

  • because they were faced

  • with one enormous challenge as cybercriminals.

  • And that challenge is:

  • How do you do business,

  • how do you trust

  • somebody on the Web who you want to do business with

  • when you know that they're a criminal?

  • (Laughter)

  • It's axiomatic that they're dodgy,

  • and they're going to want to try and rip you off.

  • So the family, as the inner core of CarderPlanet was known,

  • came up with this brilliant idea

  • called the escrow system.

  • They appointed an officer

  • who would mediate between the vendor and the purchaser.

  • The vendor, say, had stolen credit card details;

  • the purchaser wanted to get a hold of them.

  • The purchaser would send the administrative officer

  • some dollars digitally,

  • and the vendor would sell the stolen credit card details.

  • And the officer would then verify

  • if the stolen credit card worked.

  • And if they did,

  • he then passed on the money to the vendor

  • and the stolen credit card details to the purchaser.

  • And it was this

  • which completely revolutionized cybercrime on the Web.

  • And after that, it just went wild.

  • We had a champagne decade

  • for people who we know as Carders.

  • Now I spoke to one of these Carders

  • who we'll call RedBrigade --

  • although that wasn't even his proper nickname --

  • but I promised I wouldn't reveal who he was.

  • And he explained to me how in 2003 and 2004

  • he would go on sprees in New York,

  • taking out $10,000 from an ATM here,

  • $30,000 from an ATM there,

  • using cloned credit cards.

  • He was making, on average a week,

  • $150,000 --

  • tax free of course.

  • And he said

  • that he had so much money

  • stashed in his upper-East side apartment at one point

  • that he just didn't know what to do with it

  • and actually fell into a depression.

  • But that's a slightly different story,

  • which I won't go into now.

  • Now the interesting thing about RedBrigade

  • is that he wasn't an advanced hacker.

  • He sort of understood the technology,

  • and he realized that security was very important

  • if you were going to be a Carder,

  • but he didn't spend his days and nights

  • bent over a computer, eating pizza,

  • drinking coke and that sort of thing.

  • He was out there on the town

  • having a fab time enjoying the high life.

  • And this is because

  • hackers are only one element

  • in a cybercriminal enterprise.

  • And often they're the most vulnerable element of all.

  • And I want to explain this to you

  • by introducing you to six characters

  • who I met

  • while I was doing this research.

  • Dimitry Golubov, aka SCRIPT --

  • born in Odessa, Ukraine in 1982.

  • Now he developed his social and moral compass

  • on the Black Sea port during the 1990s.

  • This was a sink-or-swim environment

  • where involvement in criminal or corrupt activities

  • was entirely necessary

  • if you wanted to survive.

  • As an accomplished computer user,

  • what Dimitry did

  • was to transfer the gangster capitalism of his hometown

  • onto the Worldwide Web.

  • And he did a great job in it.

  • You have to understand though

  • that from his ninth birthday,

  • the only environment he knew

  • was gangsterism.

  • He knew no other way of making a living

  • and making money.

  • Then we have Renukanth Subramaniam,

  • aka JiLsi --

  • founder of DarkMarket,

  • born in Colombo, Sri Lanka.

  • As an eight year-old,

  • he and his parents fled the Sri Lankan capital

  • because Singhalese mobs were roaming the city,