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,