More needs to be done to curb cyberattacks

The latest cyberatack, apparently emanating from Russia again, has hit at least 20 sotware firms affecting at least 1,000 businesses. It follows a cyberatack that let parts of the US without adequate gasoline supplies for several days, and one on the Irish public health system. There are undoubtedly many more atacks that go unreported, if only because the victims do not wish to advertise their willingness to pay ransom.

And so the obvious question arises: How is all this supposed to stop? For an answer, it’s useful to apply some game theory.

The scalability of the internet can be a major virtue. But it also makes it easier for vices to proliferate. There are now the equivalent of venture capital markets to help fund ransomware atacks.

Consider street crime, for example. There is a natural limit to it if only because most people have beter options than to pursue such a life, and many who do so are simply not good at it and get caught. What’s more, street crime is constrained by the need for physical presence; you can only commit so many carjackings in a month.

In the cyber realm, these constraints do not apply. In low-wage, low-trust countries, such as Russia, you can just hire more hackers to pull off more atacks. Even if the perpetrators can be identified, Russia doesn’t seem so eager to help US law enforcement. Other havens for cybercriminals could emerge.

More aggressive regulation of cryptocurrency markets could make ransom payment more difficult, but the hackers could always resort to anonymized cryptocurrencies.

Some have proposed that paying ransoms should be made illegal. That might be hard to enforce, and it is really wise to penalize businesses that seek to restore services to their customers? Criminalization might also incentivize hackers to create ever more destructive atacks in an effort to get the ransom spigot turned back on. At least under the status quo, hackers have some incentive to seek out relatively quiet atacks that will yield a ransom but not wreak too much havoc or atract too much atention.

What about military drone atacks on ransomware terrorists? It might be an option if they are in a relatively weak country, but that is hardly likely with Russia. US President Joe Biden already is trying to pressure Russian President Vladimir Putin to help stop the atacks, but there is litle guarantee this approach will yield dividends. Putin seems happy to see the US squirm, and the government has not been able to rein in many of his other misdeeds. A laissez-faire atitude toward the hackers doesn’t cost him money, and he has a degree of plausible deniability.

Ultimately, the primary long-run solution is for businesses to pay for more secure systems. This could mean much less reliance on passwords (iris scans, anyone?), additional reliance on hardware, and greater use of multi-factor authorization. Health-care providers and insurers may have to become a bit more like the CIA.

None of this will stop ransomware atacks. But it will likely cause them to decline.

How exactly all this will unfold is clear, though unpleasant to contemplate. Many businesses and institutions still don’t view a ransomware atack as major threat, and they won’t invest much more in security until they do. As more security-conscious institutions fortify their protections, hackers will switch to the less aware and less secure targets. Most countries have millions of sot targets, and this crime will continue until most of them have improved their defenses. That could take decades.

It gets worse: In economic terms, the private value of internet security is oten less than the public value. A ransomware atack that results in only a slight decrease in profits for a business could translate into a major social inconvenience.

Game theory doesn’t help very much in predicting how long this cat-and-mouse game will go on. But it’s safe to say that it will be here for a long time to come.