A Talk by Mikko Hypponen, including APT, defence contractors and bitcoin

by Stephen Hewitt

On Friday 31 January 2014 the public lecture in the Darwin college annual series included references to intelligence agencies, defence contractors and something called bitcoin. The speaker was Mikko H Hypponen, introduced by the Master of Darwin as the chief research officer of F-secure in Finland.

Under the title "Silicon Plagues", Hypponen spoke about computer viruses, worms and other such things, in historical sequence, often showing a screen which contained only the name of the virus.

After about 30 minutes with a slide that read "APT", Hypponen was saying "But pretty much at the same time we started seeing a completely new kind of a risk 'cause we had just had, we just went through this massive shifting from hobbyist to criminals, basically from hobbyist to professionals and then we saw a case which wasn't really obvious that it was making money. There was no clear monetization mechanism at all yet it was very professionally executed and the company which initially reported the very first case that we would later categorize as APT cases was a very large defence contractor a company that was traditionally the typical target for traditional espionage and spying And they reported a case where they got infected and a little bit surprisingly the malware was found from nowhere else they were the only company in the world and in fact in that company only one person had received the malware and that particular malware wasn't an executable it was a word document which was sent by somebody he knew and trusted and when we spoke with the sender he didn't actually send it so it was spoofed in some trusted person's name."

"And when this document was opened it would actually drop a backdoor in the system giving an outsider full access to the network of this defence contractor. And we later realised that this is national intelligence agencies doing spying against other countries. This was nine years ago."

"In this case all the original cases were attributed to the Chinese intelligence. For years and years the cases were always attributed to the Chinese but later on we realised that it is not just the Chinese there's actually many many more countries involved."

After about 45 minutes he was showing a very indistinct photograph of a face. Hypponen said "This guy is Satoshi Nakamoto a cryptographer who released a paper in 2009 where he described this complicated thing that he called a block chain and by doing this complicated mathematical calculation on this block chain you could create this peer to peer network which could be used to create a new currency and the paper he published was called bitcoin: a peer to peer electronic cash system. And slowly but surely bitcoin started becoming a bigger deal and it started getting more developers than just Satoshi and people got interested in this Satoshi guy and he was really obviously a genius and he solved all the main problems we've always had with crypto currencies. But surprisingly Satoshi wasn't really responding to emails. And then people went looking for him and they realised he doesn't exist. There is no Satoshi Nakamoto. So we don't to this day we don't know who invented bitcoin which is really weird."

He continued, "But bitcoin has continued growing despite of the fact that we don't know who invented it. And when bitcoin was young it was almost worthless, not exactly worthless but almost worthless. One bitcoin was like 5 cents. And in bitcoin you confirm the money transactions within the peer to peer network so other users will confirm your transactions and you will confirm their transactions. And this is called mining. And if you confirm a lot of transactions the algorithm the bitcoin algorithm will reward you with free bitcoins. This is how they inject new currency into the system. So when bitcoin was young, people would build the absolute cheapest computer they could build like a fifty euro or fifty pound computer and leave it running for several months and it would eventually confirm enough transactions for others that it would get enough free bitcoins that it would pay itself back. This was when bitcoin was 5 cents. Today bitcoin is not 5 cents. Today bitcoin is 800 dollars. And the people who were mining in 2010 and 2011 are millionaires. cause the value has skyrocketed not just with bitcoin but also with alternative like litecoin namecoin and dogecoin. And today if you want to mine for bitcoins you can actually go and purchase yourself a purpose built ASIC based rig which you can use to do nothing else except mine for bitcoins and which will cost you 35,000 dollars. And it will pay itself back by mining for crypto currencies."

Near the end of his talk, Hypponen said "The biggest news of last year. When Mr. Snowden started leaking information about erm both US and UK intelligence agencies tapping through the internet and reaching over to our private data it really opened our eyes. It really did. Of course we had worries about the NSA collecting information about perfectly innocent normal citizens but we weren't really sure if it's happening for real or not. Now we know for a fact that it's happened. Our worst fears were proved to be true. These leaks will continue. We have only seen the very beginning of what we've seen, of what's going to come out from the Snowden files."

Later he continued "And in these leaks we have also learned about the elite hacking units both inside NSA and inside GCHQ. Inside NSA it is called TAO and in GCHQ it is called NAC. So your intelligence operatives write malware launch online attacks. And they even launch them against against allies and friends. One thing we learned from these leaked files is an operation run by your intelligence guys against an internet operator in Belgium."

And after a dead-pan joke about the Belgians he continued: "And it really is surprising how far it has gone. The fact is today that completely democratic western governments are writing viruses and using them against other democratic western governments. That's the fact. This is where we are today. That would have sounded like movie plot ten years ago. That's where we are."