Internet Wire

Cyber Warfare Risk far exceeds The Millennium Bug (Y2k)

London, UK, 30th March 1999 - DK Matai, the Founder and Managing Director of mi2g (www.mi2g.com) announced today that "The risk associated with Cyber Warfare will overtake the Millennium Bug issue for financial institutions, government and military establishments very soon. Given that 205 Million people used the internet in 1998 and this figure is going to exceed 420 Million users by 2001, the risk associated with Cyber Warfare is growing exponentially".

mi2g, a leading authority on high security Knowledge Systems engineering, published an internal memorandum on 11th January 1999 for Lloyd's of London syndicates and London Market broker clients, which is now being made public.

According to mi2g, if Cyber Warfare risk is calculated as a function of the network exposure of government, private, financial and military institutions, it greatly exceeds the Millennium bug risk, which is essentially a computing design risk. According to the law of network access, the total risk is a product of the individual risks at each node of the network and is directly proportional to the square of the accessible nodes. It can be seen that the risk from hacking on the internet with, say, 100 Million vulnerable nodes is of the order of 1016 (100 Million X 100 Million) times as high as the individual risk to a single computer.

Hence DK Matai emphasizes that, "The Millennium bug is a dwarfed problem in comparison to Cyber Warfare, which places even the mightiest military and financial institutions at substantial risk if continuous surveillance systems and counter-hacking measures are not deployed immediately."
Public Reproduction of the mi2g Internal Memorandum of 11th January 1999


The Threat to Government, Business and Financial Markets

mi2g internal memorandum

Cyber Warfare


Historically war has been classified as physical attacks with bombs & bullets between nation states. It was beyond the means of an individual to wage war.

Today, in the Information Age, the launch pad for war is no longer a runway but a computer. The attacker is no longer a pilot or soldier but a civilian Hacker. An individual with relatively simple computer capability can do things via the internet that can impact economic infrastructures, social utilities and national security. This is the problem we face in moving from the industrial world to the Information Age, which is the essence of Cyber War.

The Internet was developed during the cold war climate of the 1960s to protect communications in the event of a nuclear strike. The main strength of the internet is that if parts of the network are destroyed information automatically re-routes. In essence there is no Central Control that can be targeted. It is this very anonymity and the anarchy of the Internet that leaves organisations open to attack.


The problem is that Western societies have in the past few decades become reliant on the efficient functioning of electronic control systems for more and more segments of daily life, especially the economic processes. There is an assumption that they will function flawlessly or that there is a readily available standby in every case. There is also a misunderstanding about communications systems. Communications systems are now just computers that route information on the back of commands.

If these electronic systems go wrong the technology that supports our economies fails. As the global network of computers, the Internet, becomes the communication backbone, all societies reliant upon it are vulnerable to cyber attack.

As Stephen Badsey of Sandhurst Royal Military Academy states:

'...attack a society through its computers to cause the breakdown of the mechanism & the infrastructure which cause it to run, you will bring about mass deaths......directly or indirectly...'


It is possible to attack and interrupt any electronic network which would naturally include power stations, emergency services, stock market and air traffic control systems, with devastating consequences. The consequences are so serious that the American Government tried to suppress a report titled 'Cyberwar is Coming' by researchers at RAND, an American think tank, in 1992.

The dangers of Cyber attack lie in the Information Age allowing individuals, who choose to conceal their identity, to access something valuable electronically without being detected. A business could be shut down or severely damaged through this covert access. In May 1998 the L0pht Collective, a group of computer hackers in Boston USA, testified to a US Senate Committee studying network security:

'The seven of us could very trivially take down the entire Internet for the United States......Great Britain......basically stopping communications between all the major network access providers. That would cause overloads on to the other transit routes for communication, regular phone lines. It would cause problems for people trying to move large sums of money that are doing it over networks......Take about thirty minutes......if that'

Where is this threat coming from?

The generic term used is Hacker - but this merely means someone who has been able to penetrate any kind of defence. The motives of Hackers vary. Some destroy data, or there can be criminal intent; others could be terrorists or university students taking on the challenge. No matter who the Hackers are or their motives the equipment that is required is readily available and within the purchasing power of all.

The knowledge required can be found on notice boards posted on the Internet. Readymade formulae are available to be copied with instructions on how to dispatch attacks. This allows 'warfare' to be taken out of the national fold and readily available to groups and individuals at anytime, anywhere in the world.

Associated Repercussions

The above problem will be compounded by the new Data Protection Act 1998 in the UK which extends the envelope of criminal prosecution against the Directors of a company that fail to satisfactorily protect their corporate assets, which has now been defined to include corporate information. Furthermore this type of legislation is not promoted in the USA creating an anomaly which may also effect Anglo-American companies who regularly exchange information.


About mi2g

mi2g is a three year old, Central London based e-commerce software house whose Chairman is Sir Christopher Benson. Sir Christopher has been shaping the banking and finance sector strategy of mi2g since becoming Chairman in early 1997.

mi2g's main business to business activities are:
1. On-line Security Systems for Large Corporations using artificial intelligence
2. E-commerce System Design based on high level security and client profiling
3. Subject specific e-commerce lounge development with over 3 Million visitors
4. Internet Marketing Intelligence Software using supercomputing technology

mi2g works with financial institutions in the banking, insurance and re-insurance sector to develop bespoke e-commerce solutions for large business-to-business and business-to-consumer projects. mi2g also assists in the proper assessment and solution of the Cyber Warfare threat faced by organisations deploying complex computer networks.

mi2g's client list includes companies such as Amazon.com (USA), Cendant Corp (USA), Department of Trade and Industry (UK Government), Euler (France), First Premier Bank (USA), Granville Bank (UK), Greek Royal Family, Lloyd's of London (UK), Nations Bank, Progressive Insurance (USA) and Spydamedia (UK).

Since 1995, mi2g has also been developing an automatic business-to-consumer e-commerce airport with specific lounges and intelligent ferrets. carlounge.com, gameslounge.com and lawlounge.com are the pilots which are now up and running for tests and have 3 million visitors. The airport, lounges and ferrets are unique technology to mi2g and its visitors and will function together by the year 2000.

The airport lounges are designed to provide the best price for a product the visitor desires. They are reverse auction categorised shopping systems that appear to run uniquely for each visitor via the chosen ferret. They will work not only in English but also German and French. The lounges will focus on products such as cars; computer games; personal finance - investments, insurance, mortgages, loans and other credit instruments; branded consumer goods - books, music tracks, video and leisure with travel bookings.

The ferret helps the airport lounge visitors to find and filter automatically the most cost efficient pre-qualified vendors (such as Amazon.com, E-Bay, E*Trade etc), of quality goods and services, place an order in high security, and have the product delivered in the minimum amount of time and shipping cost.

DK Matai, the Founder and Managing Director of mi2g has worked in the R & D Labs of IBM Inc, Inmos SGS-Thomson SA and OY Helvar-Electrosonic on Massive Parallel Processing (MPP) Vector Computer Engineering, 200MHz RISC Processor Design and HDTV Video Wall Development respectively.

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