Saturday, May 9, 2015

On the Resilience of the Power Grid

The power generation and distribution system, for short "the grid." is an interesting system in a number of ways.  One of these is that, within fairly narrow limits, the supply must equal the demand.  There is a small amount of slack but little storage.  Supply decisions are made by utilities in 500 KWH increments while demand decisions are made by individuals 150 W at time.

Obviously such a system benefits from scale.  At least within limits, the more sources and uses in the system, the easier it is to achieve the necessary balance.  In order to achieve the scale, all providers and users,p within a geographic region embracing many large and small states, are connected in a market network.  Any supply, a generator, can be directed to any user.  Suppliers with excess capacity offer it for sale to all other suppliers in the grid.  Each supplier may buy from any other, and will do so,  as long as that suppliers offer is lower than his own marginal cost of generation.  

This market is highly automated and very efficient.  Not only does it provide a low average cost for all customers but it also provides reliability.  A utility that has a component, for example, a generator, failure, can use supply from any of its peers.  However, in the short run, the loss of supply may create an imbalance between supply and demand.  Other components may be momentarily overloaded.  Since a sustained overload might ultimately cause a component to fail in a destructive manner, components are designed to either shed load, e.g., from damage.   Within limits the system can absorb multiple simultaneous component failures, and re-balance, while maintaining, service to most users.

However, this design means that the grid is vulnerable to "cascading failures," in which the failure of one component may cause the protective shutdown of other components.  While the resilience of the system is continually improving, there will always be an upper bound to the number of simultaneous component failures that the system can tolerate.  When that threshold is crossed, apparently about once a generation, the system is designed to shut down in an orderly and non-destructive manner.  These successful shutdowns enable the system to resume normal service in hours to tens of hours. Such successful shutdowns will continue to be described by politicians and the media as "failures."  The designers and operators of the network will continue to think of them as successful "power grid security."

Notice that once the system has shut down, it must be restarted in a systematic way such that supply and demand are both added back to the system in such a way as to sustain the necessary balance between supply and demand.  Said another way, we cannot simply turn everything back on at once. This is complicated by the fact that many using components draw significantly more power at start-up than they do while up and running.  It is easy to imagine that restarting all the air-conditioners and refrigerators in a neighborhood at the same time, takes dramatically more power than sustaining them as they cycle on and off in normal operation.  While most components will restart automatically, some may require manual operation.  The more extensive the outage, the longer the re-start will take.  
Within limits we can increase the reliability of the grid by adding redundant capacity and automatic controls. Redundancy increases cost and drives down revenue per component.  Therefore, there is an economic limit to the amount of redundancy we will add.  As we add redundancy, we must add more automatic controls; redundant components and controls increase the complexity of the system.  At some point that increased complexity begins to cause more failures than it prevents.  A mean time to failure of infinity implies infinite cost; long before we reach that point, somewhere about a mean time to shut down of the entire grid of about twenty years, we will stop. 

Notice that even these massive shut downs are less disruptive than such natural disasters as ice storms where many homes may be without power or heat for days to weeks. 

Monday, May 4, 2015

Chip and PIN Compared to Chip and Signature

As we begin on the long process of changing credit cards from the obsolete magnetic stripe technology to smart (EMV) "chip" cards, there has been a lot of criticism of the decision of the credit card issuers not to implement "Chip and PIN."  Much of this discussion has asserted that "Chip and PIN" is more secure than the chosen chip card and signature strategy.  Apparently this position is so obvious that it has stifled analysis.

I assert that Chip and PIN is only marginally more secure than Chip and Signature. It protects against the fraudulent use of lost or stolen cards. However, fraudulent use of lost or stolen cards is only a small portion of the fraud. The largest part uses counterfeit cards; chips resist counterfeiting.
For both the individual and the issuer, the best protection against fraudulent use of lost or stolen cards is to report the card lost or stolen. The individual is now protected against any use of the card. The issuer will revoke the card and is now protected against any online use of the card.
Note that the effectiveness of revocation depends in part upon the market. In the U.S., where most transactions take place online, it is very effective. In markets where the infrastructure is less robust and many transactions take place offline, revocation is less effective. Thus in the U.S. issuers are opting for Chip and Signature while in other markets Chip and PIN is chosen.
Note that only the issuers know what the losses are for fraudulent use of lost or stolen cards is, that is, how much fraud might be reduced by the use of a PIN on all transactions. It is fair to assume that they know what they are doing.
Some have asserted that, in the absence of the PIN, security will rely upon clerks to reconcile a signature on the transaction document to,the reference signature on the card.  For most routine transactions we do not rely upon the clerk to verify the signature or even to touch the card. While in some places we still sign a chit, at checkout stands we sign on a little tablet (I hate them.) No one ever checks the signature unless the transaction is disputed. Said another way, at least in the U.S.,
we rely mostly on possession of a current card to authenticate most transactions; both signatures and PINs are backup and there is little to choose between them?

Sunday, February 22, 2015

On Trust

Steve Bellovin wrote:

I'm not looking for concrete answers right now. (Some of the work in secure multiparty computation suggests that we need not trust anything, if we're willing to accept a very significant performance penalty.) Rather, I want to know how to think about the problem. Other than the now-conceputal term TCB, which has been redfined as "that stuff we have to trust, even if we don't know what it is", we don't even have the right words. Is there still such a thing? If so, how do we define it when we no longer recognize the perimeter of even a single computer? If not, what should replace it? We can't make our systems Andromedan-proof if we don't know what we need to protect against them.
When I was seventeen I worked as a punched card operator in the now defunct Jackson Brewing Company.  I was absolutely fascinated by the fact the job to job controls always balanced.  I even commented on it at the family dinner table.  My father responded. "Son, those machines are amazing. They are very accurate and reliable.  But check on them."  Little could either of us know that I would spend my adult life checking on machines.

At the time when the work was being done on the TCB, Ken Thompson wrote his seminal response to the Turing Award in which he asserted that unless one wrote it oneself in a trusted environment, one could not trust it.

Peter Capek and I wrote a response to Thompson in which we pointed out that in fact we do trust. That trust comes from transparency, accountability, affinity, independence, contention, competition, and other sources.

I recall having to make a call on Boeing in the seventies to explain to them that the floating point divide on the 360/168 was "unchecked." They said, "You do not understand; we are using that computer to ensure that planes fly."  I reminded them that the 727 tape drive was unchecked, that when you told it to write a record, it did the very best it could but it did not know whether or not it had succeeded.  The "compensating control" in the application was to back-space the tape, read the record just written and compare it to what was intended.  If one was concerned about a floating point divide, the remedy was to check it oneself using a floating point multiply.

In the early fifties one checked on the bank by looking at one's monthly statement.  Before my promotion to punch-card operator, I was the messenger.  Part of my duties included taking the Brewery's pass book to the bank every day to compare it to the records of the bank.  As recently as two years ago, I had to log on to the bank every day to ensure that there had been no unauthorized transactions  to my account.  Today, my bank confirms my balance to me daily by SMS and sends another SMS for each large transaction.  American Express sends a "notification" to my iPhone for every charge to my account.

In 1976, for IBM, I published Data Security Controls and Procedures.  It included the following paragraph:

Compare Output with Input 
Most techniques for detecting errors are methods of
comparing output with the input that generated it.
The most common example is proofreading or
inspecting the context to indicate whether a
character is correct. Another example, which
worked well when input was entered into punched
cards, is key verification in which source data is key
entered twice. Entries were mechanically compared
keystroke by keystroke, and variances were flagged
for later reconciliation. 
Said another way, while we prefer preventative controls like checked operations and the TCB, ultimately, trust comes late from checking the results.

I often think of the world in which today's toddlers will spend their adult lives, the world that we will leave to them. My sense is that they will have grown up in a world in which their toys talked and listened and generally told the truth, but that every now and then one must check with dad.

Friday, February 20, 2015

Fraud Alerts

Recently Bank Info Security raised the question of whether fraud alerts can be used to garner customer loyalty.  I suggest that this is the wrong question.

In a world in which merchant, bank, and insurance systems are routinely breached by nation states and rogue hackers and in which hundreds of millions of credit card numbers, PINs, social security numbers, e-mail addresses, and dates of birth are freely traded for pennies in both white and black markets, it is hardly a question of "fraud alerts and customer loyalty."

I prefer to do business via proxies like PayPal, Amazon, and Apple Pay, that hide my credit card and bank credentials from the merchant.  However, I use my American Express card exclusively because all transactions to my AmEx account are communicated to me in real-time via the American Express app on my iPhone. Both AmEx and I understand that this is essential to our mutual security. It is not a mere convenience or customer loyalty gimmick.

Kenneth Chennault, CEO of AmEx, speaking before the President's "Cyber Security" urged that the regulation forbidding the use of SMS for this purpose be relaxed.  This regulation that was intended to discourage nuisances is in fact resisting a necessary use.

Anthem, the victim of the world's largest breach has offered to pay for fraud protection services for some of its customers, on an opt in basis. eBay, the victim of the second largest breach has not even done that. I think we need a law that requires all banks and credit bureaus to provide automatic notice of all activity to their subject's accounts on an opt-out basis.  While I am willing to pay for such a service, it really ought to be a cost to those who trade in data about me.

Rogue hackers, data brokers, and the intelligence agencies have all but destroyed the trust on which our commerce is based. Reliance upon periodic statements and late detection of fraud is no longer adequate. "Fraud alerts" are not a marketing feature,  In order to restore some order to our markets, "activity notices" need to become standard.

Saturday, February 7, 2015

Crypto Wars Redux

This morning, while researching another question, I found the following from Aaron Schumann to alt.security, quoting a post to the Risk Forum from me.  While written a quarter of a century ago, it might have been written this morning.
From: schuman@sgi.com (Aaron Schuman)
Newsgroups: alt.security
Subject: Congress to order crypto trapdoor?
Message-ID: <1991apr11 .231215.19779="" dragon.wpd.sgi.com="">
Date: 11 Apr 91 23:12:15 GMT 
The United States Senate is considering a bill that would require
manufacturers of cryptographic equipment to introduce a trap door,
and to make that trap door accessible to law enforcement officials.
If you feel, as I do, that the risk of abuse far outweighs the
potential benefits, please write to Senators Joseph Biden and Dennis
DeConcini, and to the Senators that represent your state, asking that
they propose a friendly amendment to their bill removing this
requirement.

I don't have exact addresses for Senators Biden and DeConcini, and
I hope someone will post them here, but the Washington DC post office
can deliver letters addressed to
Senator Joseph Biden Senator Dennis DeConcini
United States Senate and United States Senate
Washington, DC 20510 Washington, DC 20510

------------------------------
RISKS-LIST: RISKS-FORUM Digest  Wednesday 10 April 1991  Volume 11 : Issue 43
Date:  Wed, 10 Apr 91 17:23 EDT
From: WHMurray@DOCKMASTER.NCSC.MIL
Subject:  U.S. Senate 266, Section 2201 (cryptographics)
Senate 266 introduced by Mr. Biden (for himself and Mr. DeConcini)
contains the following section:
SEC. 2201. COOPERATION OF TELECOMMUNICATIONS PROVIDERS WITH LAW ENFORCEMENT
It is the sense of Congress that providers of electronic communications
services and manufacturers of electronic communications service equipment shall
ensure that communications systems permit the government to obtain the plain
text contents of voice, data, and other communications when appropriately
authorized by law.
------------------------------
The referenced language requires that manufacturers build trap-doors
into all cryptographic equipment and that providers of confidential
channels reserve to themselves, their agents, and assigns the ability to
read all traffic. 

Are there readers of this list that believe that it is possible for
manufacturers of crypto gear to include such a mechanism and also to reserve
its use to those "appropriately authorized by law" to employ it?
Are there readers of this list who believe that providers of electronic
communications services can reserve to themselves the ability to read all the
traffic and still keep the traffic "confidential" in any meaningful sense?
Is there anybody out there who would buy crypto gear or confidential services
from vendors who were subject to such a law? 
David Kahn asserts that the sovereign always attempts to reserve the use of
cryptography to himself.  Nonetheless, if this language were to be enacted into
law, it would represent a major departure.  An earlier Senate went to great
pains to assure itself that there were no trapdoors in the DES. Mr. Biden and
Mr. DeConcini want to mandate them.  The historical justification of such
reservation has been "national security;" just when that justification begins
to wane, Mr. Biden wants to use "law enforcement."  Both justifications rest
upon appeals to fear. 
In the United States the people, not the Congress, are sovereign; it should not
be illegal for the people to have access to communications that the government
cannot read.  We should be free from unreasonable search and seizure; we should
be free from self-incrimination.  The government already has powerful tools of
investigation at its disposal; it has demonstrated precious little restraint in
their use. 
Any assertion that all use of any such trap-doors would be only
"when appropriately authorized by law" is absurd on its face.  It is not
humanly possible to construct a mechanism that could meet that
requirement;  any such mechanism would be subject to abuse.
I suggest that you begin to stock up on crypto gear while you can still get it.
Watch the progress of this law carefully.  Begin to identify vendors across the
pond. 
William Hugh Murray, Executive Consultant, Information System Security 21
Locust Avenue, Suite 2D, New Canaan, Connecticut 06840       203 966 4769

We fought this battle once and thought that we won the war.  

My Little Mark

One of my conscious life goals is to "leave my little mark on culture."  I do this mostly through my work.  I often tell my audiences that they are my slate.  This blog is part of my mark and the Internet a place to leave it. I do, record, and distribute much of my work using e-mail.

This morning I was listening to Walter Isaacson, journalist, historian, and cultural commentator, on C-SPAN2's BookTV.  He was bemoaning the disappearance of letter writing and the loss to the historian of this important source.  He noted that most of us now use e-mail for what we used to do with letters but that e-mail is ephemeral, of limited use to the historian.

I wanted to test this assertion so I did a Google search on whmurray@dockmaster.mil, the first public e-mail address that I ever used.  Now this was before the world wide web and long before Google, but sure enough, Google found many messages, not all in the same place. After listing 66 messages, Google said "In order to show you the most relevant results, we have omitted some entries very similar to the 66 already displayed." Few of the items returned seem to point to the origin or destination systems but rather to quotes or citations.  So, while there are more messages than those returned, it is unlikely that all messages from the era, or even most of those with historical interest, survive.

Dockmaster may be a special case, one of historical interest.  It was a domain hosted on a Multics system by the National Computer Security Center, a part of the National Security Agency.  It was used by most of the computer security thought leaders of the era and hosted many productive discussions on the topic. Indeed, it was an example of many of the best ideas on the subject.

Isaacson may be right and we may have lost much of the e-mail. The e-mail I found may be exceptional. Perhaps the content of my message was exceptional; perhaps it was even curated.  I found one message on anus.com, The American Nihilist Underground Society.  (More on this message later.)  However, as storage continues to become cheaper and denser, the potential for e-mail to survive increases.  Thanks to Google, Bing, et.al., we will be able to sift the tiny number of messages with historical interest from the remainder.

Most of us are not aware of the significance of what we are saying or doing at the time we say or do it. It is only with the passage of time that the significance becomes apparent.  The Internet in general, and e-mail in particular, amplify our writings.  They have the potential to filter out and preserve that which is important to history.  However, the recording and reporting of history are, of their essence, imperfect.  History will note and report the impact of paper mail yielding to e-mail.

Isaacson did not comment on blogs, another important source for historians, replacing diaries and journals.  Blogs too may prove to be ephemeral but more will be written, some will survive, and historians will be able to find those that do.

I am satisfied that electronic media contribute to "My Little Mark."

Friday, January 9, 2015

Darkness in the City of Light

Last night the Tour Eifel went dark.

Once more the forces of darkness have donned their black clothing and armor and struck out, not quite blindly.  This time their target was freedom, freedom of speech, a freedom associating France with America.

Je suis Charlie!