Crypto as defence tech
Why bridging crypto and defence is a strategic imperative.
The crypto-sphere's creativity and resilience are fueled by its diversity of thought. People with vastly different backgrounds are contributing to, and influencing the space. After the early days dominated by libertarians, privacy advocates and hard money aficionados, the pragmatists and speculators took over. We believe that the defence community is poised to become significantly more involved in the years to come. This piece aims to shed light on the intricate but overall symbiotic relationship between crypto and defence.
A brief history of military cryptography
Cryptography is the art of writing and solving codes, dating back to ancient civilizations. The initial reasons for having cryptography were all political or military. Greeks and Romans developed systematic approaches to encryption, e.g., the spartan scytale, a device used to perform a transposition cipher or the Caesar cipher used by the romans to protect military messages. During the Renaissance, cryptography took on new importance with polyalphabetic ciphers, such as the Vigenère cipher. While basic compared to today’s standards, these tools enabled empires to expand and conquer, and they laid the information theoretic base for more secure protocols to emerge.
More dramatic leaps were made in the war riddled 20th century with the Nazi's Enigma machine, a sophisticated rotor cipher device. The late 20th century and early 21st century saw significant public and governmental debate over the control of cryptographic technologies, referred to as the "Crypto Wars." The U.S. government attempted to limit the export of strong cryptographic tools and proposed the Clipper Chip, which would allow government access to encrypted communications. Edward Snowden's 2013 revelations about extensive government surveillance programs further emphasised the need for robust encryption to protect privacy and national security.
Most recently, we witnessed a continuation of the crypto wars in rather financial and transactional contexts when the Biden administration was advocating for an anti-crypto army. Yet, many cutting edge cryptography tools are used in military as well as private and public environments revealing the short sightedness of such a positioning - potentially backfiring in the run-up to this year’s election.
Dual use: of crypto's military and commercial utility
Today, most cryptographic technologies are used in both - military and civilian contexts revolving around three major areas (1-4) but with an infinite frontier (5):
1/ Secure Communications
Various cryptographic protocols and tools have been developed to ensure the confidentiality and integrity of communications. PGP and its open-source counterpart, Gnu Privacy Guard (GPG), have become standard tools for secure email communication, widely adopted by individuals and organizations seeking to protect their sensitive information. HTTPS ensures secure communication over the internet. Encrypted messaging apps, such as Signal or Matrix / Element use end-to-end encryption to ensure that messages can only be read by the sender and recipient, preventing interception by third parties. The adoption of these apps by military and intelligence agencies underscores their importance in maintaining secure communication channels in high-stakes environments.
2/ Secure Transactions
For many, Bitcoin is the anti-thesis to keynesian, politicalised monetary systems with the potential to separate money from state. It's role in covert operations and payments in high-security environments, highlights its potential for secure transactions despite its lack of sophisticated privacy protection beyond pseudonymity.
The decentralised finance stack is taking those principles further by applying them to a broader set of financial interactions. Services like Tornado and Aztec allow nation state actors as well as individuals to keep their financial activities hidden from the public to protect themselves from scrutiny. As part of DeFi stablecoins, CBDCs can be looked at as military or political tools to cement the governments power over the money supply and to foster the US Dollar's global reserve currency status.
3/ Secure Computations
Some of the frontiers we have been exploring at Inflection since our founding are advancements in cryptographic techniques related to secure data collaboration.
PETs (privacy enhancing technologies) are a cluster of cryptographic techniques encompassing FHE, ZKPs, TEEs, SMPC amongst others and allow computations to be performed on encrypted data without decrypting it. They also allow for the generation of verifiable claims without revealing any information about the underlying data set. This comes in handy for collaborating in untrusted environments such as military operations, healthcare or finance. Our portfolio companies Tune Insight (encrypted computation and data collaboration), Modulus (verifiable AI) and Fabric (general purpose hardware acceleration for cryptography) are pushing boundaries in such areas.
4/ Secure Storage
Local-First Software offers user data control, privacy and security by ensuring that data primarily resides on the user's local device rather than on centralised cloud servers. It holds the benefits of collaboration and connectivity while preserving data autonomy and minimising reliance on internet connectivity. Our portfolios Anytype and Radicle have been pioneering local-first since 2019 before the term was coined by Martin Kleppmann in his Local First Paper. Based on the local first stack's properties it is in high demand amongst developers, knowledge workers like journalists, marginalised communities as well as actors operating in hostile environments - including defence and national security.
5/ Infinite Frontiers
As usual the frontiers are infinite. Here are some other dual use problem spaces we are interested in:
5.1/ Cryptographic seals are security devices that utilise cryptographic techniques to verify the integrity and authenticity of physical objects. They are physically attached to the object like a container, a lock on a document case or a tag on a piece of equipment and incorporate sensors that collect environmental data such as temperature, humidity, vibration, or movement. This data is then hashed to create a digital fingerprint. If any changes occur in the sensor data due to tampering, the hash will change, indicating a breach. Blockchains can be used for time stamping. Use cases span logistics and supply chain security in military and commercial contexts amongst others. Physical security is a core part of the resilience of our digital systems, and we believe we are especially lacking in the
5.2/ Cryptographic cameras are similar to cryptographic seals but instead of sensor data they are hashing visual information and for example device IDs to allow for cryptographic proving of where an image originated. This could increase information provenance in the age of deep fakes.
5.3/ Quantum Cryptography uses the fundamental properties of quantum particles to ensure security unlike classical cryptographic methods, which rely on mathematical complexity. This approach promises unprecedented levels of security, making it a crucial area of research and development we are excited about.
5.4/ Bio Crypto combines the principles of cryptography with biometric authentication methods. This fusion aims to enhance security by using unique biological traits such as fingerprints, facial recognition, iris scans, and even DNA as cryptographic keys or for secure authentication. Worldcoin is a popular, yet controversial example of bio crypto in action.
5.5/ Government funded crypto research is blossoming for post quantum crypto by CISA, CASA or DARPA's zero trust initiative with 40+ implementation plans from military services and defense agencies.
Conclusion: bridging crypto and defence is a strategic imperative
We believe that the infinite frontiers of cryptography will continue to be developed by the open source community with increasing contributions from the defence community as researchers, co-developers and customers. This trend is in line with thousands of years of defence technology innovation as well as current geo-political tendencies we discussed elsewhere.
Following our tradition of fostering interdisciplinary innovation by bringing together distinct communities we are co-hosting the eurodefence hackathon end of June 2024 with the goal of providing a platform for innovators to connect around the above themes and beyond.
Insightful!
Excellent insights and out of the box thinking. We at DEEPDOCK.xyz share the exact same thesis about the importance of crypto in defense. We are planning to be one of the first defense companies to implement an MVP in this field.