Security Notes: Evolutionality: a Fundamental Need for Digital Money

Digital money bursts with a bang in the realm of cyberspace, opening new gates, unveiling unthinkable possibilities, becoming a central societal feature—and determining of pulse of life in the years to come. There are thousands of digital coins, and countless applications. Countries are looking into shifting their national currency into a digital format, while the wealth claimed by digital currencies is mushrooming from year to year.

And as we go ahead, we must acknowledge the innovative shock unleashed by money made of digits, and arm ourselves with a mindset and attitude to meet this challenge without stumbling and falling into chaos. We must be “surprise ready.” Digital money presents a huge opportunity, which we discover as we move forward. But it also faces previously unimagined threats that must be handled. The opportunity is dynamic, and the threat is dynamic, and hence the digital coin cannot be stationary, and rigid.

As we design or pick a digital coin to do business with, we must ensure that our choice will be marked with evolutionality—be ready to evolve to exploit a rising opportunity, and also to meet an emerging threat.

The leading digital coins today have not been designed with evolutionality in mind. Many of them are built on a stationary cryptographic algorithm that ignores the fact that adversarial innovation will defeat them tomorrow. They discount the resourcefulness of money launderers. They don’t offer a robust answer for the issue of interrupted connectivity. They have little flexibility to adjust to privacy requirements and regulations. They don’t allow pay at any resolution, and they don’t incorporate breach-recovery procedures.

We should strive to fix this evolutionality weakness. Quantum computers pose a looming threat to all the digital coins that rely on a single “hard to crack” algorithm. We should use a coin for which the security bedrock can evolve to meet an attacker who’s smarter than expected.

For example, LeVeL by BitMint is built on a constantly changing security algorithm, designed to evolve faster than any threat to its integrity. Digital money is based on a public ledger whose integrity is protected by the brilliant idea of blockchain. Yet, emerging needs for speed require flexibility there too, perhaps a return to normal database.

Digital money needs to allow its mint to spot abusive transactions, reverse fraudulent payments, and compensate victims of criminal activity. An evolutionary path is required. The more wealth and the more dynamics claimed by a digital coin, the more critical it is to keep transacting through periods of interrupted connectivity. This is another evolutionality challenge.

Cyberspace features more than 15 billion Internet of things devices. Many of them evolve to be able to pay and get paid.   Such IoT payments need to be small and fast. Digital money will have to evolve to meet that need.

For example, electric vehicles are planned to be micro-charged by an underground magnet that sends a quick energy splash to the car while it zooms over it. The car will have to pay for this energy during the fraction of a second in which it passes over that underground energy magnet. We may not have a good solution right away, but we want a digital coin that will be able to evolve to meet such needs.

Evolutionality should be a prime concern for anyone planning to adopt a digital currency. We’re only beginning to realize what great opportunities are open to us with digital money. And we must never disparage the counter-innovation exercised by the criminal element, requiring us to be as dynamic, as resourceful, and as innovative.

—Gideon Samid gideon@bitmint.com