International government-sponsored cyber war is on the increase, and up until now, governments and organisations have seemed incapable of effectively shielding themselves. Nathan Bruschi, an American academic and former intelligence officer, thinks he may have the answer – hit hackers and their instigators were it hurts: the wallet. The Cyber Bond is not 007’s high tech brother, but a kind of securitised cyber insurance – not unlike the catastrophe bonds used to cover natural disasters. Put simply, each country involved in the scheme would hold a large pot of each other’s cash as security against future attacks.
In fighting cyber attacks, Bruschi believes that Cyber Bonds are more effective than economic sanctions because they are “more definite, immediate, targeted, and productive”. So far so good. However, there is one little snag. For this system to work, virtually every country in the world would have to participate, with the incentive being that no nation would want to be left out of the common protection pool. The concept is radical, though not as much as it would initially seem, as the cost of cyber attacks would be effectively spread across sectors and countries – the old insurance adage of the contribution of many covering the losses of the few would hold true.
The concept is more complex than can be summarised in this short space, so hop on over to Wired.com for the full story at https://www.wired.com/2016/06/cyber-bonds/