by Bell, D. R.
“That started while we were still here,” pointed out David.
“Yes, and the government became increasingly more aggressive about taking their cut because it was grabbing business from other, tax-paying enterprises. In some countries they even outlawed cash so that governments can follow the money trail. They tried to do it here but have not been able to push this through. At least not yet. In any case, people started leaving these apps for un-taxed ones, like a grey market. That’s why we call it ‘grey sharing.’ I am dabbling in this. Well, perhaps more than dabbling.”
Maggie sat at the table across from Alejandro, sipped her coffee. Years of studying economics had her sense of curiosity tingling:
“Do explain. I thought you were in the... how shall I put it... recreational drugs business?”
“No, I got out soon after Oleg’s boss was killed and the three of you went on the run. It got too dangerous at that point. I was looking for something new to do. As I told you earlier, it was the identity that Javier performed on that inspired me to look into the privacy business. As I thought about it, I figured that just giving someone’s privacy, reducing his ‘gridprint’ is not enough because they still have to use services that require identifications, credit cards and such. That was my Eureka! moment.”
Maggie laughed, “OK, once you shouted Eureka, what did you do?”
“We now maintain platforms of apps where people trade goods and services in private,” explained Alejandro. “We use a token system. There are tokens for everything: babysitting, painting a house, cooking dinner, hosting a movie showing. For many people now these tokens are money, they store value and can be traded for stuff. The concept is not new, the scope is. Here, let me show you.”
Alejandro moved his finger on the phone’s screen and a 3-D image projected in the air just above the table. It consisted of multiple planes of two-dimensional tables of characters and numbers.
“See, Maggie, this is the top view of the database of our local neighborhood, roughly eleven thousand people, three thousand households. Almost twelve hundred participate in the program. So you have twelve tables of a hundred households each. The left-most column is the encoded identifier for each participant. With multiple levels of indirection, even I don’t know who these people are. Other columns show how many tokens they have, what services they are able to offer, what orders they have in the pipeline, and more.”
“Why do people move to such bartering systems?” wondered Maggie. “Because that’s what it is, old-fashioned bartering like in ancient times, except on very modern computer platforms. That’s why money’s was invented, to simplify and streamline this bartering.”
“I am not debating the benefits of money, but when the convenience of traditional electronic money carries the price of losing privacy, some people see it as a tradeoff where convenience doesn’t always win. Perhaps because they start valuing other things. And this is not a simple bartering system. The proof of each transaction is absolute and stored on multiple independent computers. We use the system not only as money, but for contracts and agreements as well. These tokens are based on a derivative of a D-coin technology, one of the bitcoin’s descendants. But unlike regular electronic money, D-coin is completely decentralized and not transparent to the government. The tokens are redeemable outside of our local communities because we blockchain them into a centralized ledger shared with other such systems. For a small fee, D-coin payment processors will exchange tokens for traditional currencies so people can transact outside of the system.”
“The government must hate this!”
“Of course. People are buying less, they show less income, they don’t show purchases. You have lower demand, lower income taxes, lower sales taxes. The government tried to tax legitimate point-based services so many went underground, into the grey market. Some are doing this as a matter of principle. They believe that they no longer have the power, that the government represents the monied interests, not them. What did they say two hundred and fifty years ago: no taxation without representation? This slogan is now all over the place. People are going ‘off the grid’ or ‘minimizing their gridprint’ as they call it: little to no official income, no bank accounts, no credit cards.”
“This actually sounds familiar. Where I was growing up, half of the economy was unofficial. But what’s your role? If people share locally, why would they need your help? Can’t they use this D-coin technology directly?” wondered Maggie. “And why are the gardeners a backbone of this ‘grey sharing’ economy?”
“Well, I may have exaggerated slightly about the gardeners,” laughed Alejandro. “Not all the business can be done locally. You may travel. And if you need your car fixed, not every neighborhood has a mechanic that can work on it. We provide wider reach, we ensure – by some old-fashioned methods – that the rules are respected. Most important, we provide privacy and anonymity. Regulated virtual currency is not opaque to the government. Remember, the government very much wants to control these activities. And they have cameras everywhere, even in your own TV, they have drones watching from overhead, they search your e-mail and texts. We secure our apps. All sensitive data is stored on servers outside of the country. Each transaction is broken into small pieces to make it indecipherable to interception. Everything is divided into local cells of a hundred people or so, each person knows only his or her codename and we keep identity tables completely separate from the apps. If someone breaks into a local cell, they get limited data and they don’t know who the people are. This is a decentralized autonomous system for people that want to tell the government to go screw itself.”
“Never knew you to be a computer person,” Oleg shook his head.
“I’m not. I don’t have to be. This is like a Gold Rush where I sell shovels. We use mostly an off-the-shelf software, especially the D-coin part. And people themselves are now sophisticated enough to avoid devices that spy on them. A year ago, the Feds tried to convict someone using data captured from a backdoor in his phone. In three days, that phone manufacturer’s sales collapsed. What’s important for us is to have discipline and to have systems around the software. If I can’t enforce the rules, does not matter how good the software is. If I can’t deliver the ordered goods outside of the official system, I can’t support the service. The bottom line is, any system must be underpinned by people trusting it. That’s what I do: use my resources to ensure the trust. By the way, that’s where the gardeners come in: they provide delivery and, if needed, an old-fashioned communication that can’t be intercepted electronically. Large digital systems are transparent because they have to allow new people in. To make ours non-transparent, we have to have some non-electronic connections built in.”
Beijing, China
“Walk with me, Comrade Yang,” offered Kai Liu.
“Of course, Comrade General Secretary,” accepted Sun Yang.
They were in a park near a Buddhist temple, the security agents nearby but keeping a respectful distance.
“Comrade Yang, you expressed some reservations about General’s Cao’s proposal to annex Taiwan. Do you think we should not be attempting reunification of the island?”
“Comrade General Secretary, I believe the island must be re-united with the mainland. But I think we have to be careful and consider the bigger picture. The generals only too often focus on the immediate battle. General Cao is a hammer looking for a nail. I wanted to challenge him to be deliberate and consider all possible scenarios. I was playing the devil’s advocate, so to speak.”
Kai Liu took a few steps, stopped to look at the other man:
“So you are in favor of the Taiwan takeover, even though it means war with the U.S.?”
“I am. But I want to make sure we win the war. We must only attempt the reunification when we are sure of the positive outcome.”
“How much longer do you think we should wait? We’ve been preparing for many years.”
“Ideally, I would have preferred to attack when we, on our own, are mi
litary superior the Americans. But I want to hear General Cao’s proposal. Our internal situation favors initiating our expansion soon.”
Kai Liu resumed his deliberate walking.
“And you think we can overcome our military deficiencies?”
“Comrade Secretary, I consider the geopolitical situation to be in our favor now. We always knew that the American strategist Brzezinski was right: the key to the world supremacy lies in ruling the Eurasian continent. Since the 1990s, we fought the “cold war” against the Americans for control of Eurasia. We won. We secured our continental borders. We welcomed the Russians when the Americans ignored them. We then saved the Russians when the Americans tried to choke them with economic warfare ten years ago.”
“Are you counting on their gratitude? We did this for our own benefit.”
“Of course! We needed them to control Eurasia. Had we let the Russians fall, we would have lost our most important energy supplier and military ally. As it is, the U.S. and Russia are now enemies and the Russians are aligned with us both by choice and by necessity. We have also normalized our relations with India. We don’t have to worry about our inland borders.”
“Should we perhaps wait until there is a new administration in Washington? Is there a way to avoid a military confrontation by reaching some kind of agreement with the Americans?”
Sun Yang shook his head:
“No matter who is in power in Washington, they will come to Taiwan’s aid, this can’t be avoided. They can’t afford to be seen as unable to protect their allies. Their power is on the decline but we have to take it from them; they won’t relinquish it without a fight. We, together with the Russians, are the largest continental power. The Americans are the largest naval power. We and the Americans are in a similar situation: expand or die.”
Kai Liu turned around and started slowly walking back. The security agents quickly re-arranged their order and enclosed a protective bubble around the two men.
“How do you think other countries will react?”
Sun Yang nodded, “Very important question, and one that the generals often don’t sufficiently explore. We’ll have to offer something to India for their neutrality. Japan is spent and bankrupt, they won’t do anything. The Europeans are too far away.”
“What about Vietnam, the Philippines, Indonesia?”
“I think they’ll stay neutral, not wanting to bet on the wrong horse. They, by now, have closer economic relationship with us than with the Americans. But we should be proactive, let them know that we have no territorial ambitions beyond Taiwan.”
Kai Liu stopped again, looked at Sun Yang.
“The Americans believe that they are better able to win a protracted war because of their superior navy. Do you think that’s the case?”
“Not necessarily. Because of our alliance with Russia, we are no longer so dependent on maritime trade. When combined, China and Russia are independent in energy and most other resources. It will be difficult for the Americans to blockade us.”
“The Americans can attack the pipelines between our countries.”
“They know that if they take the war to our mainland, we’ll take it to theirs. Their people have not had a war on the American soil in many years. They won’t risk it.”
Secretary Liu resumed walking, chewed on his lip.
“Comrade Yang, I want you to be a part of the small group that will evaluate General Cao’s proposal. I am concerned that the military tends to engage in a groupthink, that they don’t want to show disagreement in front of the civilian government. Against their powerful network we often only think that we are in control. Please continue challenging General Cao’s assumptions. We need someone to be the devil’s advocate. And we have to be careful in our ambitions, without falling into imperial thinking. That’s what generals usually do. They set up a forward position to protect their current line. Then the new line comes under attack and they ask to establish another, further forward position. And so on, until the country goes broke.”
Farmington, USA
It was a slow day in the small office. July 4th was the previous week and some people took the advantage of making this a long vacation. By the evening, Jim Brobak was the only one left. Not that it mattered greatly, but it made him feel better. He wouldn’t have to explain why he was using an old touch-screen 3-D display instead of the modern projection one manipulated by hand and eye signals. 3-D displays were supposed to be used for highly classified work, but hardly anyone bothered these days.
Jim pulled out a sheet of paper with the accounts numbers and the search parameters that David Ferguson asked him to run. Jim didn’t want to carry the secure phone with him, it was safer to keep the phone hidden in the backyard. The FBI computer system had access to all the financial transactions systems operating within the U.S. and to select international systems and networks.
Executing the queries that David requested from 2020 to the current day took less than ten minutes. Jim saved the gigabytes of results data and was about to log out, when he had an idea. The FBI had access to databases of relationships between entities. Be it people, known relations and friendships, business connections, pets, cars, properties, corporations, charities, churches, other organizations – every known connection was in one of the searchable databases. Volumes and volumes of data were sitting there, available to be searched by anyone with proper access.
Jim had no love lost for statistics, but some knowledge was mandatory for FBI agents. Actually, in the past few years knowledge of statistics became number one priority for all white-collar workers. The more data was out there, the higher was the premium on trying to make any sense out of it. Jim added more entity relationships databases to Ferguson’s queries by specifying ‘degrees of separation’ N = 2 and asking for the p-value of less than 0.005, indicating that there is at least a 50% correlation between a data set and a particular entity. The query took longer and came up with zero results.
Jim looked at his watch; it was 7 p.m. He was hungry, he did what Ferguson asked him, his conscience was clear. Still, he did not feel satisfied. Two degrees of separation typically captured extended family, co-workers and known friends. To dig deeper, you have to go to “the third degree” as some called it. Of course, that would mean throwing a much larger net of possibly billions of entities. That would take many hours and burn through a big chunk of of the FBI’s computer utility, presenting the Farmington office with a highly noticeable and difficult to explain bill. If he wanted to raise the degrees of separation, he'd have to narrow somewhere else.
Interfaces to the SOFI, the Russian-Chinese financial system. The system was opaque, but from the prior experience he knew that the SWIFT – SOFI interface was processed in batches and there was some degree of correlation between transactions in each batch. While transactions were not necessarily correlated, they had a higher chance of being a part of a related order execution than transactions in different batches.
Brobak added a variable of using only the data from transactions that terminated at one of the SOFI’s gateways and were in the same batch. He took a deep breath, set N = 3 and ran the query. Twenty minutes later, the search ran its course. There were two results that met the statistical significance criteria. One person, John Dimon. One corporation, FreedomShield.
Jim rubbed his face, thinking. John Dimon and FreedomShield had a statistically meaningful probability to be correlated – at a distance of three degrees of separation – to each other and to transactions going into the SOFI’s “black hole.” It could have been something, it could have been nothing. Jim was not a big believer in coincidences. He expanded the details – over 99% of the executions were deposits, coming from SOFI and going into accounts here.
Brobak saved the results. After getting home, he retrieved the secure phone from its hiding place and sent the data to the Newfoundland phone number, together with a brief explanation. It was almost 10 p.m. when he finally sat down to eat his dinner.
About two thousand
miles away, in Virginia, a silent alarm went off. It was programmed to be triggered when a statistically significant search of designated entities and variables was detected. The difficulty with setting alarm triggers is that there are so many possible parameters to watch for. The people that programmed the alarm system were cautious, worried about their jobs. After all, people got fired for missing something important, not for triggering a false alarm. As the result, hundreds of alarms were being triggered daily, leading to a certain “alarm fatigue” amongst the computer security staff. The person that saw the alarm had been just recently been laughed at for giving “Priority 1” to a couple of silly IRS searches. He checked that the searches originated at the FBI, a friendly organization, and assigned the alarm “Priority 3,” to be reviewed when the time allows.
Peredelkino, 13 miles southwest of Moscow, Russia
“It’s a nice little dacha you got yourself, General,” the man that called himself simply “Arkady” unceremoniously poured a nice-sized glass of brandy and stretched in a leather chair. “It doesn’t even feel right to refer to it as a dacha. It’s more like a little summer palace. Something that a smaller tzar would build.”
It was the fourth time that General Yuriy Shelkov had to see Arkady and he absolutely hated the man. Hated this tallness, his mocking, nasal voice, his hairy hands. But Shelkov knew who was behind Arkady and did not dare to antagonize the man. Perhaps one day, when the time is right, he’d get his payback.
“What do you want?” asked Shelkov, not friendly but not particularly hostile.
“You sound a touch resentful. But why, Yuriy Denisovich?” feigned Arkady. “After all, you are now the Minister of Defense just as I promised the first time we saw each other. And your future looks quite bright.”