The Systemic Risk of a Networked Cashless Society

When its up and running, it works great. But when it breaks, or goes offline, all transactions stop. Period.

What am I talking about? Today I was reminded yet again. To buy and sell… it’s impossible without electronic networks humming along. Even if you have cash. Nope. No can do. No sale.

We stopped at Walgreens today. Mrs. J hopped out of the truck to go in and pick up a few things. I waited in the truck with the dog. I wasn’t watching but I was surprised she returned so quickly… She said that a sign on the door read something like “We are temporarily closed due to Network issues”.

No network, No sale. Period.

“But wait, I have cash!” (You might say). “Sorry, we cannot ring up cash sales without the network.” (They might say back to you).

You see, everything is tied together on electronic networks, one way or another. The networks must be up and running. The Registers. Credit/Debit card systems. Sales. Inventory management. The company’s home office ‘mother ship’…

Of course, there are exceptions. There are cash businesses. But I’m talking about the vast majority of buying and selling today.

As we were driving back home, I said to her, “Remember the days when almost all transactions were cash (or check)?” Yes, that was decades ago. But that was normal.

I also recall “way back when”, those credit card ‘machines’ (whatever you called them) … The card would be set into the little machine and the cashier would slide a mechanism across it. A paper carbon copy imprint of the card/receipt would be created and slipped in the register drawer. All by hand. I used to do that while working at a hardware store when I was (16?). How far we’ve come since those days!

My point being that it’s interesting (alarming?) how you cannot buy a product in a store if their electronic network is down.

In context with the today’s threat of cyber-attacks, it makes you go hmmmm….

Networks Vulnerable To Cyber Attack

A store could be jam packed with product, but you can’t buy a thing.

It reminds me of a book Ted Koppel wrote, titled “Lights Out”. I read it. Good book. Although he was mostly talking about cyber attacks on the power grid, this also applies to any network, especially critical networks.

(Note: The other book titled “Lights Out” by David Crawford is a good read too. A novel.)

Koppel (accurately) said “We are not ready”. He also pointed out how we are not a preemptive society, but instead a reactionary society. He’s right on that. Very few people think ‘preemptively’ while the vast majority are stuck in ‘normalcy bias’ going about their daily lives ‘reacting’ to circumstances.

“We have developed dependencies we could not even have imagined a generation ago.” “To be dependent is to be vulnerable.”

“The ranks of our enemies, those who would and can inflict serious damage on America, have grown and diversified.”

These (enemies) are not just nation states. But they include hackers, proxies, and independent actors who make it difficult or even impossible to know exactly who they are.

Food for thought.

[ Read: Lights Out For A Nation Unprepared As Cyberattack Downs Power Grid ]