The Economics of Computer Hacking*

Abstract This paper considers various classes of computer hackers, with a special emphasis on fame-driven versus profit-driven hackers. We use simple economic analysis to examine how each of these hacking markets work. The resulting framework is employed to evaluate current U.S. policy aimed at reducing the threat of computer hacking and shows that this policy is largely effective. We consider policy adjustments consistent with the insights of the framework provided as a means of strengthening cyber security.

Introduction

In the digital age cyber security is perhaps the most important form of

security individuals must be concerned with. Banks, schools, hospitals, businesses, governments and virtually every other modern institution you can think of stores and organizes its information electronically. This means that all of your most sensitive informationfrom credit card numbers and checking accounts, to medical records and phone billsis accessible for viewing, stealing, or manipulating to anyone with a PC, an Internet connection, and some computer know-how. The increasingly computerbased world is increasingly vulnerable to malevolent computer hackers. While we know little about these shadowy hackers we have a very clear picture of the damage they do. In 2003, hacker-created computer viruses alone cost businesses $55 billionnearly double the damage they inflicted in 2002 (SecurityStats.com 2004). In 2000 the total cost of all hack attacks to the world economy was estimated at a staggering $1.5 trillion (PricewaterhouseCoopers 2000). In a 2004 survey of American companies and government agencies conducted by the Computer Security Institute, over half of respondents indicated a computer security breach in the past 12 months and 100 percent of respondents indicated a Web site related incident over the same period (CSI 2004). If anything these figures probably understate the volume of hackerrelated security breaches. Firms, especially financial institutions, are extremely reluctant to report hacker-related break-ins for fear of how this may affect customers and stockholders impressions of their security. In the survey of American businesses conducted jointly by CSI and the FBI, nearly 50 percent of firms that experienced system intrusion over the last year stated that they did not report this intrusion to anyone. The

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t h e r m o r e , a l t h o u g h f o r t h e m o s t

p a r t h a c k i n g i s r e s t r i c t e d t o c

o m p u t e r s , i t n e e d n o t b e a n d m a y

b e e x t e n d e d t o f r a u d u l e n t a c t

i v i t i e s r e l a t i n g t o t e l e p h o n e s

( e . g . , t r i c k i n g p h o n e s i n t o a u t

h o r i z i n g f r e e l o n g d i s t a n c e c

a l l s , s o c a l l e d p h r e a k i n g ) , c

r e d i t c a r d s ( f o r i n s t a n c e , c r e a t i

n g g a d g e t s t o s t e a l t h e m a g n

e t i c c o d e s t o r e d o n c r e d i t c a r

d s a n d c o p y i t o n t o o t h e r s ) , s u

b w a y p a s s e s ( f o r e x a m p l e , a d u l t e

r a t i n g p a s s e s o r p a s s r e a d e r s t o

e n a b l e u n l i m i t e d f r e e r i d e s ) ,

p a r k i n g m e t e r s ( r i g g i n g p a r k i n

g m e t e r s t o a l l o w u n l i m i t e d f r

e e p a r k i n g ) o r v i r t u a l l y a n y o t

h e r i t e m w i t h e l e c t r o n i c c o m p o

n e n t s . W e r e s t r i c t o u r d i s c u s s i o

n p r i m a r i l y t o c o m p u t e r h a c k i n

g , a l t h o u g h t h e b a s i c p r i n c i p l

e s w e e l u c i d a t e m a y b e a p p l i e d

t o o t h e r f o r m s o f h a c k i n g a s w e l

l .

S o m e h a c k e r s o b j e c t t o c a l l i n g

m a n y o f t h e d e s t r u c t i v e a c t i v i

t i e s m e n t i o n e d a b o v e h a c k i n g

a n d t h e i r p e r p e t r a t o r s h a c k e r

s . T h e s e t e r m s , t h e y i n s i s t , s

h o u l d b e r e s e r v e d t o t h e h a r m

l e s s ( a l b e i t o f t e n i l l e g a l ) a c t i

v i t i e s o f c o m p u t e r e n t h u s i a s t s w h

o b r e a k i n t o s y s t e m s , l o o k a r o

u n d t o l e a r n h o w t h i n g s w o r k a

n d l e a v e t h i n g s u n d i s t u r b e d . A c

c o r d i n g t o t h i s v i e w t h e n a m e

 c r a c k e r s h o u l d b e a p p l i e d t

o t h e m a l i c i o u s c r a c k i n g b e h

a v i o r s e n u m e r a t e d a b o v e t h a t a r

e a l l t o f r e q u e n t l y c o n f l a t e d

w i t h h a r m l e s s h a c k i n g . W h i l e w e

r e c o g n i z e t h i s d i f f e r e n c e w e

n o n e t h e l e s s o p t t o r e f e r e x c l u s i

v e l y t o h a c k e r s a n d h a c k i n g t h

r o u g h o u t o u r d i s c u s s i o n . O n t h e

o n e h a n d , i n m o s t c a s e s , b o t h h a

c k i n g a n d c r a c k i n g i n v o l v e

u n a u t h o r i z e d a c c e s s a n d s o c o n

s t i t u t e s e c u r i t y t h r e a t s w h e t h

e r o r n o t t h e i n d i v i d u a l b r e a k i n g

i n u s e s h e r i l l i c i t l y g a i n e d a

c c e s s t o d o h a r m . S e c o n d , f o r b e t

t e r o r w o r s e , i n t h e p a r l a n c e o f

o u r d a y h a c k i n g r e f e r s t o t h e

a c t i v i t i e s t h a t w e d e s c r i b e a n

d t h e g e n e r a l p u b l i c d o e s n o t h a

v e t h e n u a n c e d a p p r e c i a t i o n o

f i l l e g a l c o m p u t e r a c t i v i t y t h a t

m e m b e r s o f t h e h a c k i n g c o m m u n i t

y d o t o m e r i t t h e t e r m i n o l o g i c

a l d i s t i n c t i o n i m p l o r e d b y s o m

e m e m b e r s o f t h i s c o m m u n i t y .
3

G o o d H a c k e r s W h i l e t h e p s y c h o

l o g y o f h a c k i n g i s s t i l l i n i t s n

a s c e n t s t a g e s , i n i t i a l r e s e a r c h

s e e m s t o h a v e c o m e t o s o m e c o n

s e n s u s r e g a r d i n g w h a t m o t i v a t e s

h a c k e r s t o h a c k . I n d i v i d u a l h a c k

e r s a n d h a c k e r g a n g s o p e r a t e i n

t h e c o n t e x t o f a l a r g e r u n d e r g r o

u n d s o c i a l n e t w o r k o r c o m m u n i t y

c o n s i s t i n g o f s i m i l a r i n d i v i d u

a l s . T h e b e s t e m p i r i c a l l y g r o u n

d e d w o r k t h a t e x a m i n e s t h e h a c k

e r m i n d t h e r e f o r e d r a w s p r i m a r i

l y o n i n t e r v i e w s a n d s u r v e y s

A s D a n n a n d D o z o i s p u t i t : j u s t

a b o u t e v e r y o n e k n o w s w h a t a h a c k

e r i s , a t l e a s t i n t h e m o s t c o m m o n

l y a c c e p t e d s e n s e : s o m e o n e w h o

i l l i c i t l y i n t r u d e s i n t o c o m p u

t e r s y s t e m s b y s t e a l t h a n d m a n i

p u l a t e s t h o s e s y s t e m s t o h i s o w n

e n d s , f o r h i s o w n p u r p o s e s ( 1 9 9 6

: x i i ) .

a d m i n i s t e r e d t o m e m b e r s o f t h i s

u n d e r g r o u n d c o m m u n i t y . W e w i l l

b r i e f l y o v e r v i e w s o m e r e c e n t f

i n d i n g s o f t h i s s m a l l l i t e r a t u r e

b e l o w . B e f o r e d o i n g s o , h o w e v e r

, w e s h o u l d p o i n t o u t t h a t m e m b e r

s o f t h e h a c k i n g c o m m u n i t y a r e

n o t o r i o u s f o r l y i n g t o j o u r n a l i

s t s , r e s e a r c h e r s a n d o t h e r s w h o

a p p r o a c h t h e m f o r i n f o r m a t i o n

a b o u t h o w t h e y a n d t h e i r a s s o c i

a t e s w o r k . M a n y h a c k e r s s e e m t o

 g e t a k i c k o u t o f m i s l e a d i n g s

c i e n t i s t s o r g e n e r a l l y g i v i n g o

t h e r s a f a l s e i m p r e s s i o n a b o u t

t h e i r r e a s o n s f o r h a c k i n g ( P l a t t

1 9 9 7 : 5 3 ) .
4

O f c o u r s e , t h i s f a c t m u

s t b e k e p t i n m i n d w h e n c o n s i d e

r i n g t h e r e s u l t s o f r e s e a r c h a i

m e d a t i d e n t i f y i n g h a c k e r m o t i v

e s . N e v e r t h e l e s s , t h i s d a t a i s t h

e b e s t w e h a v e t o d a t e s o w e m

u s t m a k e u s e o f i t u n l e s s w e a r e

t o a v o i d e m p i r i c a l i n v e s t i g a t i

o n s o f t h e s u b j e c t a l t o g e t h e r . T

h e m o s t c u r r e n t a n d c o m p r e h e n s i

v e d a t a r e g a r d i n g h a c k e r s d e m

o g r a p h i c s , m o t i v e s , l i f e s t y l e s ,

e t c . i s t h a t c o l l e c t e d b y S c h e l l

e t a l ( 2 0 0 2 ) . T h e s e r e s e a r c h e r s s

u r v e y e d o v e r 2 0 0 h a c k e r s w h o a t

t e n d e d t w o o f A m e r i c a s l a r g e s t

h a c k e r c o n v e n t i o n s ( y e s , t h e r e a

r e a n n u a l h a c k e r c o n v e n t i o n s i n

w h i c h h a c k e r s f r o m a c r o s s t h e g

l o b e g e t t o g e t h e r t o s h a r e t i p s

r a n g i n g f r o m t h e l a t e s t c o m p u t

e r h a r d w a r e t o h o w t o s t e a l c r e

d i t c a r d n u m b e r s s t o r e d e l e c t r o

n i c a l l y ) i n J u l y o f 2 0 0 0 . T h e s e

c o n v e n t i o n s i n c l u d e d t h e H 2 K c

o n v e n t i o n i n N e w Y o r k a n d t h e

D e f C o n 8 c o n v e n t i o n i n L a s V e

g a s . I n a d d i t i o n t o a d m i n i s t e r

i n g a n o n y m o u s s u r v e y s , r e s e a r c h

e r s r a n d o m l y i n t e r v i e w e d s o m e

h a c k e r s w i t h i n d e p t h q u e s t i o n

s ( a g a i n o n t h e c o n d i t i o n o f a n

o n y m i t y ) w h e n h a c k e r s w o u l d a g r

e e t o d o s o . T h e t o t a l s i z e o f

t h e h a c k i n g c o m m u n i t y i s u n c l e

a r , t h o u g h b y m o s t a c c o u n t s i t i s

f a i r l y s m a l l . A c c o r d i n g t o S t e

r l i n g , s o m e p r o f e s s i o n a l i n f o r

m a n t s . . . h a v e e s t i m a t e d t h e
4

a y l o r s u g g e s t s t h a t h a c k e r m a n i p u

l a t i o n o f t h e m e d i a i s p a r t l y i

n o r d e r t o r e v e l i n t h e s u b s e q

u e n t n o t o r i e t y t h a t s t i g m a t i z i

n g t h e m s e l v e s c r e a t e s ( 1 9 9 9 : x i i

i ) .

s i z e o f t h e h a c k e r p o p u l a t i o n a

s h i g h a s f i f t y t h o u s a n d . H o w e

v e r , T h i s i s l i k e l y h i g h l y i n f l

a t e d . . . M y b e s t g u e s s i s a b o u t f i

v e t h o u s a n d p e o p l e ( 1 9 9 2 : 7 7 )

. W h i l e w e k n o w l i t t l e a b o u t t h

e t o t a l s i z e o f t h e h a c k i n g c o m

m u n i t y w e h a v e a v e r y g o o d i d

e a a b o u t i t s g e n d e r p r o p o r t i o n s .

C o n s i s t e n t w i t h f i g u r e s f r o m o t

h e r s w h i c h s u g g e s t t h e p o p u l a t i

o n o f h a c k e r s i s o v e r w h e l m i n g l y

m a l e , o n l y 9 p e r c e n t o f t h o s e s u

r v e y e d b y S c h e l l e t a l ( 2 0 0 0 ) w e r

e f e m a l e ( s e e f o r i n s t a n c e , T a y

l o r 1 9 9 9 ; G i l b o a 1 9 9 6 ) . A l s o c o n

s i s t e n t w i t h o l d e r f i n d i n g s , m o s

t h a c k e r s s u r v e y e d w e r e u n d e r t h

e a g e o f 3 0 , w i t h a m e a n a g e o f

a b o u t 2 7 , a m o d e o f 2 4 a n d a m e d

i a n o f 2 5 ( s e e f o r i n s t a n c e , S R I

1 9 9 4 ) . T h e m o t i v a t i o n f o r h a c k i

n g v a r i e s b u t a s i g n i f i c a n t p r o p

o r t i o n o f h a c k e r s s u r v e y e d i n d i

c a t e d i n n o c u o u s r e a s o n s f o r t h e i

r b e h a v i o r . 3 6 p e r c e n t s a i d t h e y

h a c k t o a d v a n c e n e t w o r k , s o f

t w a r e , a n d c o m p u t e r c a p a b i l i t i e

s , 3 4 p e r c e n t c l a i m e d t h e y h a

c k t o s o l v e p u z z l e s o r c h a l l e n

g e s , a n d 5 p e r c e n t s a i d t h e y

h a c k t o m a k e s o c i e t y a b e t t e

r p l a c e t o l i v e . I f w e c a n b e l

i e v e t h e s e n u m b e r s t h e o v e r w h e

l m i n g m a j o r i t y o f h a c k e r s a r e h

a r m l e s s . I t i s t r u e , i n g a i n i n g u

n a u t h o r i z e d a c c e s s t o c o m p u t e r

s y s t e m s t h e y p o s e p o t e n t i a l s e c

u r i t y t h r e a t s . B u t t h e y d o n o t t

h e m s e l v e s c a u s e d a m a g e . O f c o u r s

e , t o t h e e x t e n t t h a t t h e y s h a r e

s e c u r i t y h o l e s w i t h o t h e r l e s s

r e s p o n s i b l e m e m b e r s o f t h e h a c k

i n g c o m m u n i t y t h e y i n d i r e c t l y

j e o p a r d i z e c o m p u t e r u s e r s ; b u t

i t i s u n c l e a r t o w h a t e x t e n t g o o d

 h a c k e r s d o t h i s .
5

A m o n g t h e s

e g o o d h a c k e r s t h e r e i s s o m e p a

r t o f t h e p o p u l a t i o n t h a t p e r f o r

m s a q u e s t i o n a b l y v a l u a b l e s e r

v i c e t o c o m p u t e r u s e r s . S o m e o f

t h e s e h a c k e r s r e p o r t s e c u r i t y h

o l e s t o p r o g r a m m e r s a n d s y s t e m s

o p e r a t o r s o f c o m p u t e r s y s t e m s w h e

r e t h e y f i n d

I n t h e e a r l y

1 9 8 0 s a n e l i t e g r o u p o f h a c k e r s

c a l l i n g t h e m s e l v e s t h e I n n e r C

i r c l e , f o r m e d t o p a s s n e w i n f

o r m a t i o n g l e a n e d f r o m t h e i r h a

c k i n g a c t i v i t i e s b e t w e e n o n e a

n o t h e r w i t h o u t m a k i n g t h i s i n f o r

m a t i o n a v a i l a b l e t o u n e t h i c a l

h a c k e r s w h o w o u l d a b u s e i t .

se c ur it y w e a k n es se s. T hi s in fo r m at io n c a n th e n

b e u se d to p at c h h ol es or st re n gt h e n v ul n er a bi lit ie

s, pr e v e nt in g in tr u si o n b y le ss b e n e v ol e nt h a c

k er s. N e v er th el es s, w e sa y q u es ti o n a bl e h er e b e

c a u se th e a d vi c e of th es e h a c k er s (a s w el l as th e

h a c k it se lf ) is u n s ol ic it e d. A c c or di n g to o n e p

o p ul ar h a c ki n g a n al o g y, it is a bi t as if s o m e o n

e br o k e in to y o ur h o u se , di d n t st e al a n yt hi n g, b

ut le ft y o u a n ot e te lli n g y o u th at y o ur al ar m s y st e

m is w e a k a n d y o ur w in d o w s u n pr ot e ct e d s o y

o u s h o ul d lo o k in to h a vi n g th at fi x e d. W hi le in o n

e se n se y o u ar e b et te r of f b e c a u se of it, in a n ot h er

se n se y o u m a y b e ju st if ia bl y o ut ra g e d. U nf or tu n at

el y, d at a o n w h at pr o p or ti o n of th e g o o d h a c k er

s ar e b e n e v ol e nt in th is w a y is n ot a v ai la bl e.
6

W e

d o k n o w th at s o m e s u c h h a c k er s e xi st b e c a

u se in si d er s at s o m e c o m p a ni es h a v e hi nt e d th at

c er ta in p at c h es th e y h a v e re le as e d ar e in re s p o n

se to g o o d h a c k er ti p s li k e th es e. C o m pl ic at in

g th e is s u e of g o o d h a c k er s is th e fa ct th at s o m e

g o o d h a c k er s ar e fa r m or e a d a m a nt th at v ul n er

a bl e pr o gr a m m er s a n d s y st e m s o p er at or s re s p

o n d to th ei r a d vi c e th a n ot h er s. S o m e g o o d h a

c k er s n ot o nl y in fo r m or g a ni z at io n s of se c ur it y w

e a k n es se s b ut al s o th re at e n to re le as e th e h ol e th e

y v e fo u n d u nl es s a ct io n is ta k e n to c or re ct th e pr o

bl e m . T hi s is as if s o m e o n e br o k e in to y o ur h o u

se a n d to ld y o u th at if y o u d o n t b u y a b et te r al ar

m th e y w ill in fo r m th e cr i m in al c o m m u ni ty a b o ut h

o w it m a y pl u n d er y o u. G o o d h a c k er s a p p e

ar to b e th e m o st c o m pl ic at e d to d e al w it h b e c a u

se th e y ar e n ot m ot iv at e d b y b as e h u m a n d es ir

es li k e m o n e y or fa m e. F or tu n at el y, b e c a u se th e y

p o se th e w e a k es t th re at a n d ar e li k el y re s p o n si

bl e fo r th e le as t d a m a g e to in di vi d u al s a n d b u si

n es se s a m o n g th e h a c ki n g c o m m u ni ty , w e lo se

re la ti v el y lit tl e at le as t in te r m s of fe lt
6

E ig ht p er c

e nt of th o se s ur v e y e d b y S c h el l et al (2 0 0 0) sa id th

at th e y h a c k to e x p o se w e a k n es se s in or g a ni z

at io n s or th ei r pr o d u ct s. It is u n cl e ar fr o m th is , h

o w e v er , w h et h er th e re as o n b e hi n d th is m ot iv e of

th es e re s p o n d e nt s is b e n e v ol e nt or m al e v ol e nt

1 1

c o st s b y th is d e ar th of u n d er st a n di n g. F ar m or e i

m p or ta nt fr o m th e st a n d p oi nt of se c ur it y ar e b a d h

a c k er s th o se w h o p er fo r m d a m a gi n g a ct s in or

d er to g ai n p e er re c o g ni ti o n a n d th o se w h o p er fo

r m s u c h a ct s fo r p er s o n al pr of it.

4 B a d H a c

k e rs : H a c ki n g fo r N ot o ri et y T h e s ur v e y c o

n d u ct e d b y S c h el l et al (2 0 0 0) s u g g es ts th at o nl

y 1 1 p er c e nt of re s p o n d e nt s ar e m al e v ol e nt ly m

ot iv at e d. H o w e v er s m al l th e pr o p or ti o n of b a d h

a c k er s m a y b e, th e y ar e th e m o st i m p or ta nt to c o

n si d er b e c a u se th e y ar e re s p o n si bl e fo r th e c o

st ly d a m a g e in fl ic te d b y h a c k er s e a c h y e ar .

C o nt ra ry to ot h er w or k w hi c h s u g g es ts th at a s u b st

a nt ia l pr o p or ti o n of h a c k er s ar e m ot iv at e d b y fa

m e or re p ut at io n in si d e th e h a c ki n g c o m m u ni ty ,

n o n e of th o se s ur v e y e d b y S c h el l et al n ot e d th

is re as o n as th ei r m ot iv at io n. It is di ff ic ul t to sa y w h y th

is is , b ut th is re s ul t is e vi d e nt ly c o u nt er to ot h er e x

a m in at io n s of h a c k er m ot iv at io n. F a m e or p e er re c

o g ni ti o n ra n k s a m o n g th e m o st pr o m in e nt h a c

k er m ot iv at io n s ci te d b y se c ur it y e x p er ts a n d h a

c k er al ik e, as w el l as in ot h er di sc u ss io n s of h a c k er p

s y c h ol o g y (s e e fo r in st a n c e, Z o et er m e er 1 9 9

9; B la k e 1 9 9 4; St er li n g 1 9 9 1; H a n n e m yr 1 9 9 9;

Pl at t 1 9 9 7; T h o m as 2 0 0 2; V er to n 2 0 0 2) .7 A s D

e n ni n g h as p oi nt e d o ut , A lt h o u g h th e st er e ot

y p e i m a g e of a h a c k er is s o m e o n e w h o is s o

ci al ly in e pt a n d a v oi d s p e o pl e in fa v o ur of c o m p

ut er s, h a c k er s ar e m or e li k el y to b e in it fo r th e s o

ci al as p e ct s. T h e y li k e to in te ra ct w it h ot h er s o n b

ul le ti n b o ar d s, th or o u g h el e ct ro ni c m ai l, a n d in p

er s o n. T h e y s h ar e st or ie s, g o ss ip , o pi ni o n s, a n

S o m e ot h er h a c k er m ot iv at io n s s u c h as

th e f e el in g of p o w er a n d a bi lit y to s h ar e k n o

w le d g e c a n al s o b e c ol la p se d in to c o n si d er at

io n s of fa m e. F or in st a n c e, th e m or e n ot or io u s a h a

c k er b e c o m es , th e gr e at er h er fe el in g of p o w er . Si

m il ar ly , h er a bi lit y to s h ar e k n o w le d g e w ill in cr e

as e w it h th e a m o u nt of n e w in fo r m at io n s h e c ol le

ct s a n d di ss e m in at es , w hi c h w ill al s o in cr e as e h er

fa m e.

1 2

in fo r m at io n; w or k o n pr oj e ct s to g et h er ; te a c h y o

u n g er h a c k er s; a n d g et to g et h er fo r c o nf er e n c

es a n d s o ci al iz in g (1 9 9 2: 6 0) . B ig g er , m or e di ff

ic ul t, m or e d e v as ta ti n g, or n e w ty p es of h a c k s br in

g th ei r cr e at or s n ot or ie ty a m o n g m e m b er s of th ei r

u n d er gr o u n d c o m m u ni ty .8 W or d of a h a c k er s e

x pl oi ts c a n b e s pr e a d a m o n g c o m m u ni ty m e m

b er s in a n u m b er of w a y s. Fi rs t, h a c k er s m a y s pr

e a d th is in fo r m at io n b y th ei r o w n w or d of m o ut h, re

p e at in g it to fe ll o w h a c k er s or ri v al g a n g s w h o

re p e at th is to ot h er c o m m u ni ty m e m b er s a n d s o o

n. S e c o n d, h a c k er s m a y p u bl ic iz e th ei r re s p o

n si bi lit y fo r a ct s of h a c ki n g o n W e b si te s, b ul le ti

n b o ar d s, or o n h a c k er em ai l li st s li k e B u g T

ra q, 9 r o ot s h el l, R I S K S D ig es t, a n d V ul n

W at c h. In th es e vi rt u al s p a c es h a c k er s ta k e cr e

di t fo r d a m a g e d o n e, m a k e in fo r m at io n or s of t

w ar e th at th e y h a v e st ol e n a v ai la bl e to ot h er h a c

k er s, or s h ar e th ei r n e w es t m et h o d s of h a c ki n g

or h a c ki n g pr o gr a m s th e y h a v e cr e at e d w it h ot

h er m e m b er s of c o m m u ni ty s o th at th es e in di vi d u al

s m a y c o n s u m e th e m . I n e a c h of th es e c as es

h a c k er s id e nt if y th e m se lv es as th e in di vi d u al s b e

hi n d n e w h a c k s b y p o st in g in fo r m at io n u n d er

th ei r h a n dl es p se u d o n y m s c h o se n b y h a

c k er s a n d h a c k er g a n g s to gi v e th e m id e nt it y

w it hi n th e h a c ki n g c o m m u ni ty a n d y et re ta in th ei

r a n o n y m it y fr o m a ut h or iti es .10 P se u d o n y m s se

le ct e d b y h a c k er s te n d to th e m e m or a bl e a n d dr

a m at ic , fo r in st a n c e, D ar k D a nt e (a k a K e vi n

P o ul se n) , C a pt ai n Z a p (a k a Ia n M ur p h y) , T

h e N ig ht st al k er (a le a di n g m e m b er of th e in fl u e nt

ia l h a c k er gr o u p th e C ul t
8

W e s h o ul d al s o

n ot e th at th e g e n er al p u bl ic s fa sc in at io n w it h th e m

y st er io u s h a c ki n g u n d er w or ld h as h el p e d to fu el

fa m e fo r m e m b er s of th e h a c ki n g c o m m u ni ty as a

w h ol e. N u m er o u s p o p ul ar m o vi es , fo r in st a n c e,

gl or if y h a c ki n g, c o nt ri b ut in g to th is p h e n o m e n

o n. W a r G a m e s, T h e N et , H a c k e r s, S n e a k e

r s a n d ot h er s al l pr o vi d e c as es in p oi nt .
9

In te re st

in g, B u g T ra q w as re c e nt ly p ur c h as e d b y th e c o m

p ut er se c ur it y fi r m S y m a nt e c fo r $ 7 5 m ill io n.
10

N ot al l h a c k er s id e nt if y th e m se lv es b y th ei r h a n

dl es al l of th e ti m e. M o st h a c k er s, h o w e v er , d o s

o m o st of th e ti m e. T h e s ur v e y c o n d u ct e d b y S

c h el l et al (2 0 0 0) , fo r in st a n c e, in di c at es 6 3 p er c

e nt of re s p o n d e nt s ty pi c al ly u se th ei r h a n dl es w h

e n h a c ki n g. T hi s fi n di n g is al s o c or ro b or at e d b

y M e y er (1 9 8 9) . O b vi o u sl y, to s o m e e xt e nt th e u

se of h a n dl es w ill d e p e n d u p o n th e ill e g al it y of th

e a ct iv it y. B a d h a c k er s, it is sa fe to as s u m e, re ly u p

o n th ei r h a n dl es m or e th a n g o o d h a c k er s d o.

1 3

of D e a d C o w s ), et c. a fa ct or th at ai d s h a c k er s a

bi lit y to g e n er at e n ot or ie ty w it hi n th e c o m m u ni ty w

h e n th e y p o st n e w in fo r m at io n. T h e sa m e is tr u e

of n a m es se le ct e d b y h a c ki n g g a n g s, fo r e x a m

pl e, W or ld of H el l, B a d A ss M ot h er F * c k er s,

C ir cl e of D e at h, F ar m er s of D o o m , a n d s o o n.

11

T h e fa m eb as e d m ot iv at io n of m a n y b a d h a c k

er s h el p s to e x pl ai n w h y pr of a n e, a b s ur d a n d o

v er st at e d g a n g n a m es a n d h a n dl es p er v a d e th

e h a c ki n g u n d er gr o u n d. H a c k er s a n d h a c

k er g a n g s th at g e n er at e c el e br it y st at u s fo r th ei

r h a c k s c a n al s o se t tr e n d s in si d e th e h a c ki

n g c o m m u ni ty . F or in st a n c e, t w o of h a c ki n g hi

st or y s m o st fa m o u s h a c k er g a n g s, th e L e gi o n

of D o o m a n d th e M as te rs of D e c e pt io n, s p ar k e d a

tr e n d w h er e b y s u b se q u e nt h a c k er s a n d g a

n g s cr e at e d h a n dl es b as e d o n c o m ic b o o k c h

ar a ct er s. Si m il ar ly , th e 4 1 4 g a n g o n e of th e fi rs

t h a c k er g a n g s ra id e d b y a ut h or iti es se t th e tr

e n d of cr e at in g h a n dl es b as e d o n n u m b er s ( S c

h el l et al 2 0 0 0: 5 8) . T h e u n d er gr o u n d w or ld of h

a c k er s al s o h as it s o w n p o p ul ar m e di a th at p u bl

is h es h a c ki n gre la te d b o o k s, n e w s p a p er s, a n

d m a g a zi n es or ezi n es . S o m e e x a m pl es of th e la tt

er in cl u d e 2 6 0 0 : T h e H a c k e r Q u a rt e rl y, B l

a c k H a c k e r M a g a zi n e, C o m p u te r U n d e r g

r o u n d D i g e st , P h r a c k M a g a zi n e, H a c k -

T ic M a g a zi n e, T h e H a c k a d e m y J o u r n a l, H

a c k e r Z i n e, H . A . C . K , B o o tl e g g e r M a g

a zi n e, a n d B i n a r y R e v o l u ti o n to n a m e a fe

w . In si d e th es e o ut le ts h a c k er s p u bl is h h o w to

 ar ti cl es (e .g ., h o w to d ef ra u d a n A T M m a c hi n e)

a n d s h ar e n e w in fo r m at io n th e y h a v e gl e a n e

d fr o m th ei r m o st re c e nt h a c ki n g e x pl oi ts . A rt ic

le s a n d b o o k s ar e p u bl is h e d u n d er th e a ut h o

r s h a n dl e a n d gi v e w el lp u bl is h e d h a c k er s

a c c es s to la rg e a u di e n c es w h o th u s c o m e to k n

o w c er ta in h a c k er s as th e b es t in th ei r ar e a, in cr e

as in g th e a ut h o r s fa m e in si d e th e c o m m u ni ty . O

n e of th e la rg es t of th es e p u bl ic at io n s P h r a c k

e v e n c o nt ai n s a se ct io n c al le d P ro P hi le s in

11

F or e x a m pl es of ot h er h a c k er g a n g n a m es se e Pl

at t (1 9 9 7) . 1 4

w hi c h fa m o u s h a c k er s, re ti re d le g e n d s, or ri si n

g st ar s in th e h a c ki n g c o m m u ni ty ar e pr of il e d a n

d in te rv ie w e d fo r re a d er s, w it h s p e ci al hi g hl ig ht s

o n th ei r bi o gr a p hi es a n d m o st i m pr es si v e h a c k

s. In th is w a y, o ut le ts li k e P h r a c k s er v e d as th e m

e a n s to le gi ti m at e h a c k er s fo r th e u n d er gr o u n

d .. . pr es e nt in g th e m as c el e br at e d h er o es to th e re a

d er s th at m a d e u p th e u n d er gr o u n d ( T h o m as

2 0 0 2: 1 4 0) . B e c o m in g fa m o u s th ro u g h th es e c

h a n n el s h as it s b e n ef it s fo r h a c k er s w h o c a

n g e n er at e st ar d o m in th e di gi ta l u n d er gr o u n d. S

o m e s u bc o m m u ni ti es w it hi n th e h a c ki n g u n d

er w or ld w ill o nl y al lo w re la ti v el y w el lk n o w n h a c

k er s in . O n e th e o n e h a n d th is gi v es fa m o u s h a

c k er s w h o ar e a d m itt e d gr e at er e x p o s ur e in si d

e th e h a c ki n g c o m m u ni ty , a n d o n th e ot h er h a

n d it gi v es th e m a c c es s to a d di ti o n al in fo r m at io n

th at m a y o nl y b e s h ar e d w it hi n th e gr o u p. P e er re

c o g ni ti o n al s o e n a bl es h a c k er s to e nt er el it e h

a c k er g a n g s th at ar e w el l k n o w n a n d hi g hl y re

s p e ct e d b y ot h er m e m b er s of th e c o m m u ni ty . A

s o n e h a c k er p ut it: P e er re c o g ni ti o n w as v er y

i m p or ta nt , w h e n y o u w er e re c o g ni z e d y o u h

a d a c c es s to m or e .. . m a n y p e o pl e h a c k e d fo

r fa m e as w el l as th e ru s h. A n y o n e w h o g et s a n in

fo r m at iv e ar ti cl e in a m a g a zi n e (i .e ., P h r a c k, N

I A , et c. ) c a n b e a d m itt e d to b ul le ti n b o ar d s. 1

W h e n d o n e ri g ht , c el e br it y in th e h a c k er u

n d er gr o u n d c a n e v ol v e in to o ut ri g ht c ul t st ar st

at u s as ot h er h a c k er s se e k to i m it at e a n ot or io u s

h a c k er s m et h o d s or vi e w hi m as a le a d er w it hi n th

ei r c o m m u ni ty . S u c h w as th e c as e, fo r in st a n c e,

w it h C a p n C ru n c h, w h o se n a m e is fo re v er li n k e

d to th e pr a ct ic e of p hr e a ki n g a n d w h o se bi g di sc o

v er y h as le d to , a m o n g ot h er th in g s, o n e of th e la rg

es t h a c k er p u bl ic at io n s 2 6 0 0 w hi c h is n a m

e d af te r hi s di sc o v er y.

12

Q u ot e fr o m a h a c k er

s e m ai l in te rv ie w w it h T a yl or (1 9 9 9: 5 9) . 1 5

 C o n d or , a k a K e vi n M it ni c k, o bt ai n e d si m il ar

s u p er st ar st at u s in si d e th e h a c ki n g u n d er gr o u

n d a n d g e n er at e d a c ul tli k e fo ll o w in g of hi s o

w n. M it ni c k, ar re st e d n u m er o u s ti m es fo r hi s h a c

ki n g a ct iv iti es , n ot o nl y g ai n e d n ot or ie ty w it hi n th

e h a c ki n g s u bc o m m u ni ty , b ut b e c a m e w el l

k n o w n to th e o ut si d e w or ld as w el l. H is pi ct ur e a n d

st or y a p p e ar e d th ro u g h o ut th e c o u nt ry in n e w s

p a p er s a n d m a g a zi n es a n d M it ni c k to ld hi s st or

y o n te le vi si o n s 6 0 M i n u te s. In a d di ti o n to se rv in

g as th e b as is fo r n u m er o u s b o o k s, M it ni c k s h a

c ki n g h el p e d in s pi re u se of th e te r m C y b er p u n

k in p o p ul ar c ul tu re , w hi c h w as fa m o u sl y u se d p

ar tl y in re fe re n c e to M it ni c k b y a ut h or s/ jo ur n al is ts

K at ie H af n er a n d J o h n M ar k of f (1 9 9 1) .13 F ol lo w in

g M it ni c k s la st ar re st in 1 9 9 5 a gr o u p of hi s h a c k

er c o m m u ni ty fo ll o w er s pr ot es te d hi s tr ia l in th e la te

1 9 9 0 s. T hi s gr o u p of h a c k er s, w hi c h h a d or g a

ni z e d it se lf in to a g a n g c al le d H a c ki n g fo r G ir

li es , br o k e in to th e N e w Y o r k T i m e s W e b p a g

e a n d cr e at e d a m es sa g e th e T i m e s c o ul d n ot re

m o v e, e x o n er at in g M it ni c k fo r al l th e si te s re a d

er s. S el e ct h a c k er s g et th e re p ut at io n a m o n g th

ei r c o h or ts as el it e th e cr e a m of th e u n d er gr o

u n d. T h es e in di vi d u al s ar e of te n g a n g le a d er s li

k e L e x L ut h er (f or m er h e a d of th e L e gi o n of D

o o m ), or P hi b er O pt ik (a fo r m er le a d er of th e M as te

rs of D e c e pt io n) w h o w as e v e n h er al d e d b y N e w

Y o r k M a g a zi n e as o n e of th e ci ty s s m ar te st 1 0 0

p e o pl e. T h es e h a c k er s ar e th e m o st in n o v at iv

e in th e u n d er gr o u n d a n d ar e re s p o n si bl e fo r m

a ki n g h a c ki n g pr o gr a m s p u bl ic ly a v ai la bl e to th

e h a c ki n g c o m m u ni ty at la rg e. H a c ki n g pr o gr a m

s c a n b e d o w nl o a d e d fr o m h a c k er b ul le ti n b

o ar d s, fo r in st a n c e, a n d u se d w it h m in i m al k n o

w le d g e a n d ef fo rt to h a c k v ar io u s s y st e m s.
13

W ill ia m G ib s o n, cr e di te d w it h c oi ni n g th e te r m c

y b er s p a c e, h el p e d s p a w n th e sc ie n c e fi ct io

n g e nr e n o w c al le d c y b er p u n k in th e 1 9 8 0

s (s e e fo r in st a n c e, G ib s o n 1 9 8 4) . S o m e b el ie

v e th at th is g e nr e c o nt ri b ut e d si g ni fi c a nt ly to th e

s h a p e of h a c ki n g c ul tu re b y gl or if yi n g c y b er a

nt ih er o es (s e e fo r in st a n c e, T h o m as 2 0 0 2) .

1 6

M o st h a c k er s, of c o ur se , d o n ot re a c h th is le v el of

fa m e. T h ei r in fe ri or pr o gr a m m in g s ki ll s pr e v e nt th

e m fr o m cr e at in g ef fe ct iv e h a c ki n g pr o gr a m s, a n

d in st e a d m o st of th ei r e n er gi es ar e d e v ot e d to fi n

di n g a n d re p or ti n g re la ti v el y s m al l or al re a d y k

n o w n se c ur it y h ol es to fe ll o w h a c k er s, or si m pl y d

o w nl o a di n g in fo r m at io n a n d pr ef a br ic at e d pr o gr

a m s li k e T ri n 0 0, T ri b al Fl o o d N et w or k, or

 St a c h el dr a ht , d e v el o p e d b y s u p er io r h a c

k er s a n d u si n g th es e to at ta c k s y st e m s.
14

T h es e

s cr ip t ki d di es , as th e y ar e c al le d, ar e u nl ik el y to g ai

n fa m e in th e la rg er h a c k er c o m m u ni ty fo r th ei r h a

c ki n g s ki ll s, b ut s o m e m a y g ai n n ot or ie ty fo r th e

d a m a g e th e y c a u se u si n g th e pr o gr a m s a n d in

fo r m at io n cr e at e d b y m or e el it e h a c k er s. It re q ui

re s lit tl e h a c ki n g pr o w es s to cr as h A m a z o n. c o m

, fo r in st a n c e, as w as d e m o n st ra te d b y M af ia b o

y, th e 1 5 y e ar ol d sc ri pt ki d di e w h o se h a c ki n g

a nt ic s c o st s o m e of th e In te rn et s la rg es t v e n d or s

$ 1. 7 bi lli o n F e br u ar y of 2 0 0 0. M o st fa m edr iv e n

h a c k er s e x pl ic itl y es c h e w m o n et ar y g ai n as p ar

t of th ei r h a c ki n g e x p e di ti o n s. T h e y h a v e c

o nt e m pt fo r pr of it dr iv e n h a c k er s w h o o p er at e

or w or k fo r c o m p ut er se c ur it y c o m p a ni es , or ot h er

la rg e c o m p ut er re la te d c or p or at io n s, as th o u g h th

es e in di vi d u al s w er e b e n e at h th e m . F a m edr iv e

n h a c k er s e v e n h a v e a s p e ci al , d er is iv e n a

m e fo r th es e h a c k er s th e y c al l th e m M ic ro se rf

s. T hi s n e g at iv e re a ct io n to pr of it dr iv e n h a c ki

n g h as m u c h to d o w it h th e c ul tu ra l n or m s of th e fa

m edr iv e n h a c ki n g c o m m u ni ty , w hi c h in la rg e p

ar t b el ie v es th at bi g b u si n es se s ar e u n sc ru p ul o u s

a n d vi e w s

14

O th er e x a m pl es of pr o gr a m s cr e at

e d b y h a c k er s th at c a n b e d o w nl o a d e d a n d

u se d b y vi rt u al ly a n y o n e to h a c k s y st e m s in cl

u d e B la c k O ri fi c e cr e at e d b y th e C ul t of D e

a d C o w s a n d L 0 p ht C ra c k cr e at e d b y L 0 p

ht , a n d W in N u k e al l u se d to h a c k M ic ro s of

t W in d o w s. A si m il ar pr o gr a m c al le d A O H el l c a

n b e u se d to h a c k A O L . In 1 9 9 5, D a n F ar m er a n

d W ie st e V e n e m a re le as e d th ei r S e c ur it y A d m

in is tr at or T o ol fo r A n al y zi n g N et w or k s, a k a S A

T A N , a n a ut o m at e d pr o gr a m to b e u se d b y s y st

e m s a d m in is tr at or s to fi n d fl a w s in th ei r se c ur it y.

T hi s pr o gr a m c o ul d al s o b e u se d, h o w e v er , b y

lo w le v el h a c k er s to h a c k v ul n er a bl e s y st e m

s, a n d th u s th er e w as gr e at c o n c er n it w o ul d le a d

to m a n y pr o bl e m s. T o d at e, it h as n ot c a u se d th e h

ar m e x p e ct e d b y m a n y.

1 7

s u c h e nt iti es as s u b or di n at in g th e cr e at iv e s ki ll s

of th e h a c k er to th e gr e e d y c or p or at e w or ld .

4.

1 T h e E c o n o m ic s of F a m eD ri v e n H a c ki n g

T h e fa m eb as e d dr iv e of m a n y h a c k er s h as p ar ti

c ul ar i m pl ic at io n s fo r h o w th is se g m e nt of th e h a

c k er m ar k et lo o k s. T h e c oi n of th e re al m fo r fa

m edr iv e n h a c ki n g is , of c o ur se , fa m e. H o w w e m

o d el th is m ar k et th er ef or e di ff er s fr o m tr a di ti o n

al m ar k et s in w hi c h m o n e y dr iv es pr o d u ct io n a n d

pr ic e a dj u st s to e q ui li br at e s u p pl ie rs a n d d e m a

n d er s. T h e fa m edr iv e n h a c ki n g m ar k et c o n

si d er s th e re la ti o n s hi p b et w e e n fa m e a n d th e q

u a nt it y of h a c ki n g. It m a p s s u p pl y a n d d e m

a n d ( w hi c h as w e w ill se e b el o w , is n ot d e m a n

d in th e c o n v e nt io n al se n se ) in fa m e/ q u a nt it y of h

a c ki n g s p a c e. O n o n e si d e of th is m ar k et ar

e th e pr o d u c er s of h a c k s w h o d es ir e fa m e. T h e

s u p pl y sc h e d ul e fo r th es e h a c k er s h as th e c o n

v e nt io n al p o si ti v el y sl o p e d s h a p e. W h e n h a

c k er s st a n d to b e c o m e m or e fa m o u s or b et te r k

n o w n w it hi n th e h a c k er c o m m u ni ty fo r h a c ki n

g, th e y s u p pl y a gr e at er q u a nt it y of h a c ki n g ( w

hi c h m a y b e e x pr es se d in te r m s of th e in v e nt iv e n

es s of h a c k s, th e se v er it y of h a c k s, et c. ). W h e n th

e y st a n d to re c ei v e le ss fa m e or n ot or ie ty fo r h a c ki

n g, th e y ar e w ill in g to s u p pl y le ss . T h e p o si ti o n

of th is s u p pl y c ur v e is d et er m in e d la rg el y b y th e c

o st of h a c ki n g. H a c k er s fa c e a m o d er at e in iti al fi

x e d c o st of h a c ki n g, w hi c h in m o st c as es c o m es d

o w n a c o m p ut er , a te le p h o n e li n e (o r c a bl e) ,

a n d a m o d e m . F or m or e s o p hi st ic at e d at ta c k s

fi x e d c o st s m a y al s o in cl u d e tr ai ni n g in b as ic pr

o gr a m m in g a n d c o m p ut er la n g u a g es , th o u g h

m a n y ki n d s of d e v as ta ti n g h a c k s re q ui re lit tl e

s p e ci al iz e d tr ai ni n g at al l. H a c k er s v ar ia bl e c o

st s c o n si st pr i m ar il y of th e c o st of el e ct ri ci ty .

1 8

T h e ot h er pr i m ar y d et er m in a nt of th e s u p pl y c ur v

e s p o si ti o n is th e n u m b er of h a c k er s in th e in d u

st ry . T hi s p o p ul at io n is c o n st ra in e d si g ni fi c a nt

ly b y th e n u m b er of p e o pl e w h o d es ir e fa m e in th e

h a c k er u n d er gr o u n d (y o ur si st er , fo r in st a n c e,

is pr o b a bl y c a p a bl e of h a c ki n g b ut d o es n ot d es

ir e to b e fa m o u s a m o n g h a c k er s a n d s o d o es

n ot ), w hi c h is re la ti v el y s m al l. T hi s fa ct or th e p o

p ul at io n of in di vi d u al s w h o d es ir e to e nt er th e H a

c k er H al l of F a m e e n d s u p b ei n g th e li m iti n

g fa ct or d et er m in in g th e p o si ti o n of th e s u p pl y c ur

v e fo r h a c ki n g. T h u s al th o u g h vi rt u al ly a n y o

n e c a n c a u se a lo t of d a m a g e as a h a c k er b e c

a u se it is s o c h e a p, v er y fe w d o s o b e c a u se v er

y fe w d es ir e th e re w ar d it of fe rs fa m e a m o n g h a c

k er s. T h e ot h er si d e of th is m ar k et is u n u s u al in

th at it d o es n ot c o n si st of d e m a n d er s in th e u s u al

se n se . W h e n h a c k er s s u p pl y m or e h a c k s th e

re st of th e h a c ki n g c o m m u ni ty b e c o m es h a p pi er

. T hi s m a y b e b e c a u se it gi v es th e m a c c es s to n

e w in fo r m at io n, n e w h a c ki n g m et h o d s, a n d s of

t w ar e, w hi c h th e y m a y v al u e fo r th e p ur p o se s of

u n d er ta ki n g th ei r o w n h a c ki n g a ct iv iti es or b e c

a u se th e y vi e w th es e th in g s as g o o d s in a n d of th e

m se lv es . M e m b er s of th e h a c ki n g c o m m u ni ty m a

y vi e w a ct s of h a c ki n g as e x pr es si v e of th ei r st a n

d a g ai n st c or p or at e e nt iti es or th ei r b el ie f th at al l in

fo r m at io n o u g ht to b e p u bl ic ly a v ai la bl e a n d f re

e. 1
5

O th er s m a y si m pl y b e m al ic io u s a n d e nj o y

se ei n g th e se c ur it y of bi g c or p or at io n s, fo r in st a n c

e, je o p ar di z e d, or th e y m a y vi e w h a c k at ta c k s as

in di re ct ly se rv in g th ei r p ol iti c al e n d s.
16

15

A c

or e c o m p o n e nt of th e h a c k er c o d e as cr ib e d

to b y s o m a n y h a c k er s is th at a c c es s to c o m p ut

er s a n d al l in fo r m at io n s h o ul d b e u nl i m it e d a

n d fr e e. F or a m or e d et ai le d d es cr ip ti o n of th is c o d

e se e L e v y (1 9 9 4) .
16

M a n y h a c k er s te n d to b e

st ro n gl y le ft le a ni n g a n d ar e a d a m a nt ly a g ai n st

 c o m m o di fy in g in fo r m at io n. T hi s p ar tl y st e m s

fr o m th ei r ro ot s in th e Y ip pi e m o v e m e nt of th e 1

9 6 0 s a n d 1 9 7 0 s, w hi c h in a d di ti o n a d v o c at

in g p hr e a ki n g w as la rg el y a n c h or e d in th e le ft is t

p ol iti c al e n vi ro n m e nt a m o n g y o u n g p e o pl e of

th is ti m e (s e e fo r in st a n c e, St er li n g 1 9 9 2) .

I n th e fa m edr iv e n c as e th e h a c ki n g c o m m u ni ty

d o es n ot p a y fo r m or e h a c ki n g w it h a hi g h er pr ic

e. T h e pr o d u c er s of h a c k s d o n ot se e k m o n e y

a n d, as w e n ot e d pr e vi o u sl y, of te n e x pl ic itl y re je ct

m o n et ar y re w ar d. T h e y se e k fa m e. T hi s, in c o nj u n

ct io n w it h th e fa ct ot h er m e m b er s of th e h a c ki n g c

o m m u ni ty v al u e a d di ti o n al h a c ki n g, le a d s th e

m to c h e er m or e, s o to s p e a k, w h e n a d di ti o n al h

a c ki n g o c c ur s. A d di ti o n al c h e er in g is tr a n sl at

e d in to a d di ti o n al fa m e fo r th e s u p pl ie rs of h a c k

s. R at h er th a n d e m a n di n g th e o ut p ut of s u p pl ie rs

in th e u s u al se n se , th e ot h er si d e of th e fa m edr iv e n

 h a c k er m ar k et c o n si st s of in di vi d u al s (t h e h

a c ki n g c o m m u ni ty ) w h o re s p o n d to th e s u p pl

y of h a c ki n g w it h gr e at er or le ss er a p pl a u se . In th e

la n g u a g e of e c o n o m is ts , th e h a c ki n g c o m m

u ni ty h as a re a ct io n fu n ct io n, w hi c h s p e ci fi es h o w

th is c o m m u ni ty re a ct s w it h fa m e to v ar io u s q u a nt

iti es of h a c ki n g th at ar e s u p pl ie d b y h a c k er s. M or

e h a c ki n g is re w ar d e d w it h m or e a p pl a u se a n d

le ss w it h le ss a p pl a u se . T h e h a c ki n g c o m m u ni

ty s re a ct io n fu n ct io n is th er ef or e p o si ti v el y sl o p e

d li k e th e s u p pl y of h a c ki n g it se lf . T h e in te ra ct

io n of th e s u p pl y c ur v e fo r h a c ki n g a n d th e h a

c ki n g c o m m u ni ty s re a ct io n fu n ct io n cr e at es t w o

p o ss ib ili ti es , d e pi ct e d in Fi g ur e 1 a n d Fi g ur e 2.

R S F
H F

F S
H

R
F

F*

F*

Q*H Figure 1.

QH

Fi

2.

2 0

I n Fi g ur e 1 h a c k er s s u p pl y c ur v e is le ss el as ti c

th a n th e h a c ki n g c o m m u ni ty s fa m e re a ct io n fu n

ct io n. In Fi g ur e 2 th e re v er se is tr u e. T hi s m e a n s th at

in Fi g ur e 1 th e pr o d u c er s of h a c k s ar e m or e re s p

o n si v e (s e n si ti v e) to c h a n g es in fa m e th a n th e c

o m m u ni ty of re a ct in g h a c k er s, a n d in Fi g ur e 2 th e

c o m m u ni ty of re a ct in g h a c k er s is m or e re s p o n si

v e to c h a n g es in fa m e th a n ar e pr o d u c er s of h a c

k s. T h es e t w o p o ss ib ili ti es h a v e v er y di ff er e nt (a

n d in fa ct , c o nt ra di ct or y) i m pl ic at io n s fo r p ol ic y ai

m e d at re d u ci n g th e q u a nt it y of h a c ki n g in th e fa

m edr iv e n h a c ki n g in d u st ry . It is th er ef or e v er y i

m p or ta nt to c ar ef ul ly c o n si d er th e i m p a ct of e xi st in

g p ol ic y in e a c h c as e a n d, if p o ss ib le , id e nt if y w

hi c h c as e is m or e li k el y to pr e v ai l. W e a d dr es s th es

e is s u es in S e ct io n 6.

5 G r e e d y H a c k e rs : H

a c ki n g fo r P r of it A th ir d cl as s of h a c k er s is dr iv

e n b y th e pr of it p ot e nt ia l of h a c ki n g a ct iv it y. T h

es e h a c k er s ar e c o n c er n e d w it h d ol la rs n ot fa m

e a n d m a y c o m e fr o m ei th er p o ol of h a c k er s, g o

o d or b a d. F ro m th e b a d p o ol ar e h a c k er s w h o e

n g a g e in a ct iv iti es s u c h as cr e di t c ar d fr a u d, st e

al in g fr o m b a n k s, se lli n g se n si ti v e in fo r m at io n st

ol e n fr o m o n e c o m p a n y to a n ot h er , or th o se w h

o ar e hi re d b y ot h er cr i m in al s to d o th ei r bi d di n g fo

r a fe e. F ro m th e g o o d p o ol ar e h a c k er s w h o w or

k fo r or o p er at e c o m p ut er se c ur it y fi r m s. In 2 0 0 1

th is w as a $ 1. 8 bi lli o n in d u st ry in th e U ni te d St at es al o

n e ( W in gf ie ld 2 0 0 2) . T h es e h a c k er s se ll th ei r s

ki ll s at fi n di n g se c ur it y w e a k n es se s in c o m p ut er

s y st e m s a n d pr o gr a m s to g o v er n m e nt al in st it ut

io n s a n d pr iv at e b u si n es se s th at w a nt to st re n gt h e

n th ei r se c ur it y. T h es e or g a ni z at io n s hi re se c ur it y

fi r m e m pl o y e es to e n g a g e in si m ul at e d h a c k er

at ta c k s o n th ei r s y st e m s a n d th e n re p or t v ul n

er a bi lit ie s s o th at th e y m a y b e c or re ct e d. S o m e of

th e se c ur it y e x p er ts e m pl o y e d b y or ru n ni n g th es

e fi r m s ar e re fo r m e d h a c k er s

2 1

in di vi d u al s w h o u se d to h a c k ill e g al ly a n d ei th er

g a v e it u p v ol u nt ar il y or w er e c a u g ht a n d p u ni

s h e d fo r th ei r fo r m er cr i m es a n d s o tu rn e d to le gi

ti m at e h a c ki n g. S o m e e x a m pl es of th is in cl u d e th

e n o w d ef u n ct , C o m se c D at a S e c ur it y o p er at e

d b y fo ur fo r m er m e m b er s of th e L e gi o n of D o o m ,

a n d C ro ss b ar S e c ur it y o p er at e d b y M ar k A b e n

e (a k a P hi b er O pt ik ) a fo r m er le a d er of th e M as te rs of

D e c e pt io n. S u c c es sf ul e x a m pl es of re fo r m e d h a

c k er ru n se c ur it y fi r m s in cl u d e, fo r in st a n c e, S

h o pI P, ru n b y J o h n D ra p er (a k a C a p n C ru n c h) w

hi c h n o w h as m a d e a v ai la bl e a n e w fi re w al l it c

al ls th e C ru n c h b o x, a n d Ia n M ur p h y s (a k a C

a pt ai n Z a p) I A M S e c ur e D at a S y st e m s, In c.
17

ut of m is tr u st , m a n y b u si n es se s ar e re lu ct a nt to hi re

re fo r m e d h a c k er s to i m pr o v e th ei r se c ur it y. T hi

s w as ul ti m at el y re s p o n si bl e fo r w h y C o m se c w e

nt o ut of b u si n es s. M a n y ot h er or g a ni z at io n s, h o w

e v er , ar e es p e ci al ly dr a w n to th is fe at ur e of s o m e se

c ur it y fi r m s b e c a u se th es e fi r m s pr o vi d e th e m

o st re al is ti c h a c k at ta c k s o n th ei r s y st e m s. H a

c k er s ar e sa id to p o ss es s a u ni q u e w a y of th in ki n g

th at le a d s th e m to fi n d in v e nt iv e w a y s in to s y st e

m s th at n or m al hi re d h a n d s c o ul d n ot . M aj or c or p

or at io n s s u c h as A m er ic a n E x pr es s, D u n & B ra d st

re et a n d M o n sa nt o, h a v e al l hi re d s oc al le d t ig er

te a m s to te st th ei r s y st e m s fo r v ul n er a bi lit ie s ( R

o u s h 1 9 9 5: 6) . T h e m ar k et s fo r b ot h g o o d a

n d b a d pr of it m ot iv at e d h a c k er s lo o k c o n v e

nt io n al . Si n c e pr o d u c er s se e k m o n e y, th e s u p

pl y a n d d e m a n d fo r h a c ki n g ar e e x pr es se d in tr

a di ti o n al pr ic e/ q u a nt it y s p a c e a n d pr ic e e q ui

li br at es th e b e h a vi or of s u p pl ie rs a n d d e m a n d er

s. B ot h m ar k et s e x hi bi t p o si ti v el y sl o pi n g s u p

pl y c ur v es a n d n e g at iv el y sl o p e d d e m a n d c ur

v es . In b ot h c as es h a c k er s w ill pr o vi d e a la rg er q u

a nt it y of h a c ki n g if th e y ar e p ai d m or e a n d le ss if

th e y ar e p ai d le ss . Si m il ar ly , b ot h cr i m in al s a n d

le gi ti m at e
17

F or m er n ot or io u s h a c k er K e vi n P o

ul se n (a k a D ar k D a nt e) is n o w a n e di to ri al di re ct or fo

r S e c u ri ty F o c u s, a n o nli n e in fo r m at io n n et w

or k fo r c o m p ut er se c ur it y.

2 2

b u si n es se s th at hi re pr of it dr iv e n h a c k er s fo r th ei

r p ur p o se s d e m a n d s m al le r q u a nt iti es of h a c ki

n g w h e n h a c k er s c h ar g e m or e a n d d e m a n d

gr e at er q u a nt iti es w h e n h a c k er s c h ar g e le ss . T

h e pr ic e el as ti ci ti es of th es e c ur v es ar e d et er m in e d b

y th e st a n d ar d fa ct or s a n d th er e is n o re as o n to th in

k th at th e y w ill b e e xt re m e fo r ei th er th e s u p pl y of or

d e m a n d fo r h a c ki n g. Si m il ar ly , th e p o si ti o n of

th e th es e c ur v es ar e d et er m in e d b y th e ty pi c al el e m

e nt s in e a c h c as e, w it h th e e x c e pt io n of th e fa ct th

at c o st of h a c ki n g fo r b a d h a c k er s is hi g h er th a

n it is fo r g o o d h a c k er s b e c a u se th e fo r m er in v

ol v es th e p o ss ib ili ty of le g al p u ni s h m e nt w hi le th e la

tt er d o es n ot . It is th er ef or e re as o n a bl e to th in k th at th

e e q ui li br iu m pr ic e of h a c ki n g in th e m ar k et fo r b a

d pr of it dr iv e n h a c ki n g w ill b e hi g h er th a n it is in

th e m ar k et fo r g o o d pr of it dr iv e n h a c ki n g. T o th

e e xt e nt th at fo rpr of it h a c k er s ar e w ill in g to s u p pl

y th ei r se rv ic es to th e hi g h es t bi d d er , th e ra te s of re tu

rn o n b a d v er s u s g o o d pr of it dr iv e n h a c ki n g

w ill d et er m in e th e fl o w of h a c k er s b et w e e n th es e

t w o in d u st ri es th at c o m p et e fo r th ei r la b or . T hi

s c a n b e a g o o d th in g or a b a d th in g fr o m th e p er

s p e ct iv e of c o m p ut er se c ur it y. If g o o d fo rpr of it h

a c ki n g is m or e pr of it a bl e th a n b a d fo rpr of it h a c

ki n g, s o ci et y w in s o n t w o fr o nt s fr o m th e st a n d

p oi nt of se c ur it y. T h e n u m b er of b a d h a c k er s s hr

in k s e n d o g e n o u sl y a n d e x o g e n o u sl y. O n

th e o n e h a n d m or e h a c k er s w ill b e e m pl o y e d

in a ct iv iti es th at d o n ot in v ol v e ill e g al ly br e a ki n g in

to ot h er s s y st e m s, th u s re d u ci n g th e n u m b er of p

ot e nt ia ll y h ar m fu l h a c k er s o ut th er e. N ot o nl y th is

, b ut th e s u p pl y of pr of it dr iv e n h a c k er s n o lo n

g er e m pl o y e d in h ar m fu l h a c ki n g is a ct u al ly e m

pl o y e d in fi g ht in g th e at te m pt s of b a d h a c k er s at

te m pt in g to c a u se tr o u bl e. If , h o w e v er , b a d fo r-

pr of it

2 3

h a c ki n g is m or e lu cr at iv e, th e o p p o si te is tr u e. T h

e s u p pl y of h a c k er th re at s ri se s as th e b es t a n d br

ig ht es t fo rpr of it h a c k er s ar e re cr ui te d to th e d ar k si

d e.

6 P ol ic y I m pl ic at io n s T h e pr i m ar y fe d er

al la w in th e U ni te d St at es d es ig n e d to d e al w it h c o m

p ut er h a c k er s is th e C o m p ut er F ra u d a n d A b u se

A ct , or ig in al ly cr e at e d in 1 9 8 4 b ut m o di fi e d in 1 9

9 6 b y th e N at io n al In fo r m at io n In fr as tr u ct ur e P ro te

ct io n A ct . O ri gi n al ly th is la w a p pl ie d o nl y to g o v er

n m e nt c o m p ut er s b ut it h as s u b se q u e nt ly b e e n

e xt e n d e d to in cl u d e a n y c o m p ut er in v ol v e d in

in te rs ta te c o m m er c e. T hi s a ct pr o hi bi ts u n d er p e n

al ty of la w : a c c es si n g a pr ot e ct e d c o m p ut er w it h

o ut a ut h or iz at io n (o r e x c e e di n g a ut h or iz e d a c

c es s) , a c c es si n g a pr ot e ct e d c o m p ut er w it h o ut

a ut h or iz at io n a n d a c q ui ri n g in fo r m at io n, tr a n s

m itt in g a pr o gr a m , in fo r m at io n, c o d e or c o m m a n

d, a n d as a re s ul t of th at c o n d u ct , in te nt io n al ly c a

u si n g d a m a g e to a c o m p ut er s y st e m w it h o ut a

ut h or iz at io n (c o m p ut er vi ru se s) , tr af fi c ki n g in c o m

p ut er p as s w or d s or ot h er s u c h in fo r m at io n th ro u g

h w hi c h a c o m p ut er m a y b e a c c es se d w it h o ut a

ut h or iz at io n, a n d in te rs ta te th re at s fo r th e p ur p o se s

of e xt or ti o n to c a u se d a m a g e to a pr ot e ct e d c o m

p ut er ( R a y s m a n a n d B ro w n 2 0 0 0) . T h e a ct al

s o pr o hi bi ts a c c es si n g a pr ot e ct e d c o m p ut er w it

h o ut a ut h or iz at io n w it h th e in te nt to d ef ra u d w h er e

as a re s ul t of s u c h a ct io n th e h a c k er c a u se s d a

m a g e in e x c es s of $ 5, 0 0 0 o v er a o n ey e ar p er io

d. M o st vi ol at io n s of th is la w c a n re s ul t in u p to fi v

e y e ar s in pr is o n a n d $ 2 5 0, 0 0 0 in fi n es fo r th e fi

rs t of fe n se a n d u p to te n y e ar s in pr is o n a n d $ 5 0

0, 0 0 0 in fi n es fo r th e se c o n d of fe n se . A n y vi ol at io

n of th is la w re s ul ts in a se nt e n c e of at le as t si x m o nt h

s. T h e C o m p ut er F ra u d a n d A b u se A ct al s o al lo w

s a n y p er s o n w h o s uf fe rs d a m a g e as a

2 4

re s ul t of it s vi ol at io n to br in g ci vi l c h ar g es a g ai n st

th e p er p et ra to r fo r d a m a g es . A d di ti o n al ly , si n

c e s o m e h a c k s in v ol v e th e vi ol at io n of c o p yr ig

ht e d m at er ia ls , th e D ig it al M ill e n ni u m C o p yr ig ht A

ct p u ni s h es th o se w h o at te m pt to di sa bl e e n cr y pt io n

d e vi c es pr ot e ct in g c o p yr ig ht e d w or k. I n a n ut s h

el l, th e pr es e nt la w p u ni s h es c o m p ut er h a c k er s, b

e th e y g o o d or b a d, w it h st if f fi n es a n d ja il se nt e

n c es . It is h o p e d th at th ro u g h th es e p u ni s h m e nt

s, h a c k er s w ill b e d et er re d fr o m h a c ki n g. W h at c

a n o ur a n al y si s sa y a b o ut th is p ol ic y ?

6. 1 P ol

ic y a n d P r of it D ri v e n H a c ki n g In th e c as e of

pr of it dr iv e n h a c k er s, pr es e nt p ol ic y a c hi e v es it

s d es ir e d e n d. B y in cr e as in g th e c o st of b a d fo rpr

of it h a c ki n g th ro u g h m a ki n g th is b e h a vi or cr i m

in al , c ur re nt p ol ic y re d u c es th e s u p pl y of b a d fo r-

pr of it h a c ki n g. T h e ef fe ct of th is le gi sl at io n is t w ofo

ld . Fi rs t, it ra is es th e e q ui li br iu m w a g e of pr o d u c er

s w h o re m ai n in th e b a d fo rpr of it h a c ki n g in d u st

ry , a n d se c o n d it re d u c es th e q u a nt it y of b a d fo

rpr of it h a c ki n g s u p pl ie d. T h es e ef fe ct s of c ur re nt

le gi sl at io n ar e d e pi ct e d in Fi g ur e 3.

S W S W W D

Q QB QBH
H

B H

Figure 3.

2 5

A lt h o u g h pr es e nt p ol ic y th at cr i m in al iz es b a d pr of

it dr iv e n h a c ki n g ef fe ct iv el y re d u c es th e q u a nt

it y of th is h a c ki n g, th is is n ot al l th at p ol ic y c a n d o

to w ar d s th is e n d. A s w e n ot e d e ar li er , th e re la ti v

e ra te s of re tu rn o n w or ki n g as a b a d v er s u s a g o o

d fo rpr of it h a c k er d et er m in e w hi c h of th es e m ar k et

s w ill g ar n er th e b es t a n d la rg es t n u m b er of pr of it -

dr iv e n h a c k er s in g e n er al . If it b e c o m es m or e pr

of it a bl e to b e a g o o d pr of it dr iv e n h a c k er w h o

o w n s or w or k s fo r a le gi ti m at e fi r m , pr of it dr iv e

n h a c k er s c ur re nt ly e m pl o y e d in b a d fo rpr of it h

a c ki n g w ill b e lu re d o ut of th is in d u st ry a n d in to th e

g o o d pr of it dr iv e n h a c ki n g in d u st ry . A s w e al

re a d y n ot e d th is h as t w o p o si ti v e ef fe ct s o n c o

m p ut er se c ur it y. Fi rs t, it re d u c es th e n u m b er of b a d

pr of it dr iv e n h a c k er s a n d se c o n d, it re cr ui ts th e

m to th e g o o d si d e in th e fi g ht a g ai n st b a d h a

c k er s. O n e w a y of m a ki n g g o o d fo rpr of it h a c ki

n g lo o k re la ti v el y m or e at tr a ct iv e to fo rpr of it h a c

k er s is to ra is e th e c o st of b a d fo rpr of it h a c ki n g, w

hi c h e xi st in g le gi sl at io n pr o hi bi ti n g th is a ct iv it y d

o es . A n ot h er w a y to in cr e as e th e c o m p et iti v e n es

s of g o o d pr of it dr iv e n h a c ki n g, h o w e v er , is to

in cr e as e it s re tu rn vi svi s b a d pr of it dr iv e n h a c

ki n g. T o d o th is , g o v er n m e nt c o ul d s u b si di z e

la b or er s a n d b u si n es se s in th e g o o d fo rpr of it h a

c ki n g in d u st ry vi a o ut ri g ht tr a n sf er s or th ro u g h ta

x br e a k s a n d ot h er pr ef er e nt ia l tr e at m e nt th at re s

ul ts in ra is in g th e in c o m es of th o se in th is in d u st ry . T h

e ef fe ct s of th is p ol ic y ar e d e pi ct e d in Fi g ur e 4.

2 6 W S S W W D QGH QGH Figure 4. QGH

6.

2 P ol ic y a n d F a m eD ri v e n H a c ki n g A lt h o u

g h c ur re nt le gi sl at io n is a p pr o pr ia te fo r pr of it dr iv e

n h a c ki n g, it m a y n ot b e ef fe ct iv e in re d u ci n g th e

q u a nt it y of h a c ki n g fo r fa m edr iv e n h a c k er s. R

e c al l fr o m S e ct io n 4 th at th e fa m edr iv e n h a c ki n

g in d u st ry m a y lo o k o n e of t w o w a y s. In th e fi rs t

c as e th e s u p pl y sc h e d ul e fo r h a c ki n g is le ss el as

ti c th a n th e fa m e re a ct io n fu n ct io n fo r h a c ki n g, a

n d in th e se c o n d c as e th e o p p o si te is tr u e. W e al s

o n ot e d in S e ct io n 4 th at th es e di ff er in g c as es h a v e

c o nt ra di ct or y i m pl ic at io n s fo r th e ef fe ct iv e n es s of

pr es e nt p ol ic y. T o se e w h y th is is s o, c o n si d er Fi g ur

es 5 a n d 6. S
H

SH R

F F F

Q
H

Q QH
H

QH Figure 5.

Figure

27

A s w it h fo rpr of it h a c ki n g, c ur re nt le gi sl at io n th at g

e n er ic al ly p u ni s h es h a c ki n g a ct iv it y ra is es th e c

o st of fa m edr iv e n h a c ki n g as w el l. T hi s le a d s to a

re d u ct io n in th e s u p pl y of h a c ki n g, w hi c h in Fi g ur

es 5 a n d 6 is ill u st ra te d b y a le ft w ar d s hi ft in th e s u

p pl y of h a c ki n g fr o m S
H

to S H . N ot e th e di s p ar at

e i m p a ct th is p ol ic y h as in e a c h c as e a b o v e. In Fi

g ur e 5 w h er e th e s u p pl y of h a c ki n g is le ss el as ti c

th a n th e fa m e re a ct io n fu n ct io n of th e c o m m u ni ty of

h a c k er s, c ur re nt p ol ic y h as th e d es ir e d af fe ct th e

e q ui li br iu m q u a nt it y of h a c ki n g dr o p s fr o m Q H

to Q
H

W h er e th e s u p pl y of h a c ki n g is m or e el as ti

c th a n th e re a ct io n fu n ct io n of th e h a c ki n g c o m m

u ni ty , h o w e v er , th e re v er se is tr u e. In Fi g ur e 6 p ol

ic y h as a p er v er se ef fe ct . L e gi sl at io n th at ra is es th e c

o st of h a c ki n g c o u nt er in tu iti v el y le a d s to m or e

h a c ki n g, n ot le ss . S p e ci fi c al ly th e q u a nt it y of h

a c ki n g ri se s b y th e a m o u nt Q
H

Q H . P er h a p

s st ra n g el y, th e st if fe r th e p e n al ty fo r h a c ki n g i

m p o se d b y la w , th e gr e at er th e in cr e as e in fa m edr iv

e n h a c ki n g. I n li g ht of p ol ic y s c o nt ra di ct or y ef

fe ct s in e a c h of th es e c as es th e i m p or ta nt q u es ti o n

th u s e m er g es : W hi c h of th e m m o st li k el y c h ar a ct

er iz es th e a ct u al fa m edr iv e n h a c ki n g in d u st ry ? T

h e f a m e el as ti ci ty of s u p pl y d e p e n d s h e a vi

ly u p o n h a c k er s a bi lit y to m e et in cr e as e d d e m a

n d fo r h a c ki n g w it h a d di ti o n al h a c ki n g. B e c

a u se th e m ar gi n al c o st of h a c ki n g is p o si ti v e a n

d in cr e as es w it h a d di ti o n al o ut p ut , it is re as o n a bl

e to th in k th at th e s u p pl y of h a c ki n g is fa ir ly in el as ti

c o v er at le as t s o m e ra n g e of o ut p ut . I n c o nt ra

st , th e h a c ki n g c o m m u ni ty s fa m e re a ct io n fu n ct

io n is li k el y to b e re la ti v el y el as ti c. T h e lo gi c h er e

is si m pl e. T h e m ar gi n al c o st of pr o vi di n g fa m e is e xt

re m el y lo w , if n ot z er o, fo r th e h a c ki n g c o m m u ni

ty . U nl ik e gi vi n g u p m o n e y, w hi c h in v ol v es sa cr if

ic in g s u c c es si v el y m or e i m p or ta nt al te rn at iv es as th

e pr ic e p ai d ri se s, pr o vi di n g fa m e is es se nt ia ll y c o st

le ss . In cr e as in g th e a m o u nt of fa m e th e h a c ki n g

2 8

c o m m u ni ty w ill p a y to pr o d u c er s of h a c k s is

v er y in e x p e n si v e. A s C o w e n p oi nt s o ut , f a m

e re m ai n s p o si ti v es u m a t it s c u rr e n t m a r g

i n. A lt h o u g h fa m e is gr o w in g in s u p pl y, it is n ot cl

o se to b ei n g s o pl e nt if ul as to lo se it s e x cl u si v e fl a

v or a n d it s p o w er (2 0 0 2: 1 1 4) . W hi le th e n u m b

er of fa m o u s in di vi d u al s m a y gr o w , fa m e is n ot a w

in n er ta k e al l, n e g at iv es u m g a m e. T hi s is es p e ci

al ly tr u e as te c h n ol o gi es pr o gr es s th at al lo w s fa n s to

m o ni to r a n in cr e as in g n u m b er of ar ti st s. In cr e as

in g fa m e th er ef or e re m ai n s a c h e a p w a y to in d u c

e m or e h a c ki n g. T hi s m e a n s th at fa m e b es to w e d

u p o n h a c k er s b y ot h er m e m b er s of th ei r c o m m

u ni ty is re la ti v el y re s p o n si v e to c h a n g es in th e q

u a nt it y of h a c ki n g s u p pl ie d. T a k e n to g et h er w

it h th e fa ct th at th e s u p pl y of h a c ki n g is re la ti v el y

in el as ti c, th is i m pl ie s th at th e fa m edr iv e n h a c ki n g

in d u st ry w e a ct u al ly c o nf ro nt m o st li k el y c or re s p

o n d s to th e c as e d e pi ct e d in Fi g ur e 5 w h er e ra is in

g th e c o st of h a c ki n g d o es n ot h a v e a p er v er se ef

fe ct . T hi s is g o o d n e w s fr o m th e p er s p e ct iv e of

pr es e nt p ol ic y b e c a u se it s u g g es ts th at c ur re nt le gi

sl at io n is ef fe ct iv el y d e cr e as in g th e q u a nt it y of h a

c ki n g in th e fa m edr iv e n h a c k er in d u st ry ra th er th a

n in cr e as in g th e pr o bl e m , as it w o ul d if th e re la ti v e

el as ti ci ti es w er e re v er se d. W hi le it is d es ir a bl e to re ta

in c ur re nt le gi sl at io n w hi c h af fe ct s th e h a c ki n g in

d u st ry th ro u g h th e s u p pl y si d e d e m a n d m a n

a g e m e nt c o ul d al s o b e ef fe ct iv el y u se d to fi g ht fa

m edr iv e n h a c k er s. P ol ic ie s th at m a k e it m or e c o

st ly to m a k e th e pr o d u c er s of h a c k s fa m o u s th

o se th at re d u c e th e le v el of fa m e th e h a c ki n g c o m

m u ni ty is w ill in g to of fe r pr o d u c er s fo r a n y gi v e n

q u a nt it y of h a c ki n g w ill fu rt h er re d u c e th e q u

a nt it y of fa m edr iv e n h a c ki n g. S u c h p ol ic ie s s hi

ft th e h a c ki n g c o m m u ni ty s re a ct io n fu n ct io n ri g

ht w ar d in st e a d of s hi ft in g pr o d u c er s s u p pl y c ur

v e le ft w ar d.

2 9

T h er e ar e at le as t a fe w m e as ur es th at m ig ht b e ta k e n

in th is di re ct io n. U nf or tu n at el y, th e m o st o b vi o u s m e

as ur es to w ar d s th is e n d in v ol v e vi ol at io n s of b as ic ci

vi l li b er ti es th at m a n y w ill b e o p p o se d to . F or in st

a n c e, as w e di sc u ss e d pr e vi o u sl y, o n e w a y b y w

hi c h m e m b er s of th e h a c ki n g c o m m u ni ty gi v e fa

m e to in v e nt iv e h a c k er s is b y p u bl is hi n g th e m in

h a c k er m a g a zi n es a n d b o o k s. P ro hi bi ti n g th es

e p u bl ic at io n s w o ul d n ot pr e v e nt th e h a c ki n g c

o m m u ni ty fr o m gi vi n g fa m e to h a c k er s, b ut it w o ul

d li k el y fo rc e th e m to fi n d m or e c o st ly a v e n u es of

a p pl a u di n g fa m ese e ki n g h a c k er s. T h e sa m e m

e as ur es m ig ht b e ta k e n a g ai n st h a c ki n g c o m m u

ni ty b ul le ti n b o ar d s a n d em ai l li st s. P ro hi bi ti n g

h a c k er s fr o m p o st in g h a c k er pr o gr a m s, ti p s, et

c. , it w ill m a k e it m or e c o st ly fo r m e m b er s of th e h

a c ki n g c o m m u ni ty to a w ar d fa m e to in n o v at iv e h

a c k er s. A g ai n, fo r o b vi o u s a n d g o o d re as o n s,

st e p s li k e th is o n e ar e li k el y to b e u n p o p ul ar .

St ill , th e y m a y re m ai n ef fe ct iv e m e a n s of re d u ci n

g th e q u a nt it y of fa m edr iv e n h a c ki n g.

7 C o n

cl u si o n W hi le c o m p ut er h a c k er s c o n st it ut es a

m aj or se c ur it y c o n c er n fo r in di vi d u al s, b u si n es se

s a n d p u bl ic in st it ut io n s a cr o ss th e gl o b e, h a c ki

n g a n d h a c k er s u n d er gr o u n d c ul tu re re m ai n s

m u c h of a bl a c k b o x fo r b ot h la w m a k er s a n d th

o se v ul n er a bl e to h a c k er at ta c k s. T h e m y st er y th

at s ur ro u n d s m u c h of h a c ki n g pr e v e nt s u s fr o

m ar ri vi n g at d ef in iti v e s ol ut io n s to th e se c ur it y pr o

bl e m it p o se s; b ut o ur a n al y si s pr o vi d es at le as t te nt

at iv e in si g ht s fo r d e al in g w it h th is pr o bl e m . A n al

y zi n g c o m p ut er h a c ki n g th ro u g h th e le n s of e c

o n o m ic s gi v es ri se to se v er al s u g g es ti o n s in th is v

ei n. Fi rs t, it is cr iti c al to re c o g ni z e th at ar e di ff er e nt ki

n d s of h a c k er s c h ar a ct er iz e d b y di s p ar at e m ot

iv at io n s. B e c a u se of th is , th e m o st ef fe ct iv e m et h o

d of

3 0

re d u ci n g th e ri s k p o se d b y h a c k er s in g e n er al

w ill ta il or le gi sl at io n in s u c h a w a y as to ta rg et di ff er e

nt cl as se s of h a c k er s di ff er e nt ia ll y. W e lo o k e d at fa

m edr iv e n a n d pr of it dr iv e n h a c k er s a n d s h o

w e d h o w p u ni s h m e nt a p pr o pr ia te fo r o n e m a y

a ct u al ly w or se n th e pr o bl e m g e n er at e d b y th e ot h

er . C ur re nt p ol ic y di re ct e d at re d u ci n g h a c ki n g b

y af fe ct in g th e s u p pl y si d e ef fe ct iv el y re d u c es th e

q u a nt it y of b a d pr of it dr iv e n h a c ki n g. F or tu n at

el y, th er e ar e al s o g o o d re as o n s to th in k th at th is p ol

ic y ef fe ct iv el y re d u c es th e q u a nt it y of fa m edr iv e n

h a c ki n g. If , h o w e v er , th er e w er e st ro n g re as o n

s to th in k th at th e el as ti ci ti es c h ar a ct er iz e d in Fi g ur e

6 pr e v ai le d o v er th o se in Fi g ur e 5, s u p pl y m a n a g

e m e nt th at ra is es th e c o st of h a c ki n g w o ul d e x a c

er b at e in st e a d of re d u c e th e q u a nt it y of fa m edr iv

e n h a c ki n g. W e h a v e s u g g es te d w h y w e b el ie

v e th is is u nl ik el y to b e th e c as e. St ill , b e c a u se of it

s c o nt ra di ct or y p ol ic y i m pl ic at io n s it is i m p or ta nt

to in v es ti g at e th is is s u e fu rt h er .

O ur a n al y si s

h as o nl y to u c h e d u p o n th e m a n y a n d c o m pl ic

at e d is s u es re g ar di n g c o m p ut er h a c ki n g. In p ar ti

c ul ar , w e h a v e n ot gi v e n a d e q u at e at te nt io n to

g o o d h a c k er s w h o ar e dr iv e n n ei th er b y fa m e n

or m o n e y, b ut w h o v ol u nt ar il y re p or t se c ur it y w e

a k n es se s to v ul n er a bl e c o m p ut er o p er at or s. W hi le

th e b e h a vi or of th es e h a c k er s is st ill ill e g al , it m a

y pl a y a n i m p or ta nt ro le in h el pi n g to pr e v e nt th e at

ta c k s of m or e m al ic io u s h a c k er s. W e h a v e al s

o n ot p ai d s uf fi ci e nt at te nt io n to th e p ot e nt ia l i m p

a ct th at ta il or in g h a c ki n gre la te d p u ni s h m e nt s to

th e a g e gr o u p of th e p er p et ra to r m a y h ol d fo r re d

u ci n g th e se c ur it y th re at p o se d b y c o m p ut er h a c

k er s. W e n ot e d th at m o st h a c k er s ar e re la ti v el y y

o u n g u n d er th e a g e of 3 0. W hi le th is d e m o gr a p

hi c g e n er al ly c ut s a cr o ss fa m edr iv e n

a n d pr of it dr iv e n h a c ki n g gr o u p s, th er e is s o m

e e vi d e n c e s u g g es ti n g th at a di s pr o p or ti o n at

e n u m b er of pr of it dr iv e n h a c k er s ar e a b o v e th

is a g e th re s h ol d. T h e di ff er e nt a g es of th e in di vi d u

al s in th es e t w o di ff er e nt gr o u p s s u g g es ts th at p u

ni s h m e nt s d es ig n e d to hi t e a c h a g e gr o u p w h

er e it h ur ts w ill b e m or e ef fe ct iv e in re d u ci n g h a c ki

n g th a n a o n esi z efi ts al l a p pr o a c h th at m a y

d et er th e m e m b er s of o n e gr o u p w h o ar e ol d er , b

ut d o lit tl e to d et er th e ot h er cl as s of h a c k er s w h o ar

e y o u n g er . In ot h er w or d s, w e m a y w a nt to p u ni s

h fa m edr iv e n h a c ki n g, w h er e h a c k er s ar e y o u

n g er , w it h o n e ki n d of p u ni s h m e nt th at d et er s y

o u n g er in di vi d u al s, a n d p u ni s h b a d pr of it dr iv

e n h a c ki n g, w h er e h a c k er s ar e ol d er , w it h a n

ot h er ki n d of p u ni s h m e nt . T hi s se e m s re la ti v el y

si m pl e a n d y et to o ur k n o w le d g e h as n ot y et b e e

n a d dr es se d in p ol ic y di sc u ss io n s. P re s u m a bl y 1 4

y e ar ol d sc ri pt ki d di es a n d 5 0 y e ar ol d m e n v al

u e di ff er e nt th in g s, s o ef fe ct iv e d et er re n c e w ill m e

a n di ff er e nt ia l p u ni s h m e nt s. I f e v e n af te r c o

n si d er in g th es e is s u es it is d e ci d e d th at a u ni fo r m

p u ni s h m e nt fo r al l ty p es of h a c ki n g (f a m e or pr of

it dr iv e n) is d es ir a bl e, it w ill st ill b e w is e in d e v el o

pi n g le gi sl at io n fo r d e al in g w it h h a c k er s to ta k e

in to c o n si d er at io n th e fa ct th at it w ill in e vi ta bl y a p pl

y pr i m ar il y to y o u n g m e n. T hi s s u g g es ts th at ef fe

ct iv e p u ni s h m e nt m ig ht b e u n c o n v e nt io n al e v

e n if it is u ni fo r m a cr o ss ty p es of h a c ki n g. W e le a v

e is s u es li k e th es e fo r fu tu re re se ar c h.

3 2

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Stoll, Richard (1989). The Cuckoos Egg. New York: Doubleday. Taylor, Paul (1999). Hackers: Crime in the Digital Sublime. London: Routledge. Thomas, Douglas (2002). Hacker Culture. Minneapolis: University of Minnesota Press. United Nations (1994). International Review of Criminal Policy. Available at: http://www.uncjin.org/Documen ts/EighthCongress.html Wingfield, Nick (2002). It Takes a Hacker, Wall Street Journal, March 11, 2002. Zoetermeer (1999). E-mail interview with Paul Thomas in, Hackers: Crime in the Digital Sublime. London: Routledge.

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