The world’s first cyber attack

Kit here again.

Before we get started today, I want to point you in the direction of this short video, from my colleague, James Allen.

On Thursday, James is launching a new project. His aim is to help you capture some lightning fast stock gains.

I’m talking 50%… 100%, even 1000% in just one trading day.

It sounds impossible, but having seen the research behind it, I’d urge you to at least find out more.

You can do that here.

On to the subject of today’s letter.

Yesterday, we spoke about technology and war. Specifically how Japanese history is peppered with stories of military technology either making or breaking its army.

Today, we’re going to look at another way technology has transformed the battlefield: Cyberattacks.

In December 2015, Russian hackers cut electricity to nearly a quarter of a million Ukrainians.

Former CIA Director Michael Hayden says that when he learned of the attack he felt, “This has a whiff of August 1945. Somebody just used a new weapon and this weapon will not be put back in the box.”

Since then, the number of attacks has only risen – and plenty of them very close to home.

In fact, according to the Department of Defence, in the last six months the UK has been hit with 34,000 hacks. That’s roughly 200 a day… or one every 13 minutes.

Those stats are just one of the reasons my colleague James Allen has gone public with his warning.

It’s less than a month since he first started warning readers about the terrifying risk of a hack on our national grid.
Yet it didn’t take long for the world to show just how dangerous a blackout could be.

As I write this, a crippling blackout in Venezuela is entering into its fifth day.

Supermarkets have been ransacked, hospitals are struggling to operate and public transport is barely functioning.

Alejandro Guzmán, a 26-year-old lawyer and one of millions of Venezuelans left in the dark, said, “It’s like a city of shadows.”

President Maduro has blamed the blackout on cyber-attacks.

Whether it’s the result of a hack or, as many are suggesting, poor maintenance and corruption, it illustrates just how quickly things can fall apart in a modern city when the power goes out.

Again, James explains in detail why the UK could be uniquely vulnerable to something similar.

But, on to lighter topics.

Today I want to take you right back to the world’s very first cyber-attack.

To when?

It might surprise you.

30 years BEFORE Japan entered into the Meiji Restoration, modernising its military at breakneck speed, France had its own breakthrough.

Actually, breakthrough might not be the word. But it was definitely a development of sorts.

In the 1790s, France built the world’s first national data network, a semaphore telegraph.

These ‘telegraphs’ were made of chains of towers, placed about 8-10km apart.

Here’s a picture of one:

 By Lokilech at German Wikipedia – Own work, CC BY-SA 3.0,

As you can see, each tower had two rotating arms.

These arms could be positioned in various ways to make a code of symbols, like this:

The operator at the receiving tower could look through a telescope to see the symbols show by the transmitting tower. They would then repeat those symbols in their own tower, and so on.

Incredibly, this networked stretched to cover a total distance of 4,800 km, through 556 stations.

It was used until the 1850s, and messages travelled along it at around 500 km per hour.

The “Chappe Network” in France.
By Jeunamateur – Own work d’après “La télégraphie Chappe”, FNHAR, 1993, CC BY-SA 3.0,

A single symbol sent from Paris would arrive at Lille, a distance of about 200 km, in just nine minutes.

So far, so good. At least it was until 1834, when an enterprising pair of twins came along.

The world’s first cyberattack

Joseph and Francois Blanc, were bankers working on the Bordeaux stock exchange.

There, information about market movements have to come from Paris by mail coach. A journey which took several days.

Traders who could get the information more quickly could make money by anticipating these movements.

Some tried using messengers and carrier pigeons.

Not fast enough for the Blanc brothers.

They hired a colleague in Paris to keep watch on the stock exchange and pass information on the most significant trends to a telegraph operator in Tours, on the line that transmitted data to Bordeaux.

Since the telegraph network was for governmental use only, they had to find a way to hide their messages inside those which were approved.

The telegraph’s encoding system included a “backspace” symbol that instructed the transcriber to ignore the previous character.

So the brothers sent their message by making specific errors in the transmissions, letting them travel along the line, and then correcting them after.

The spurious character indicated the direction of the previous day’s market movement.

The back space meant that by the time the message was written out for delivery, nobody was any the wiser.

The brother’s managed to avoid getting caught for two years. And when they were discovered, in 1837, there was nothing the authorities could do – there was no law against the misuse of data networks!

But as I would like you to see in this video the network attacks being plotted all over the world right now are far more concerning.
Many thanks,

Kit Winder
Exponential Investor

Category: Technology

From time to time we may tell you about regulated products issued by Southbank Investment Research Limited. With these products your capital is at risk. You can lose some or all of your investment, so never risk more than you can afford to lose. Seek independent advice if you are unsure of the suitability of any investment. Southbank Investment Research Limited is authorised and regulated by the Financial Conduct Authority. FCA No 706697.

© 2020 Southbank Investment Research Ltd. Registered in England and Wales No 9539630. VAT No GB629 7287 94.
Registered Office: 2nd Floor, Crowne House, 56-58 Southwark Street, London, SE1 1UN.

Terms and conditions | Privacy Policy | Cookie Policy | FAQ | Contact Us | Top ↑