The Cybersecurity Boom
How Investors Can Play the Global Explosion in Cyberattacks and Cybercrime
Thanks to Purefunds Cybersecurity ETF (HACK) for helping us put this together.
In 1983’s WarGames, a young Matthew Broderick unwittingly hacks into military central computer while searching for video games and almost inadvertently starts World War III. This film is classified on IMDB as in the “Sci-fi, Thriller” genres.
While the prospects of cybercrime and cyberterrorism are certainly thrilling (and scary), the descriptor of “Sci-fi” for the movie may no longer be necessary. In the last calendar year, there’s been dozens of high-profile cybersecurity incidents that are not a far cry from the geopolitical near-miss in WarGames.
The United States government and the country’s largest bank have both had serious security intrusions as of recent. This summer the United States Government revealed it had over 20 million records stolen by hackers allegedly based in China. Just as concerning, it was exactly one year ago that J.P. Morgan was compromised with records stolen from over 76 million households and 7 million small businesses. The company has now vowed to spend $250 million a year in preventing such incidents.
Most recent of all is this week’s hack of the popular adultery site Ashley Madison. The leak of sensitive information on potentially 37 million customers isn’t a potential geopolitical concern as the above cases, but it does have business implications: the website’s plan to raise $200 million in an IPO in London has now been kiboshed for the foreseeable future.
If big organizations like Sony, Target, Google, and Home Depot can’t do anything to stop cybersecurity incidents, what chance do the rest of us have?
And that’s the problem with cyberattacks. Detected incidents have skyrocketed over the last five years, soaring from 3.4 million to 42.8 million from 2009-2014, and they now cost the global economy an estimated $400 billion a year. Every day these incidents happen on a small scale, but today’s hacking technology and sophistication allows for much more. Exploitation of big cybersecurity vulnerabilities could cause financial chaos, destroy reputations of entire companies, expose business and state secrets, and even shut down moving vehicles remotely. This is not science fiction. This is reality – and we haven’t even gotten into the hypothetical potential damage that hackers could cause if they had even more resources or resolve. People’s lives and money are at stake.
Systems are more sensitive and hyperconnected than ever before, and hackers are deploying more sophisticated tactics to take advantage of them for personal or organizational gain. Luckily, there is also an entire industry of engineers, programmers, analysts, designers, cryptographers, and other professionals trying to build the walls and moat around the castle. Cybersecurity, as we depict in this infographic, is a booming industry with hundreds of companies scrambling to protect us from having intellectual property, health records, financial information, and other vital data compromised.
That’s why by 2020, the cybersecurity market is expected to be valued at $170.2 billion, which implies a 9.8% CAGR (compound annual growth rate) from today’s estimate of $106.3 billion. Businesses and governments are spending more on cybersecurity: even the Whitehouse announced this year that in its 2016 fiscal budget that it would aim to spend $14 billion on additional measures. Fifteen years ago, cybersecurity was only a blip on the US government’s radar at $938 million in spending.
The private sector is in the same boat, as 69% of business executives see cyberattacks as a threat to their growth. This is a fair statement since Verizon estimates in its 2015 Data Breach Investigations Report that the average cost of a cyberattack to a business ranges between $475,000 to $9 million depending on the number of records stolen.
Among the companies that are benefiting from the surge in cybersecurity spending include those building firewalls, secure servers, routers, anti-virus software, and malware detection tools. Firms that specialize in consulting and solving related security problems are also getting plenty of interest. Investors can potentially profit from this sector as well by identifying companies and funds that will gain from booming activity and spending in the sector.
How Decentralized Finance Could Make Investing More Accessible
Under the current global financial system, billions of people do not have access to quality assets. Here’s how decentralized finance is changing that.
Infographic: How Decentralized Finance Could Make Investing More Accessible
Did you know that a majority of the global population doesn’t have access to quality financial assets?
In advanced economies, we are lucky to have simple options to grow and protect our wealth. Banks are all over the place, markets are robust, and we can invest our money into assets like stocks or bonds at the drop of a hat.
In the United States, roughly 52% of people are invested in the stock market – but in a place like India, for example, this portion drops to a paltry 2%. How can we make it possible for people on the “outside” of the financial system to gain access?
Breaking Down Barriers
Today’s infographic comes to us from Abra, and it shows how decentralized finance could make investing a more universal phenomenon, especially for those that don’t have access to the modern financial system.
It lays out four key obstacles that prevent people in developing markets from investing in quality financial assets in the first place:
- The Geographic Lottery
Where you live plays a massive role in determining your ability to build wealth. In advanced Western economies, the average person is much more likely to be invested in financial markets that can help compound wealth.
- Financial Literacy and Complexity
Roughly 3.5 billion adults globally lack an understanding of basic financial concepts, which creates an impenetrable barrier to investing.
- Local Market Turmoil
Even if a person is mentally prepared to invest, local market turmoil (hyperinflation, political crises, closed borders, etc.) can make it difficult to get access to stable assets.
- The Cost of Investing in Foreign Markets
Foreign assets can be pricey. One share of Amazon is $1,800, which is realistically more money than many people around the world can afford.
In other words, there are billions of people globally that can’t take advantage of some of the most effective wealth-building tactics.
This is just one flaw in the current financial system, a paradigm that has created massive amounts of wealth but only for a specific and well-connected group of people.
Enter Decentralized Finance
Could decentralized finance be the alternative to open up access to financial markets?
By combining apps with blockchain technology – specifically through public blockchains such as Bitcoin or Ethereum – decentralized finance makes it possible to get around some of the barriers that are created by more traditional systems.
Here are some of the innovations that are making this possible:
Smart contracts could automate transactions and remove intermediaries, making investing cheaper, faster, and more accessible.
Fractional investing could allow partial or shared ownership of financial assets by using tokenization. This would make expensive stocks like Amazon ($1,800 per share) available to a much wider segment of the population.
Location independent investing is possible through smartphones. This would make it possible for people in remote parts of the developing world to invest, even without access to nearby financial institutions or local markets.
Like the internet with knowledge, decentralized finance could reshape the world by making financial access universal. Who’s ready?
How Much Data is Generated Each Day?
By 2020, there will be 40x more bytes of data than there are stars in the observable universe. See how much data gets added to the mix each and every day.
How Much Data is Generated Each Day?
View the full-size version of the infographic by clicking here
You’ve probably heard of kilobytes, megabytes, gigabytes, or even terabytes.
These data units are common everyday amounts that the average person may run into. Units this size may be big enough to quantify the amount of data sent in an email attachment, or the data stored on a hard drive, for example.
In the coming years, however, these common units will begin to seem more quaint – that’s because the entire digital universe is expected to reach 44 zettabytes by 2020.
If this number is correct, it will mean there are 40 times more bytes than there are stars in the observable universe.
A Crash Course in Data
Today’s infographic comes to us from Raconteur, and it gives us a picture of this new data reality.
Before we get to how much data is created each day – both now, and in the future – it’s worth getting acquainted with how data scales in terms of units.
|Abbreviation||Unit||Value||Size (in bytes)|
|b||bit||0 or 1||1/8 of a byte|
|B||bytes||8 bits||1 byte|
|KB||kilobytes||1,000 bytes||1,000 bytes|
|MB||megabyte||1,000² bytes||1,000,000 bytes|
|GB||gigabyte||1,000³ bytes||1,000,000,000 bytes|
|TB||terabyte||1,000⁴ bytes||1,000,000,000,000 bytes|
|PB||petabyte||1,000⁵ bytes||1,000,000,000,000,000 bytes|
|EB||exabyte||1,000⁶ bytes||1,000,000,000,000,000,000 bytes|
|ZB||zettabyte||1,000⁷ bytes||1,000,000,000,000,000,000,000 bytes|
|YB||yottabyte||1,000⁸ bytes||1,000,000,000,000,000,000,000,000 bytes|
There’s no doubt that data literacy will only become more important in the future, so make sure you know your zettabytes from your yottabytes!
A Day of Data
How much data is generated in a day – and what could this look like as we enter an even more data-driven future?
Here are some key daily statistics highlighted in the infographic:
- 500 million tweets are sent
- 294 billion emails are sent
- 4 petabytes of data are created on Facebook
- 4 terabytes of data are created from each connected car
- 65 billion messages are sent on WhatsApp
- 5 billion searches are made
By 2025, it’s estimated that 463 exabytes of data will be created each day globally – that’s the equivalent of 212,765,957 DVDs per day!
If you think the above information is fascinating, see what happens in an internet minute.
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