When a data owner's (a business) sensitive data is breached it is difficult to quantify the monetary loss. According to respectable survey sources, the average cost of sensitive data breach for a large size company is about $50,000. I am attempting here to think about this in simple mathametical terms:

There is a data breach. From the data owner's perspective the loss is:

Loss = Cost to protect data + Loss of business due to data theft aka cost of competitive disadvantage

From the data thief's perspective

Net Gain= [Cost of producing the data  *  Data freshness factor] - Cost to steal the data + Profit of business due to data aka gain of competitive advantage

From the above two equations it is very clear that this is not a zero sum game. There is a clear cost asymmetry for a data owner and for a data thief. When there is an asymmetry there is an opportunity. Data owner would not even know that the data is lost because the original copy of the data may be still intact - data thief could have simply copied the data. Data theft does not look like a car theft, there is no vacuum left behind. 

This motivates a data thief to keep the cost to steal low, steal highly valuable data that has a long shelf life and in a way that data owner will never even be aware of theft.

From a data thief's perspective, the cost to steal data if kept high would disincentive him. Moreover, Data freshness factor, i.e. how valuable this data is over period of time plays an important role. A good example is content of today's newspaper is hardly valuable tomorrow, but the content of newspaper two days ahead (if can be procured)would be invaluable. Data relevance is a function of time and other marketplace variables -  Data freshness Factor accounts for that variable. A good way to discourage data thief is to increase his/her cost to steal the data. There are other inferences from the above equation. If there exists no competitive advantage with the stolen data, hardly any thief would even venture to steal the data in the first place. If the cost of producing data is very low, then probably thief can just produce the data himself and would not attempt to steal the data. If the cost of theft is kept high, it would definitely deter the data thief from stealing data using technical mechanisms, then the data thief would exploit weak links in data security such as use of social engineering to get access to the data.

From data owner perspective protecting data becomes very important. How much would the owner be willing to spend? Not definitely the cost equal to cost of producing the data. 1% to 10% of cost of producing data is considered prudent. For a data owner it is difficult to estimate cost of data protection of a specific data, because it is not easy to chunkify data protection costs. Moreover, as Dan Geer says in his book, a data owner has to protect himself from number of intruders not just one.

It pays for a data owner to: be aware of data breaches (or data leaks), employ appropriate mechanisms to protect the data; the cost of protection which is fractional cost of the valuable data and enhance information security awareness of personnel who handle the data.

Data loss is not a zero sum game. The advantage is in favor of a data thief (data thieves rather). Data owner does not give much thought on the value of data unless there is a data theft. But, a data thief has every reason to think about economics of data theft before he acts to steal the data else data thief won't survive in this game and he is very well aware of his advantageous position.

One of the main problems in counterterrorism today is that there are so many people and vehicles, and so much data and material, moving through globalization's myriad networks that it seems virtually impossible to track it all effectively. Nowhere has this problem been more acute than on the high seas.

In 2006, Adm. Harry Ulrich, then U.S. commander of NATO Naval Forces Europe, decided to do something about it. Despite having virtually no resources, his dream was to transpose the global air-traffic control system onto sea traffic.

Worldwide, aircraft are transparent, because they're all required to carry an identification beacon that allows them to be tracked leaving and entering airports, and monitored between airports, by a global network of sensors. Act suspiciously and somebody's fighter aircraft will soon be on your tail.

No such pervasive system currently exists globally for maritime traffic. While bigger ships carry an ID beacon similar to aircraft, without a shared monitoring network, that's like tracking only selected commercial jets and giving everyone else a pass.
So Ulrich, upon taking command, asked a simple question: "If we can do that in the air, why can't we do it on the sea?" He made a point of pioneering his sea-traffic-control effort first inside the Mediterranean, where NATO's southern naval forces have historically been concentrated, but his real target was waters off Africa -- the most ungoverned maritime space in the world.

Ulrich knew the U. S. Navy couldn't do it alone, much less bring Africa's meager coast-guard-like navies up to snuff so they could do it on their own. So he quickly created a network of assets -- both public and private -- to manage that space, modeling his monitoring system on international air-traffic control.

Ulrich began stitching together a network of shore-based sensors ringing the Mediterranean. His naval command then began initial monitoring by tapping into the International Maritime Organization's existing Automated Identification System, transforming NATO's ability to track ship traffic in the Med.

Almost overnight, NATO went from tracking dozens of ships on the Mediterranean to thousands, and instead of getting the data sometimes up to 72 hours late, now the contacts were being tracked in one to five minutes -- to an accuracy within 50 feet on the earth's surface.

When the classic big-firm systems integrators told Ulrich it would be too costly to pull it off, the admiral turned to the Volpe Center in Cambridge, Massachusetts, a U.S. Department of Transportation research center. Instead of hundreds of millions of dollars, Ulrich's initial network cost $900,000. The shore-based receivers are small, roughly the size of a radar dish you might find on a pleasure craft.

The strength of the system is a function of its reach: the more countries join, the larger the shared operational picture. By the time Ulrich retired at the end of 2007, he had enlisted 32 countries throughout the Mediterranean, the North Atlantic, along the west coast of Africa, around the Black Sea, and in the Pacific. Today, the network continues to spread around the planet.

With Ulrich's system in place, local police, coast guards, and border patrols catch most bad guys, obviating American military responses. As Harry told me for an article I wrote about his work in a fall 2007 issue of Esquire, "I don't do defense; I do security. When you talk defense, you talk containment and mutually assured destruction. When you talk security, you talk collaboration and networking. This is the future."

The admiral's legacy program, the Maritime Safety and Security Information System, earned the Volpe Center a prestigious "Innovations in American Government" award this month from Harvard University's Ash Institute for Democratic Governance and Innovation.

1. I don't trust Google.
2. I don't trust the Internet.
3. The tools for creating private documents are so much better than the online ones.
4. I can get to my documents when I am offline.
5. The Internet is too slow.

• Security and stability
• Offline application mode
• Fast running and standards based application engine

Thanks to a software program called a zapper, even technologically illiterate restaurant and store owners can siphon cash from computer cash registers and cheat tax officials.

[...]

Zappers alter the electronic sales records in a cash register. To satisfy tax collectors, the tally of food orders, for example, must match the register's final cash total. To hide the removal of cash from the till, a crooked business owner has to erase the record of food orders equal to the amount of cash taken; otherwise, the imbalance is obvious to any auditor.

[...]

The more sophisticated zappers are easy to use, according to several experts. A dialogue box, which shows the day's tally, pops up on the register's screen.

In a second dialogue box, the thief chooses to take a dollar amount or percentage of the till. The program then calculates which orders to erase to get close to the amount of cash the person wants to remove. Then it suggests how much cash to take, and it erases the entries from the books and a corresponding amount in orders, so the register balances.

In their eyes, we were not earning money for the bank. Worse, we had the power to say no and therefore prevent business from being done. Traders saw us as obstructive and a hindrance to their ability to earn higher bonuses. They did not take kindly to this. Sometimes the relationship between the risk department and the business lines ended in arguments. . . .

Tactfully explaining why we said no was not our forte. Traders were often exasperated as much by how they were told as by what they were told.

At the root of it all, however, was—and still is—a deeply ingrained flaw in the decision-making process. In contrast to the law, where two sides make an equal-and-opposite argument that is fairly judged, in banks there is always a bias towards one side of the argument. The business line was more focused on getting a transaction approved than on identifying the risks in what it was proposing. The risk factors were a small part of the presentation and always “mitigated”. This made it hard to discourage transactions. If a risk manager said no, he was immediately on a collision course with the business line. The risk thinking therefore leaned towards giving the benefit of the doubt to the risk-takers.

Collective common sense suffered as a result. Often in meetings, our gut reactions as risk managers were negative. But it was difficult to come up with hard-and-fast arguments for why you should decline a transaction, especially when you were sitting opposite a team that had worked for weeks on a proposal, which you had received an hour before the meeting started. In the end, with pressure for earnings and a calm market environment, we reluctantly agreed to marginal transactions.

• Would You Know a Good decision if You Saw One?
• Decision Making Under Uncertainty

If someone is simultaneously watching a user’s traffic as it enters and leaves the network, it is possible to de-anonymise the communication. This could occur if the first and last node for a connection is controlled by the same person. Tor takes some steps to avoid this possibility e.g. no two computers on the same /16 network may be chosen for each connection. However, someone with access to several networks could circumvent this measure.

Not only is route selection critical for security, but it’s also a significant performance factor. Tor nodes vary dramatically in their capacity, mainly due to their network connections. If all nodes were chosen with equal likelihood, the slower ones would cripple the network. This is why Tor weights the selection probability for a node proportional to its contribution to the network bandwidth.

Because of the dual importance of route selection, there are a number of proposals which offer an alternative to Tor’s bandwidth-weighted algorithm. Later this week at PETS I’ll be presenting my paper, co-authored with Robert N.M. Watson, “Metrics for security and performance in low-latency anonymity systems”. In this paper, we examine several route selection algorithms and evaluate their security and performance.

Intuitively, a route selection algorithm which weights all nodes equally appears the most secure because an attacker can’t make their node count any more than the others. This has been formalized by two measures: Gini coefficient and entropy. In fact the reality is more complex — uniform node selection resists attackers with lots of bandwidth, whereas bandwidth-weighting is better against attackers with lots of nodes.

Our paper explores the probability of path compromise of different route selection algorithms, when under attack by a range of different adversaries. We find that none of the proposals are optimal against all adversaries, and so summarizing effective security in terms of a single figure is not feasible. We also model the performance of the schemes and show that bandwidth-weighting offers both low latency and high resistance to attack by bandwidth-constrained adversaries.