Originally posted on the Cambridge University Press blog Fifteeneightyfour. The book “The Quantum Internet: The Second Quantum Revolution” is available for purchase here along with a free online preview.
The true power of classical computing was never fully realised until the emergence of the internet, enabling the global integration of computing infrastructure. Indeed, many of our present-day devices would have very little utility without it. In the absence of the internet, consumers would not be able to rely on cloud infrastructure, information sharing and communication would not be possible, supercomputing would be largely inaccessible, and smartphones would be little more than bricks. The internet enables information to be a commodity whose market value drives technological advancement.
With emerging quantum technologies the quantum internet will be very different and far more powerful. Quantum computers operate according to entirely different principles in the way they process information, which in the future will enable many advanced and extremely economically valuable forms of computation to be implemented which cannot be realised on conventional computers. This raises the immediate question “what if we start networking them together?”
The classical internet is not capable of integrating remote quantum devices. This requires entirely new infrastructure that distributes quantum entanglement, a uniquely quantum information resource. The long-term vision for this infrastructure is the quantum internet, something that will likely develop in the coming decades. As with the emergence of the classical internet, it is to be expected that quantum computers will not realise their full potential until this infrastructure exists. But the motivation is even stronger than for classical devices. When classical computers are unified via distributed cloud-based architectures, the net computational power is effectively the sum of the parts. However, quantum computers exhibit fundamentally different scaling characteristics: a classical computer’s power is roughly proportionate to the number of CPUs it contains, whereas a quantum computer’s power grows exponentially with the number of quantum bits —or qubits— it processes. Therefore, upon unifying quantum devices via a quantum internet, we are left with something far greater than the sum of the parts, acting as an immediate incentive for global cooperation.
This quantum enhancement in computing power translates to enhanced economic incentives and returns, making quantum entanglement a highly valuable future commodity. As with any fungible commodity, entanglement will have a market value that drives economic investment into the infrastructure required to distribute it. In an ideal world, a unified global marketplace would emerge, similar to what we see in other global markets. The strategic implications of quantum computing are immense — breaking important cryptographic codes, making new unbreakable ones, with major implications for research & development, important optimisation problems, drug design and simulation. However, these strategic implications may also fracture quantum networks along geo-strategic boundaries, leading to quantum alliances, diplomacy and politics.
Although it is too early to predict exactly how the quantum internet will evolve over the coming decades, it’s clear this technology will underpin the future quantum era in the same way that the classical internet underpins the present digital era. One thing is certain — the global impact of the quantum internet will be enormous.
Apple recently announced that the next version of their iOS operating system will include new child protection features. Amongst these is a new image scanning technology that will enable Apple to notify the National Center for Missing & Exploited Children (NCMEC) if a user synchronises images containing child abuse material with iCloud. The technical summary for how this technology works is available here.
The architecture is designed to not rely on direct comparison of images, since this would require Apple to maintain a database of offending images themselves, which clearly is something to be avoided. Instead, it relies on comparing hashes of images, or rather of image ‘signatures’ which characterise images independent of simple changes. These signatures are generated by a machine learning algorithm named NeuralHash that identifies the essential features that characterise images as opposed to raw image data which can easily be reformatted, transformed or obscured with modifications.
For our purposes, all we need to know about hash functions is that they are one-way functions that take an arbitrary piece of data as input and generate a short hash (also known as a digest or checksum) as their output, usually no longer than 256-bits in length. The one-way nature of these functions means that if you are provided with a hash it is not computationally possible to invert it to determine what the actual input was. Hash functions are one of our most secure cryptographic primitives and are believed to be robust even against future quantum computers. This provides a very useful means by which to securely compare whether two pieces of data are the same without revealing what the data was. For this application, this means that only the party that generated the list of hashes from the original images can connect the dots should a flagged hash be provided to them, but any intermediary dealing only with the hashes remains oblivious to what they correspond to.
This cryptographic property of hash functions allows Apple to identify offending material without possessing it or uploading it to your phone. However, it simultaneously implies that if the hash list provided to them contains hashes of things unrelated to child protection it is not possible for them to know and they retain full plausible deniability if the list is manipulated for other purposes.
Apple is clearly not going to get into the business of validating the integrity of the hash list they are provided with. They’ll very intentionally remain as legally and ethically separated from that process as possible. All they do is provide the NCMEC with appropriate provisions if a sufficient number of flagged hashes are attributed to someone’s account. After that, it’s entirely up to the NCMEC who by necessity have to operate behind a veil of extreme secrecy, immune to public oversight. The only other example of such organisations that spring to mind are defence and intelligence agencies, but that would be very bad marketing compared to the more emotionally appealing notion of saving children from sexual predators.
Far more suspicious is the fact that the filtering is taking place client-side rather than in the cloud. One of the primary motivations driving our technological shift towards cloud computing is that it’s far more efficient for computation to be centralised, which is especially the case when it comes to devices with limited resources like phones. It’s hard to justify the design decision to perform computational filtering of cloud data on the client-side — a complete inversion of usual cloud computing principles — unless being restricted to cloud data isn’t the intention at all.
The fact that Apple is using the same tried-and-tested “save the kids” marketing campaign so over-used that it acts as an immediate red flag is telling in itself. To provide some context into just how overused the “save the kids” marketing campaign is (along with “terrorism” — presumably coming in iOS 16), a Google test of the number of hits associated with different encryption-related search terms provides some indication of the relative attention given to the different contexts in which concerns about encryption are raised:
“encryption child protection”: 13,900,000
“encryption terrorism”: 10,500,000
“encryption human centipede”: 9,970,000
“encryption murder”: 9,190,000
“encryption chainsaw massacre”: 8,330,000
“encryption arms trafficking”: 3,410,000
“encryption getting stabbed by a meth dealer in Logan”: 793,000
“encryption drug trafficking”: 718,000
“encryption human trafficking”: 633,000
The priorities here are obviously completely wrong. Poor old murder, who makes an appearance about 20,000 times every year in the United States, is feeling quite undervalued here. And who in their right mind is more concerned about the prospect of getting blown up by Osama bin Laden than being turned into a human centipede?
Many but not all of these things are more common and present a greater threat than the subset of pedophiles who lack the intelligence to turn iCloud off, which involves clicking this button:
iOS 15 isn’t going to be the last of Apple’s operating system updates. But let’s assume the security model described in the technical white paper remains fixed. How could it be manipulated to provide full back-door access to message content beyond child abuse material?
The obvious next step is for filtering to extend beyond images to include text strings. This has very nefarious political implications given the heavy use of hashtags, code-words and names within political organisations. For example, the Turkish government recently announced that it is investigating the #HelpTurkey hashtag, suspected of being associated with a foreign influence operation. Hashing a hashtag is completely compatible with Apple’s security model. Foreign influence aside, this could be used to identify members of political organisations, something the Indian government has been proactively pursuing.
Alternately, the machine learning algorithm that generates image signatures could simply be updated to recognise other things. This is an especially opaque part of the computational pipeline. Machine learning classifiers operate very differently than conventional algorithms whose operation can easily be understood by inspecting the source code. A machine learning implementation will typically operate according to a fixed algorithm — for example simulating a neural network — whose operation is determined by its training information, essentially a long list of numbers representing complex multi-variate correlations, which collectively allow complex patterns or features to be recognised. This is very similar to how the human brain processes information, where it is the weighting of which neurons communicate with which that determines what it is that we have learned. But in the same way that knowing the structure of a brain does not allow us to know what it has learned, it is unviable to reverse engineer machine learning training parameters and know what it has learned to recognise. This choice of algorithmic implementation, therefore, makes it extremely difficult to know what it is capable of even with full knowledge of all its parameters, thereby limiting scrutiny.
But with some simple updates on the client-side software the problems can extend far further than this. Although it isn’t possible for NCMEC to have a pre-calculated list of hashes for every possible image or every possible piece of text, a simple technical workaround is to communicate hashes on a byte-by-byte basis. If we take an arbitrary image and instead of hashing the full image we directly hash each individual byte in the image (or other) data, there are only 256 pre-calculated hashes that need to be stored to enable full reconstruction of an arbitrary data stream using a dictionary attack. On the client side, this only requires a few lines of changes in the operating system code, which have probably already been written but currently commented out. This very trivial client-side change, easily automatically pushed as part of a future iOS update, does not require any changes to the advertised security model, which is still only comparing and passing hashes around but would provide NCMEC with full backdoor access to any data stream. The model is already fully future-proofed to enable this. Only minor changes in the iOS code are needed to take full advantage of it.
It’s hard to know what NCMEC might consider doing with full backdoor privileges, but this capability is certainly something of enormous interest to many branches of government, whose eyes must be watering. A cursory glance at their organisational structure and history raises some immediate issues.
According to the NCMEC Wikipedia page the current President and CEO, John F. Clark, was appointed Director of the United States Marshals Service by George W. Bush, and in 2010 joined defence contractor Lockheed Martin as their director of security operations for information systems and global solutions, and spent seven years working in the Special Operations Group.
Its Board Chair, Karen Tandy, served as the administrator for the United States Drug Enforcement Agency (DEA), also nominated by George W. Bush, and since 2016 served as vice-chair for the Homeland Security Advisory Council.
And on the issue of emotionally manipulating public opinion, its co-founder, John Walsh, has attracted some controversy:
Some critics accuse Walsh of creating predator panic by using his publicity. Walsh was heard by Congress on February 2, 1983, where he gave an unsourced claim of 50,000 abducted and 1.5 million missing children annually. He testified that the U.S. is “littered with mutilated, decapitated, raped, strangled children,” when in fact, a 1999 Department of Justice study found only 115 incidences of stereotypical kidnappings perpetrated by strangers, about 50 of which resulted in death or the child not being found.
Apple’s child protection initiative needs to be called out for what it is — integrating a device-level backdoor into its operating system, sending information to a government-backed private agency closely linked to the security establishment, intentionally designed in such a way that Apple has plausible deniability as to what information is being targeted, by necessity completely shielded from public oversight, and all marketed using the usual vernacular that governments use to engage in emotional blackmail whenever they can’t get what they want by implying you support pedophiles if you disagree.
It’s self-evident that the agenda isn’t to catch pedophiles if they simultaneously tell them how to avoid it. The only way to prevent this software from being misused is to prevent it from being implemented.
Our recent panel discussion with the Australian Strategic Policy Institute (ASPI) International Cyber Policy Centre for the launch of our policy brief “An Australian strategy for the quantum revolution”, with Simon Devitt, Tara Roberson and Gavin Brennen, hosted by Danielle Cave.
Within modern libertarian-leaning circles, there has been increasingly vocal support for introducing a Universal Basic Income (UBI) — an unconditional state-financed income guarantee for all citizens. This is often met with surprise from those more social-democratic leaning, who, interestingly, are increasingly supportive of the idea too, albeit approaching it from the social rather than the economic angle. I believe the arguments from both sides are valid, and regardless of which way you vote or whether you lean left or right, we should support the introduction of a UBI as a replacement for our existing welfare systems.
Perhaps the biggest gripe with current social welfare spending is how inefficient governments are at handling it, which is hardly surprising, given that governments simply aren’t very strongly incentivised to be efficient. A UBI is the most simple and efficient social spending program that can be envisioned and owing to its inherent universality and uniformity it disempowers politicians from manipulating it for political purposes.
We can effectively eliminate all forms of existing welfare (including unemployment benefits, aged and disability pensions, maternity and paternity leave, carers allowances, and student income support) and their associated bureaucratic infrastructure, replacing it with a script that makes automated periodic bank transfers to everyone. The entire existing infrastructure can be completely dismantled and put to rest, along with all its operating costs and overheads, and the associated labour put to better use than paper-pushing.
This isn’t only more efficient for the government, but also for recipients, who are no longer burdened with battling against bureaucracy and can instead turn their attention to more productive things.
Benefits for the unemployed
A common and completely correct criticism of conventional unemployment benefits is their creation of ‘poverty traps’, induced by the extremely high effective marginal tax rate (EMTR) imposed upon the unemployed when they gain employment, whose income upon gaining employment is discounted by their loss of benefits. Their effective pay increase is the difference between these (not very much for a low-income worker), yet their respective increase in workload is from zero to full-time. This is equivalent to paying a very high rate of income tax, typically far higher than the highest marginal tax rates in even highly progressive systems. This creates an enormous disincentive to seek employment since people aren’t likely to switch from unemployment to full-time work if it only earns them an extra cup of coffee. With an unconditional UBI in place, any new income earned is not discounted by benefit reductions, and the person’s marginal income remains their actual income.
Eliminating this poverty trap barrier would foreseeably result in far greater incentive amongst the unemployed to seek and hold onto employment. Additionally, by not being stuck in a situation where people have the “I have to take any job I can get otherwise I’ll be homeless” mindset, people are more likely to find themselves in jobs that suit them and provide a positive future outlook.
Additionally, in eliminating the minimum award wage we prevent low-skilled workers from being priced out of the labour market altogether given the inevitability that some workers will be unable to readily find employment in which their skillset empowers them with productivity above this imposed threshold, thereby condemning them to unemployment.
Benefits for workers
Amongst low-skilled workers in particular, there is significant bargaining asymmetry against employers — to the employee, everything might depend on keeping their job, whereas to the employer the cost of replacing them is relatively low. A UBI to a significant extent offsets the former issue, placing workers into a stronger workplace bargaining position without the need for regulatory mechanisms of highly questionable efficacy to attempt to enforce it. This increases the labour market competitiveness of workers.
The same argument extends to self-employment. A low-skilled worker might self-employ by undertaking odd jobs, or contract- or app-based work, which don’t provide long-term job security but ought to be encouraged.
Labour market mobility
Throughout much of the developed world, savings rates are very low, providing a significant hindrance to labour market mobility — the ability for people to switch between jobs. Since it can be very challenging to line up a new job timed exactly right to match the exit from an existing one, transitioning between jobs is effectively disincentivized by this savings barrier. This creates an employment trap that inhibits people from placing themselves into jobs to which they are best suited and most likely to be successful and productive at.
Increased mobility in the labour market is enormously beneficial not only to workers, but also to employers, and reducing inefficiencies that undermine mobility have huge economic benefits. This doesn’t only apply to upward mobility, whereby people shift into jobs with higher income, but especially to sideways mobility, where people change jobs to better suits their conditions or gain new skills. A UBI improves overall labour market mobility by ensuring that employees aren’t economically trapped into jobs that aren’t right, or where they could find something better, which isn’t a good outcome for any of us, either individually or collectively.
How to introduce a UBI
Given that introducing a UBI represents a major structural reform, it is important to be mindful of minimising disruption during implementation. If poorly executed it could shock the system and cause destabilisation. A suggestion for how to smoothly go about implementing this is as follows.
Take all existing employment contracts and automatically overwrite them to subtract the introduced UBI amount from the specified income, with no other contractual changes — the legislation effectively negotiates down all salaries by an amount equivalent to the newly introduced UBI, which everyone now receives. The UBI amount is effectively contractually refunded back to the employer via reduced liability, with no perceived change in income by employees.
We could similarly eliminate mandatory superannuation — a hugely inefficient and inequitable system — instead converting whatever fraction is necessary into income taxation to finance the component of the UBI stream that replaces the pension and allowing workers to retain the rest.
There is one obvious pitfall in the above figure, being that at the bottom end of the labour productivity spectrum legislatively renegotiated incomes become extremely small or indeed vanish in the limit where the UBI equals the previous minimum award wage. Clearly it isn’t viable for those employees to accept that. But that isn’t to say that their labour is actually worth nothing. The purpose of the legislative override is only to balance the various money flows, but it simultaneously skews incentives.
Two ways to navigate this issue are:
Complement the legislation with the right for employees (but not employers) to exit their contracts and choose to either reapply with newly negotiated salary. Employees can realistically negotiate their salaries upward at this point given that their labour still has value, however they would now be doing so in competition against a bigger pool of competitors given that the minimum wage has now been abolished. The new market value is expected to be less than before (due to increased labour market competition).
Introduce the UBI gradually over time, discounting the pre-existing benefits stream by an equal amount until over time it evaporates entirely and can be abolished. This has the advantage of mitigating sudden labour market shocks that a spontaneous introduction would induce and allow the market to find new pricing for labour on its own without top-down intervention.
Given that employers have all now been granted an employment cost reduction equivalent to the UBI paid to their employees, the cost of the UBI can now be compensated for by tax liabilities to the employer via company tax. For this to remain budget neutral the new tax liabilities would in total be greater than before since they now also must cover those who are unemployed but now received the UBI, which corresponds to the unemployment rate, offset by whatever the costs of the previous, far less efficient unemployment benefits schemes were. All things combined, in countries with low unemployment and/or highly inefficient public sectors, this is unlikely to be a major burden.
To maintain parity from the income tax side, existing income tax rates should be renormalised such that income and UBI combined are taxed equivalently to previous incomes without the UBI. This implies workers’ marginal tax rates to be pushed upwards to remain tax revenue neutral since they are effectively promoted to higher tax brackets.
Now everything is roughly financially equivalent from the perspective of both employees and employers, the primary difference being that the unemployed have now been absorbed into this new system, with the previous one being dismantled.
Benefits for employers
From the employer’s perspective, especially small businesses employing low-skilled workers, this is a massive boon, since the cost of employment is reduced to the differential between what it previously was and what the new UBI provides. However, they’re receiving the same labour in exchange, so the ratio between the reduced labour cost (indirectly subsidised via the UBI) and the original labour cost (the worker’s full income) provides a multiplier on the productivity of their employees. This ratio is largest for low-income workers, thereby stimulating demand for their employment. Businesses are now better off to the effect of a UBI per employee, which can be recovered via company tax adjustments to finance the UBI.
It’s easy to see the attractiveness of this from a social-democratic perspective. But not just in the trivial sense that it directly undermines poverty. More generally, it places every member of society in a position of greater independence. People in abusive relationships are better able to leave. People have a greater genuine choice in making life decisions, both personally and professionally, and are less easily coerced. People who need lifestyle or career flexibility for health reasons are in a far stronger position. And perhaps most importantly, the impact on general mental health within society is likely to be significant, by removing enormous insecurities, particularly during periods of labour market volatility.
A more powerful monetary tool
During the course of the current COVID-induced economic crisis, it has become clear that central banks have exhausted their fiscal tools in stimulating consumption, and have entered a cycle of concocting ever more elaborate and extreme new ones out of desperation. This has arisen because their tools are largely limited to manipulating the money supply via interaction with financial markets. But that isn’t where consumption takes place, it’s where investments are made and assets held. Consumption is driven down here, not up there.
With well-considered legislation in place, a UBI provides a monetary tool for stimulating consumer spending via the injection of additional funds — in addition to the regular UBI flow under the umbrella of fiscal policy, central banks have the option of supplementing it with monetary stimulus. This provides the most direct possible mechanism for stimulating consumer price inflation (CPI) as opposed to conventional monetary stimulus via open market operations (OMOs) which largely affect asset price inflation. Unlike manipulating income tax rates, this is not conditional on people being employed (and less likely to spend than those who are not), and the latency between pulling monetary levers and their impact on CPI is minimised.
This is not to advocate for more monetary intervention by governments, who have consistently demonstrated themselves not especially competent in doing so, but rather provides tools that are more effective in achieving what they’re ostensibly intending to do. It doesn’t take a genius to see that when interest rates are near zero, pumping more cash off the press into financial markets isn’t going to be hugely effective at stimulating consumption. This represents a trickle-up rather than trickle-down approach to economic stimulus, the latter being oft criticised as being ineffective, which it is.
Economic & social robustness
During COVID, various governments scrambled to introduce mechanisms to protect businesses from the catastrophic impact of having neither workers nor clients. One approach, which seems to have worked reasonably well here in Australia (the so-called JobKeeper scheme) was for the government to temporarily pay the incomes of companies’ employees, thereby allowing businesses to go into hibernation and be insulated from payroll liabilities, ensuring that existing employees’ employment is retained. A UBI would have made this kind of response far less chaotic.
A UBI provides significant robustness against future pandemic scenarios and other temporary but catastrophic labour market shocks. There is no need to rush to put new legislation into place to absorb such shocks, the infrastructure is already in place. Companies, especially small businesses with limited financial buffers, needn’t wait for governments to decide if and when they will consider programs like JobKeeper, which has seemingly been very effective at protecting businesses from their employees being prevented from working.
While a UBI is a ‘big government’ initiative and therefore might be unpalatable to many on the political right, it needs to be seen on a comparative basis relative to what we currently have, a social welfare system that ostensibly aims to achieve the things a UBI will but does so with massive bureaucratic overhead and inefficiencies that in many ways create more problems than they solve.
Dismantling a hugely complicated set of systems focussing on different aspects of social welfare and reducing them to a single streamlined one that requires very little overhead to maintain is very much aligned with small government philosophy and massively reduces the number of levers the government has to play with and therefore play politics with.
The redundancy of human labour
It seems likely a UBI will become inevitable at some point in time based on the expectation that as automation and AI continue to advance, increasing numbers of workers will simply not be able to compete with the productivity of machines. There’s only so much retraining we can do before trying to do something that machines can’t do better becomes futile. And this isn’t an expectation that applies only to low-skilled or manual labour, but inevitably will over time impact the competitiveness of even the most highly skilled jobs. With this kind of inevitable future outlook, the conventional libertarian philosophy of “leave the market to itself” will simply not be capable of addressing society’s needs.
We are in an era where automation dominates productivity, a trend that will inevitably continue escalating exponentially. It simply isn’t plausible that in the long term we will be able to compete against the machines we invented, and the need for state intervention to subsidise income will be necessary to ever-increasing extents. A UBI is the most practical and efficient way to achieve this, with the most positive outcomes both economically and socially. It would be complete intellectual capitulation for libertarians and conservatives not to allow free-market philosophy to evolve and accommodate for the hard reality that our labour is becoming worthless and that a UBI is the best way to accommodate for this in a manner entirely congruent with the remainder of free-market philosophy. As we outsource our productivity to machines, we mustn’t outsource all the return also.
The incentive tradeoff
The fact that a UBI implies higher marginal tax rates, even if net tax revenue remains the same inevitably raises the perfectly legitimate criticism that this skews incentives and may undermine competitiveness. There is truth in that, however while higher marginal rates act as a disincentive these are counteracted by newly created incentives, specifically more competitive workers, more streamlined government, a more efficient and less regulated labour market with greatly increased mobility, and most importantly all those who were previously priced or regulated out of the labour market altogether no longer face those roadblocks and are able to compete.
From the perspective of businesses, who now pay higher tax rates to effectively reimburse the UBI, they have the new incentive that labour costs have been reduced, providing a multiplier on return on investment into labour, and face fewer regulatory barriers when negotiating employment contracts since we can now safely dismantle many existing employment regulations.
Vote Script for President
Ladies & Gentlemen — Allow me to introduce our new Minister for Social Services.
We’re pleased to announce our quantum network simulator QuNet, written by my PhD student Hudson Leone.
The Julia source code and documentation are available on GitHub here.
The development of QuNet is based on the theoretical work performed in conjunction with Hudson Leone, Nathaniel Miller, Deepesh Singh, Nathan Langford and myself, presented in our recent arXiv paper “QuNet: Cost vector analysis & multi-path entanglement routing in quantum networks”here.
Our latest paper “Quantum crypto-economics: Blockchain prediction markets for the evolution of quantum technology”, on using the forward price of blockchain-based assets to create prediction markets for trends in the development of quantum computing is now available on the arXiv here.
This is in collaboration with Gavin Brennen from Macquarie University, and Vijay Mohan, Sinclair Davidson, Chris Berg, Darcy Allen and Jason Potts from the RMIT Blockchain Hub.
This paper provides a next-generation, market-based alternative to the bullshit Quantum Bullshit Detector (@BullshitQuantum), and the equally bullshit Democratic Quantum Bullshit Detector Bullshit (@QuantumDemocrat).
Two of the most important technological advancements currently underway are the advent of quantum technologies, and the transitioning of global financial systems towards cryptographic assets, notably blockchain-based cryptocurrencies and smart contracts. There is, however, an important interplay between the two, given that, in due course, quantum technology will have the ability to directly compromise the cryptographic foundations of blockchain. We explore this complex interplay by building financial models for quantum failure in various scenarios, including pricing quantum risk premiums. We call this ‘quantum crypto-economics’.