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What is a Hacker? An Overview of Hacking History and the Evolution of the Term Hacker

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The term “hacking” has its roots in a time and place that had no major influence by personal computing. The ubiquitous PC and the Internet were still decades off when people began “hacking” at the Tech Model Railroad Club, in 1946. A “hack” would be an interesting innovation in the model trains the group played with. Such a fascination with trains and things can be seen still today in a less physical way, though the TMRC remains, in games like OpenTTD, which is a hacked extension of a game released commercially in the 1990s. The point is: to “hack” does not have to mean “to destroy.” In contrast, the spirit of the hacker is that of determination to achieve. Whatever the goal and whatever the obstacles, the hacker strives to achieve. One of the most famous hackers in history is Gary McKinnon, whose belief that the US government had evidence of alien life on earth was so strong it drove him to compromise several top secret systems within the US government.

The term has garnered quite a bit of negativity over the decades, as mass media have labeled it to various famous miscreants, be they childish and somewhat benign or outright dangerous. News clips like the following illustrate the point:

For the purpose of clarity, the reader should note that in our age the term “hacking” relates strictly to computers, programming, and the like. Various bastardizations of the term, like “lifehack,” are often met with disdain by members of the security community. Hacking almost exclusively now refers to computer network security, although it is occasionally used to refer to programming with very strict goals in mind. One might say “I’ve been hacking on my Python project all weekend,” and merely mean they’ve been trying to achieve certain goals in their project.

So, what is a hacker? A hacker is someone who will stop at nothing to achieve their goal, particularly in terms of computing. A hacker will learn programming languages in order to write scripts that can compromise an obstacle system. A hacker will stay awake for weeks on end trying different methods to make a given thing work. The spirit of the hacker is that of endless curiosity and spurious determination, or, as Richard Stallman once put it: “Hackers typically had little respect for the silly rules that administrators like to impose, so they looked for ways around.”

“Types” of Hackers

As humans, we like to classify things in little boxes that can be checked. When we see an automobile, we like to know it’s not just a sedan, but a red 2016 Chevy Impala. Thus, over the years, to distinguish the various types of hackers, both professional and amateur, a few terms have been settled upon.

The black hat hacker is perhaps the most infamous and well-known type of hacker. The black hat hacker can be a mercenary or government-sponsored hacker, or they can just be a maladjusted kid doing it for the laughs. The primary defining characteristic of a black hat hacker is their unwillingness to disclose security vulnerabilities to software vendors or system administrators. Instead, black hats often seek to profit from these, or in the case of particular missions from state agencies, seeks to establish regular access for the purpose of spying or other murky activity. The black hat is often what has come to encompass the meaning of the term “hacker” overall in the popular lexicon. When someone says “hacker” on television, they often mean a black hat hacker.

In direct contrast to black hat hackers, and perhaps most responsible for the persistence of these terms, are “white hat” hackers. These are individuals who do the same type of work as black hats, but seek to inform those who’d be victimized by black hats. Instead of selling exploits, white hats disclose them. Often, they are rewarded for doing so. A whole community is dedicated to this process, called HackerOne, where hackers can submit vulnerabilities and other bugs they’ve found in various commercial applications. Once their discoveries are vetted, they are rewarded with cash. The goal of such organizations is to make it profitable to “do the right thing.”

Lastly, you have the gray hat hackers. Gray hats are somewhere in between. They are not as motivated to “do the right thing” if, for instance, they don’t like the organization they’ve found to be vulnerable. They might engage in white hat and black hat activities during the same week. Some of the most famous hackers have been gray hats, notably the l0pht group, who developed l0pht crack and other software to help less-skilled people achieve their ends. One of their members coined the term in 1997 at the first Black Hat Conference. Contrary to its name, the Black Hat Conference mostly plays host to white hat hackers and professional computer security firms. It is not some gathering of super villains.

Motivations For Hacking

As in all things, the biggest motivator for hackers in the modern age is money. Hackers find and sell exploits to other hackers, to government agencies, and, as previously stated, even to the would-be victims of the exploits. A common compromise of systems in recent years has been the “cryptolocker,” also known as “ransomware,” which makes a computer’s filesystem inaccessible to the owner until they pay a ransom. However, other motivations also exist.

In the early days of networked computing, the simplest motivation was curiosity. What would happen if I did this, the hacker would ask, and then simply do it, regardless if it was against the rules. Government agencies like the NSA hack as part of their mission, which changes with the political atmosphere. Thanks to the hacker Edward Snowden, we’ve learned that they actively seek to weaken security in commercial communication protocols for the purpose of eavesdropping.

Speaking of politics, many hackers have had political motivations. Perhaps the most infamous hacking group of the past decade has been Anonymous, a group which has often hacked in the name of various social justice causes. One of the most high-profile hacking incidents in recent memory is the December, 2014 hack of Sony Pictures, a hack which was conducted by the so-called “Guardians of Peace,” who sought to force the company to not release “The Interview,” a film which made raucous fun of North Korean dictator Kim Jung-un. This hack was successful in scope, and the film was canceled in many theaters for security concerns. Instead, it was released directly via Google Play and other online distribution services.

Proper attribution of hackers can often be hard, as most competent hackers are well-versed in the art of remaining anonymous or a few steps ahead of those who would apprehend them. The group “Anonymous,” for instance, could be attributed with all the hacks ever conducted, since the group technically has no center or driving body. Actual claiming of hacks by Anonymous is only verifiable on the basis of reputable sources, such as Twitter handles that are known to have connections inside the actual group. In the case of the Sony Pictures hack, the North Korean government was blamed despite there being evidence that it could have been an inside job.

So, What Is A Hacker?

Like most words in English, “hacker” means different things to different people. The common citizen probably perceives the word with either fear or admiration. In a sense, the hacker is the one responsible for the continued improvement of computer security the world over. He or she is the reason that large corporations you trust with your data have entire departments working to ensure that your data is secured, and often enough, at his day job, also the one finding ways to ensure as much.

The hacker disregards petty rules in favor of actual results. The World Wide Web presented untold intellectual freedom and the hacker is perhaps the last line of defense between power-hungry despots and the elimination of that freedom. Hackers have been responsible for some of the most important involuntary disclosures by the US government in recent years, including the revelation of war crimes and spying on citizens. Without such bold people in the world, as we increasingly rely on technology for nearly every part of human life, liberty might all but cease to exist in practice, with every facet of life having come easily under the control of powerful lunatics.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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5 stars on average, based on 2 rated postsP. H. Madore has covered the cryptocurrency beat over the course of hundreds of articles for Hacked's sister site, CryptoCoinsNews, as well as some of her competitors. He is a major contributing developer to the Woodcoin project, and has made technical contributions on a number of other cryptocurrency projects. In spare time, he recently began a more personalized, weekly newsletter at http://ico.phm.link




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  1. Dawood Khan

    December 15, 2015 at 8:17 pm

    “In computer security, a hacker is someone who focuses on security mechanisms of computer and network systems. That is, the media portrays the ‘hacker’ as a villain. Nevertheless, parts of the subculture see their aim in correcting security problems and use the word in a positive sense. White hat is the name given to ethical computer hackers, who utilize hacking in a helpful way. White hats are becoming a necessary part of the information security field.”

    Taken from here.

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Altcoins

Cryptocurrency Investing: What is a Healthy Portfolio and Where Does Bitcoin Stand

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Over the past 12 months, year-to-date, bitcoin has fallen behind Ripple, Litecoin, and Ethereum in terms of price growth.

Bitcoin’s Year-to-Date Return

Bitcoin still has recorded a massive price increase of 14-fold, from $1,000 to $14,000. But, other cryptocurrencies in the market such as Ripple have recorded a staggering 163.5-fold increase in value. Merely a $1,000 dollar investment in Ripple in the beginning of 2017 would have led to a profit of $162,500, while an investment in bitcoin would have led to $14,000.

Yearly bitcoin price growth provided by Coinbase

The top three cryptocurrencies in the market bitcoin, Ethereum, and Bitcoin Cash have less potential to increase by large margins in comparison to cryptocurrencies with market valuations of less than $10 billion. Unless the entire cryptocurrency market surges exponentially and the valuation of the market grows to many trillions of dollars by the end of 2018, in the short-term, it is unlikely that leading cryptocurrencies including bitcoin, Ethereum, and Bitcoin Cash will record an astronomical surge in value, by more than 100-fold.

Billionaire hedge fund investor Mike Novogratz, Fundstrat’s Tom Lee, and highly respected financial analyst Max Keiser have established an interim price target of bitcoin at around $50,000, which would place the market valuation of bitcoin at $1 billion. Solely in terms of price growth, a $50,000 target would be a 3.5-fold increase in value over a 12-month period.

Consequently, many investors in the market have started to diversify their investments into other cryptocurrencies, and the trend has been evident in the decline of the dominance index of bitcoin. Three cryptocurrencies at the top of the market are considered as reserve assets or safe haven assets. They have low risk but low returns. That is, a low return relative to other cryptocurrencies in the market. Bitcoin, Bitcoin Cash, and Ethereum have drastically outperformed all of the currencies and assets in the traditional finance sector year-to-date.

Investors like CNBC analyst Brian Kelly and cryptocurrency-focused hedge funds spread out their funds across many cryptocurrencies with strong technologies, active developer communities, solid markets, and applicability.

John McAfee for instance, has emphasized the necessity of private or anonymous cryptocurrencies like Dash, Monero, and Zcash, as in the future, more investors will seek out for cryptocurrencies that are capable of providing a high level of confidentiality.

Combination of Low-Risk and High-Risk Cryptocurrencies

A healthy portfolio of cryptocurrencies would be a certain amount of funds spread across both strong low-risk cryptocurrencies like bitcoin, Ethereum, and Bitcoin Cash, and high-risk cryptocurrencies with lower market caps like Monero, Zcash, and Dash.

Squeeze, a prominent cryptocurrency trader, noted that price is not an accurate representation of the size of a cryptocurrency. Rather, investors should consider the market valuation of a cryptocurrency to decide its potential and space to grow.

“For new investors in crypto, think in market cap. Not price per coin. Market cap gives an estimate of the potential growth. Price per coin doesn’t mean anything as the supply for each altcoin differs $0.1 per coin doesn’t mean it’s cheap $100 per coin doesn’t mean it’s expensive,” said Squeeze.

An example of a high market cap but low price cryptocurrency is Ripple. The market valuation of Ripple is at nearly $40 billion but its cryptocurrency remains at $1. Meanwhile, Dash, Litecoin, and Monero have tokens valued at more than $300. Yet, their market valuations are substantially lower than that of Ripple.

For investors and bitcoin holders that have seen significant returns over the past few years, diversifying funds across unique and potent cryptocurrencies could lead to better returns in the short-term.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.4 stars on average, based on 3 rated postsJoseph Young is a finance and tech journalist based in Hong Kong. He has worked with leading media and news agencies in the technology and finance industries, offering exclusive content, interviews, insights and analysis of cryptocurrencies, innovative and futuristic technologies.




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Analysis

On Speculative Bubbles, Strategies, FOMO, and Early Exits

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In the 16 years that I have spent observing and trading the markets, there were several incredible events that changed how I look at investments. The bull market in stocks that is fuelled by free money, the Lehman-Crash, and the Dot-Com bubble were among them. To be clear, the current cycle in cryptocurrencies is not one of those, even as some of the coins routinely double daily.

Why is that? Because the dynamics behind the moves are familiar; precious metals in 2011, the Chinese stock market a couple of times in the past 10 years, oil in 2008, the Dot-Com bubble, and so on. All of these trends had an eerily similar dynamic, although the exact path of price movements and the volatility of the moves differed substantially.

“History doesn’t Repeat itself but often Rhymes”

Allegedly Mark Twain observed that, and I couldn’t agree more. As a certain topic goes through boom-bust cycles with spectacular gains and higher and higher bottoms, it naturally draws in new investors that are standing on the sidelines waiting for confirmation of some sorts.

After a while, as publicity rises, the success stories go mainstream, and the number of participating investors multiplies, the market reaches an inflection point where the influx of capital won’t be enough to hold the marginal selling by the already invested public. To be precise, this inflection “point” is sometimes a longer period of grinding gains, one blow-off advance, or another topping pattern such as a double top for instance.

Tha Nasdaq Bubble and the Aftermath

Here is the catch though; in advance, you never know when this point arrives, as the pool of potential investors, the willingness of the previously entered investors to hold, and several other factors are unknown. That said, as the market matures, it will be harder and harder to sustain the gains that drove the valuations far from reality already, and the market will be more and more similar to an old-fashioned pyramid scheme, where the last entrants lose almost everything.There were several potential tops along the way, just as it has been the case with BTC, and the majority of the most successful long-term investors sold very early, in line with their tested strategies.

The Crypto-Boom is Legit, But…

(more…)

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 353 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Trading 101

Trading 101: Moving Averages and Moving Average Strategies

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What are Moving Averages?

Moving Averages are among the most popular trend indicators in Technical Analysis. They provide a simple, yet powerful visualization of the ongoing trends in an asset. They are used for a wide variety of reasons, primarily for trend following and reversal strategies.

Simply put moving averages are connected points calculated for every day (or whatever the timeframe is). The calculation itself is simple; you take a given number of previous days and calculate their average. Of course, you don’t have to do the calculations yourself. All basic charting software and trading platforms do the math for you and plot the moving average (or up to dozens of averages for that matter) on the chart of the asset.

How to Interpret Moving Averages?

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Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 353 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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