
Fraud and Humans – a Historical Narrative, by Gautam Hazari.
Did you know that every 12 seconds, someone in the UK falls victim to fraud? (Guardian, 2023) The financial cost of online fraud globally is around USD 5.127 trillion – which is approximately 5% of the global GDP in 2024! (Report by Portsmouth University) Interestingly, this makes fraud the third-largest economy in the world – just behind the United States and China! Imagine fraud being the third-largest economy, and the impact on humanity if we could use that money lost to improve human lives!
What makes this even more striking is that fraud, especially financial fraud, is one of the oldest businesses that has ever existed. Yes – that’s right – the two words “oldest” and “business” are not really an exaggeration. Fraud is a business, and the staggering scale of it can be seen with a 74.8% increase globally in just a year (Ravelin). The fraudsters are doing business, albeit a very negatively shaded one.
Now, let’s return to fraud being one of the “oldest” businesses. How old is the oldest? A decade old? 20 years old? As old as the birth of the World Wide Web? It’s actually much older than that!
The year was 300 BC. Hegestratos, a sea merchant from Greece, and his partner Zenosthemis became creative and devised a plan to take out a form of large insurance policy known as “bottomry.” Bottomry is a maritime transaction referring to the bottom or the keel of the ship, where the ship owner uses the ship as collateral to borrow money.
The interesting thing is that until the ship reaches its destination, the entire risk is with the lender. If the ship encounters an accident or sinks, the borrower is not liable to repay the borrowed sum, as the guaranteed security no longer exists. The lender only gets the principal plus interest once the ship survives the voyage.
Hegestratos planned to sink the ship, which was apparently empty, as the corn it was supposed to ferry across was not loaded. This way, he wouldn’t need to repay the borrowed money and could make an additional profit by selling the corn. However, Hegestratos and Zenosthemis were caught in the act by the crew. Hegestratos drowned and lost his life while attempting to escape, and Zenosthemis was tried in the Athenian courts.
Not much has changed in the business of fraud since then – from the drivers behind fraud to fraud being a business. With advancements in technology, it has become much more accessible for fraudsters to conduct their business. The most important thing to consider is that fraud is a human problem. Being human is the key reason for becoming a victim of fraud, and every instance of fraud has a human story. I have talked about Amygdala Hijacking and fraud earlier and also how human evolution is used against humans by fraudsters.
Interestingly, another significant event happened in the same year – 300 BC. Euclid presented the prime numbers and the prime series to the world. Humanity could not have realised at the time that this event would become a potential solution to fraud and help protect us humans.
From my quantum physics days, I believe in conservation theories – like the pair-production process where (fundamental) particles and anti-particles are created at the same time, conserving mass + energy. Similarly, problems and anti-problems are most likely created at the same time, with anti-problems being the solutions – a conservation of sanity, probably. The prime numbers introduced by Euclid in 300 BC are critical for many cryptographic algorithms and mathematics.
Cryptography is a potential solution to the problem of fraud. As with any technology, humanisation is a non-negotiable characteristic. It may sound rhetorical, but we have been using humanised cryptography since 1991 – in the humble SIM card, which we carry in our mobile devices all day long. The SIM contains unique cryptographic keys and utilises cryptographic algorithms in a way that we humans are not scared to participate in the cryptographic process. This is humanised cryptography. This is humanised technology.
This is exactly what we at Sekura are passionately doing all around the globe: using SIM-based cryptographic authentication to solve the fraud problem – in the form of SAFr Auth. We utilise many other valuable signals associated with the SIM and the mobile number from mobile operators to protect humans from the age-old fraud problem, from account takeover fraud protection using SIM swap and call forward signals to mobile-to-person match and much more. We are building the missing identity layer of the Internet along the way.
Let’s make the world a SAFr place. Let’s protect every human, every transaction, and every thought from fraud – together.
Connect with Gautam Hazari on LinkedIn to stay updated on his latest insights and contributions to the field of digital identity and technology and AI beyond artificial.