Study: Attack on KrebsOnSecurity Cost IoT Device Owners $323K

A monster distributed denial-of-service attack (DDoS) against KrebsOnSecurity.com in 2016 knocked this site offline for nearly four days. The attack was executed through a network of hacked “Internet of Things” (IoT) devices such as Internet routers, security cameras and digital video recorders. A new study that tries to measure the direct cost of that one attack for IoT device users whose machines were swept up in the assault found that it may have cost device owners a total of $323,973.75 in excess power and added bandwidth consumption.

My bad.

But really, none of it was my fault at all. It was mostly the fault of IoT makers for shipping cheap, poorly designed products (insecure by default), and the fault of customers who bought these IoT things and plugged them onto the Internet without changing the things’ factory settings (passwords at least.)

The botnet that hit my site in Sept. 2016 was powered by the first version of Mirai, a malware strain that wriggles into dozens of IoT devices left exposed to the Internet and running with factory-default settings and passwords. Systems infected with Mirai are forced to scan the Internet for other vulnerable IoT devices, but they’re just as often used to help launch punishing DDoS attacks.

By the time of the first Mirai attack on this site, the young masterminds behind Mirai had already enslaved more than 600,000 IoT devices for their DDoS armies. But according to an interview with one of the admitted and convicted co-authors of Mirai, the part of their botnet that pounded my site was a mere slice of firepower they’d sold for a few hundred bucks to a willing buyer. The attack army sold to this ne’er-do-well harnessed the power of just 24,000 Mirai-infected systems (mostly security cameras and DVRs, but some routers, too).

These 24,000 Mirai devices clobbered my site for several days with data blasts of up to 620 Gbps. The attack was so bad that my pro-bono DDoS protection provider at the time — Akamai — had to let me go because the data firehose pointed at my site was starting to cause real pain for their paying customers. Akamai later estimated that the cost of maintaining protection against my site in the face of that onslaught would have run into the millions of dollars.

We’re getting better at figuring out the financial costs of DDoS attacks to the victims (5, 6 or 7 -digit dollar losses) and to the perpetrators (zero to hundreds of dollars). According to a report released this year by DDoS mitigation giant NETSCOUT Arbor, fifty-six percent of organizations last year experienced a financial impact from DDoS attacks for between $10,000 and $100,000, almost double the proportion from 2016.

But what if there were also a way to work out the cost of these attacks to the users of the IoT devices which get snared by DDos botnets like Mirai? That’s what researchers at University of California, Berkeley School of Information sought to determine in their new paper, “rIoT: Quantifying Consumer Costs of Insecure Internet of Things Devices.”

If we accept the UC Berkeley team’s assumptions about costs borne by hacked IoT device users (more on that in a bit), the total cost of added bandwidth and energy consumption from the botnet that hit my site came to $323,973.95. This may sound like a lot of money, but remember that broken down among 24,000 attacking drones the per-device cost comes to just $13.50.

So let’s review: The attacker who wanted to clobber my site paid a few hundred dollars to rent a tiny portion of a much bigger Mirai crime machine. That attack would likely have cost millions of dollars to mitigate. The consumers in possession of the IoT devices that did the attacking probably realized a few dollars in losses each, if that. Perhaps forever unmeasured are the many Web sites and Internet users whose connection speeds are often collateral damage in DDoS attacks.

Image: UC Berkeley.

Anyone noticing a slight asymmetry here in either costs or incentives? IoT security is what’s known as an “externality,” a term used to describe “positive or negative consequences to third parties that result from an economic transaction. When one party does not bear the full costs of its actions, it has inadequate incentives to avoid actions that incur those costs.”

In many cases negative externalities are synonymous with problems that the free market has a hard time rewarding individuals or companies for fixing or ameliorating, much like environmental pollution. The common theme with externalities is that the pain points to fix the problem are so diffuse and the costs borne by the problem so distributed across international borders that doing something meaningful about it often takes a global effort with many stakeholders — who can hopefully settle upon concrete steps for action and metrics to measure success.

The paper’s authors explain the misaligned incentives on two sides of the IoT security problem:

-“On the manufacturer side, many devices run lightweight Linux-based operating systems that open doors for hackers. Some consumer IoT devices implement minimal security. For example, device manufacturers may use default username and password credentials to access the device. Such design decisions simplify device setup and troubleshooting, but they also leave the device open to exploitation by hackers with access to the publicly-available or guessable credentials.”

-“Consumers who expect IoT devices to act like user-friendly ‘plug-and-play’ conveniences may have sufficient intuition to use the device but insufficient technical knowledge to protect or update it. Externalities may arise out of information asymmetries caused by hidden information or misaligned incentives. Hidden information occurs when consumers cannot discern product characteristics and, thus, are unable to purchase products that reflect their preferences. When consumers are unable to observe the security qualities of software, they instead purchase products based solely on price, and the overall quality of software in the market suffers.”

The UK Berkeley researchers concede that their experiments — in which they measured the power output and bandwidth consumption of various IoT devices they’d infected with a sandboxed version of Mirai — suggested that the scanning and DDoSsing activity prompted by a Mirai malware infection added almost negligible amounts in power consumption for the infected devices.

Thus, most of the loss figures cited for the 2016 attack rely heavily on estimates of how much the excess bandwidth created by a Mirai infection might cost users directly, and as such I suspect the $13.50 per machine estimates are on the high side.

No doubt, some Internet users get online via an Internet service provider that includes a daily “bandwidth cap,” such that over-use of the allotted daily bandwidth amount can incur overage fees and/or relegates the customer to a slower, throttled connection for some period after the daily allotted bandwidth overage.

But for a majority of high-speed Internet users, the added bandwidth use from a router or other IoT device on the network being infected with Mirai probably wouldn’t show up as an added line charge on their monthly bills. I asked the researchers about the considerable wiggle factor here:

“Regarding bandwidth consumption, the cost may not ever show up on a consumer’s bill, especially if the consumer has no bandwidth cap,” reads an email from the UC Berkeley researchers who wrote the report, including Kim Fong, Kurt Hepler, Rohit Raghavan and Peter Rowland.

“We debated a lot on how to best determine and present bandwidth costs, as it does vary widely among users and ISPs,” they continued. “Costs are more defined in cases where bots cause users to exceed their monthly cap. But even if a consumer doesn’t directly pay a few extra dollars at the end of the month, the infected device is consuming actual bandwidth that must be supplied/serviced by the ISP. And it’s not unreasonable to assume that ISPs will eventually pass their increased costs onto consumers as higher monthly fees, etc. It’s difficult to quantify the consumer-side costs of unauthorized use — which is likely why there’s not much existing work — and our stats are definitely an estimate, but we feel it’s helpful in starting the discussion on how to quantify these costs.”

Measuring bandwidth and energy consumption may turn out to be a useful and accepted tool to help more accurately measure the full costs of DDoS attacks. I’d love to see these tests run against a broader range of IoT devices in a much larger simulated environment.

If the Berkeley method is refined enough to become accepted as one of many ways to measure actual losses from a DDoS attack, the reporting of such figures could make these crimes more likely to be prosecuted.

Many DDoS attack investigations go nowhere because targets of these attacks fail to come forward or press charges, making it difficult for prosecutors to prove any real economic harm was done. Since many of these investigations die on the vine for a lack of financial damages reaching certain law enforcement thresholds to justify a federal prosecution (often $50,000 – $100,000), factoring in estimates of the cost to hacked machine owners involved in each attack could change that math.

But the biggest levers for throttling the DDoS problem are in the hands of the people running the world’s largest ISPs, hosting providers and bandwidth peering points on the Internet today. Some of those levers I detailed in the “Shaming the Spoofers” section of The Democraticization of Censorship, the first post I wrote after the attack and after Google had brought this site back online under its Project Shield program.

By the way, we should probably stop referring to IoT devices as “smart” when they start misbehaving within three minutes of being plugged into an Internet connection. That’s about how long your average cheapo, factory-default security camera plugged into the Internet has before getting successfully taken over by Mirai. In short, dumb IoT devices are those that don’t make it easy for owners to use them safely without being a nuisance or harm to themselves or others.

Maybe what we need to fight this onslaught of dumb devices are more network operators turning to ideas like IDIoT, a network policy enforcement architecture for consumer IoT devices that was first proposed in December 2017.  The goal of IDIoT is to restrict the network capabilities of IoT devices to only what is essential for regular device operation. For example, it might be okay for network cameras to upload a video file somewhere, but it’s definitely not okay for that camera to then go scanning the Web for other cameras to infect and enlist in DDoS attacks.

So what does all this mean to you? That depends on how many IoT things you and your family and friends are plugging into the Internet and your/their level of knowledge about how to secure and maintain these devices. Here’s a primer on minimizing the chances that your orbit of IoT things become a security liability for you or for the Internet at large.