Should you worry about terrorists with Bio-Weapons? (No.)

A recent story said that there was a terrorist “planning” to attack the Italian town of Macomer (pop. approx. 10,000) by putting Ricin and Anthrax in the water supply. That sounds scary, right?

First, he didn’t HAVE Anthrax or Ricin. He was planning on buying it online. Somehow. (No, no-one is selling biological weapons online. Not even on the dark web.) But let’s assume he managed to get it, somehow. Maybe ISIS or Al-Qaeda, which pursued biological weapons but couldn’t manage to buy or make them, nevertheless ended up finding some surplus bioweapons from the Russians, and gave them to this guy in Italy. And no, that’s not plausible, but we’re going well past the point of plausible in order to try to find a way to worry about this threat.

OK, so he’s got his materials, and wants to put them in the water. The water supply might be unguarded — I don’t know, but many places have fences and such around freshwater drinking sources, and might notice someone dumping in something. But maybe they don’t. Some places have water utilities that test the drinking water for various toxins somewhere along the line. Let’s assume there is no such program in place for the water delivered to this small Italian town. But how much Antrax and Ricin would he need to put in, exactly?

We can start with Ricin. It’s relatively easy to make. (Obviously much harder than a bomb, and most terrorists can’t manage to make those without a fair amount of help, but maybe the terrorist has a really good chemistry background.) The victims only need to ingest 1 ml of ricin per kilogram of body weight to have a 50% chance of dying. We’ll conservatively assume that the people of Macomer average 50kg. That’s only 50ml of ricin per person, or 500 liters of ricin toxin — or about 100 gallons, for Americans. That’s not an amount you can stick in a backpack — you need to back a truck up to the water supply to get that volume of toxin in.

But people aren’t ingesting all of that water. An approximate level of water usage per person is 450 liters per day. (That’s still about 100 gallons.) In California, with its droughts, they require about half that, and we’ll go with the lower number. People only need to drink about 2 liters of water (8 cups) a day. That doesn’t need to all be in the form of tap water — juices and soda works too. But again, let’s assume everyone is being healthy and environmentally conscious, and they drink only tap water. That’s about 1% of their daily water usage. So we need to multiply the amount in the water supply by 100 to get the same effect — that’s a large tanker truck worth of ricin. But a city isn’t only going to have a single day supply of water in the reservoir. For every day worth of water they have, we need to add another tanker truck.

OK, so maybe our would-be terrorist isn’t going to be able to order a couple dozen tanker trucks of Ricin on the dark web. (And don’t worry too much about a permanently contaminated water supply — boiling the water gets rid of ricin.)

But anthrax. Maybe that could work. And it is found naturally on the ground! Fortunately for us, and unfortunately for our would-be terrorist, culturing anthrax in large quantities is really, really hard. For an idea how hard, we can look at Aum Shinrikyo — the people who successfully made Sarin and used it to attack a subway in Japan. It turns out that before they did this, they spent years trying to isolate Anthrax. The eventually succeeded, but it turns out that the strain they ended up cultivating wasn’t a very good one for hurting people. Still, maybe our terrorist gets lucky, and finds someone on the internet who happens to be willing to sell the a dangerous strain of anthrax. All they need to do is cultivate it.

Unfortunately, the terrorist in question doesn’t have any lab experience in microbiology. He can try to buy a book, and some equipment, but he’s going to have a hard time figuring out something that the PhD bacteriologists need to use specially designed fermenters to culture.

And then he needs to add it to the water. And even though there doesn’t need to be a huge quantity of spores to cause fatal anthrax by ingestion in an individual, as with Ricin, the picture changes when the spores are dumped into a large body of water.

At the end of the day, biological threats exist, and it’s likely that we will see more in the future. But idiots claiming to have plans to poison water supplies with non-existent supplies of bio-weapons are just that — idiots that make ridiculous claims. Terrorist threats are serious, and I’m sure he’ll serve time in jail. That’s good, because there are lots of ways that people interested in committing terrorism can kill people. They just involve trucks and guns, not imaginary mail-order bioweapons.

Blockchains, Reserve Banks, and Accounting for Liabilities

Blockchain enthusiasts have occasionally claimed that blackchains allow “an asset without a liability,” a phrase used by Walker and Luu, and echoed by Nic Carter. Despite being a ledger, the blockchain is not money owed by anyone — which is a informal understanding of what a liability is. The claimed advantage of this seems to be that cryptocurrency holdings are akin to a natural resource, like gold or silver, rather than a reserve-bank backed fiat currency.

In many ways Bitcoin and similar ventures do resemble such assets, or even exceed them in important ways. For example, the supply of Gold is “fixed” — modulus mining, which can increase when gold prices are high. The supply of bitcoin, of course, is fixed in a much less manipulable sense. However, not having a corresponding liability is not one of the ways that cryptocurrencies differ from reserve-bank currencies — in fact, it is an incredibly close parallel.

First, it is useful to understand what a reserve bank balance sheet does — it has assets, which are things it purchased, and liabilities, which is principally the money that has been issued. Reserve banks function by running a liability-focused balance sheet — they create money from nothing, which gives them an asset, the money created, and a corresponding liability, which is that the money is actually a debt to itself. If this money is used to buy something, they get an asset in exchange for an asset and the balance sheet balances. But the liability doesn’t mean they owe anything — they can leave the currency issued and never repay it.

If I have a $50 bill, that is a direct $50 liability on the part of the central bank. They don’t owe me anything, but it’s a liability. The way those liabilities are balanced is via a negative equity — the total government debt. That’s because in most cases, central banks are actually paying for things that they don’t receive — the government runs a deficit, and the excess payments by the government creates a debt, which is again, a reserve bank liability. The theory is that the reserve bank could always balance its books by having the government tax to pay for all of those liabilities — but the more common resolution is inflation, insolvency, and often abandoning the currency.

This is fundamentally different than a commercial bank. If I have $50 in a commercial bank, and no debt, that’s a $50 liability that the bank owes me, and a corresponding $50 asset that they have to lend. The money is ALSO a liability on the reserve bank balance sheet, corresponding to the asset the bank has. The bank’s balance sheet for these assets needs to balance, however, unlike the reserve bank. If they hold the cash, they can then lend my $50 (in fractional reserve banking, to three or four people,) but for every dollar they hand out, they gain a corresponding asset — that someone owes them the money. They can become insolvent just like the federal government — if too many people default on loans, they run out of money, and (if the FDIC or equivalent doesn’t step in,) the depositors lose their deposits.


How does a blockchain work? Just like a reserve bank, it gives out money (pre-mined tokens, block rewards, transaction fees,) but it does not get anything in exchange. This is a lot like when a government overspends its assets — the corresponding liabilities turn into money. Here, however, the item purchased with the money isn’t an asset, it’s an intangible — security and transactibility. Until the currency is fully mined, every block mined costs the network money to pay for this security and transactibility.

When I have a bitcoin, it’s an asset balanced by a liability held by the blockchain. Whose liability? It belongs to the network. The network must mine more blocks to allow transactions, and keep these liabilities useful —and this is an ongoing expense.

Cryptocurrencies have associated liabilities, just like any other asset that gets issued. What balances the block-chain debit-sheet? Nothing — just like central banks, which spent money and created liabilities. Unlike central governments, blockchains don’t have the ability to tax to re-balance the balance sheet. By design, of course, most also can’t inflate the currency. If for any reason the blockchain is unable to meet the ongoing expense of mining rewards to provide security and transactability, it does exactly the same thing a reserve bank does, and the money disappears.