Nearly 200 years ago, the Blanc brothers devised a way to exploit the French government’s telegraph network to profit from stock trading information.
Many people believe that the first cyber attack in history occurred in 1988 when Robert Morris, a 20-something graduate student at Cornell, accidentally released a computer worm (a type of malware that primarily self-replicates to other computers while still operating on the infected systems), quickly clogging much of the Internet. However, the history of cyber attacks predates Morris’s worm, according to Amusing Planet. In fact, it began before the Internet existed and before wireless telegraphy was even a concept. Instead, there was a large data network based on visual signaling known as semaphore.
The semaphore signaling tower. (Photo: Amusing Planet).
The semaphore system consisted of a series of towers, each equipped with movable wooden arms at the top. Different configurations of the arms corresponded to letters, numbers, and various symbols. An operator at each tower would observe the configuration of the adjacent tower through a telescope and then replicate it on their own tower. This way, messages could be transmitted from one station to another along a line at an impressive speed. The semaphore network was for government use, but in 1834, the Blanc brothers, François and Joseph, figured out how to infiltrate the system for profit.
François and Joseph Blanc traded government bonds at the stock exchange in Bordeaux, France, where they closely monitored market fluctuations at the Paris stock exchange. As the largest stock exchange in France, Paris dominated trading in stock markets across other cities nationwide. However, these secondary markets were always days behind because information about market fluctuations took days to be relayed from Paris via mail coaches. If they could obtain information faster, traders could act before the market moved, thus earning more money. Some used people or carrier pigeons, but the Blanc brothers knew that these methods were unreliable. Pigeons often lost messages, and couriers were not necessarily faster than dedicated mail coaches. They needed to devise another way to gather information.
The two brothers bribed the telegraph operator in Tours. News about the stock market was relayed by an accomplice in Paris to this operator. The operator’s job was to transmit the information from Tours to Bordeaux using the semaphore system. However, the telegraph was strictly for government use, and the bribed operator could not transmit personal messages without risking detection. Therefore, the Blanc brothers instructed the operator to apply a unique code to the government telegraph messages sent throughout the network. These codes were designed to resemble mistakes but actually contained crucial information about the market that traders like the Blanc brothers were seeking.
Typically, when an operator accidentally made a mistake while transmitting a signal, they would encode the correction on the next transmission. However, the error and the subsequent correction would be copied from one station to another. When the final station received both the erroneous message and the correction, the mistake would be rectified. The Blanc brothers positioned an accomplice equipped with a telescope near the final station on the transmission line to Bordeaux. This person would read the “error”, decode it, and relay the information to the Blanc brothers.
The operation went smoothly for two years and was only uncovered when the operator in Tours fell ill and revealed the secret to a friend, hoping this friend would take over his position. Unfortunately, that friend reported the matter to the authorities. The Blanc brothers were arrested, but since there were no clear laws regarding the misuse of the telegraph system, they were released. This incident highlighted that the semaphore system in France was not secure, and even if it wasn’t the Blanc brothers, others would find a way to exploit the vulnerabilities somehow.
