March 26, 2012: Cyber War (attacks on computer networks, usually via the Internet) requires ammunition, and the most common form of ammo is "Zero Day Exploits" (ZDEs). These are freshly discovered and exploitable defects in software that runs on the Internet. These flaws enable a hacker to get into other people's networks and PCs. In the right hands these flaws enable criminals to pull off a large online heist or simply maintain secret control over someone's computer.
ZDEs are rare. They are in great demand and are increasingly expensive to find, or buy, from legitimate researchers or on the hacker black market. The price of ZDEs varies a lot. That's because not all vulnerabilities are equal. Some are much more valuable than others because they are more effective or allow attacks on a larger number of targets. Commercial Internet security firms offer rewards to people (usually software engineers who spend too much time on the Internet) who first discover a "zero day vulnerability." These "vulnerabilities" are software bugs that have not yet been put to use by a hacker to create a ZDE. The rewards for really good ZDEs can sometimes exceed a million dollars. The commercial security firms, which provide services for corporate and government clients, offer the rewards openly. There is a more lucrative underground market, financed by criminals and some governments that offer even larger rewards.
The users, especially large companies, get after the software publishers to find and fix the bugs quickly. This rarely happens, and discovering and fixing these vulnerabilities usually takes several months and sometimes as long as a year or more. This is largely because fixing these bugs is expensive and publishers don't want to risk creating new ones. The publishers know that every time they open their source code to repair something there is high risk of creating more bugs. Moreover, it's expensive to fix the bug, test the patched software and then distribute it to their customers. Thus, unless the bug is highly likely to be exploited, it is not attended to right away. The problem with this approach is that the software publisher may not be aware of how exploitable the bug is. Criminals and Cyber Warriors have an interest in finding ways to exploit bugs that appear relatively harmless. That turns the bug into ammunition, for the Cyber War, and a way to make money, for the criminals.
In preparation for a Cyber War ammo supply is critical. Put simply, whoever has found the largest number of quality vulnerabilities (unpatched of course) and has turned them into exploits will win. There's a lot of evidence that the United States and China have both compiled large arsenals and tested a lot of their stuff. Other countries are players as well, but the U.S. and China appear to be the superpowers of Cyber War.
The U.S. has an edge in the number of potential "mercenaries" (commercial security firms and freelance experts) it could enlist for the war effort. China openly encourages its hackers to go out and practice on foreigners, especially the Japanese (still hated for World War II era atrocities) and the United States. China is also believed to have arrangements and understandings with the gangs that specialize in Internet based crime. Remember, China is still a police state and communist secret police organizations have long been known to use criminal organizations for all sorts of things.
For over a decade now Cyber War and criminal hackers have secretly placed programs ("malware") in computers belonging to corporations or government agencies. These programs ("Trojan horses") turn the infected PCs into "zombies" (or "bots") which are under the control of the people who plant them (the "botmasters"). Such control allows the botmaster to steal, modify, or destroy data or shut down the computer systems the zombies are on. You infect new PCs and turn them into zombies by using ZDEs. This is a big business, although a lot of that business is delivering spam. But mixed in with all the garden variety criminality is a lot of corporate and military espionage.
Cyber War commanders are resigned to the fact that they will have to use mercenaries if they want to survive any future Internet based conflict. Much use is being made of mercenaries right now in the race to build up stockpiles of munitions. In Cyber War the ammo is information. That is, knowledge of vulnerabilities in software connected to the Internet or major networks not connected to the Internet. It's feared that China actually has a lead in this area, a lead they will not discuss but that the victims know exists.