Bitcoin protects privacy and fights oppression

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Surveillance is power, as authoritarian regimes have known throughout history. The emergence of the Internet in the late 20th century made surveillance easier than ever, creating a historically unprecedented repository of information about individuals and organizations stored on servers around the world.

Over the years, the dangers of the internet’s panopticon have caused many ordinary people to fight back – advocating for regulation through their governments where possible, but also developing their own technological defenses, including popular tools like messaging and encrypted messaging platforms. It is no exaggeration to say that, without privacy, individual freedoms cannot survive for long. And the battle for privacy in the digital age is now heading into its most recent, and perhaps most important, stage with the emergence of central bank digital currencies, or CBDCs.

This article is part of CoinDesk’s Privacy Week.

CBDCs are attempts by central government to turn blockchain technology for its own use: using its efficiency to store and transfer value, but also through the social control via surveillance it enables. CBDCs have clear advantages over the analog financial system, but alongside the promise of increased financial access and efficiency, they also expose citizens to a level of potential surveillance unimaginable in the past.

An authoritarian government administering a CBDC would have full oversight of every transaction anywhere on earth using its currency, as well as the ability to freeze, expropriate, or even force to spend funds belonging to individuals as it sees fit. . The prospect of such state-controlled currencies, like the digital yuan already deployed in China, also highlights why in the future a technology like Bitcoin may end up being the only insurance against financial repression in authoritarian countries, but even in democracies like the United States. States.

The seriousness of this problem, as it relates to privacy and surveillance, is particularly clear to me.

As a journalist, I spent years reporting on classified documents provided by National Security Agency whistleblower Edward Snowden. The documents showed in incredible detail the powers the US government had acquired to monitor and, by extension, control the lives of individuals whose communications fell under its massive global net.

Decentralized currencies like Bitcoin represent a possible safe haven from future government excesses in a world built on CBDCs

Behind the scenes, the NSA had developed the power to collect essentially any private message or metadata it sought from devices around the world, including from American citizens who had never suspected the level of power their government wielded. privately about them. Surveillance can ruin lives and I have seen firsthand the impact it can have on innocent people caught in a digital net.

CBDCs have the potential to further supercharge the surveillance power created by the internet. As Web 2.0 revolutionized the way information could be created and distributed, Web 3.0 will do the same for the creation and distribution of economic value. Governments will seek to have as much control over this as possible, just as they have with the Internet. The prospect of the government of a country like China having near-total ability to monitor and manipulate the information its citizens see is serious enough, but, whenever it seems possible, it acquires the same level of control over the ability people to conduct even the slightest economic activity, we will be in a whole new world of repression.

Many countries around the world are already following China’s lead by developing their own CBDC projects, including the United States with a digital dollar. Americans will likely expect their government to act in good faith in the way it administers such a currency, creating and enforcing regulations that protect their privacy and liberty. But as the Snowden documents have already shown, good faith assumptions aren’t particularly durable. Politics can help guarantee rights, but it is not enough. Just as crypto email and messaging platforms offer individuals a strong personal defense against surveillance abuse, decentralized currencies like Bitcoin represent a possible safe haven from future government excesses in a world built on CBDCs.

The current debate about the future role of Bitcoin and other cryptocurrencies rarely takes into account the issue of privacy in the digital age. Bitcoin is often accused by critics of having no valid use cases, or of being used as a tool by criminals and terrorists to conceal their activity. But similar accusations have often been leveled against encrypted emails in the past. While it is true that criminals sometimes also profit from the existence of privacy, that same privacy is also what enables the vast majority of law-abiding citizens to preserve their civil liberties.

Relying on regulation alone to do the job of protecting privacy on its own seems like a bad bet, given that regulation has failed to provide such protections in democracies like the United States and that such a perspective of benevolent governance does not even theoretically exist in non-democratic countries. It’s not hard to imagine a near future where Bitcoin and other currencies are the only haven for people fleeing government abuses, which have sadly proven to be common across the world.

In 1975, describing an analog era of espionage that involved wiretapping and physical eavesdropping that we would now consider quaint, Democratic Senator Frank Church warned of the dangers of the information surveillance regime already developing. in the USA. The surveillance power of the government and its security agencies could, “at any moment, be turned against the American people, and no American would have more privacy, such is the ability to monitor everything: telephone conversations, telegrams, it is not”. it counts. There would be no place to hide,” he said.

Church clarified what this would mean for democracy. If a dictator were to ever take power in the United States, he could use surveillance “to impose total tyranny, and there would be no way to retaliate.”

The government now has oversight powers beyond what Sen has. Church might dream back then, and they are poised to become even more powerful as digital currencies rise to prominence. These state-backed digital currencies will be the next battleground in the fight for privacy, and no weapon can be thrown down to defend against their potential misuse.

Bitcoin is not free from criticism, but due to its decentralized protocol, it is the bet most likely to offer strong resistance against a future financial panopticon. Those who have experienced what it is like to have their freedoms snuffed out by regimes of surveillance and social control, in the United States and abroad, know that the potential virtues of censorship-resistant currency cannot be dismissed lightly.

Neither Bitcoin nor crypto in general can substitute for politics. But they offer a practical way to protect the most vulnerable from predation in the digital age. In the brave new financial system looming on the horizon, these are tools we will need on our side.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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