By Awa Yun Sin, Co-Founder of Anomaa suite of protocols enabling self-sovereign coordination
We are failing to regulate the most invasive privacy intrusions society has ever seen. Support for privacy enforcement has never been louder and ‘Big Tech’ is in crisis as support for privacy grows into resentment of surveillance. We have entered the so-called ‘age of tech regulation,’ but online privacy seems more elusive than ever.
As a sign of action, the EU approved a landmark agreement to monitor tech platforms, strong-arming industry giants to police their platforms and further commit to keeping users safe. Meta, formally Facebook, recently warned that the EU may hit the platform with data protection fines. On the surface it may appear that the world’s tech and privacy laws are starting to grow teeth. Still, little is changing.
People’s privacy concerns are justified and while privacy regulation is theoretically welcome, it’s clear that governments are not best positioned to safeguard people’s privacy. In Europe, bureaucratic bottlenecks and regulatory mazes block even well-meaning attempts to tackle data privacy. This was never made clearer than when Johannes Caspar, head of the Hamburg Data Commission issued a scathing review of GDPR, Europe’s supposed crown jewel in data privacy enforcement. Casper called it completely unfit for purpose: “It just can’t work … you can’t accept this in the long term.”
Recent technological advancements in cryptography mean that our ability to reclaim our privacy and financial autonomy are finally within grasp. Blockchain rails allow people to reclaim their financial privacy and autonomy, divorcing privacy from a reliance on states and governments that, so far, have failed to implement any meaningful change.
Financial and economic infrastructure is corrupted by perverse incentive systems which lead to vast inequality as well as societal, environmental, and economic collateral damage. Nowhere is this more visible than the erosion of people’s privacy. Commercial incentives built the pervasive infrastructure of surveillance capitalism. From an autonomy perspective, authoritarian state actors deploy financial surveillance mechanisms to extinguish the will of citizens. Photos from the 2019 Hong Kong protests showed long lines at subway stations as pro-democracy protestors queued to buy tickets with cash rather than credit cards to avoid being placed at the scene of the protest by Hong Kong authorities.
A major privacy concern is that society, supercharged by the CoVID-19 pandemic, has moving away from cash.
Cryptography is providing an important tool for people who wish to import the anonymity provided by cash into the digital world. Distributed ledgers drive advancement further by removing the need for a centralized authority to keep track of transactions.
Measures governments have taken to monitor crypto exchanges
The adoption of blockchain and crypto assets was sure to encourage governments to retaliate and a regulatory arms race is taking shape as states move into the space. In March, EU lawmakers voted in favor of controversial measures that would ban anonymous crypto transactions – the move received significant pushback with many viewing the vote as an invasion of privacy. Lawmakers extended anti-money laundering (AML) requirements that apply to conventional payments over € 1,000 to the crypto assets and scrapped the floor for crypto payments. The result is that even the smallest transactions would be subject to identification.
In the US, President Biden announced a sweeping executive order on crypto-assets calling on federal agencies to adopt a government-wide approach to understanding, and entering, the market. The UK has announced plans to become a global crypto hub, and Australia is looking to bring crypto-assets into the regulatory landscape by 2025.
While it remains to be seen what, if any, impact these government actions will have on people’s privacy, it’s clear that governments are interested in keeping watch.
People need to take control of their own privacy. Commercial incentives mean that we cannot leave it to tech giants, while history makes it clear that governments cannot be trusted either. In short, we need to decouple the infrastructure needed to protect online privacy from centralized internet rails.
Recent advancements in cryptography offer society its best avenue yet, through which to escape financial surveillance, by re-engineering financial infrastructure around the foundations of autonomy and privacy. Advancing blockchain interoperability will also ensure that no single blockchain is used to store information – further decentralizing society’s information from over concentrations of power.
More recently, zero knowledge proofs (ZKPs) balance the asymmetric data flows currently feeding online surveillance. ZKPs verify information online without revealing the data needed to perform the verification, further enshrining privacy and autonomy into the transaction process.
Financial incentives have laid the foundation for privacy intrusions on a scale never before seen. At the same time, it’s clear that online surveillance concerns are not confined to surveillance capitalism alone.
The appetite for change has never been greater. One approach would be to build momentum for a grassroots social movement calling for a breakup of tech monopolies, publishers, advertisers, and financiers in a major market correction writing public utility back into the law. But governments have repeatedly shown that, even when they want to take action, they rarely succeed.
A better approach would be to simply remove our reliance on political and state infrastructure entirely. It’s clear that if we want to place value on privacy and autonomy, such a system needs to be divorced from all forms of centralized and over-concentrated power. Building this system will revitalize people’s financial autonomy online, re-define what we mean when we think about money, and boost humanity’s capacity for collaboration.
We need an ambitious and brave approach for how we leverage technology as we re-draw privacy protection in the cashless age. s The convergence of cryptographic techniques and decentralization offer us a means to build this future and correct the imbalance that has poisoned our current financial infrastructure – will we take the opportunity?
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.