The Satoshi Revolution: A Revolution of Rising Expectations
Section 2: The Moral Imperative of Privacy
Chapter 6: Privacy is a Prerequisite for Human Rights
The Satoshi Approach to Privacy. (Chapter 6, Segment 5)
The traditional banking model achieves a level of privacy by limiting access to information to the parties involved and the trusted third party. The necessity to announce all transactions publicly [the blockchain] precludes this method, but privacy can still be maintained by breaking the flow of information in another place: by keeping public keys anonymous. The public can see that someone is sending an amount to someone else, but without information linking the transaction to anyone. This is similar to the level of information released by stock exchanges, where the time and size of individual trades, the “tape”, is made public, but without telling who the parties were.
“The Case For Privacy” is an excellent essay by the Austrian economist and legal scholar David D. Friedman. It opens: “An old science fiction novel features a device that surrounds its bearer with an impenetrable bubble of force.” The novel is Shield (1963) by Poul Anderson. It presents a dystopian world in which a neoconservative, militaristic, and repressive United States dominates the globe, with the exception of China.
Then a game changer occurs. An idealistic astronaut, Peter Koskinen, returns from Mars, with a new technology that has been developed in tandem with indigenous Martians. A portable force field protects the wearer from almost every attack, but it allows light to penetrate freely. It is the ultimate defensive device for individuals. Koskinen wrestles with himself about which political faction to gift with the force field. After a murder attempt, he realizes that no one should have a monopoly on the technology. Friedman sketched Koskinen’s solution. “He writes out an explanation of how the shield works and spends two days distributing the information to people all over the world. By the time Military Security-the most formidable of his pursuers-catches up with him, it is too late. The cat is out of the bag.”
Friedman’s brilliance is to draw an immediate parallel between the force field and privacy. Anderson’s brilliance was to foreshadow Satoshi’s strategy regarding release of the blockchain.
Satoshi’s Solution to the Privacy Problem
The transparency of online communication, according to some, is the death knell of privacy because unwanted others can easily eavesdrop. The government is the biggest snoop of all, of course, especially when it comes to the most demonized personal information of all–financial data.
With apologies to Mark Twain, reports of privacy’s death have been greatly exaggerated. With the possible exception of science designed for global warfare, technology always benefits individuals as much as or more than it benefits government. Digital technology has enhanced the individual’s ability to control his own life, including the flow of information and how to protect sensitive data that could be used against him.
