When activity is recorded on blockchain, there is no privacy. This means that all activity is subject to scrutiny or investigation either immediately or at some later time. Most of the time it's not an issue, but there will always be some matter best left to as few people as possible. For those situations, there is something worse than a cryptocurrency's blockchain: a Central Bank Digital Currency, or CBDC. With what we know about both, we are in a battle for choosing the world in which we live: living in a crypto world versus living in a CBDC world.
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In Which World Do We Want To Live?
It's one thing for privacy not to exist. It's another for us to be left in peace or left alone. In a world build around decentralized cryptocurrencies ("crypto world" for short), we have more options for what we want to do. With more options comes more freedom to do what we want rather than the need to do do something because we have no choice.
The Crypto World
In a crypto world, we can choose to do things. Also in a crypto world, we can choose to not do things. Both statements are true because they go back to perhaps the most fundamental law of the crypto world: Not your keys, not your crypto. That leads to another fundamental law of crypto: You are your own bank. In a crypto world, we are in control, and we decide what we can do or not do. In a crypto world, we do what we do and are left alone until there is a need for us to be contacted or notified of something.
The CBDC World
In a CBDC world, choice is taken from us. Whatever we want to do involving "money," it needs to be done using the CBDC; no other money is allowed to be used. The Central Bank controls the CBDC "money" we use, so it call the shots. Since CBDCs are fiat currencies in digital form, we are still at the mercy of debt-based money and debt-based systems of finance. If we need more money, we still have to go to banks or other financial institutions and deal with cumbersom processes and potential rejection of our requests. The CBDC world is simply the current world digitized.
Privacy in the 2 Worlds
With each passing day, privacy becomes a quaint concept from a time when post traveled by horse and coach. With the advent of social media, privacy has been made rare because subscribers to these networks-- most especially of the Web 2.0 variety-- were encouraged to post their daily lives online for the whole world to see. At first this was not a concern, but the events of recent years have shown us the dark side of social media.
Financial privacy is nearly non-existent, although it's still possible to achieve it in some cases. When nations began instituting income taxes, bureacracies such as the Internal Revenue Service in the United States came into existence to monitor the flow of taxes based on income into the Treasury. What began as something affecting a small number of people came to affect everyone within a nation's borders. In the hunt for taxes, these taxing authorities became more intrusive in our lives and as a result grew to match the efforts expended on that hunt. With privacy being made ananachronism, how do the 2 worlds handle it?
Privacy in the Crypto World
Every transaction we make using cryptocurrency is recorded on blockchain. For payment cryptocurrencies such as Bitcoin and Dogecoin, that's basically all there is to it. For programmable cryptocurrencies such as Ethereum, Cardano, Solana, and Polkadot, more is involved because the platforms handling these cryptos can do more. Then there are cryptocurrencies such as Hive built as the social media networks of Web 3.0, where we put as much of our lives out there for world to see as we wish.
Whatever crypto we use, related activity is recorded on the blockchain. In general, that's as far as it goes: although available for review at a later date, most of the time people leave us alone or (in the case of Hive) laugh at silly pet pictures or comemnt on recent exploits on Splinterlands. Only if we're involved in some heinous activity such as embezzlement or murder would we have our lives turned upside-down-- and deservedly so.
Privacy in the CBDC World
One goal of every government is to collect tax on every transaction. At the moment some cash transactions involving paper money transactions escape make that impossible. Most of these tend to be of the illegal or sordid variety, but they could also be something as mundane as paying for a full tank of fuel or a take-out meal. The illegal activity will be the excuse given for switching to a CBDC, but 100% financial surveillance will result.
If we're lucky-- which we won't be-- CBDC tranasctions will be handled like crypto world transactions. Financial surveillance has been used to build profiles on people, and those profiles contain information about us we're not even aware of (or we had forgotten). For people whose profiles dereived from financial surveillance don't please the authorities, it will only get worse: we've heard about the "social credit" system used in China, but that can be easily transported to a jurisdiction near you.
In Conclusion
It's one thing for all we do to be recorded on blockchain (more so for us using Hive or any of its sidechains). It's another thing for us to be hounded for something we perhaps shouldn't have done at any point in our time on the blockchain.
In a crypto world, each of us is soverign-- our crypto is ours because we own the keys, and we are our own banks. We treat fellow holders of crypto, or even holders of cryptos alien to us, the same way we want to be treated. Although all of our activities are recorded on blockchain, we tend to leave each other alone except for situations which require investigation or intervention such as fraud or murder.
In a CBDC world, it's like the current world only magnitudes worse. Where cameras aren't around to witness activity or mircrophones aren't around to record conversations, the money itself is used as a backdoor way to keep an eye on the people. Even a mundane thing like buying a bottle of whiskey or a box of a dozen glazed donuts can set off the alarms for a surveillance state on the lookout for anyone engaged in behavior deemed "detrimental to society."
Lack of privacy may be here to stay, but we are battling for how we want that lack of privacy handled. In a crypto world, we still have control over what we do or don't do. In a CBDC world, the dystopian novels we've read or heard about won't even come close to the reality.
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| My main focus is cryptocurrencies from a number of angles (educational, commentary, observations, even pop culture). A secondary focus is sharing my discoveries about the world of Hive Social. Most of my posts can be found at these two locations: ● LeoFinance : @magnacarta ● Proof of Brain : @magnacarta For posts I make at other tribes or communities, start here to locate them : ● Ecency: @magnacarta/posts Follow me at this D.Buzz-only account : ● D.Buzz : https://blog.d.buzz/#/@magnacarta.buzz-- note the ".buzz" at the end! I also expect Festivus to take off in popularity in the coming years. |