The Satoshi Revolution – Chapter 4: Is Privacy Possible in the Digital Era? (Part 3)

Is Privacy Possible in the Digital Era?

The Satoshi Revolution: A Revolution of Rising Expectations.
Section 2 : The Moral Imperative of Privacy
Chapter 4: When Privacy is Criminalized, Only Criminals will be Private
by Wendy McElroy

Is Privacy Possible in the Digital Era? (Chapter 4, Part 3)

Recent inventions and business methods call attention to the next step which must be taken for the protection of the person, and for securing to the individual … the right “to be let alone” … Numerous mechanical devices threaten to make good the prediction that “what is whispered in the closet shall be proclaimed from the house-tops.”

— Louis Brandeis

What is privacy? Simple images come to mind, like slamming a door in the face of a census taker, but the question unlocks a complex issue.

Perhaps the most famous answer comes from an article by the American attorneys Samuel Warren and Louis Brandeis, which appeared in a 1890 issue of the Harvard Law Review. It was one of the most influential articles in the history of legal theory. “The Right to Privacy” is considered to be the first prominent call for privacy as a concept to be cemented into law. It opened: “THAT the individual shall have full protection in person and in property is a principle as old as the common law; but it has been found necessary from time to time to define anew the exact nature and extent of such protection.” Elsewhere, privacy is defined as the right to be left alone.

The article argued for privacy as a “foundational” or basic human right, upon which all other rights depended. “The right of property in its widest sense… including all rights and privileges, and hence embracing the right to an inviolate personality, affords alone that broad basis upon which the protection which the individual demands can be rested.” No right is more basic than privacy; freedom of speech, sexuality, freedom of conscience, and financial security depend upon it because none could exist in the presence of storm troopers smashing through your bedroom door. The right to close your door is paramount.

Interestingly, the Brandeis-Warren article was in response to technological developments that were seen to threaten personal privacy, much as the internet and blockchain are seen to threaten it today. One of those developments was the portable camera with which journalists photographed prominent people in venues that were formerly private, such as restaurants, weddings, and funerals. Today, the focus of privacy rights has shifted from rude journalists to the rude government for which “privacy” is a synonym for “secrecy.” The government regards privacy as a smoke-screen for criminal acts, especially tax evasion. The shift is probably a function of how powerful and massive government has become, compared to the 1890s.

Although privacy rights have been a theme in common law and, so, a strong theme within Anglo-American societies, their legal status has been vague. Indeed, before “The Right to Privacy,” the legal expression of the right was splintered. There were laws against trespassing, for example, but being safe from the invasion of property and home is only one aspect of privacy. The codifying of the broad concept of privacy is more difficult.

After all, what does the “right to be left alone” mean? Everyone knows a woman’s purse should not be snatched or a house broken into. But these are easy cases, and not the ones cryptocurrency users will confront; they must deal with their personal information being mined, and then being used against them.

The blockchain’s ledger of transfers allows uninvited parties to eavesdrop on financial and other information that has been voluntarily made public — at least, to some degree. What should the legal status of eavesdropping be? If someone overhears a personal conversation in a public place and he repeats the content, does the act infringe anyone’s right to “be left alone?” What if the eavesdropper uses the information to advantage, for example, by acting on a stock tip? What if he uses the data to blackmail? Is there a right to legally restrain the eavesdropper?

The Bottom Line of Privacy

The iconic libertarian Murray Rothbard argued that all human rights devolve to property rights; that is, they come down to the question of who properly controls the use of something, anything: a widget, an idea, information, your body. It is always possible to use force and usurp control, of course, but who is the proper owner in a peaceful society? It is the individual who acquires valid title through production, trade, or other peaceful means. There is no more clear or valid title than the one individuals have to the use and protection of their own bodies, which includes their personal information.

This right is under concerted attack by the biggest eavesdropper in human history–and one that intends to use the data against you with extreme prejudice. Government wants to access and control personal information in order to own the power of its content–that is, to use the power of your identity against you. It registers babies at birth; it pathologically chronicles everyone’s financial, medical, and educational status; it requires official paperwork at all junctures of life, including death. It does not matter if the person has done no harm and he is accused of no crime. The government’s purpose is control. Individuals who do not meekly acquiesce to being controlled are criminals.

One reason government succeeds at stealing information is that privacy is an ill-defined concept that people do not understand; if they did, they might value it more. Privacy hinges on two questions. As a place to start asking them, consider the right to control of your own thoughts and their expression. (Privacy consists of more than this ability, of course, but it is a springboard point.)

Question #1: Who owns what is in your mind? Most people would loudly declare “no one owns what’s in my mind!” Your thoughts are yours for the same reason that you own your fingers and eyes; they are part of your body; they are an integral part of who you are. But what if the thought in your mind is a chemical formula that you accidentally glimpsed? The instant you glimpsed the formula, it began to change by integrating with every other thought you have on chemistry and life. Do you own the altered formula that is now in your mind? If you do, then can you market it over the protest of the chemist who perfected it? If not, why not?

The parallel to financial information: if someone has financial assets, such as a sack of gold, then the information is properly private, but only as long as it is unrevealed. The problem with cryptocurrencies — at least, for this paradigm of privacy — is that all transactions are revealed.

Question #2: Who owns information that is now part of another person’s mind? Who owns information that has been made public? The 19th century libertarian James Walker stated, “My thoughts are my property as the air in my lungs is my property…” But what if you exhale? What if you willingly throw ideas or information into a public realm, like the internet or the blockchain?

If information sharing comes with a nondisclosure contract, then there is no problem; the originator retains rightful possession. But reality isn’t usually like that. Most violations of personal information are involuntary, such as being registered at birth and assigned a government tracking number for life. Some result from a transaction in which a naive person exchanges data with a corporation for a free subscription or the like.

The glut of personal information in the public sphere returns to the title of this article: Is Privacy Possible in the Digital Era? The answer is “yes.”

The Solution

As long as the old paradigm of privacy is used — that is, privacy = concealment — then the transparency of the blockchain is a death knell. But what if privacy now equals transparency, and the focus of protection is not on the transaction but on the identities of actors? This is a new and purer paradigm of privacy. For the sake of honesty and equitable trade, do not hide any transaction. For the sake of privacy, do not require the identities of actors anymore than grocery stores require ID of those who buy milk with cash. Then, let everyone see; let everyone verify. Both honesty and privacy can be preserved. The key is to keep your identity private—own what is in your mind, and in no one else’s—while allowing the information to be public as a proof of honesty.

Of course, there is a catch. How does anyone protect identity while making an open transaction? The solution to privacy is often painted as the problem. “Technology destroys privacy” is a common sentiment. The opposite is true.

Consider a small aspect of how to preserve privacy: encryption. Encryption is the process of coding and decoding information.

The idea and its importance to privacy is not new. It played a key role in the founding of America. Before Confederation, the Founding Fathers attacked the existing post office because the British used it as a censorship machine. After Confederation, some Founders did much the same thing. The Continental Congress wanted to declare some political material “unmailable” because it was deemed to be dangerous. A prime target was anti-Federalist letters and periodicals; the anti-Federalists fought many aspects of the Constitution, and they effectively blocked ratification unless the document included a Bill of Rights. During the intense debates, they simply could not circulate their material through the Federalist-controlled post office. Many of them, including Thomas Jefferson, resorted to corresponding in code.

The American government has always realized the political importance of controlling the flow of information. In the 1770s, communication may have occurred through postal routes maintained by horseback riders, while today, we communicate through packets of data beamed across optical cables. This difference is irrelevant to the principles involved. The key questions are: “Who owns your words and ideas?”; “Who has the right to read them?”; “Who owns your personal information?”


Few rights are as important as financial privacy because wealth is the way people feed themselves. The attacks on privacy are intensifying because government realizes the stakes; after all, your wealth is also the way government feeds itself.

The new paradigm of privacy is transparency without identity. But it works only if people protect their identities at every turn. Never willingly give personal data to government, to exchanges, or to the corporations that are government proxies.

Privacy is a human right, but it is a right you can surrender in the much the same manner as you can surrender your claim to a pile of cash by throwing it into the wind. In a word: don’t.

[To be continued next week.]

Thanks to editor/novelist Peri Dwyer Worrell for proofreading assistance.

Reprints of this article should credit and include a link back to the original links to all previous chapters

Wendy McElroy has agreed to ”live-publish” her new book The Satoshi Revolution exclusively with Every Saturday you’ll find another installment in a series of posts planned to conclude after about 18 months. Altogether they’ll make up her new book ”The Satoshi Revolution”. Read it here first.

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Source: Bitcoin