Back in early May, a ransomware attack on Colonial Pipeline forced the company to pay the hackers US$5 million in cryptocurrencies.
And anyone can see that,” Belcher explained, in a video interview with Forkast.News.
“I like to think about this photo that I saw from the Hong Kong protests.
Department of Justice has named privacy coins “anonymity-enhanced cryptocurrencies” and insists that they are potentially criminal — this fends off the possibility of people making anonymous transactions through cryptocurrencies.
Belcher views the central bank digital currency movement in the same way — as a type of government surveillance that could potentially threaten civil liberties.
“People really need to understand that financial transactions are a window deep into someone’s life, deep into their politics, deep into what they’re doing, their location.
Welcome to Word on the Block, the series that takes a deeper dive into blockchain and the emerging technologies that shape our world at the intersection of business, politics and economy.
Well, the Department of Justice has announced that the FBI has successfully recovered millions of Bitcoin dollars from the Colonial Pipeline ransomware hackers.
She’s the general counsel of Protocol Labs, special counsel at the Electronic Frontier Foundation, chair of the Filecoin Foundation, and one of blockchain’s most prominent legal voices today.
Certainly, this big hacking event, that was followed up by a ransom of Bitcoins, and then, subsequently, the recovery that the FBI was able to conduct.
We don’t know the details of how, but this really underscores that a technology where all transactions are permanently and publicly recorded on a ledger is not actually that great of a tool for crime.
Unfortunately, it’s a pretty common refrain for critics of crypto to say that cryptocurrency facilitates crime.
We don’t blame Ford when one of its cars is used as a getaway vehicle in a bank robbery.
Lau: Certainly, that really is starting to debunk what a lot of even central bankers — everyone from Christine Lagarde over in Europe and top voices across the spectrum of regulatory bodies — they all point to the same thing, that there is a terrorism aspect to it.
I really think people don’t realize that Bitcoin is not anonymous — it’s pseudonymous — and you’re having a public key recorded permanently on a ledger forever.
Lau: That is the one obvious aspect.
There are these photos where there are these long lines at the subway stations because the protesters wanted to buy their train tickets using cash because they didn’t want their electronic purchases to place them at the scene of the protest.
government and other governments around the world have actually been pushing to take the surveillance that happens in the traditional financial system and to extend it to cryptocurrency.
Unfortunately, we’ve come to just accept in the traditional banking system and the traditional financial system that so many of our transactions are frankly turned over to the government by default without a warrant.
And for me, that’s really concerning because, for whatever reason, we all seem to have just accepted that banks turn over our financial transactions to the government without a warrant in a system of mass surveillance.
We’re starting to hear that from even Jerome Powell over at the Federal Reserve in the United States, exploring what a CBDC could potentially look like.
What if they only had the option of purchasing something that is traceable by the government? How would that change their behavior? I don’t think you would have seen those protests, or they would have had to walk home.
Brian Brooks … the former Comptroller of the Currency, just recently was commenting that he really didn’t see this as something that was in line with the way that Americans do things, sort of like we don’t rely on our government necessarily for these types of innovations.
The Department of the Treasury tried to shove through a regulatory proposal that really would have extended this type of surveillance to cryptocurrency and made many of our cryptocurrency transactions visible to the government by default.
It’s really all a common theme of pushing the financial surveillance of the traditional banking system onto cryptocurrency.
Lau: I recently talked to Chris Giancarlo — he’s the head of the Digital Dollar Foundation — on a previous episode of Word on the Block.
That’s one of the most exciting things about cryptocurrency, is that suddenly it’s not just about which government do you think is the least likely to fail in the near future.
You’re absolutely right when we think about monetary fiat right now, the actual cash, they’re so much connected to it beyond just a transaction between individuals.
Instead of having to choose the clubs country-wise, we can now choose sub clubs that are more value-driven, industry-driven, more transactionally driven.
Not just that you have these cryptocurrencies tied to particular use cases, but also the fact that inherent to many of those cryptocurrencies — certainly with Filecoin — is the ability to program your money.
What do these outages say about the safety of our assets, our finances, our access to something that drives our day-to-day? I’m curious how you thought about that, and how the foundation thought about that, when you take a look at how centralized attacks tore down these sites, and what a decentralized system might have enabled us to continue to do.
This is a great example of why it is so important and so powerful to have an alternative to that centralized model, where instead of having a model where everything is in one place and in order to retrieve a website, and getting something from across the world where instead there can be many copies of that website, and I can just retrieve the one that’s closest to me.
And it is an enormous place where we’re watching innovation thrive alongside — unfortunately — really bad actors, alongside immense opportunities, alongside all of the issues that come up when you’re trying to settle the wild, wild West.
Fundamentally, what a lot of this technology boils down to is giving you the ability to transact with others directly via a computer program without any central intermediary sitting in between, and the ability for you to really just interact with others, similar to the way you interact with someone when you hand them a US$20 bill.
We’ve already seen some instances where regulators are making statements that are frankly just anathema to the First Amendment when they’re talking about the way that they might be regulating this computer code.
But it’s very easy to latch on to: “Okay well, what did they do wrong? Well, they wrote this code.” It’s just so, so important that that’s not what regulators do, that they take a more nuanced approach and that when they’re talking about the things that they want to regulate, it’s not the writing of the code, it’s other behaviors.
Lau: We’ve often seen that when those interests conflict, innovation gets big-footed by the greater good.
It’s really important to have regulatory clarity, to not have issues of gray areas persisting around very important legal questions, and having those questions only answered by scattershot enforcement actions.
It’s supported until it reaches tolerance, or something happens, and then there’s a little bit of a clampdown, and then there’s a whack-a-mole effect where, sure, you could clamp it down here and it pops up somewhere else.
It has evolved even beyond and is starting to, at least in the creative kind of industries.
One of the things we were talking about, the issues with the centralized web, and I think one of the issues with NFT is, you want to be able to make sure that this thing that you’re buying, that you’re spending all this money on, is actually going to persist into the future.
And then I think the second issue is really just a generally a content moderation question, like, how do you think about content moderation on the decentralized web? I could jump into either of those, but I guess I’ll give a high level of both.
So, on the copyright side of things, there’s just a massive opportunity right now for people to do NFTs and licensing rights, and to really make sure that when you are making an NFT of something, you’re taking into consideration: When someone buys NFT, are they also receiving a license, are they also actually getting copyright to the underlying artwork? These are questions that are often overlooked.
So when you have an NFT, the fact that you’re selling an NFT of something doesn’t mean that you can’t also mandate that the underlying work is continued to be licensed under Creative Commons, for example.
It’s not Facebook or Google or one individual company that’s making decisions about content moderation, but rather that these content moderation decisions can be made at a node-by-node level or a gateway-by-gateway level, basically taking content moderation and scaling it in a way that works for Web 3.
I talked already about the push for financial surveillance to be extended to cryptocurrency and to have this warrantless mass surveillance in the crypto space.
And honestly, I’m so excited every day to get to work on it, and just beyond delighted to be the board chair of this organization at the Filecoin Foundation.
Lau: I truly believe that it’s these legal voices in our industry that actually do help translate beyond the technology layer, an impact layer to regulators as it pertains to the law and defend against a lot of criticism and misperceptions, which I hope that we helped kind of debunk today.
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