This is a thoughtful treatment of some of the issues. I worked on digital identity in govt, and sovereign identity is considered seriously there. The concepts in the article force the question of what things like security, dystopian, and scalable mean, among others.
If I were to articulate the gap in perspectives, it would be that it is between the engineering view of solving problems (e.g. Vitalik's "soul bound tokens") and managing them - that is, to extract value from a dynamic, in the case of existing legacy paper/card identity schemes today.
Arguably, in a society, all value is created from risk, where someone takes on the risk of an outcome and someone pays them to hold it while reaping the benefits of whatever thing has exposure to the failure. It's imperfect on purpose, as it allows for flexibilty and non-binary failure modes, and it lets people manage (or extract value) from the shifting risk, where the result is an Economy. When you just solve a problem - let's say we had these perfect soul based tokens, where there was no ambiguity or repudiation for anything, you are depriving people of the very thing we have evolved to be good at, which is judge and collaborate to trade in risks. It's not desirable precisely because instinctually people get they don't want to become solved problems and known quantities.
Digital identity is a very nuanced power struggle going on in the background within government and industry, as identity is the substrate to a certain type of economy, and who wouldn't want to be the controller of that? The better case is having ephemeral identities and just price in insurance to transactions, much like interest rates on credit, but less centralized, and with more exposure to volatility of real life - just like other crypto solutions.
The people writing about this stuff in the crypto community are still sounding out some things for the first time, but just because they are doing so doesn't mean they are the first to consider them. When I worked on an actual govt digital identity and currency product, I pissed off the execs because I said their design didn't pass "the hookers and blow test," which is that if you can't use the payment and identity scheme for grey market transactions, nobody is going to adopt it. Not because they are vice ridden manaics, but because the human animal knows when it is in captivity and it will find ways to resist it.
This is the same reason that central bank digital currencies are going to be an economically inferior good, and create dangerous black markets that produce the dystopian corruption that idealists seem to be trying to avoid, as 1/3 of people just aren't going to trust them. Sure, you can impose the schemes, but if you have ever spent time in an authoritarian regime, you know that the culture is completely debased and anything-goes behind closed doors becase the rules themselves are arbitrary and selectively enforced, because the arbitrariness creates a sense of illigitimacy where there is nothing to trust or believe.
The stupidity of technocracies is illigitimate, and it breeds contempt and corruption. This may seem meta compared to the implementation details of some nerdy key management protocol, but I'd argue if you haven't thought these other parts through, crypto really is just some naive kids building a bike shed to fill with shaved yaks and thinking they're reinventing democracy and freedom.
Visiting Copenhagen I pondered on those points too. Denmark seems to be a society that firmly embraced “centralized digital currency” - even the beggers have POS terminals and if you _request_ a cash payment at a restaurant people look at you funny.
But they have this “Freetown” of sorts right smack in the center of their capital, where you can buy illegal stuff with cash.
There’s no guards, no police posted at the entrance. People are just kinda OK with all that. You live a highly structured civilized life, but then a metro stop away you enter this place where people are selling weed on the streets and you can probably get other funky stuff.
And seems to be quite stable thing - they’ve had it for like 50 years or so.
Maybe thats what we need - unregulated places where societies can try out different things that are not accepted at large?
Maybe digital currencies in the future would incorporate that? A friend is working for a VMWare project where the etherium based crypto has an “escape hatch” built in with some allowance for “cash like” transactions … maybe something like that would work?
What I actually suspect is that the move toward drugs legalization in places like Canada and experiments with decriminalization of cocaine and heroin are a way to normalize using electronic payments (e.g. interac) for those black market goods, which brings them into the fold of centralized economic control and removes a key use case for cash. However the liberalization is a trap intended to set the stage for CBDCs, as once cash is fully marginalized, what will you pay in when the people in the govt change their mind about legalization?
Forget drugs for a moment, what about meat, gas, ammunition, and other normal things that are being reclassified as decadent luxuries you apparently don't "need," or "deserve," according to whoever "they" are. It's not enough for them to live virtuously according to their values, they need to police you first, and fly around in private jets while they do it. Seeing the institutions behind identity, government, and payments from the inside has persuaded me that the conspiracy theorists are just people in denial of what they have discovered, because they can't face the consequences of how serious it really all is. The architects of this don't care what anyone believes, they just need for members of any potential resistance to keep doing nothing to stop it. For good men to do nothing, as they say.
Cryptocurrencies were and remain necessary beacuse they represent a limit on state power in an era of previously unimaginable total surveillance tech, and this limit makes leviathanists and technocrats apopleptic. That's also why the arguments against crypto always seem to have a shrill whinge of cant about them - as they're based on accusations of blasphemy against the pillars of offical technocratic narrative, and the arguments themselves aren't powerful or persuasive.
Not only do we need cryptocurrencies, we need to establish boundaries on the dominion of people in governments, as without those boundaries, we're in for a totalitarian hell not even fiction could prepare us for, imo.
Some good points. I think a major problem is with the word "identity",
is that there are always (at least two) meanings that may or may not
intersect. We have self-regarding identities and other-regarding
identities. The set of things we define about ourselves that includes
beliefs, intentions, secrets and so on may be (for secrets must be)
disjoint from the set of things others attribute to us, reputation,
observed history, expectations and so on - though a mature, well
integrated, social person could be expected to have a high
intersection.
If we try to conflate those kinds of identity problems arise because
people who are young, vulnerable, transient, in crisis need to be able
to revise both kinds. Unless we are wanted criminals we have a right
to be forgotten. And we all have a right to change our minds about
things and re-invent ourselves.
I think we don't yet have a mature enough understanding of what
identity really means for human beings to get successful digital
mileage except in a few limited applications like payment systems or
session management. Perhaps that's why the concept of "identity
politics" is so prominently at play.
> 1984 had a pretty good argument why it’s dystopian to tell people
they are not allowed to remember or continue believing something.
Its a good book. It should also be tempered with a little Jane Austen,
about the tyranny of unshakable reputation. My take is it's the
"telling people what they are allowed to do" part that is
dystopian. To that extent all laws are dystopian. However we do it all
the time and obtain great wider benefit. For example, bad money
choices might lead someone into insoluble debt, they declare
bankruptcy, and seven years later that is deleted from public records
so they can make a fresh start. In reality a "right to be forgotten"
is more of a right to be forgiven. Asking that people forgive and
discount past wrongs is not the same as poisoning and torturing them
in a basement until their minds are wiped, as in some demonic
MK-UTLTRA shitshow.
People can remember all they want… It’s the permanent digital record indexed by search engines, available at the tip of your fingers anywhere anytime - that is the problem.
I'd rephrase that it's the powerful agents dicating what them searchable indexes can find beyond what the algorithms doing the finding can do that's the real problem.
Add in the notion that the police and other important agencies can find a lot more than the Public can, because safety... and continue to completely break democracy while pretending you're doing all this for the greater good (where "for good" actually means "for concentration of power")
No they are not. They are a physical medium more akin to physical records than they are the mind.
This is such a ridiculous take it’s hard to take it seriously.
What about retention periods? About about paper copies? Should no data anywhere be regulated because it is somehow this nebulously and poorly defined “extension of the mind?”
> What about retention periods? About about paper copies? Should no data anywhere be regulated because it is somehow this nebulously and poorly defined “extension of the mind?”
and extremal counterpoint to this viewpoint is that all data be regulated because it's all digital and in the cloud.
> I said their design didn't pass "the hookers and blow test," which is that if you can't use the payment and identity scheme for grey market transactions, nobody is going to adopt it. Not because they are vice ridden manaics, but because the human animal knows when it is in captivity and it will find ways to resist it.
"Nobody is going to adopt it" is an extreme opinion. People have resentments about society but most are minor. Few enough people feel captive that most continue as members of significant societies. The degree to which people feel resentment and pursue extreme "solutions" is a complex variable. Some societies succeed better than others in meeting needs without needing a cryptocurrency.
> The stupidity of technocracies is illigitimate, and it breeds contempt and corruption. This may seem meta
The phenomena that you are describing here are resentments about characteristics of people or of society (or of a particular society). These resentments are unlikely to find a solution in another even more dubious techno-financial construct for which literally no one will ever care except for the value that credulous people ascribe to it.
> I'd argue if you haven't thought these other parts through, crypto really is just some naive kids building a bike shed to fill with shaved yaks and thinking they're reinventing democracy and freedom.
Yes, I do agree.
> the arbitrariness creates a sense of illigitimacy where there is nothing to trust or believe.
Problems of "illegitimacy", trust, and belief, are not going to be solved by cryptocurrency. In fact, the cryptocurrency movement has no trust and no credibility at all.
This is probably one of the most interesting comments I’ve ever read. Can you share more details about the digital identity and currency product you were working on and for which government was it intended for?
Thx. I can be candid because I'm not talking about any institution or client in particular, but there has been more than one and less than six I've worked on directly as a security architect over the last 15-20 years. The details of the identity or currency aren't really that interesting, as if you understand federation protocols and maybe some standard cryptogrphic/security protocols with tokenization, the implementations are compositions of those.
However, what I can say is that engineers are not lawyers, so we tend not to understand the regulatory systems in place, and the lawyers you would need to untangle this stuff aren't technologists. That's changing post-covid, where western governments in general are taking a "so sue me," approach to imposing technology and mandates over top of privacy norms and regulations, and there is a young generation of lawyers who grew up online (and with cryptocurrency, bitcoin is 11 years old now) who can pick up things like protocols.
The vaccine passport system and covax was quite a gambit as it was an international digital id scheme intended to subsume other efforts that had stronger technical requirements. The central bank digital currency (CBDC) stuff we're hearing about now is an artifact of a few related factors, but what CBDCs are really going to look like in my opinion is the CUC in cuba, or a kind of government/public sector scrip, or the peso in argentina or venezuela that has an official dollar peg and price controls, but there's a huge grey market for USD. Reality is from a state perspective, power is zero sum and human suffering is just managable, and the technology changes of the last two decades have sidelined government as an authority, so they're all trying to reassert themselves. It's going to look clumsy and dumb and it will destroy a lot of wealth and value, but they don't care so long as they think they have secured the reins.
Of course, nobody ever secures the reins so the demand for authority is infinite, but that doesn't stop anyone from trying. Economists, politicians and so-called experts who tell you they can manage an economy don't tell you the part where they run it in to the ground and rule over the ashes, as once you give them secured control, it doesn't matter how well it works. Their promises and arguments are to persuade you to give in to them, because their logic reduces to, if we have power, what do we need your consent and approval for?
If I were hedging, I would figure out what the grey market commodities will be in response to a CBDC that doesn't pass the H&B test I described above. Precedents I would reference would be times in history where govts declare a "bank holiday" and replace bank deposits with treasury bills, or seize deposits of FX and reserve currencies and "buy" them from citizens with the new pegged currency with greater national controls.
The scenario I speculate about is NZ/AU/CAN use a long weekend or "banking system outage," to replace citizen cash deposits with the new CBDC with the flick of a switch and the stroke of a pen, similar to India banning certain cash denominations and taking high denomination bills out of circulation. Assets that facilitate capital flight out of these places will be at a premium, imo. (good news for the art, wine, jewelry, collectables, precious metals, equine, super cars, and other portable alternative asset markets, imo. The big auction houses will probably do well this year.)
Dark stuff, but you spend enough time in security, and everything is within a degree or two of these historic sea changes.
I don't understand what you mean by "all value comes from risk." Could you give examples? I don't understand how, say, the value of some food you buy at a grocery store comes from risk.
Also, you say that "instinctually people get they don't want to become solved problems and known quantities," but at least a large subset of the population wants to be famous. And it seems like being trusted by people you know has its benefits too?
The way I think of it, risk of accident of the delivery truck, the risk of the farm getting their crops ruined, risk of insolvency or net x day term payments, risk of loans taken out to cover patented seeds, risk of expired food.
If nobody wanted to take the risk to plant each time given the potential ROI, you wouldn't get grocery items?
Okay, but if you reduced or eliminated one of the risks, doesn’t the food still have the same value as before? It seems like the risk is something like a cost, to be optimized away if you can without reducing value. And it isn’t the only cost.
My first name asserted in a conversation is one, as it's sufficient to define an endpoint for a low value transaction. 1:1 with cash or bitcoin is easy, because it's a straight retail transction. It only gets complicated when you have an intermediary. Identity is mainly a problem for dealing with intermediaries, and not for people who want to do things.
If I were to articulate the gap in perspectives, it would be that it is between the engineering view of solving problems (e.g. Vitalik's "soul bound tokens") and managing them - that is, to extract value from a dynamic, in the case of existing legacy paper/card identity schemes today.
Arguably, in a society, all value is created from risk, where someone takes on the risk of an outcome and someone pays them to hold it while reaping the benefits of whatever thing has exposure to the failure. It's imperfect on purpose, as it allows for flexibilty and non-binary failure modes, and it lets people manage (or extract value) from the shifting risk, where the result is an Economy. When you just solve a problem - let's say we had these perfect soul based tokens, where there was no ambiguity or repudiation for anything, you are depriving people of the very thing we have evolved to be good at, which is judge and collaborate to trade in risks. It's not desirable precisely because instinctually people get they don't want to become solved problems and known quantities.
Digital identity is a very nuanced power struggle going on in the background within government and industry, as identity is the substrate to a certain type of economy, and who wouldn't want to be the controller of that? The better case is having ephemeral identities and just price in insurance to transactions, much like interest rates on credit, but less centralized, and with more exposure to volatility of real life - just like other crypto solutions.
The people writing about this stuff in the crypto community are still sounding out some things for the first time, but just because they are doing so doesn't mean they are the first to consider them. When I worked on an actual govt digital identity and currency product, I pissed off the execs because I said their design didn't pass "the hookers and blow test," which is that if you can't use the payment and identity scheme for grey market transactions, nobody is going to adopt it. Not because they are vice ridden manaics, but because the human animal knows when it is in captivity and it will find ways to resist it.
This is the same reason that central bank digital currencies are going to be an economically inferior good, and create dangerous black markets that produce the dystopian corruption that idealists seem to be trying to avoid, as 1/3 of people just aren't going to trust them. Sure, you can impose the schemes, but if you have ever spent time in an authoritarian regime, you know that the culture is completely debased and anything-goes behind closed doors becase the rules themselves are arbitrary and selectively enforced, because the arbitrariness creates a sense of illigitimacy where there is nothing to trust or believe.
The stupidity of technocracies is illigitimate, and it breeds contempt and corruption. This may seem meta compared to the implementation details of some nerdy key management protocol, but I'd argue if you haven't thought these other parts through, crypto really is just some naive kids building a bike shed to fill with shaved yaks and thinking they're reinventing democracy and freedom.