Cryptocurrency and the government’s desire for control

The benefit of blockchain is found in its transparency as a public ledger. This is beneficial if it is not controlled or limited by a central authority. If it were centrally controlled and limited, it could quickly become a weapon against private property, individual liberty, and the pursuit of happiness. It is in this point of contingency that lies the issue of blockchain and the concern of control. There is a constant debate among proponents of cryptocurrency in regard to its anonymity. If a currency and its purchases are anonymous, then justice can exist; if it is regulated, monitored, and put into a public ledger, justice cannot be maintained. There needs to be a cautious approach to cryptocurrencies and the government controlling them. Governments naturally work towards further control as ‘governments’ are by definition, and as a general paraphrase of famed political scientist Max Weber and later reiterated by Elon Musk, a coercive monopoly of the initiation of force or use of violence. 

To maintain checks and balances (finance pun intended) between the general population and their governments, some sort of anonymity must be maintained by the citizenry against their government. This concept of privacy is well embedded within the Constitution, through the Fourth and Ninth Amendments. It has a direct origin in the philosophy of John Locke. To have property rights is to assume privacy rights, naturally, since what one does with their property is only their ultimate concern so long as it does not infringe on someone else. Property rights are necessary to secure privacy rights. Privacy is sought after by the individual and made possible with individual property rights. 

In Neil Richards’ book, Why Privacy Matters, he writes, “Privacy matters because good privacy rules can promote the essential human values of identity, power, freedom, and trust. We will need privacy rules if we want to preserve our commitments to these precious yet fragile values.”

Government is to protect sensitive information that might hurt an individual socially. Privacy has innumerable uses and benefits required for freedom itself. Privacy enables personal choice by allowing individuals to decide what they do with themselves, with others, what information they make privy to others and how that information is used, serves for bodily autonomy and the privacy of personal medical history. It prevents coercion through blackmail and so much more. To maintain this sense of privacy among citizens, a free people must hold their governments accountable in order for that government to maintain its legitimacy, assuming there was any from the beginning. 

In the U.S.’ democratic republic, this expectation of reverence for privacy, among many other inalienable human rights, is due to the realization that government can be much like a loaded gun. Whoever is in power would not want to abuse that power because it can spark the blowback return to the perceived abuser or others on their side– in fact, really anyone arbitrarily. In the case of cryptocurrency, also known as crypto, a blockchain currency does have the ability to be private. However, under the ultimate control of select departments and groups, privacy could dissolve even further than it already has. 

Today, when people use paper money, there may be some level of anonymity along with a natural difficulty of others in determining for certain one’s ownership over the item purchased or services rendered. With blockchain, it is also possible to not indicate what is purchased when using a cryptocurrency. Still, once a government oversees the exchange processes, it behooves that government to know what is exactly being traded as this would provide that governmental department with the who, what, where, and when of the exchange. The more tax revenues to be generated would be for these details to be disclosed to that government in order to verify all transactions, which sparks incentive for the regression towards complete control.

 The entity that collects the information may be any of the banks, the transaction platforms, the data companies, etc., where that information is then used for the company’s benefit, sold, given away, or acquired by a government agency along any of these stages. Many of the wealthiest companies in the world, such as Google or Amazon, make the largest brunt of their money and competitive edge through data acquisition and selling that data directly or indirectly to various companies, organizations, and governments. Some theorists and former security personnel suggest that some of these companies act as an additional arm of the U.S. government already. 

As general taxes and capital taxes continue to plague the crypto market, anywhere from 10% to 37% as of 2022, there is increasingly more incentive for the government to command the cryptocurrency market. Furthermore, if the government controls the internet, it is a higher probability that cryptocurrencies and respective purchases will be tracked out of sheer pragmatism. The general public will be indoctrinated by the message that the taxes and lack of privacy are of greater benefit to them than without, and this will become the institutionalized dogma echoed. Proponents of the heavily fettered crypto will tie unregulated currencies to black markets, human trafficking, foreign or domestic terrorism, drug wars, weapons trading, tax evasion, international villains, and anything else to demonize in order to ultimately control. 

Joshua D. Glawson works in technology and currently resides in California.