How digitization is corrupting privacy, and what part crypto plays 

Since the early 2000s, the question of data privacy has been at the forefront of academic and political debate. As social media infiltrated people’s lives, and the collective ‘choice’ was made that we’d prefer to give up our right to data privacy than pay to use social media, the landscape has shifted dramatically.

As seen in 2020, our personal data is used to influence almost every online interaction we have, from targeted advertising to the creation of echo chambers in which we can no longer tolerate opposing views or engage in robust debate. As online users, we have slowly surrendered our individuality through the blind surrender of our data, the valuable tiny pieces of information that can be gathered to sketch a picture of who we might be.

  • Cash provides a level of anonymity. Government oversight of all citizen spending – even if you trust the current government or system, is not safe.
  • If there is unfettered access to all data on spending by a single entity, it could be used to influence things such as community project spending, insurance costs, city planning, or more sinister things like racial profiling or socioeconomic division.
  • Data is used as currency on the Internet – you want ‘free’ access to social media, you pay with your data. According to one academic, ‘life and contexts are fluid, so privacy cannot be reductively conceived as one specific type of thing.
  • It is better understood as an important buffer that gives us space to develop an identity that is somewhat separate from the surveillance, judgment, and values of our society and culture.
  • Privacy is crucial for helping us manage all of these pressures – pressures that shape the type of person we are – and for ‘creating spaces for play and the work of self-[development].’
  • Privacy laws safeguard democratic societies by furthering ‘autonomy, self-fulfillment, socialization, and relative freedom from the abuse of power.’

While the GDPR has been implemented to protect people accessing sites in the EU, there is no consensus on how personal data should be acquired, used, stored, or even traded. A recent report estimated the collective revenue of digital advertising companies in the US and valued the revenue from data generated from a single adult at about US$35 per month.

The internet operates for consumers as what looks like a socialist collective, with information and access granted in return for an email address or date of birth. In reality, users are not given an option to pay for access in return for the protection of their data, and people are selling themselves without knowing the value of their personal information.

However, it isn’t the money that is made from internet users’ data that is the major concern, or even the manipulation of search information or news bubbles; it is the loss of freedom that should most concern internet users. Our every moment on the internet is under surveillance, our every action, recorded and sold. This has a psychological impact that we are often unaware of. We lose our sense of security, personal identity, and choice. It changes our thinking. George Orwell’s ‘1984’ is the so-often used example of how censorship numbs our minds, robs us of difference, and imposes a sense of thought control. While in the case of the internet there is no single entity or power that is influencing our thinking, there is the application of algorithms designed to target advertising to specific demographics which is creating bubbles and decreasing our tolerance towards ‘others’. It is a type of xenophobic mindset that is increasingly becoming accepted as we are not forced to challenge, qualify or confront our beliefs.

While lawmakers in many parts of the world are working with academics to understand how to govern the internet in ways that conform with our expectations of free and fair access to information without an invasion of our privacy, one system has tried to emancipate internet users from governmental and capitalist oversight by socializing data; blockchain. From this idea of networking data to ensure it cannot be corrupted, cryptocurrency has become the best-known application of the technology.

The Promise of Blockchain Technology

Blockchain holds the promise of a socialist internet in a capitalist system. The decentralization of assets, in the form of cryptocurrency, so that internet users can be the masters of their data. The idea that multiple nodes are used to exchange data, rather than a single source, removes not only the central power but also increases security. While it sounds like a socialist ideal, the reality of cryptocurrencies is more complex than an ideal.

The removal of centralized power and control is a goal for many individuals. People essentially believe that government oversight has become insidious, in some instances bordering on authoritarian, and in some nations, it is. Censorship, surveillance, and data collection are some of the tools that central powers use to control populations. In some instances, these tools are used for the good of society, such as the building of schools, hospitals, and other public infrastructure in accordance with the demographics of the community. In other cases, this information is used to repress populations and disseminate misinformation that disenfranchises people and removes personal freedoms, such as in North Korea where the citizenry are isolated from the global community through state-owned and controlled media, and isolationist national policy that includes movement of peoples and access to information.

“Currency cannot be private, money is a public good of sovereignty.” Bank of France Governor Francois Villeroy de Galhau

The digitization of currency is one of the biggest ‘next steps’ the world faces. The pandemic has expedited the ‘need’ for the digitization of payments, as citizenry are encouraged to forgo making cash payments for purchases in favor of contactless options to reduce the spread of the virus.

In China, banknote and coin payments are fast being replaced by mobile payments, particularly via Alipay and WeChat Pay. As of June 2020, around 801.7 million people used mobile payment transactions in China, up from around 765 million users in March 2020. Worldwide, the uptake of user rates of online payment systems has accelerated at a rate that was predicted to take about 10-years growth to achieve in only a few short months, while the volumes in the first half of 2020 were lower than expected due to trade restrictions and international bans on some imports, user rates have skyrocketed.

It is because of the pandemic that crypto has this year again come to the forefront of the debate about consumer privacy and online user protections. For the majority of people using and trading in cryptocurrency, digital assets do not represent a political statement shunning the authoritarian power of central governments and commercial banks, it is simply a wise investment in a promising new technology that is fast gaining traction in the mainstream consciousness as a viable and legitimate asset.

National Digital Currency a Red Flag

National governments, such as the People’s Republic of China, are assessing the value of introducing a national digital currency that might one day replace physical currency. A new fiat that would be monitored and controlled in the same way that current fiat is issued. However, it comes with a caveat that should be a red flag to all consumers; digitization of spending means collection of data, and no anonymity for consumers.

Digital spending is of concern if governments and commercial banks are allowed to control the systems by which such trade would take place. While an obvious concern is the use of a single node to store and exchange data, leaving information vulnerable to hacking, another major concern is the control that could easily be exerted over citizens.

As discussed, when a single power has access to data, it can be used to create bubbles or echo chambers that influence our thinking and reinforce ideas through the constant messaging in targeted ads and pseudo-news articles, meaning that we subtly stop thinking for ourselves and start to concur with a herd mentality.

One of the reasons that cash transactions matter, is that they provide a space for people to make private transactions that are not monitored or recorded by governments. Governments argue that the recording of transactions helps to reduce crime, such as human trafficking, illegals arms trade, and terrorist organization funding – which is what AML policy officers are trained to monitor and flag to ensure that transactions are legitimate, especially online.

However, not all purchasing involves nefarious or criminal intent. The purchase of a book from a secondhand bookstore or a garment from a clothing store can be a private purchase. For example, a teenager interested in exploring their sexuality might want to purchase a book about sexuality and gender studies. If they do this online, it is recorded in a central database and they will be sent targeted ads which could pigeonhole their thinking and limit their self-exploration. If they enter a bookstore, they can pay cash and essentially make an ‘anonymous’ purchase.

Cash transactions provide a vital service that allows people to retain their sense of privacy, and removing cash purchasing from society means removing privacy. We do not yet have the tools and protections to protect our individualism online.

Who Should Develop Cryptos?

For this reason, it must be asked if governments are the right institutions to develop new digital currencies?

Bank of France Governor Francois Villeroy de Galhau in 2020, said that having private companies issue digital currencies was of concern because, ‘currency cannot be private, money is a public good of sovereignty.’ While this statement might be factually correct, does it stand up to scrutiny when a government is not acting in the best interest of its public?

There are over 5,000 cryptocurrencies, and some other non-crypto currency digital currencies, such as E-Gold and DigiCash. There is user-based evidence to suggest that netizens want privately issued money and national currencies.

However, analysts warn that economic crises could worsen with such a system because central banks’ ability to use monetary policy instruments would ‘be greatly reduced or even destroyed’ if their economies favor private currencies over national currencies.

Another concern is that the widespread use of private digital currencies could decrease a nation’s seigniorage income, increasing gaps between rich and poor and lowering general standards of living for populations due to possible funds shortages.

The question is then raised – do private currencies push societies towards a capitalist agenda that excludes those who are already disenfranchised, and is it doing so under the guise of a socialist agenda? It is a question not of politics, but policy.

The protection of privacy and the development of mechanisms that ensure the maintenance of personal freedoms is one of the foundations that must be laid so that the internet, its usage, and the many benefits of the technology can be enjoyed in a way that answers the needs of a complex globalized society.


The disruption of systems by the introduction of blockchain technology is a step on our journey towards a globalized community. The pandemic has proven that while national sovereignty and border controls are still powerful physical forces, we have developed an online world that has few of those controls. If the future is decentralized, how is that an environment that is inclusive of all people if there is not a democratic force if it is only led by financial power? And how is it different from the forces that we are living under in many nations today?

Cryptocurrencies have forced policymakers to examine the power of decentralization, if and how two monetary systems – public and private – can work together, and overall, what benefits and threats are posed by privatized financial systems?

Blockchain does not promise privacy, but it does offer greater transparency. The technology can be used to benefit internet users, if users are educated about how the technology works and how it can be applied, such as voter registration and protection, supply chain tracking, and community access to banking. It is through the robust digitization of data using a network of nodes that people are protected online. A greater understanding of blockchains by the general public could lead to higher adoption rates of various technologies that might address issues of online privacy, digital payment systems, and ultimately, online governance.

Is it the responsibility of those who develop, trade, or use cryptocurrencies to do so with a social conscience, or is it just another investment opportunity that allows the rich to get richer, and increases the gap between the haves and have nots further? Why do you choose cryptocurrency?

A Future of Privilege or Rights

If such questions are left unasked and unanswered, it is monopoly firms, like Facebook which has control over much social media as well as having launched its own cryptocurrency, that will decide what is appropriate or not in terms of privacy. They already have, slowly, eroded people’s control over their data by updating policies and not requiring users to accept the new terms and conditions, normalizing targeted advertising, and failing to hold themselves to account for the use of algorithms that have proven to incite violence and promote extreme views.

Cryptocurrencies are a powerful tool for citizens to demand that governments reassess and update policies. It is a tool that, if used with foundations of inclusion and equality as its focus, has the potential to disrupt financial systems and demand that profits made by commercial banks be used for the benefit of communities, not private individuals.

But, is that the purpose of cryptocurrency, or simply a possible application? Is it the responsibility of those who develop, trade, or use cryptocurrencies to do so with a social conscience, or is it just another investment opportunity that allows the rich to get richer, and increases the gap between the haves and have nots further? Why do you choose cryptocurrency?

Privacy is not a privilege, it is a human right. It is something that is necessary for our development, to form an identity that is not dictated by the social conditions that directly or indirectly influence our thinking, decisions, and behaviors; and for us to decide what type of society we want to live in. When private companies have the power to target us, it shapes who we are, inhibits our thinking, and forces us into making choices that we think will conform with the surveyors of our domain. We act differently when under surveillance. We need privacy to know our beliefs.