When it comes to writing opinion pieces, conventional wisdom demands that I take a side in any argument – the more extreme, the better. However, there are times when the issues are too complex to take one side clearly over the other. That holds true, for example, when it comes to the question of the anonymous nature of Bitcoin and to what extent, if any, that should be sacrificed for public safety and security.
Before the ideologically pure commence an assault on me in the comment section, allow me to explain why that is so. I lost a much loved family member in the 9/11 attack on the World Trade Center and my oldest son is currently on deployment with the U.S. Army in the Middle East. As much as I intellectually understand the argument that the right to privacy is absolute, from a real life perspective, the argument that defeating terrorism and crime is of paramount importance to me. Despite that, though, on balance I would still side with privacy protection in the digital sphere.
As I said, I have more reasons than most to place security first, but it seems to me that compromising the security of our digital records, and even money, may seem like a good idea initially but when potential consequences are considered, that isn’t the case. Not just from a theoretical perspective, but also from a practical one. I am not somebody who hates or distrusts either government or big corporations, but history tells us that neither have exactly a stellar record of protecting against hackers. Allowing the “good guys” access just increases the chance that the bad guys will find a way in.
This thorny question of digital privacy has once again come to the fore recently. In a highly publicized case, Apple (AAPL) has revealed that it will fight a court order to break the encryption code on an iPhone used by one of the terrorists who killed innocent people in the San Bernardino shootings of last December. In a separate case, a Hollywood hospital admitted that it paid a ransom in Bitcoin to somebody who had penetrated their computer system with malware. The coincidence of these two events is just that, a coincidence, but their presence in the public consciousness at the same time could have a profound effect on how people view the issue of anonymity with regard to Bitcoin.
Without the backdrop of the Apple case, the criminal actions of the hacker(s) who held the Hollywood Presbyterian Hospital’s computer system hostage, and the fact that they demanded a ransom in Bitcoin, would be used by opponents of the digital currency as just another example of why it is dangerous and must be clamped down on.
The obvious questions, such as should we therefore clamp down on cash, gold or anything else that has ever been used to pay a ransom anonymously, or what exactly is meant by “clamping down” on an internet-based currency and how that could practically be achieved would have remained unasked by most mainstream commentators.
As it is, though, with Apple defending the view that the Fifth Amendment to the U.S. Constitution is absolute and applies to our tech devices as much as our homes, the conversation should have a different tone. Their argument, that developing code to unlock a phone, any phone, would leave us all vulnerable is a powerful one. The real questions of personal liberty versus personal security will be asked in that case, and one can only hope that as a result the public considers them the next time Bitcoin’s anonymity comes under attack.
As I suggested earlier, I am torn on this issue, but as a trader, I have learned that it is usually best to take the side of logic rather than fear or emotion in general. It is a measure of its importance that even in these polarized times, the one function of government that both the left and the right agree on is its role as a protector of a nation and its citizens. Sometimes, the obvious route to enhancing that protection holds out the prospect of ultimately doing more harm than good. In the case of digital privacy, whether involving iPhones or Bitcoin keys, logically, fear must take a back seat.