Cryptocurrency and surveillance capitalism: Ascension of digital economics in the time of Corona

Can a modern human fill the gap between confidence and trust? The confidant upon whom you are placing reliability, can they be trusted with your possessions of any sort?

The mysterious creator of Bitcoin, Satoshi Nakamoto, said "the electronic payment system is based on cryptographic proof instead of trust. We have proposed a system for electronic transactions without relying on trust."

Nakamoto here is advocating the secure algorithm of blockchain, which is the foundation of worldwide cryptocurrency.

What is cryptocurrency? Like many, I can also make extravagant speculations. Though the logline is simple - the technology requires various steps of complex initiation, much like the internet when it first came to be.

Professor Catherine Malabou from Kingston University in the UK says, "Cryptography is the procedure by which a sender transmits an encrypted product to a receiver, who then deciphers the product with the help of a key."

There are many cryptocurrencies, and Bitcoin is just one of them. It is not a physical coin whatsoever. Instead, it is basically a computer file stored as a digital wallet app on your device.

Transaction history through Bitcoin remains listed through Blockchain technology, spreading the data in multiple computers or devices to protect it from hackers.

There are social and political controversies surrounding the evolution of cryptocurrency. It is more prone to unannounced fluctuations than any other stock exchange in the world. Yet, we are observing a continuous rise of interest among investors.

In mid-February this year, Bitcoin reached $58,332. But during February 21 to 23, it fell by more than 20%. Again, on February 24, it recovered and gained around $51,000.

In addition to this, on April 15, a cryptocurrency company named CoinBase reached $100Billion in worth, making it the biggest Bitcoin surge to this date. 

Other than the constant bounce and debounce, one more difficulty with cryptocurrency is its liquidity. As it depends on algorithm-based trading, investors or companies can easily buy or sell shares or make business-friendly transactions on a large scale.

Moreover, since no intermediaries are involved, there is no need to pay fees to the banks. Your money remains only yours.

Struggling with economic instability, monetary derangements, and insufficiency of necessary resources - the third world countries live far away from the decentralisation opportunities cryptocurrency may offer.

Large-scale adaptation to this system is only possible if people at all levels can access it. This possibility lies in the future. But we can easily see how a global pandemic has driven general people, not only just investors, to explore and try their luck with cryptocurrencies.

On April 15, a cryptocurrency company named CoinBase reached $100Billion in worth, making it the biggest Bitcoin surge to this date. Source: Bloomberg

Blockchain is being adopted by Microsoft, Amazon, and many big companies due to its innumerable potentials and promises of user data security. Blockchain may someday provide us with encrypted digital identities since its specific nature makes fraudulence and information hacking incredibly difficult.  

Consciously and subconsciously, when we buy something online, we know that our data is being deciphered, our choices monitored, and our preferences stored. Shoshana Juboff, the Harvard Business School Professor and author of the book "The Age of Surveillance Capitalism", explained clearly how social media utilise our privacy in exchange for financial benefits:

"Imagine you have a hammer. That's machine learning. It helped you climb a grueling mountain to reach the summit. That's machine learning's dominance of online data. On the mountaintop, you find a vast pile of nails, cheaper than anything previously imaginable. That's the new smart sensor tech. An unbroken vista of virgin board stretches before you as far as you can see. 

That's the whole dumb world. Then you learn that any time you plant a nail in a board with your machine learning hammer, you can extract value from that formerly dumb plank. That's data monetization. What do you do? You start hammering like crazy and you never stop, unless somebody makes you stop. But there is nobody up here to make us stop. This is why the 'internet of everything' is inevitable."  

The biggest challenge for cryptocurrency technology is to prove its credibility in ensuring mass privacy, what Zuboff calls 'behavioral surplus extraction'.

Cryptocurrency and surveillance capitalism stands upon different ideologies. Michael J Casey, The Chairman of CoinDesk's advisory board says, "A blockchain solution for breaking down surveillance capitalism would naturally be a technological one, embracing the power of math and cryptography to design a new digital topography of trust that disempowers the centralised middlemen and creates human agency within a decentralised system."

But can our current internet economy provide healthy cooperation to Blockchain? The answer lies under the sheathes within. For now, we know that Facebook is developing its own cryptocurrency Diem. This cryptocurrency is expected to launch later this year. Diem has many policy contrasts with the traditional cryptocurrency. However, only the future can tell how secure our privacy would be in the hands of these tech giants.

The author is an educator and SDG enthusiast. She can be reached at tanha.emita@gmail.com.

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinions and views of The Business Standard.