Columnist

Privacy is key: Dominic Frisby discusses the importance of protecting privacy

DOMINIC FRISBY: "Those that know about us have power over us. Protecting privacy limits that power" 

Here I am writing this week’s missive against the backdrop of waves crashing down on the Pacific coast of Mexico. I’ve flown here to give a talk at a crypto conference and, specifically, I’m going to be talking on a theme that has been rearing its head rather a lot over the past few months. Privacy.

Given that the price action in crypto so far this week has been its typical-of-late flat self – up a few per cent then down a few per cent – I thought I’d veer away from my usual message of “it’s a bear market, but it won’t go on forever” and outline some of the things I’m planning to say in my talk.

Privacy is the next big narrative

I’m convinced that when the next bull market in tech comes along, privacy is going to be one of the big narratives. We are only now waking up to its importance. For 20 years or more, we’ve been giving away deeply private and personal information about ourselves in exchange for the ability to send and receive messages for nothing. To be able to post photos of ourselves or pass judgement on some recent development on social media.

Knowledge is power, folks, and we have handed over untold amounts of information without realising what we are doing.

It’s not a case of “if you’ve nothing to hide, what’s the problem?”. Everybody has private affairs. There’s a difference between privacy and secrecy. There are many things you might say or do in one situation that you would not say or do in another.

You might tell your doctor something you don’t want your family to know about. You might tell a friend something that you wouldn’t tell your spouse. You might tell your lawyer something you don’t want a work colleague to know about. The information you share depends on the relationship – whether personal, professional, governmental, or commercial.

But I send – or I used to – all of my emails through Gmail. Gmail knows everything about me. It even knows the emails I didn’t send – the ones I drafted but never dispatched.

The same goes for the likes of Amazon, YouTube, Facebook, PayPal, eBay, and Google. How much do they know?

If that information is used elsewhere, without permission or out of context, then there is a breach of trust. And, as we all know, that information is definitely being used.

It is being used to nudge you and influence the decisions you make – what you buy, sell, read, or watch. It’s being used to persuade you to vote in certain ways. It’s being used to decide the content you see, the messages you receive, the loans, the insurance, the job, or the opportunities you are offered. Governments will try to regulate it, but the tech companies are so far ahead, governments may as well be farting in the wind.

I mentioned to my son last week that I need a new pair of slippers. The next day, Amazon is marketing slippers at me. Is my iPhone listening to me? My computer? It’s a trivial example. But you can be sure that there is the possibility for far more sinister forces at play.

We don’t know what data is being used, how, and by whom. We have no power to object. We have no ability to make changes to that data. We have no control.

And what happens when hackers get hold of information?

Protecting privacy

More and more people are waking up to this reality and changing their habits. More and more products will be developed to provide people with opportunities to protect their privacy. Encrypted messaging, paid-for email, privacy coins, protocols, wallets – these are just some of the areas where we are seeing great steps forward being taken.

The problem may be tech. But the solution is also tech. Privacy tech. Protecting privacy limits the scope that others have to use our information beyond the purpose for which it was supplied. It allows us greater control over our online reputation. It allows us to grow and mature without being shackled by foolish things we may have said or done in the past. It enables us to explore new ideas outside the mainstream without fear of being watched.

Those that know about us have power over us. Protecting privacy limits that power.

The secret of value investing is to look around for assets that are undervalued, buy them, and then sell when they are fully or overvalued. Privacy has been undervalued, but the dominoes are all lined up for that to change.

So I’m convinced if you can find good coins, companies, technologies, protocols, apps, wallets – whatever it is – that somehow enhance or protect privacy, this has got to be a good area to be in in the upcoming years.

Privacy coins

So what are the main privacy coins? There is no perfect one. Once we thought Bitcoin was private. We’ve since discovered it is more pseudonymous than anonymous, and the provenance of coins has given rather a lot away.

Monero, of course, is the most renowned privacy coin, but it does have scalability issues. Zcash has many cool features, but few people are using it to transact and there are questions about the full extent of its decentralisation.

Litecoin’s developers are making noises, not for the first time, about adding privacy features. As it’s something of a sandbox for Bitcoin, what comes to Litecoin could eventually come to Bitcoin.

Dash has some cool privacy features, as well as a cool community, but it’s not the finished article.

Then of course we have the new kids on the block – Beam and Grin. As it isn’t an open source venture, the former has some of the same shortcomings as Zcash, while the latter has a lot of promise – but it is a long way from being the finished article.

But keep an eye on this space, folks. It is going to get a lot bigger…

Dominic Frisby is author of the first (and best, obviously) book on Bitcoin from a recognised publisher, Bitcoin: the Future of Money?, available from all good bookshops, and a couple of rubbish ones too. Dominic is director of Cypherpunk Holdings (CSE:HODL), a company set up to invest in privacy-related technologies. Follow Dominic – @dominicfrisby

 

Related Articles