Digital Shadows: How the Internet Empowers Anonymity and Challenges Governments
Pseudonymity, Anonymity, Bitcoin and Monero, and their impact on society
Note : this article is the 7th in a series on the disruption of nation-states by the Internet.
Also, this is the very 1st post on this blog that is less than 1500 words... (not including words in forms and the links to the series) just goes to show that everything can happen :)
Here are the fourteen articles in the series:
How the Internet makes Governments Impotent to Tackle Bottlenecks
How cryptocurrencies are disrupting Nation-States, part 1 of 2
How cryptocurrencies are disrupting Nation-States, part 2 of 2
Digital Shadows: How the Internet Empowers Anonymity and Challenges Governments
How the Internet prevents governments from enforcing their laws
Where it hurts most: how the Internet makes it harder for governments to collect taxes
The Web of Fraud: How the Internet Exposes Nation-States' Weaknesses
Today, the Internet enables many people to influence millions without anyone knowing who they are.
Of course, authors have been using the printing press to disseminate texts using a pen name for quite some time (Voltaire, whom we'll talk about in next week's article, being one of the many examples1 ), but the Internet makes it even easier to use pseudonyms, and not just to disseminate ideas.
For example, as we've seen in a previous article, the creator of Bitcoin gave himself the pseudonym Satoshi Nakamoto, and nobody knows who he is: it's even possible that it's a group of individuals.
Let's meditate for a moment on the fact that one of the greatest inventions of the early 21th century, with such disruptive power, was created by someone we know nothing about.
Do we have any other examples of this kind in history?
It's quite possible that this anonymity protected him from legal repercussions, because as we've seen, the history of Bitcoin-like projects before Bitcoin is a rather tragic one of visionary founders who were taken to court, and forced to stop their project, for various legal reasons.
And it doesn't stop there: Monero, the cryptocurrency explicitly designed to be untraceable, was also created by unknowns, answering to the sweet names of Nicolas van Saberhagen (the author of the white paper describing the theoretical principles of what would become the Monero protocol), and thankful_for_today on the bitcoin forum2 .
And not only are more and more developers contributing to software pseudonymously, like the coders of the Bitcoin privacy tool Samourai Wallet, but some people are building entire communities without revealing their identity, for example punk6529 (who has over 450,000 followers on Twitter as I write this), or Cozomo de’ Medici (who has around 290,000 followers on Twitter as I write this).
AI-generated videos, images and audio are likely to see this phenomenon explode - and it's a new disruption that chips away at the power of nation-states: not only will it push many too-shy people to take to the Internet, but of course it means that many criminals and other agents of influence will be able to have a field day, and be very difficult to identify.
Just imagine: eventually, anyone will be able to publish videos generated by an AI, with an entirely different character and voice.
This video dates from 2021! Here, the voice is done by the actor, but AI will soon make it possible to imitate someone's voice perfectly - if that's not already the case.
These videos could have been generated entirely by the AI, or transformed from a video made by the person in question, to the point where it would be absolutely impossible to know who was really behind the video.
If the person is careful to cover their tracks on the web, using VPNs that don't keep connection logs for example, and/or TOR, and gets paid in crypto knowing what they're doing3 , then in practical terms they'll be virtually impossible for the authorities to identify... and in any case they'll greatly slow down any attempt to do so, requiring far greater resources and time than usual.
Imagine tens of thousands of influencers, authors and developers doing this, and how complicated it will be to investigate each and every one of them.
These individuals will be able to spread their opinions and propaganda, their works and products, their software - which will include smart contracts on the blockchain and DAOs - without fear of major repercussions from governments, or groups of haters who would like to cancel them.
It will be for better or for worse, but it will be highly disruptive for governments in any case.
And it's not hypothetical, it's already happening, as we've seen with the examples of the creators of Bitcoin and Monero, two crypto-currencies that, in practical terms, undermine the power of nation-states by making their role as creators of currency obsolete, and by making it far more difficult to trace their use - even impossible in the case of Monero.
Note that you don't have to want to defend yourself against governments, or against all governments, to use a pseudonym: hundreds of millions of people already use a pseudonym for privacy reasons, and if you've ever created an account on a discussion forum or in an online video game without using your real name, you're one of them.
Silicon Valley thinker Balaji Srinivasan, whom we'll be talking to again in future articles, even speaks of a "pseudonymous economy", and believes that its development is mandatory to combat censorship by certain governments, and certain groups of haters4 .
Of course, it's possible for governments to tackle the bottlenecks that are social media, by forcing them to ask their users for ID, but :
Not all countries can force all media to do this
Some social media, such as those built on the Nostr protocol, are designed to withstand such demands by being decentralized (if you are on Nostr, you can follow me here BTW :) ) .
Criminals and other motivated individuals will find a way around this problem.
So today, the technical possibility of being someone influencing hundreds of thousands, or millions, of people exists, and is already in use: it's extremely disruptive, because never in history has it been possible to have such influence while remaining anonymous.
Of course, the anonymity of many of these individuals would probably not stand up to extensive police investigation, let alone that of an intelligence agency like the CIA.
Like Balaji said in his presentation, pseudonymity is not the same as anonymity : pseudonymity implies the use of a pseudonym or alias, while anonymity means the total absence of a recognizable identity.
And as we saw above, to remain anonymous even after an an investigation, you need to know what you’re doing, use the right tools, and basically never make a mistake. It's difficult, but not impossible.
But in the long term, the sheer number of pseudonymous individuals, coupled with their international nature, will make their massive identification complex.
And it will also make the task of those individuals who know what they're doing, and will set up advanced techniques to hide their identity, easier, thanks to the sophistication of the AI tools at their disposal, as well as the fact that it's easier to blend into a mass (for example, as we'll see, the massive democratization of encryption on the Internet has turned the use of encryption from suspect to normal, to the point where it's almost suspect today not to use encryption).
Next article: How the Internet makes it harder for governments to collect taxes
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The series on the disruption of nation-states by the Internet
This article is the 7th in a series on the disruption of nation-states by the Internet.
Here are the first six articles in the series:
His real name was François-Marie Arouet
Because, as we've seen, using transparent cryptos like Bitcoin or Ethereum in the wrong way can lead to fairly easy identification by public authorities. Using them with the right tools, or going through cryptos designed to enhance privacy like Monero, instead makes it very difficult for public authorities.
"Balaji Srinivasan: The Pseudonymous Economy", Lecture given online in 2021