The ramblings of an Eternal Student of Life
. . . still studying and learning how to live

Latest Rambling Thoughts:
 
Sunday, August 17, 2014
Current Affairs ... Economics/Business ... Society ...

This will be one of those “off the top of my head” entries. The thing up there on top right now: Bitcoins. So here are a few random bits on Bitcoin.

I had an “ah ha!!!” moment the other day; I finally “get” what Bitcoin is really all about. I was reading a magazine article about big data and the NSA and how there’s really no privacy anymore. Big government and big business can know just about anything they want to know about us, given how closely we are tracked and how our data is “warehoused” forever. Now that we are living digitally, now that everything we do economically and legally happens via a credit card or some other individual account on a computer network (e.g. employer records, medical insurance, mortgage and other loan accounts, Social Security and Medicare, tax payments, criminal records, banking and investment accounts, motor vehicle records, the list goes on and on) . . . then layer in all the personal communications via e-mail and social networks . . . all it takes are a few interconnections between a handful of database systems to paint a detailed picture of who we are: what we do, what we eat, how our health is, how many accidents we’ve had, how much liquor we drink, what are assets and debts are, who our friends and enemies are, what we care about, where we are likely to be next Sunday morning, what our political beliefs are, where our loved ones live . . .

So far the NSA has made the most aggressive use of these interconnections to look for the bad guys. And so long as the NSA answers to a constitutional government that continues to define “bad guys” as carefully as we do today in America, then this isn’t such a nightmare. But if “bad guys” start getting identified by those in power as they are today in China or Russia or North Korea (or to really make the nightmare vivid, go back not so long ago to Stalin’s Soviet Union or Hitler’s Germany), then we’re in for some deep do-do.

On a somewhat lower level, but one which still has a lot of creepy potential to it . . . big businesses can and do pay to connect to a lot of transactional databases (including some of the government ones) to make decisions about us . . . e.g. who or who not to give a loan to, to offer a job, to terminate a job, to give more credit or less credit to, to charge more or less for various goods and services, to require more or less downpayment.

As a small example, I’m getting more and more creeped out by those “helpful” and increasingly personalized communications from my health care insurer, about what I should or shouldn’t be doing “for my own health”. There are even “health incentives” in conjunction with my employer, e.g. go to some cheapo clinic at your local big-chain drug store and have your vitals checked [for my employer’s and insurer’s databases, no doubt] in the next month, and you can win a free round of put-put golf. Rinky-dink so far, but it’s only going to get worse; what happens when the incentives become “get denied coverage or lose your job if you don’t do what we say”?

One big component of our entry into “digital big brother land” is our use of credit cards to buy things. If you go somewhere and swap currency for goods, i.e. “cash and carry”, you have carried out a transaction fully anonymously (well, so long as the store personnel don’t know you and the cameras in the store didn’t get good facial shots of you). But as soon as you take out a credit card, then welcome to the big database. It is forever recorded and available to those in power that you bought XYZ from so-and-so for so many dollars on such and such date and time. Even if you use cash but pull out a customer loyalty card, welcome to the database.

Thus, if someone wanted to figure out how to murder me, they could tap into the Panera’s database and check out my pattern of customer card use, and they would know just what Paneras I usually go to and just what day and time I will probably be there next. A few more inter-connections and they would see the make, model and license plate number of my car. So they could set a sniper up to take me out the next time I’m stopping by for a coffee. I’m mindlessly walking across the parking lot and piff (sound of a rifle with silencer), I’m dead. Right now that would still be pretty hard and expensive to carry out, but it’s getting easier and easier.

So, enter Bitcoin. If I were really worried about a Paneras hit being put on me, I could theoretically put both my customer card and credit card away and switch to using Bitcoin. OK, right now I could just trash the loyalty card and use cash, but let’s face it, cash is going out of style; every store will require a smart phone at some point. That’s clearly the trend. Before Bitcoin, using a smart phone to buy things required a credit card or maybe PayPal or something like it. All of these options make my personal information available to the seller and to the bank or financial company behind the card or PayPal account. But Bitcoin is [mostly] anonymous! It’s a way to have the convenience of digital transaction via pocket device, and yet not give away who you are. It’s something like a digital version of hard cash!!

[Oh, yea, and another precaution against the Panera’s hit — turn off the smart phone on the ride over, as it constantly sends out trackable signals telling where I am.]

Well, Bitcoin isn’t perfectly anonymous, although it has gained popularity with illicit drug buyers and sellers. A Bitcoin transaction can still be tracked back to the user, but only with a lot of computing power and maybe some legal barriers (e.g. the need to get court warrants, like back in the days when phone calls were given privacy protections; no such thing anymore for Facebook or Twitter chats!!). If you are buying something on-line that needs to be delivered, you still have to leave an address and usually some contact into . . . but theoretically you could use a pick-up spot (e.g. a Post Office box or a private mail service office). And there is a downside to Bitcoin versus the standard route of using a credit card — if someone hacks your computer and gets your Bitcoin info, your money is GONE. It’s not like credit card fraud, where you usually go thru a lot of hassle but don’t absorb the loss. And Bitcoin can only protect you in your consumer life; it doesn’t hide your insurance record, your employment record, your driving record, etc. And what you say via e-mail or social media is still out there forever, no erasing it or burning it like paper.

But OK, I finally “get it” about Bitcoin! If enough people other than narcotics dealers and buyers really want to protect their privacy and maintain some anonymity in the digital age, Bitcoin (or something like it) will succeed. So far, though, many people, especially younger adults, seem to accept living in a digital glass house, having most everything about them available on-line. This will be a really interesting thing to watch over the next few decades, a really interesting topic for sociological research. If the freedoms that we take for granted stay intact, then Bitcoin (or whatever succeeds it) will be mostly an interesting side-show. But if more people start getting worried about what can be done to them by “the bad guys” because of their digital transparency . . . such bad guys possibly being the governments, banks, telecom companies, police agencies, big retailers, insurance and health care companies, etc. that we complain about but mostly tolerate today . . . then Bitcoin may become a real part of daily life over the next generation. [And maybe someone will then develop digital message cloaking devices, allowing you to limit who would know where the message came from.]

Hmm, wonder what Rand Paul (or his father, a true libertarian) has to say about Bitcoin? Rand in fact seems to like it, but daddy Ron has some doubts, but he likes the overall concept. Even libertarian politicians have trouble giving straight answers!!

◊   posted by Jim G @ 6:41 pm      
 
 


  1. Jim, Good explanation of the advantages and disadvantages of Bitcoin. However, I’m so far behind in the digital and technological world that I don’t have a clue how or what Bitcoin actually is.

    So: What precisely *is* Bitcoin? I know I’ve heard the term and that it’s supposed to be some kind of fake (or non-fake?) money. Or *is* that what it is? I don’t know.

    Then too, I have no clue how one goes about acquiring Bitcoin. It’s supposedly “digital money”? Then one could only acquire it using a computer? Or buying something with a computer? Why does it seem from your explanation that only illegal drug users would be the *real* market for Bitcoin? Would this put out of business people such as the ones in Netflix’s “Orange is the New Black” who are really good at transporting suitcases of money from place to place? But I find myself astonished to think that even illegal drugs can be/are being bought online. A “who knew?” to me. Well, I guess some illegal drugs, such as fake prescription drugs can be, and maybe are, bought online; but I was thinking mainly of drugs such as heroin, methamphetamines, etc.

    Somehow or other this “Bitcoin stuff” all seems to be more complicated than I care to be bothered with. And if the only thing one can “hide” from the national nosey people, who have to poke their nose into every little move I make, is how much money I have (which certainly is not a lot), I’d think having a ton of money hidden in some offshore bank or a Swiss bank would do the trick just as well.

    In summary: I’m so far behind this whole idea that, while I’ve heard the term, I don’t have a clue what Bitcoin is or how one acquires it. Thus, I can’t make a decision, or even have an opinion, about what I think about having it or not having it, etc. So, I’m unable to give an intelligent or even a non-intelligent response to the topic of Bitcoin. I wonder if I’m alone in this problem or if there are a lot more people like me. Probably my giess is that I’m in the small group of people who have no clue concerning Bitcoin. MCS

    Comment by Mary S. — August 18, 2014 @ 9:35 am

RSS feed for comments on this post.

Leave a comment:


   

FOR MORE OF MY THOUGHTS, CHECK OUT THE SIDEBAR / ARCHIVES
To blog is human, to read someone's blog, divine
NEED TO WRITE ME? eternalstudent404 (thing above the 2) gmail (thing under the >) com

www.eternalstudent.com - THE SIDEBAR - ABOUT ME - PHOTOS - RSS FEED - Atom
 
OTHER THOUGHTFUL BLOGS:
 
Church of the Churchless
Clear Mountain Zendo, Montclair
Fr. James S. Behrens, Monastery Photoblog
Of Particular Significance, Dr. Strassler's Physics Blog
My Cousin's 'Third Generation Family'
Weather Willy, NY Metro Area Weather Analysis
Spunkykitty's new Bunny Hopscotch; an indefatigable Aspie artist and now scolar!

Powered by WordPress