Week 5: Case Crypto Currencies.

This week, I have asked Mia Ross, one of your colleagues,  to be our Guest Blogger. There are two reasons for that:

  • In the ICM program, we are doing research that has to do with the latest developments in Media Governance (there will be another Guest post on 4/28 on Digital Rights). It’s important for you to know about the work your peers do.
  • This is also to showcase that, indeed, the course is about issues that are currently happening and that are challenging the existing power regimes. — That’s why we need to examine them: Even if you will never directly work with governance issues you will be affected by them. As a professional, you need to know the trends.

This week, the case is Crypto Currencies: An innovation that is based on comm tech technology (cryptology) and that is drastically changing some power structures. (Some say it saves the music industry, others such as the UN that perhaps it could be a tool for global development).

It’s good to understand, in general, what digital currencies are. Some of them you use every day. The term digital currency depicts the broadest category of means of digital value transaction, including options such as Pay-Pal. They involve a legal tender of value.

Virtual currencies are a form of digital currencies. They are digital representations of value, issued by private developers and denominated in their own unit of account. They can be transacted electronically, and can be used for a variety of purposes, as long as the transacting parties agree to use them. The concept covers a wide array of “currencies,” ranging from simple IOUs of issuers (such as Internet or mobile coupons and airline miles), and “crypto currencies” such as Bitcoin.

The term crypto currency, then, refers specifically to a digital currency that uses cryptography in transactions, to ensure security and anonymity of transactions. Cryptocurrencies use a technology called blockchain. In simple terms, blockchain is a data structure of a digital ledger of transactions that is shared among a distributed network of computers.

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Source: Digital currencies – taxonomy, IMF 

Our ICM820 course (shoutout to both Mia and Chiang) studied the phenomenon and presented our results in UN Vienna and UNHQ New York. Here are Mia’s reflections about the project; more to come in the Institute blog next week.

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When reading the following, please think of the issues we have covered so far: what kinds of shifts in power does this case represent? Who are the stakeholders? What kinds of governance structures are being challenged? Should they be amended or even replaced?

Mia, the floor is yours!

What’s a crypto-currency?

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“The technology likely to have the greatest impact on the next few decades has arrived. And it’s not social media. It’s not big data. It’s not robotics. It’s not even AI. You’ll be surprised to learn that it’s the underlying technology of digital currencies like Bitcoin. It’s called the blockchain. Blockchain.” – Don Tapscott

Every time you make a purchase on your credit or debit card, you are relying on big intermediaries we call banks. They are a central authority that our transactions must be verified through, and they perform authentication, identification, record keeping and more. These central authorities are centralized and human controlled, making them vulnerable to hacking, human err, and corruption. Aside from the people they do serve, there are millions around the world who do not have physical access to traditional banking systems or simply do not have the minimum requirements to open an account. These requirements could mean formal identification or a minimum deposit.

What if we could have an internet of money, value, and assets? A global distributed ledger available to everybody where not only currency could be stored… but any kind of asset from music, to invention copy writes, to intellectual property, to land titles could be stored, moved, transacted, exchanged, and managed – all without a central authority?

By means of cryptography, encryption, and code, crypto currencies are a form of programmable money that uses Blockchain technologies in a way where we would no longer need to trust in these powerful middle-men currently needed to perform exchanges of value. The video below explains briefly how it works:

Hesitations

Governments are weary of crypto-currencies due to its popularity within black markets. It is infamous for being used as a cipher for drug transactions, sex worker advertisements, illegal genome sequence analysis, gambling, fake ID’s, and just about any malicious thing you can think of to be sold on the Dark Web. What attracts criminals to this technology is how transactions cannot be tampered with in the blockchain, not even from a government.

However this puts the media and governments in peculiar positions.

The media serves as a checks and balances for governments and businesses, however journalistic efforts are many times the first to be suppressed by lack of financial support or direct financial blockades imposed by governments. With crypto currencies, consumers can support courageous media producers without depending on corporate perspectives. Wikileaks is a prime example of this idea coming to play. In December of 2010 donations to Wikileaks were blocked by Bank of America, VISA, Mastercard, Western Union, and Paypal. This financial block was subjective, since the Wikileaks project is aimed at whistle blowing corporate and governmental injustice. Through bitcoin the company has accepted over 32,000 dollars in donations to fund itself as a way around this and other financial blockades with a global payment method immune to political pressure and monetary censorship.

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Jon Matonis, a Forbes contributor explains why the public’s involvement with entities like WikiLeaks is so important: “It used to be that people had secrets and the government was transparent; now it’s the people that lack privacy and the government has secrets. Freedom of payments is an extension of financial privacy and digital cash-like transactions without financial intermediaries become a critical piece of that foundation. Money was never intended to act as a form of identity tracking or payments restriction and this is why the option for anonymous and untraceable transactions is so vital as society moves to a world of digital currency.”

So here we see some of the potential of digital currencies, and the hesitations of governing bodies in efforts to embrace the technology. Yet, studies show that 26% of Millenials in the world be using some form of digital currency on a daily basis by 2020.

Assignment: Brainstorm

How do you think crypto-currencies could be used to empower the field of communications? Be specific.

How do you see the blockchain technology changing the landscape of how we work and interact in the future?

Is this possible to govern? If so what steps would be needed to govern these types of transactions?

Please post your thoughts below as a comment by 2/24, midnight!

Further reading – differing opinions, FYI:

PS: Your Mid term Exam will be posted online next Friday. You will have two weeks, until 3/10, to complete it.

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16 thoughts on “Week 5: Case Crypto Currencies.

  1. 1. I think crypto-currencies are great because they eliminate the middle man when dealing with currency. The peer-to-peer benefit offers up so much opportunity to communicate internationally. Because there is no exchange rate, it allows us to collaborate with people and businesses across the globe with fewer barriers.

    2. With fewer barriers and less government intervention, blockchain technology can revolutionize how people do business, particularly international business. I think companies wouldn’t think twice to expand or have branches in other countries because of the ease of using bitcoin for salary payments. Having a universal money system will allow us to help build economies in developing countries. Cryptocurrencies can also be useful for those seeking to provide money for their families in other countries. Remittances would be easier to send, especially now given the seemingly low regulatory environment for cryptocurrency.

    3. I think typically, a digital currency with implications that span globally would need to be governed, but I think that the complete selling point of bitcoin is that it is not regulated or controlled by the government. An article from Bitcoin Magazine says “companies [that run Bitcoin transactions] can have a greater impact on Bitcoin’s protocol rules and, therefore, on Bitcoin’s governance process.” I think the governance is in the hands of the program that a person uses to send or accept their cryptocurrency. I think that this can have some cons, with rules and policies differing on each software platform and no definitive list of regulations for the digital currency. These software platforms then would basically turn into digital banks, with some charging fees, some offering better benefits than others, etc. I think that governing cryptocurrency would ruin what makes it so great.

    Liked by 1 person

    1. Tiffany, you make a great point about the conflicting nature of governing technology such as this. It’s interesting that you referred to software platforms as a possible “new third party”. What if governments made policies to prevent these platforms from gaining too much power? However, governments would only be able to “govern” crypto-currencies to a limited extent. One of the articles mentions “Decentralized currency generation means a sovereign nation’s central bank can no longer actively control the money supply.”

      Like

  2. Crypto-Currencies: The Wave of the Future?

    Virtual currency is a new medium, which is changing outdated conceptions of currency theory and practice. The future is currently upon us. In fact, without even knowing, we use different types of digital currencies everyday. Pay-Pal and Bitcoin are two virtual currencies that are gaining steam, leading the way for innovation through monetary based systems. However, the term crypto-currency refers to an enhanced level of secure digital transactions. Crypto-currency also ensures anonymity, which is crucial when money processes occur in cyberspace.
    Crypto-currency is made possible through a new and emerging technology known as “Blockchain”. Mia’s insight was crucial when understanding this complex concept. She makes great insights, including my favorite except, “Blockchain technologies in a way where we would no longer need to trust in these powerful middle-men currently needed to perform exchanges of value.” The main point here is that crypto-currencies cut out the middle man, allowing consumers and corporations to have a more streamlined relationship. She also mentions a utopian view of what a secure and matured cyberspace could look like. For example, she writes how not only money can be stored. Music, copyrights, intellectual property and land titles could one day be secured in an online database.
    Mia also does a great job of showing the drawbacks that come with crypto-currencies. Phrasing them as “hesitations”, she mentions how governments would push back on future developments in cryptography. She then closes out her argument with the great example of WikiLeaks. Crypto-currencies can bolster the media’s true role in society. Often there is an argument that media is an agenda-based and framed version of corporation’s bias. Crypto-currencies can put the power in the hands of the people once again. So where to now? The emerging statistics show that 26% of millennials will be using some form of digital currency by 2020. Perhaps it’s time for the government to get with the times?

    Like

    1. Anthony,

      Good indication of Paypal as a form of virtual currency. Often, we don’t realize how much of our “money” is already virtual. Credit Cards have a similar effect, and cash only has symbolic value established by our government since money is no longer related to gold. In light of all this, why not consider a worldwide form of currency that is self-sustaining and verifies itself? You have a point, maybe governments should “get with the times”.

      Liked by 1 person

  3. Crypto-Currencies: The Wave of the Future?

    Virtual currency is a new medium, which is changing outdated conceptions of currency theory and practice. The future is currently upon us. In fact, without even knowing, we use different types of digital currencies everyday. Pay-Pal and Bitcoin are two virtual currencies that are gaining steam, leading the way for innovation through monetary based systems. However, the term crypto-currency refers to an enhanced level of secure digital transactions. Crypto-currency also ensures anonymity, which is crucial when money processes occur in cyberspace.
    Crypto-currency is made possible through a new and emerging technology known as “Blockchain”. Mia’s insight was crucial when understanding this complex concept. She makes great insights, including my favorite except, “Blockchain technologies in a way where we would no longer need to trust in these powerful middle-men currently needed to perform exchanges of value.” The main point here is that crypto-currencies cut out the middle man, allowing consumers and corporations to have a more streamlined relationship. She also mentions a utopian view of what a secure and matured cyberspace could look like. For example, she writes how not only money can be stored. Music, copyrights, intellectual property and land titles could one day be secured in an online database.
    Mia also does a great job of showing the drawbacks that come with crypto-currencies. Phrasing them as “hesitations”, she mentions how governments would push back on future developments in cryptography. She then closes out her argument with the great example of WikiLeaks. Crypto-currencies can bolster the media’s true role in society. Often there is an argument that media is an agenda-based and framed version of corporation’s bias. Crypto-currencies can put the power in the hands of the people once again. So where to now? The emerging statistics show that 26% of millennials will be using some form of digital currency by 2020. Perhaps it’s time for the government to get with the times?

    Like

  4. 1. I think crypto-currencies could be used to empower the field of communications.it is a great techonology.An open, interoperable, censorship-resistant platform for data agreement could help solve many of their problems–and these were real problems: micropayments to support content producers, digital identification to help refugees, and services like credit and cheap money transfer for the unbanked. Though the solutions are far from obvious, even the possibility of making a dent in these problems is worth exploring, and surprisingly, the people involved seem to think an open-access, cryptographically signed log could help.
    2.This protocol is the foundation of a growing number of global distributed ledgers called blockchains—of which the Bitcoin blockchain is the largest. While the technology is complicated, the main idea is simple. Blockchains enable us to send money directly and safely from me to you, without going through a bank, a credit card company, or PayPal.
    Rather than the Internet of Information, it’s the Internet of Value or of Money. It’s also a platform for everyone to know what is true—at least with regard to structured recorded information. At its most basic, it is an open source code: anyone can download it for free, run it, and use it to develop new tools for managing transactions online. As such, it holds the potential for unleashing countless new applications and as yet unrealized capabilities that have the potential to transform many things.
    3.Yes,The blockchain is public: anyone can view it at any time because it resides on the network, not within a single institution charged with auditing transactions and keeping records. And the blockchain is encrypted: it uses heavy-duty encryption involving public and private keys–like the two-key system to access a safety deposit box–to maintain virtual security. You needn’t worry about the weak firewalls of Target or Home Depot, or a thieving staffer of Morgan Stanley or the U.S. federal government.The new platform enables a reconciliation of digital records regarding just about everything in real time.

    Liked by 2 people

    1. You phrased this very well: “The new platform enables a reconciliation of digital records regarding just about everything in real time.” This has potential to make major improvements in the efficiency of our government and in international commerce as a whole.

      Like

    2. From my point of view, neither Bitcoin nor cryptocurrencies is the most important thing but the blockchain technology. Cryptocurrencies will never become a primary official currency, but merely a kind of substitutable and subordinate currency. Although this is still significant, it becomes far less significant when it compared to the blockchain technology. Cryptocurrencies is only a thing, but this technology represents a reformable trend and many positive possibilities forward.

      Liked by 2 people

  5. Thank you for your reflection Mia!

    Crpyto-currencies could be used to do business in countries with people that do not have access to a traditional bank account. The communication will be more directly linked to the source of which it came from thus allowing companies to expand and pay employees through bit-coin. Whether for medicine or toothbrushes, anyone will be able to purchase items securely through bit-coin expanding business and breaking down barriers everywhere. A safe and encrypted means of transaction it will minimize the distribution at which a product goes through. Creating a more reliable, direct path will decrease the price of the product increasing the target market.

    Companies and governments will be forced to have a bigger sense of transparency and responsibility. Since everyone is able to access a copy of the chain at which the product has gone through to get to them, miscellaneous charges will no longer be able to sneak their way in. Not having to interact with as many middle-men decreases the amount of money the company will have to pay This will effect the landscape at which we work by
    Requirements of regulated industry thus giving them more time and energy to focus on more innovative work. The music industry, which almost everyone supports some way another will change dramatically by allowing fans to purchase the music directly to the source (artist). This will enhance the relationship and appreciation for music or product.

    Since bit-coin already exists on the black market and has been used by illegal industries to run their business with no trace of the transaction it will be hard to take back control. To govern crypto-currencies the first step to take would be to properly introduce the new way of commerce to the world. Next the set of regulations put into play must some how protect the individual’s private information but also structure the consequences if caught using it for illegal purposes. Since the point of it is that it is safe from human error- if a there was a type of surveillance it would be rather contradicting. They would have to develop a program feature in the blockchain- technology that systematically regulates the system detecting for error.

    Like

    1. Regarding the future of work, you have a noteworthy indication: what will we do with the time and creative energy that was once used to correspond with middle-men? The possibilities are endless, but I believe how this is used could propel companies ahead of their competitors.

      Some criminals have gravitated to crypto-currencies specifically because their transactions cannot be blocked. However, as awareness rises in the general population, the overwhelming majority of transactions would become neutral or beneficial to society. Essentially the transactions will provide a reflection of our financial habits. I think when considering the pros and cons of embracing this technology, governments should consider if they’re fears are of the crypto-currency itself or human nature.

      Like

  6. Thank you for your reflections Mia!

    1. Crpyto-currencies could be used to do business in countries with people that do not have access to a traditional bank account. The communication will be more directly linked to the source of which it came from thus allowing companies to expand and pay employees through bit-coin. Whether for medicine or toothbrushes, anyone will be able to purchase items securely through bit-coin expanding business and breaking down barriers everywhere. A safe and encrypted means of transaction it will minimize the distribution at which a product goes through. Creating a more reliable, direct path will decrease the price of the product increasing the target market.

    2. Companies and governments will be forced to have a bigger sense of transparency and responsibility. Since everyone is able to access a copy of the chain at which the product has gone through to get to them, miscellaneous charges will no longer be able to sneak their way in. Not having to interact with as many middle-men decreases the amount of money the company will have to pay This will effect the landscape at which we work by
    Requirements of regulated industry thus giving them more time and energy to focus on more innovative work. The music industry, which almost everyone supports some way another will change dramatically by allowing fans to purchase the music directly to the source (artist). This will enhance the relationship and appreciation for music or product.

    3. Since bit-coin already exists on the black market and has been used by illegal industries to run their business with no trace of the transaction it will be hard to take back control. To govern crypto-currencies the first step to take would be to properly introduce the new way of commerce to the world. Next the set of regulations put into play must some how protect the individual’s private information but also structure the consequences if caught using it for illegal purposes. Since the point of it is that it is safe from human error- if a there was a type of surveillance it would be rather contradicting. They would have to develop a program feature in the blockchain- technology that systematically regulates the system detecting for error.

    Liked by 1 person

  7. Crypto-currencies empowers the field of communication by creating another means in which to speak the language of business. In simplest terms, this new way of purchasing goods and services creates a new dynamic that enhances the original ways people would formally conduct various transactions. The block chain technology that is connected to this digital currency further enhances business transactions by bringing the idea of accountability to the forefront. All participants within a transaction can be assured that everyone involved is doing their part and receiving their fair due within a given transaction through this technology. Additionally, if any part of a transaction needs to be updated, it is done so upon the approval of all. This simple feature would encourage those conducting business to be more accurate, transparent, ethically sound, and liable for their actions and would be the standard set for future work and interactions. With this feature, governance of these types of transactions would be done by its participants without any outside influences. If governance were to occur from outside influences, it would take away from one important concept of this platform- privacy. Overall, this idea of having digital currency can be seen as revolutionary to people who are unable to utilize traditional establishments/ methods to conduct personal and general business transactions as well as gives added protection within the process of exchanging money from person(s) to person(s).

    Like

  8. How do you think crypto-currencies could be used to empower the field of communications? Be specific.
    • Crypto-currencies seem to be the new wave of the future. Not only are crypto currencies beginning to have a huge impact of the World Wide Web, but also it can definitely turn the field of communications upside down. Within the communications field, often time many resources and important data is able to be formulated, crypto-currencies will allow people throughout the all realms of communication to do business with people overseas who do not have access to traditional forms of money transferring as well as can serve as a better and more effective way to exchange monetary values without the additional worry about personal information being stolen or breached.

    How do you see the block chain technology changing the landscape of how we work and interact in the future?
    • Block chains, if used correctly and in the proper manner will cause many company to be more open and transparent with their users/customers. This can ultimately change the landscape of the future as well as give user a better indication, even users who aren’t web or technology savvy a great way to be on board with how technology is being transmitted and transformed.

    Is this possible to govern? If so what steps would be needed to govern these types of transactions?
    • When it comes to cyber currencies, I do believe that this will be something that will take a lot of time in order to completely govern and control. In recent day many people on the black market currently use bitcoins illegally and fly under the radar without governance from the current government.

    Like

    1. Transparency is a vital asset to businesses, and as you mentioned, that may be a defining characteristic that comes in the future of work. However, the businesses that may have something to hide might be more reluctant to adopt or promote the popularity of Blockchain technology.

      Liked by 1 person

  9. Thank you everyone who participated and apologies for some delays – double postings. This is because something (the word crypto?) set off the WordPress spam filter, and so, several contributions went to spam before I rescued them 😉

    Like

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