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.
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.
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?
“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:
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.
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.
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:
- Bitcoin Without the Bite: Can Digital Currencies Help Governance?