Three things are happening simultaneously: (1) we are generating personal data at a rapid and accelerating pace, (2) leaking these data to a growing number of sources through intentional and unintentional means (e.g. hacks) and, (3) developing and improving technologies that can make sense of these vast pools of personal information.

These three things enable an Unstoppable Panopticon. Data about individuals and groups are plentiful, readily available to many organizations, and easy to process and use to make decisions.

Some of these decisions can help people (like better shopping or entertainment recommendations). Other decisions can hurt people (like identifying targets for an authoritarian regime to silence).

If these three things continue (more personal data, available to more organizations, more easily consumed and processed), then an Unstoppable Panopticon feels inevitable. This seems important, so I plan to dedicate a good chunk of my time to exploring this idea and adjacent topics in privacy.

Is this bad? Is it preventable? Will people care? Can individuals protect themselves? What are the consequences?

In this post, I start from the beginning of US history in search of lessons on how US citizens have dealt with privacy loss. And describe where we are today.

Revolution (1754 - 1776)

In 1754, the colonies of British America fought against those of New France, each side supported by the military of their parent countries. During the war, soldiers from Britain needed a place to stay, but British generals found it hard to convince American colonists to provide provisions and quarters. So in 1765, the “Quartering Act of 1765” was passed stating that if the soldiers outnumbered housing available, they would be “quartered in inns, livery stables, ale houses, victualing houses, and the houses of sellers of wine and houses of persons selling of rum, brandy, strong water, cider or metheglin.”

But the actions of the British often went beyond these laws, with soldiers forcibly seizing quarters in private dwellings during the war.

After the American Revolution, John Adams, a founding father of the United States, would say that it had been the British right to enter private dwellings without justification that sparked the fight for independence1. While the legality of search and seizure in the American colonies would go back and forth over the years, at a certain point, American citizens felt that their private sphere had been violated. And this feeling of violation led to a war for emancipation.

We can see evidence of this in the Declaration of Independence: :

He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation:

For quartering large bodies of armed troops among us.

To use my direct vs emergent framing, privacy loss was there all along (the law permitted quartering long before the revolution), but the direct consequence of soldiers inside yours or your neighbor’s home was required for revolution to form. Without the direct consequences, its unlikely that the colonists would have cared about the privacy loss and perhaps the revolution would have never occurred.

But the direct consequences did emerge. And as a result, we saw the first wave of privacy preservation in the (soon to be) United States.

We will see the same pattern again with the early internet: start with a system where privacy is unprotected, catalyze demand for privacy with direct consequences of privacy loss, and change the system.

Internet Voyeurism (2002 - 2016)

In 2002, a man named Nick Denton started a media empire focused on celebrities. Among its popular sites were Gawker and Valleywag.

For over a decade, his writers published headlines like:

  • “Peter Thiel Is Totally Gay”
  • “That Type of Girl Deserves It”
  • “Even for a Minute, Watching Hulk Hogan Have Sex in a Canopy Bed is Not Safe For Work but Watch it Anyway.”

They would spread rumors, share explicit photos and videos without the consent of the people in them, and delight in the resulting attention and controversy. And in the early 2000s, it seems that most people were okay with this, enough so that the company was once valued for hundreds of millions of dollars2.

In 2019, it’s hard to imagine such a site could get away with sharing intimate, dubiously acquired, and oftentimes inaccurate information about other people, but in the early 2000s, times were different. The social zeitgeist had yet to view these discrete violations of privacy as wrong. And the law was on Gawker’s side. They would win case after case on the grounds of the First Amendment.

Until they lost a case and the company to Hulk Hogan and his backer Peter Thiel.

Ryan Holiday details the incredible story in Conspiracy, which I highly recommend. In it, details how shifting views on online privacy would work against Gawker:

The internet was no longer new and exciting, but a part of normal life. new norms, new concerns about technology and privacy had developed in that time and they were conservative norms. Many were established in response to some of the horrible events that had happened publicly via blogs and social media. A young man named Tyler Clementi had committed suicide in 2010 when his college roommate filmed him kissing another boy with a webcam and mocked him on Twitter for it. For years the prosecution of his bully roommate led the news, changing attitudes slowly with it. States had begun to pass anti-revenge porn laws. Even as the Hogan and Gawker trial began, another jury was out deciding the fate of the man who had recorded peephole footage of the sportscaster Erin Andrews through the wall of her hotel room. They would award her $55 million. What Gawker could have justified in 2007 when it was still a small company and outed Peter Thiel, in 2012 when it posted Hogan’s sex tape, even in 2015 had the trial proceeded as scheduled, was no longer the same. […] To the jury, to their peers, to the public following the events through the headlines and via live stream, what they stood for was incomprehensible.

Gawker thrived when its readers saw Gawker’s victims as “other.” But as society started to observe more and more relatable stories about privacy loss, they turned against Gawker. By the time they went to trial, exposing compromising information about an individual was unacceptable. And the law would change to reflect these beliefs[^aside].

Like the revolutionaries in colonial British America, early internet users suffered potential privacy loss for years before caring. But once they started to feel direct consequences to overall online privacy, they changed the system to better protect their privacy.

Unstoppable Panopticon (2018 - present)

We are in the midst of another “privacy moment.”

Last March, The Guardian, The New York Times, and Channel 4 News in the UK simultaneously published an expose detailing a massive data harvesting effort by Cambridge Analytica. The company had collected millions of peoples’ Facebook profiles without their consent. The expose went viral and the ensuing scandal knocked over $100 billion from Facebook’s share price and led to CEO Mark Zuckerberg testifying in front of US Congress.

Later that year, Equifax announced a cyber-security breach that resulted in the loss of 145.5 million US consumer’s personal data to cybercriminals.

A few months later, Marriott was hacked, leading compromised personal information for 500 million people.

More recently, a #deletecoinbase movement started because Coinbase acquired a blockchain analytics company founded by former members of a cyberintelligence company that helped authoritarians surveil and control people
A recent Axios report shows that while a growing majority now views online privacy as a crisis, few are wiling to do anything about it.

So what happens now? It is now clear to most that we are suffering from a system that insufficiently protects privacies. But will the direct consequences of this privacy loss catalyze a change?

Pessimism about present day privacy

While the American Revolution and Gawker examples catalyzed change that protected privacy, I am less confident today. Both the privacy loss itself and the direct consequences of the privacy loss are harder to detect. The average citizen can see authoritarians in foreign countries murder journalists, but that only translates to a feeling of direct consequence if both (1) they associate that event as a result of privacy loss and (2) they perceive a personal threat from the event. I’m skeptical of either happening, so society is unlikely to organize against this privacy loss.

Moreover, the nature of this privacy loss is harder to control even if society wanted to. There’s more data, more people that can access the data through legal and illegal means, and more tools and resources to make sense of that data. And all three of these things are accelerating.

You can think of the three privacy moments like this:

Moment Situation Catalyst Result
American Revolution British were allowed to search colonial homes without warrants Unwarranted search Revolution
Internet Voyeurism Media outlets sharing intimate content without consent were protected by First Amendment laws Gawker vs Hulk Hogan, Fappening, etc. Revision to laws
Unstoppable Panopticon Personal data generated at breakneck pace and available to many types of organizations Cambridge Analytica, Equifax, Coinbase/Neutrino ???

In each case:

  • Start with a system that fails to protect privacy but people don’t yet care
  • Catalyze a demand for privacy with direct consequences of privacy loss
  • Change the system to protect privacies

In order for the system to change, we need a strong enough catalyst to shift the social zeitgeist and the means to change the system. Our present-day privacy moment suffers disadvantages in both areas. The consequences are less direct and the system is more distributed and thus harder to control.

It’s frustrating. This frustration can be felt in the way people reacted to Coinbase/Neutrino. As I wrote to members, setting the problematic background of the Neutrino team aside, the acquisition was pro-privacy:

acquiring a chain analytics company like Coinbase did is actually pro-privacy for users. Instead of two entities having your data (Coinbase and Chainalysis, for example), only one does. And that one that has it isn’t aggregating data about your behavior from other sources. It’s a bit of a shame that Coinbase became the scapegoat due to awkward communications. They had the opportunity to take the privacy highground.

But the Neutrino team’s background of privacy violation in service of authoritarians reminds us of our frustration with our lack of privacy, so people declare “#deletecoinbase.”

This frustration is also what compels politicians to recommend breaking up tech “monopolies.” But breaking up tech monopolies won’t solve the systemic problem. While much of the data originates from tech monopolies, the Unstoppable Panopticon is not controlled by a few companies–it’s distributed.

It’s tempting to say that’s why we need blockchain(TM). But today’s blockchains are arguably worse at protecting privacies than legacy systems3.

Maybe privacy technologies like STARKS will help us build privacy preserving systems. I hope they do, but if they are built, will they come? While some privacy-focused services are growing (e.g. DuckDuckGo, Firefox), the majority of people will be unwilling to change their behaviors (and will even state their unwillingness to change per the recent Axios surveys).

We know what happens if we do not intervene: the Unstoppable Panopticon forms. Big picture, building and using systems that cannot contribute to the Panopticon seems like the answer (“can’t be evil”). At the individual level, producing less data and using tools that make it harder to link data together could mitigate the problem3. This is a privacy challenge of an unprecedented scale. What will it take to catalyze a change?

  1. Adams, John, Charles Francis Adams, and John Adams. Letters of John Adams, Addressed to His Wife. Boston, C.C. Little and J. Brown, 1848. 338. 

  2. https://www.thewrap.com/gawker-media-has-received-multiple-100-million-plus-bids-exclusive/ 

  3. Though there are forces outside of your control that could unravel your privacy anyways  2

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Member updates

March 14, 2019

Ripple funding games is good for crypto (plus should have shorted Grin)

March 7, 2019

On the margin, Coinbase's Neutrino acquisition is pro privacy but your coins aren't fungible either way

March 1, 2019

Who cares if Coinbase lists XRP? (plus Facebook Coin)