Financial privacy has been the norm. Law enforcement has never had full access or visibility into our finances. Most law enforcement still use traditional mechanisms. We don't have to give away privacy to be safe. Privacy is not the antithesis of security; privacy is security. Security is not the absence of crime, it is the presence of justice. The price of full financial surveillance is an illusion of security and billions in poverty. We should resist totalitarianism. We're winning the Crypto War.
Transcript
[AUDIENCE] I would love for you to get back to the privacy versus transparency issue you touched on. We all had in mind, [when] Tim Cook resisted the FBI request about providing cryptographic backdoors... into the iOS operating system... Often times when I talk with regulators, I make the point that, in the near future, monitoring communications...
and the subset of our communication which is financial transactions, would not be possible, because even with cryptographic backdoors, the honest people will have their privacy exposed and bad people would just use backdoor- less cryptography with [multiple] layers. We will be facing a new, different society in which the transparency that [law enforcement] used before... will not be available anymore; we benefit, really. Can you share some ideas on this?
[ANDREAS] Law enforcement never had visibility into our finances [like this]... until the mid 1970s and beginning of the 1980s. [Before that], most of our finances were completely invisible to law enforcement. Yet somehow, they were able to enforce the law.
They reduced crime quite significantly without visibility. [This] tool, of having visibility into finance, has proven to be a very ineffective law enforcement tool. It's a very addictive law enforcement tool and certainly gives a lot of power; with that power comes great addiction to power, but it doesn't demonstrably change the fundamental requirements of law enforcement. Most law enforcement still operate with very traditional mechanisms.
If I want to find out what [kind of] bitcoin transactions a company has been making, then you find someone who has done something wrong, take them into a room and say, "[You get] twenty years [in jail], or you tell me everything about your boss' bitcoin address." Then you go to their boss, in the same boat, and say, "[You get] twenty years, or you tell me everything." And keep 'rolling' them. I believe that was invented here in Italy, that system. [Laughter] The point being this: law enforcement has never had full access to all of our finances. We should be skeptical about the idea that, in order to be safe, we have to completely give away privacy that...
we've had for thousands of years, in a way that has no accountability. I think that is a terrifying idea. I think what it does, is actually endanger security. Privacy is not the antithesis of security.
Privacy is security. Security is not the absence of crime, it is the presence of justice. You don't create a secure world by removing crime, you create it by increasing [access to] justice. If we allow full financial surveillance, we are not increasing justice.
The price we pay for full financial surveillance is the economic exclusion of four billion people. Without access to sufficient identification and proof of assets, they're unbanked [in the world financial system]. The price we pay for the bourgeois, puerile illusion of security we have bought with totalitarian surveillance, is condemning four billion people to poverty. That is not a price I'm willing to pay, and that is what we should be asking: what is the price you are willing to pay to create this little totalitarian dream of yours?
You can surveil everything, [but] it doesn't make me more secure. I think we are actually winning this particular battle. A lot of the people who got involved in the battle for [encryption] in the last decade probably see us losing. But I was there in 1991, when they tried to ban it worldwide and put backdoors in every chip.
We won then and we've got a lot more crypto now, a lot more people who can write [for] crypto now. You're right, [financial surveillance] is not only a [bad] idea, but it also doesn't work. We should resist it, because it is evil.