Review: Tracers in the Dark

Tracers in the Dark: The Global Hunt for the Crime Lords of Cryptocurrency
By Andy Greenberg
ISBN: 978-0-385-548/09-0

At the 1997 Computers, Freedom, and Privacy conference, the computer scientist Timothy C. May, a co-founder of the influential Cypherpunks mailing l|ist, presented the paper Untraceable Digital Cash, Information Markets, and BlackNet. In it, he suggested that the combination of the Internet, anonymous digital cash, and the possibility that anyone could be a “mint” (in the money sense) created the conditions for BlackNet, a market in stolen secrets, assassinations, and other illegal goods and services. In trying to stop it, he said, regulators and governments would invoke the “Four Horsemen of the Infocalypse”: nuclear terrorists, child pornographers, money launderers, and drug dealers.

Like all futurists, May was building on existing trends. Digital cash already existed in an early form, and governments were already invoking the Four Horsemen in opposing widespread access to strong encryption (they still are, in debates about the UK’s Online Safety bill. Still, his paper also imagined Wikileaks.

Almost certainly the unknown creator of bitcoin, Satoshi Nakomoto, knew the cypherpunks list. In any event, at the beginning, bitcoin appeared to be – and the community surrounding it sometimes billed it as – sufficiently anonymous and untraceable to enable May’s BlackNet. Tl;dr: not for long.

In the highly readable Tracers in the Dark, veteran Wired journalist Andy Greenberg tells the story of step-by-step technical advances that enabled law enforcement, tax authorities, and others to identify and arrest the owners and users of sites dealing in illegal goods like Silk Road, AlphaBay, and Welcome to Video, and take the sites down.

The essential problem for criminals seeking secrecy is, of course, that the public blockchain indelibly records every transaction for all to see for all time. Not only that, but the bigger the pile of data gets the more useful information it yields to analysis. Following the money works.

Greenberg’s series of detective stories begins and ends with Sarah Meiklejohn, now a professor in cryptography and security at University College London. As a graduate student circa 2012, she began studying how bitcoin was being used, and developed clustering techniques that ultimately made it possible to understand what was happening inside the network and identify individual users and owners. Following in her footsteps are an array of interested detectives: the fledgling company Chainalysis, Internal Revenue Service, the Drug Enforcement Agency, and international police. She herself declined a well-paid offer to join them; she sees her role as that of an impartial researcher issuing a public advisory.

At every step the investigators had help from the criminals themselves, who over and over again were remarkably sloppy about their own security. Ross Ulbricht, was identified as the administrator of Silk Road because he’d once posted his real email address to a coding forum. Alexandre Cazes, the owner of AlphaBay, was successfully arrested because he kept helpfully posting details of his many female conquests to an online forum, helping the agents following him build a detailed understanding of his whereabouts.

Each takedown has been followed by efforts to improve blockchain privacy. But even so, investigators have years’ worth of leads they can still follow up. And by then, as Danish entrepreneur Michael Gronager says toward the end of the book, referring to the then new, more resistant technologies Monero and Zcash, “Any of these systems, anything that’s developed, you always see a couple of years alter, someone finds something.” Nothing’s perfect.

Review: Cloudmoney

Cloudmoney: Cash, Cards, Crypto, and the War for our Wallets
By Brett Scott
Publisher: Bodley Head
ISBN: 978-1-847-92587-9

Three years ago, the area around the local tube station included a bank and four ATMs. Come the pandemic, the bank closed, never to return, and so did two of the ATMs. The loss of the bank gave a couple of the chain stores an excuse to refuse to take cash. But they’re a minority in an area full of independent local shops, who recognize that many of their customers are cash users. Journey into some parts of central London, however, and cash gets you ghosted.

We are told that the cashless future is what we want: it’s more convenient (except when the system is down, the app needs to be rebooted, or there’s no Internet connection). The reality, as “monetary anthropologist” and former broker Brett Scott points out in his book Cloudmoney, is that despite this inevitability narrative, one reason electronic/digital payments are more convenient is a deliberate effort to make cash harder to access. Often, promoters claim the cashless society is – or will be – more financially inclusive. Yet, as Scott recounts, that “inclusion” in the remote global economy often brings with it the exclusion of locally-controlled, less formal economies. Less financial inclusion, more *enclosure* and “corporate seep”.

Scott’s central thesis is simple: once the forces of Big Tech and Big Finance have merged, they will have a hitherto unimaginable amount of power over all of us. I have some sympathy with this argument. People forget that it was through the banks that Gilead was brought into being in Margaret Atwood’s The Handmaid’s Tale. All they had to do was locate all the accounts tagged “F” and turn off access until a suitable male came forward to claim them. This is the power of cloudmoney – money that exists for us only in the form of numbers that represent promises to pay. Scott is not predicting a specific dystopia; but he does want to propagate a counterbalancing narrative to the “liberation” every new fintech app pretends to promise while scarfing up all our personal data. In his campaign to protect the public system of cash, he sometimes finds himself in the company of conspiracy theorists whose other ideas he rejects.

What is less clear is where bitcoin and other cryptocurrencies fit in. They also started with rhetoric: they were digital cash, digital gold, a mechanism for bypassing the world’s banks and governments. In practice, so far, they haven’t succeeded at any of these things, and even in El Salvador, where bitcoin is legal tender, you can’t use it to buy a box of oatmeal in a supermarket.

The story technology companies tell is, of course, that they are disrupting the stodgy, antiquated world of traditional finance. Instead, what Scott sees is plain old automation that serves that world and tightens its control. Almost every new service, whatever the rhetoric it starts with, from credit cards to Paypal to Apple Pay to Facebook’s failed Libra cryptocurrency, becomes a front end for bank accounts for the same reason that robbers always focused on them: that’s where the money is. The exception is cash – slow, partially disconnected cash that enables transactions that aren’t caught in what Scott calls the “digital mesh” of corporate capitalism. No wonder they hate it.

Review: Survival of the Richest

A former junior minister who’d been a publicity magnet while in office once told me that it’s impossible to travel on the tube when you’re famous – except in morning rush hour, when everyone glumly hides behind their newspaper. (This was some while ago, before smartphones.)

It was the first time I’d realized that if you were going to be famous it was wise to also be rich enough to buy yourself some personal space. The problem we face today is that we have multi-billionaires who are so rich that they can surround themselves with nothing *but* personal space, and rain in the form of other people never falls into their lives.

In fact, as Douglas Rushkoff writes in Survival of the Richest, this class of human sees the rest of us as an impediment to their own survival. Instead, they want to extract everything they can from us and then achieve escape velocity as completely as possible.

Rushkoff came to realize this when he was transported far out into the American southwestern desert by a pentangle of multi-billionaires who wanted advice: what, in his opinion, was the best way to hide from out and survive various prospective catastrophes (“The Event”)? Climate change, pandemics, mass migration, and resource depletion – where to go and for how long? Alaska, New Zealand, Mars, or the Metaverse: all their ideas about the future involved escaping humanity. Except: what, one wanted to know, would be the best way to keep control of their private security force?

This was the moment when Rushkoff discovered what he calls “The Mindset”, whose origins and development are what the book is really about. It is, he writes, “a mindset where ‘winning’ means earning enough money to insulate themselves from the damage they are creating by earning money in that way. It’s as if they want to build a car that goes fast enough to escape from its own exhaust”. The Mindset is a game – and a game needs an end: in this case, a catastrophe they can invent a technology to escape.

He goes on to tease out the elements of The Mindset: financial abstraction, Richard Dawkins’ memes that see humans as machines running code with no pesky questions of morals, technology design, the type of philanthropy that hands out vaccines but refuses to waive patents so lower-income countries can make them. The Mindset comprehends competition, but not collaboration even though, as Rushkoff notes, our greatest achievement, science, is entirely collaborative.

‘Twas not ever thus. Go back to Apple’s famous 1984 Super Bowl ad and recall the promise that ushered in the first personal computers: empower the masses and destroy the monolith (at the time, IBM). Now, the top 0.1% compete to “win” control of all they survey, the top 1% scrabble for their pocket change, and the rest subsist on whatever is too small for them to notice. This is not the future we thought we were buying into.

As Rushkoff concludes, the inevitability narrative that accompanies so much technological progress is nonsense. We have choices. We can choose to define value in social terms rather than exit strategies. We can build companies and services – and successful cooperatives – to serve people and stop expanding them when they reach the size that fits their purpose. We do not have to believe today’s winners when they tell us a more equitable world is impossible. We don’t need escape fantasies; we can change reality.