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Cryptocurrencies

Crypto Hunters: Why Elites are Anxious About Cryptocurrencies

Over the last decade, while we have lived through the ebbs and flows of global crises, triumphs, and changes, a ‘paradigm shift’ has been happening across a network of interconnected computers. This shift began in 2008 when the pseudonymous ‘Satoshi Nakamoto’ unveiled his new project: a trustless peer-to-peer network of monetary transactions that would be recorded on a decentralized public ledger. This new version of ‘electronic cash’ was called Bitcoin.

A Bitcoin is created by computers attempting to solve a cryptographic algorithm—a process known as “mining”—which are then ‘rewarded’ with units of monetary representation for having solved the block of code. Once miners have these monetary units, they can send them across the network to other addresses, quickly and with minimal fees.

What made this process wholly unique was its decentralized nature: multiple nodes connected to a network to verify transactions and blocks, and to ensure that every line of code was accurate to the ledger—also known as a ‘blockchain.’

The Bitcoin source code became the envy of computer programmers, hackers, and an entire generation of “cypherpunks”: technology activists who advocated the use of cryptography to achieve true privacy. This was the dawn of the cryptocurrency age.

As users of the network grew, so did copycat projects. The numbers of vendors accepting cryptocurrencies also grew and eventually an entire economy of digital assets emerged, far from the heavily regulated (and policed) financial sector.

Today, that global cryptocurrency and digital asset economy is worth more than $2 trillion, surpassing the GDP of some G7 nations, including Canada and Italy.

Cryptos in the crosshairs

Today—owing to their size, reach, and utility—cryptocurrencies are no longer mere projects of tinkering computer programmers. Prices of Bitcoin and other digital currencies are commonplace on stock tickers. They are found in the portfolios of large financial institutions. And, at least in the case of Bitcoin, they are now considered legal tender in a country like El Salvador.

But the growth and mainstream adoption of cryptocurrencies has necessarily put them in the crosshairs of various regulatory authorities who want to restrict their use. Often authorities have said that this is because of the volatile, speculative nature of cryptocurrencies, which can sometimes have a percentage rise (or fall) in the double digits in just a matter of hours. Authorities have also pointed to various scams that have swindled users of their ‘coins.’ 

At other times, however, there is a worrying sense that ‘crypto’ is evolving faster than regulators can even grasp, offering unique lending, payment, and exchange options that exist—without a central authority.   

In a recent Bloomberg podcast, Christine Lagarde, former IMF director and now president of the European Central Bank, said: “Cryptos are not currencies, full stop. Cryptos are highly speculative assets that claim their fame as currency, possibly, but they’re not. They are not.” Lagarde thus joins the chorus of central bank chiefs, finance ministers, and treasury secretaries that have warned of the unique threat posed by cryptos to the global system of traditional financial markets.

JPMorgan Chase CEO Jamie Dimon has been one of the more vocal Bitcoin foes, saying recently that he “always believed it’ll be made illegal someplace, like China made it illegal, so I think it’s a little bit of fool’s gold,” and calling on lawmakers to “regulate the hell out of it.”

As decentralized digital assets proliferate, the limited ability of established agencies to oversee and limit transactions means that value is being exchanged outside a guarded or protected system—far from the prying eyes of tax authorities, banking chiefs, and issuers of national currencies.

This, however, is one of the main advantages of using digital assets clocked according to cryptographic algorithms and a real, free market of floating prices: without a central authority, the ability to inflate or deflate the currencies via a printing press or by minting coins is rendered null.

A hedge against the state

When the main unit of exchange is a national currency, the value of that currency is subject to exchange prices. But it also may be inflated or deflated on a whim, based on the needs of the state—for instance, to pay back debts, wage wars, or boost or reduce exports.

Whether it was Roman Emperor Diocletian—who debased the Roman currency and instituted price controls in his 301 AD Edict on Maximum Prices—or the hyperinflation of the German Weimar Republic in the 1920s, or even the abandoning of the Gold Standard by Richard Nixon in 1971, the debasing of currencies serves a purpose that befits a nation and its institutions, and not necessarily its people.

Furthermore, today we see this: U.S. $100 in 1960 are the equivalent of US$886 in 2021. This makes life generally more expensive for those who use U.S. dollars, who must purchase goods and services that may or may not follow the trendline of inflation.

By fixing supply indefinitely—21 million, in the case of Bitcoin—holders of the coin are assured that its value will never be artificially inflated or deflated based on the whims of central monetary authorities, offering peace of mind to investors, savers, and holders (or HODLers).

What’s more, because of the cryptographic process of mining coins and the distributed public ledger of the blockchain, no one can cheat the system. Double-spending, mining new coins without proof of work, or conducting fake transactions cannot happen. And because each account or ‘wallet’ is protected by a “seed phrase”—essentially a private key—there is no way to physically seize accounts or stop payments.

These basic features of cryptocurrencies, as well as their ability to be traded without intermediaries demanding strict compliance (using things like social security numbers, identification cards, tax numbers, etc.) entirely removes governments from transactions. If the financial system were based on these principles and methods, it would make it difficult for the European Central Bank or the Federal Reserve to create new currency, adjust prices, or bail out firms or entities that have made mistakes in times of crisis.

Adapt or die

Given how widespread the trading and use of crypto has become, many in positions of authority have realized that they must reckon with its power. As voiced by Gary Gensler, head of the U.S. Securities and Exchange Commission, the innovative nature of Bitcoin has been a ‘wake-up call’ to the financial sector. “Nakamoto’s innovation, not only Bitcoin as the first sort of one but this whole distributed ledger technology, has been a catalyst for change that, around the globe, central banks and the private sector are looking in on how we can enhance our payment systems,” Gentler told The Washington Post.

Gensler’s comments demonstrate that officials and ruling elites are taking crypto innovations more seriously. They also suggest that they recognize that the revolution that has begun cannot be stopped.

A group at the U.S. Department of Treasury, led by Gensler and Treasury Secretary Janet Yellen, will soon debut official recommendations on regulating the crypto sector by focusing on “stablecoins,” which are digital assets pegged to the value of national currencies for easier convertibility. And in the European Union, the European Commission has tabled a proposal on “Markets in Crypto-Assets Regulation,” focusing on the investment trends of cryptocurrencies and how consumers and users could be impacted by wild price swings.

Core to each of these regulatory efforts are mechanisms designed to tame the so-called “wild West” of crypto. These include plans to regulate fiat-to-crypto exchanges, deeming various cryptocurrencies as securities, and increasing financial surveillance of the crypto market in order to ensure tax compliance.

There is little doubt that many of these regulations will come to pass. Whether firms or crypto users continue to stay in these jurisdictions, however, remains to be seen. While our current monetary system rests on national currencies and regulated banks, every new user of a cryptocurrency unlocks the potential of a system that cannot be overruled, made redundant, or inflated away.

While regulators can claim significant authority on regulated exchanges or payment providers, the decentralized, distributed nature of crypto means that the currencies themselves cannot be controlled or influenced arbitrarily—and perhaps that is the fact that scares authorities the most.

Originally published here

A Crypto Surveillance Mandate In the Infrastructure Bill Must Be Rejected

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A Crypto Surveillance Mandate In the Infrastructure Bill Must Be Rejected

Washington, D.C. — Today, the US House is expected to take a vote on the bipartisan infrastructure bill that contains vast implications for cryptocurrency users.

Hidden inside is an amendment to tax code 6050I that could make receiving and failing to correctly report a digital asset (be it a cryptocurrency, NFT, or another type of digital asset) a felony. According to the amendment of 6050I, any US citizen who receives over $10,000 must report within 15 days the sender’s personal information such as Social Security number and tax ID. Failure to do so could result in mandatory fines and lead to a felony charge with up to five years in prison. 

As noted by University of Virginia School of Law Adjunct Professor Abraham Sutherland, it “relies on a 1984 law that was written to discourage in-person cash transfers and to encourage the use of financial institutions for large transactions”. By regulators once again applying old rules to an emerging asset class they are risking not only harming the consumer and the whole nascent industry but also further eroding the privacy of US citizens. 

“If passed, this amendment will stifle innovation and result in huge loss of value for consumers and businesses alike while further centralizing control over transactions that US citizens make. It will hurt a flourishing economy, and it will also have long-term effects in a future where digital assets are not going away,” said Yaël Ossowski, deputy director of the Consumer Choice Center, a global consumer advocacy group.

CCC’s Crypto Fellow Aleksandar Kokotović echoed those sentiments: “Not only US companies and investors would be hurt by this amendment, but also domestic consumers and retail investors, who would be severely discouraged from participating in the digital asset class economy which is now setting standards for decades to come.”

In an asset class that didn’t exist in 1984 when the original law was written, it is completely possible that the person receiving the funds would not have a specific individual or legal entity to report but rather that the ‘sender’ is a decentralized exchange or a group of individuals. This is just one example of the anachronistic stipulations of this amendment that are worrying consumers.

“Turning even small retail investors such as students into potential felons or subjecting them to outdated laws will only serve to limit the unparalleled economic growth currently provided by the sector, or risk pushing all investment and entrepreneurship to other jurisdictions,” added Kokotović.

As legislators and regulators seek to understand, contain, and regulate cryptocurrencies, last week the Consumer Choice Center published its list of common-sense principles for smart crypto regulation that will safeguard innovation, protect consumers, and adapt for technological and financial change.

“We recognize the importance of crypto regulation for keeping bad actors in check and providing a sound institutional framework. We also recognize that the nascent crypto finance space is ever-changing and rapidly evolving, and that overzealous regulation could cripple future potential,” said Ossowski. “We offer bedrock principles on smart crypto regulation for lawmakers, hoping to promote sound policies that will encourage innovation, increase economic inclusion across all income groups, all the while protecting consumers from harm,” he added.

In the coming weeks, the Consumer Choice Center will be meeting with legislative and regulatory officials to ensure these principles are upheld in any future regulation or guidance.
 

CONSUMER CHOICE CENTER’S PRINCIPLES FOR SMART CRYPTO REGULATION:

  • Prevent Fraud
  • Technological Neutrality
  • Reasonable Taxation
  • Legal Certainty & Transparency

The policy primer can be read in full here.

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva, and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org.

Bagaimana Kebijakan Regulasi Mata Uang Kripto yang Tepat?

Mata uang kripto, atau yang juga akrab disebut cryptocurrency, saat ini menjadi salah satu medium investasi dan transaksi yang mengalami peningkatan yang sangat pesat. Saat ini, kita bisa membeli berbagai produk mata uang kripto dengan sangat mudah melalui banyak sekali platform yang tersedia di dunia maya.

Tidak sedikit pula mereka yang mendapatkan banyak keuntungan dari investasi di produk-produk mata uang kripto. Keuntungan tersebut didapatkan dalam jangka waktu yang relatif sangat cepat, karena nilai dari mata uang kripto tersebut mengalami peningkatan yang sangat cepat dibandingkan dengan berbagai instrumen investasi lainnya.

Selain itu, banyaknya mata uang kripto yang bergerak sangat bebas tanpa adanya intervensi dari otoritas atau institusi negara juga menjadi daya tarik tersendiri bagi banyak orang untuk menggunakan instrumen tersebut untuk melakukan transaksi. 

Dengan bebasnya pergerakan dan peredaran mata uang kripto, maka nilainya tidak bisa dimanipulasi oleh institusi pemerintahan yang berkuasa.

Dengan semakin banyaknya pengguna mata uang kripto, saat ini kita bukan hanya bisa menggunakan mata uang kripto untuk membeli berbagai produk-produk virtual seperti poin game, tetapi juga mencakup barang-barang nyata hingga kebutuhan kita sehari-hari. 

Tidak hanya itu, beberapa negara juga sudah melegalkan mata uang kripto sebagai legal tender, sebagaimana mata uang nasional yang diterbitkan oleh pemerintahan di negara tersebut.

El Salvador misalnya, belum lama ini menjadi negara pertama yang secara resmi menjadikan mata uang kripto, seperti bitcoin dan berbagai mata uang kripto lainnya, sebagai legal tender. 

Tidak hanya El Salvador, negara-negara lain juga perlahan-lahan mulai menjadikan mata uang kripto sebagai legal tender, diantaranya adalah Panama dan Ukraina (cnbc.com, 9/9/2021).

Tetapi, tidak semua pemerintahan bersedia untuk mengikuti langkah yang diambil oleh El Salvador, Panama, dan Ukraina. 

Tidak adanya peran institusi pemerintah dalam peredaran dan pengaturan mata uang kripto membuat tidak sedikit pemerintahan di berbagai negara di dunia menaruh kecurigaan yang besar terhadap produk ini. 

Beberapa langkah yang diambil tidak main-main, mulai dari melarang mata uang kripto digunakan sebagai alat transaksi yang sah, hingga melarang seluruh kegiatan yang berkaitan dengan mata uang kripto.

Lantas, bila demikian, bagaimana kita seharusnya menyusun kebijakan yang tepat terkait dengan kebijakan mata uang kripto?

                                              *

Perkembangan mata uang kripto saat ini seakan merupakan hal yang hampir mustahil dapat dibendung. Untuk itu, sangat penting bagi pemerintahan di berbagai negara di seluruh dunia untuk mampu membuat serangkaian aturan dan kebijakan regulasi yang tepat terkait dengan produk mata uang kripto ini.

Beberapa waktu lalu, lembaga advokasi konsumen internasional, Consumer Choice Center (CCC), menerbitkan makalah kebijakan yang membahas mengenai bagaimana pemerintahan negara-negara di dunia dapat menyusun regulasi yang masuk akal dan tepat terkait dengan mata uang kripto (Consumer Choice Center, 2021).

Makalah tersebut dalam pembukaannya memaparkan bahwa, sejak diperkenalkan pada tahun 2008, sektor mata uang kripto sudah mencapai nilai hingga 2 triliun dollar. Hal ini mencakup penambangan, pasar mata uang kripto, blockchains, dan lain sebagainya.

Meskipun membawa banyak manfaat, seperti memudahkan kita mengirim uang ke luar negeri, sebagai instrumen investasi, dan lain sebagainya, tetapi kita juga tidak bisa menutup mata dari berbagai potensi kejahatan dan juga penipuan yang terjadi melalui berbagai produk-produk mata uang kripto.

Untuk mencegah terjadinya hal tersebut, dan di sisi lain juga bisa mendapatkan manfaat yang luar biasa melalui mata uang kripto, CCC mengadvokasi beberapa kebijakan penting yang harus dapat diambil oleh pemerintah.

Kebijakan pertama yang sangat penting dan tidak bisa dilupakan adalah kebijakan yang berfokus untuk mencegah terjadinya penipuan dan kejahatan. Hal ini tentu sangat penting untuk mencegah penyalahgunaan mata uang kripto. 

Dengan demikian, yang harus menjadi sasaran bukan produk mata uang kripto itu sendiri, melainkan berbagai penyalahgunaan yang dilakukan dengan menggunakan mata uang kripto tersebut.

Kebijakan kedua adalah pemerintah harus memiliki posisi netral terkait dengan perkembangan teknologi. Pemerintah dalam hal ini jangan sampai menjadi hakim yang memutuskan teknologi kripto apa yang menjadi pemenang yang bisa digunakan dan mana yang kalah. Konsumen lah yang harus menjadi penentu utama melalui mekanisme pasar yang bebas,

Kebijakan ketiga yang sangat penting adalah adalah adanya kebijakan pajak yang masuk akal untuk produk-produk kripto. 

Untuk itu, para regulator juga jangan sampai melihat mata uang kripto hanya sebagai alat untuk spekulasi, tetapi juga sebagai teknologi yang memiliki potensi besar untuk membawa manfaat yang sangat luas bagi konsumen dan masyarakat.

Kebijakan keempat adalah adanya kepastian hukum bagi produk-produk kripto. 

Dengan adanya kejelasan hukum, maka kebijakan tersebut akan membuka pintu yang luas bagi perusahaan dan inovator yang bergerak di sektor mata uang kripto untuk memiliki rekening bank, mendapatkan asuransi, dan berbagai hal lain sebagaimana usaha lainnya. Dengan demikian, inovasi akan semakin meningkat.

Keempat kebijakan inilah yang harus dapat diambil oleh berbagai para pengambil kebijakan di seluruh dunia agar regulasi mata uang kripto yang masuk akal dapat tercapai. Hal ini berlaku juga tidak hanya di luar negeri tetapi juga di Indonesia.

Sebagaimana negara-negara lain di seluruh dunia, fenomena berkembangnya penggunaan mata uang kripto, baik sebagai instrumen investasi atau transaksi, juga terjadi di Indonesia. 

Berdasarkan data dari Bank Indonesia, pada bulan Maret tahun ini, setidaknya ada sekitar 3,5 juta – 4 juta pengguna mata uang kripto di Indonesia (iNews.id, 7/10/2021).

Angka 3,5 juta – 4 juta orang tentu bukan merupakan angka yang sedikit, dan berpotensi besar terus meningkat dari waktu ke waktu, mengingat sangat besarnya jumlah penduduk Indonesia dan akses internet yang semakin meluas.

Untuk itu, adanya kebijakan regulasi mata uang kripto yang masuk akal dan tepat merupakan langkah yang harus segera diambil oleh para pembuat kebijakan di Indonesia.

Dengan demikian, bila Indonesia mampu menyusun kebijakan tersebut, negara kita akan dapat mendapatkan banyak manfaat dari teknologi mata uang kripto, dan inovasi teknologi ini juga akan semakin meningkat.

Originally published here

September 2021

Hello,

Greetings everyone!
As we roll into Autumn, and the weather outside is getting chillier by the day, we at CCC are turning up the heat, with our team tirelessly working to defend the rights of the consumers all across the world. Without further ado, let’s delve into the many new developments that we had in September.
Principles for smart crypto regulation
While the existence of Bitcoin is no longer news to anyone, following its meteoric rise and the shockwaves it sent across the world, the question arose of what kind of legislative framework it will continue to exist in in the future. Our deputy director Yaël Ossowski and crypto fellow Aleksandar Kokotovic wrote a fascinating policy note on smart crypto regulation, offering a unique perspective on a regulatory framework that maximises innovation, economic inclusion, and consumer protection.
READ MORE
Michael Bloomberg is coming for your vape
Ever wondered who’s the man willing to funnel millions of dollars to deprive developing countries from innovative technologies? Well then CCC has got you covered, with our digital and creative team with Luka Kobalia, Luka Dzagania, and Yaël Ossowski at its head producing a video, exposing how Michael Bloomberg and his brigade have been halting life saving technologies from being accessible in developing countries.
WATCH HERE
US vs EU agriculture regulation
The importance of agriculture regulation cannot be overstated, and Bill’s policy note delves into the depths of the subject of food regulations in the EU and the US, outlining the importance for the US to prioritize the pursuit of greater economic exchange with the EU, instead of emulating the European regulation framework, which, at this time, is inferior to that of the United States.
LEARN MORE
The EV accessibility: Boom or bust?
With the electric vehicle revolution upon us, David and Liz have worked out an in-depth article on EV accessibility for the consumers in the US. While Joe Biden’s ambitious target, of half of the new vehicle sales in 2030 to be comprised of EVs, holds an exciting promise of reducing car emissions in the future, all of these efforts may be futile if an outdated state regulation, limiting direct sales of EVs to consumers, is not addressed.
READ MORE
Sharing Economy series
What is the Sharing Economy? How has it been affected by Covid pandemic? What regulatory changes are in store for it? To answer these questions, and more, Anna has stated a series of short blog posts, analysing different aspects of this exciting and rapidly evolving industry, outlining the benefits that sharing economy services provide for consumers, and what the future may hold for them.
READ MORE
David’s interview on Canadian elections
With polarizing federal elections in Canada, David went on “Counterpoint” to discuss the issues with the English election debates, racial issues caused by Bill 21, missed opportunities of the Green party, and more.
WATCH HERE
FDA and the new smoking pandemic
As the new smoking pandemic lures over us, Maria has worked out a news-piece, explaining how e-cigarettes help smokers quit, the bureaucratic nightmare that vape shop owners have to go through for product market approval, and how the FDA is at fault for putting the lives of countless people at risk. 
READ HERE
That’s a wrap for this month! Stay tuned on all of our social media channels for more info on our current and upcoming activities!

Luka Dzagania
Graphic Designer

The Smart Way to Think About Crypto Regulation

Within the usually boring procedure of shepherding another massive infrastructure bill through Congress last month, a fiery debate erupted over the future of cryptocurrencies and digital assets.

The Senate bill contained broad language to ensure tax and regulatory compliance on all cryptocurrency transactions, regardless of origin, as a revenue generator.

However, traditional financial transactions cannot compare to the complex algorithmic crypto world of mining, staking, rewards, and smart contracts. It is easy to see why many digital currency enthusiasts were alarmed.

In a hackneyed manner no one saw coming, the entire future of the crypto industry, including projects such as Bitcoin, Ethereum, Non-Fungible Tokens, and blockchains, was thrown into peril.

Amendments to adapt the language or delete it outright were proposed. But following Senate rules, even a single voice of opposition could kill them. Or, in this case, a desire to spend $50 billion more on defense spending killed them. And that was that.

To be clear, America deserves a fair and substantive debate on the nascent crypto space. If we are to consider regulation, we need testimony from innovators, entrepreneurs, advocates, and skeptics. Instead, we witnessed a collage pasting marathon, with proposals and taxes glued together without even a thought for millions of crypto consumers.

Most shockingly, however, the rules have actually very little to do with the innovative nature of the crypto space and everything to do with how much money legislators thought they could extract from the industry and token holders. This was laid bare in the Biden administration’s fact sheet on the infrastructure bill, which claimed the $1 trillion plan would be funded by “strengthening tax enforcement when it comes to cryptocurrencies.”

Despite the inelegance of these proposals, there are smart and consumer-friendly policies we can adopt on cryptocurrencies and crypto projects.

To begin, federal agencies can concentrate on the causes of fraud and abuse. With every successful crypto token or coin, there are dozens of scam sites or exchanges that defraud users or siphon all digital assets they can before they shut down, known in the industry as a “rug pull.”

By focusing resources on dishonest brokers and projects committing fraud, the government could save millions of consumers from losing their hard-earned money, all the while differentiating between bad actors and good ones. This would help boost confidence in the system overall.

Second, any crypto regulation should make technological neutrality a core tenet, meaning that government should not declare winners or losers. Just like the vinyl record was replaced by the CD-ROM and then the MP3, governments should not choose a preferred technology and instead allow innovation and consumer choice to make that determination.

The less than a decade-old crypto industry hosts an intense competition that rapidly changes each day. Whether through algorithmic mining (Proof of Work) or block validation (Proof of Stake), users and entrepreneurs are testing and adapting best practices. If the government endorses one method or outlaws another, because of environmental or technical concerns, it risks backing the wrong horse and stifling innovation.

Third, regulators must not pigeonhole cryptocurrencies only as investments fit for taxing, but rather as technological tools that empower consumers and foster innovation. A unique crypto asset class, separate from traditional securities, would help users benefit from the decentralization and encryption that these projects offer while ensuring reasonable taxation of gains.

Last, regulators must provide legal certainty to the budding crypto sector or risk pushing all crypto activity to the black market, where no rules or regulations will be followed. The disastrous effects of the Drug War on cannabis users or victims of 1920s Prohibition underscore this point.

Clear guidelines that allow crypto companies to open bank accounts, take out insurance, and compensate workers legally will safeguard innovation, continue to create value for entrepreneurs and consumers, and will allow firms to pay taxes and follow rules. This will be vital.

Legislators should view the crypto industry as a friend rather than a foe. With more opportunities will come more investment, more jobs, and more innovation – and that means we’ll all be better off.

Originally published here

Digital data security poses several challenges

On a Monday, there is a data leak affecting half a billion Facebook accounts. By Tuesday, a bot has scraped 500 million LinkedIn accounts. Then Wednesday, Stanford University announces a hack that exposed thousands of Social Security numbers and financial details. And Thursday, the world’s largest aviation IT company announces 90% of passenger data might have been accessed in a cyberattack. And so on. The cycle is endless.

The sheer number of reports of data leaks, hacks and scams on affected accounts has now grown so gargantuan that consumers and users are left numb. It might as well be the soaring national debt total —the higher the number, the less we care.

But breaches of private data matter. And consumers should be rightly ticked off.

Because for every company screw-up, hacker exploit and insecure government database, there are thousands of firms and organizations doing it right, keeping users’ data secure, encrypted and away from prying eyes.

And although such states as California, Virginia and Vermont have passed privacy and data laws, many of these provisions too closely resemble the European Union’s troubled General Data Protection Regulation (GDPR) in making it more difficult for legitimate businesses to secure data, not less.

When large data breaches occur, consumers who have been legitimately harmed should have their claims heard in court.

But the current regulations across the U.S., including in tech-centric California, place too much of a burden on those who follow the law and do right by their customers. There’s also a risk of creating a patchwork of different rules in different jurisdictions. To avoid this, a national framework on data and consumer privacy will need to take shape.

While we should always be vigilant about potentials for leaks and hacks, a chief concern of a smart and common-sense data privacy bill should be in championing innovation.

For every new health data company, logistics firm or consumer wearable, proper data collection and retention are a core value. The more that rules are uniform, clear and do not create barriers to entry, the more innovation we will see when it comes to data protection.

We should incentivize firms to adopt interoperability and open data standards to ensure data is portable and easy for users to access. Major social media networks now allow this prevision, and it has been the standard for website data for several years.

If that becomes the standard, consumers will be able to choose the brands and services that best cater to their needs and interests, rather than just companies left standing in the wake of overregulation.

At the same time, if we are to have a national privacy bill, we should enshrine the principle of technology neutrality, where government avoids decreeing winners and losers. That means that regulating or endorsing various formats of data, algorithms or technology should be determined by firms and consumers, not government agencies without the knowledge necessary to make good decisions. The EU’s recent attempt to designate the “common phone charger” as the micro-USB connection, at a time when USB-C connections are becoming the industry standard, is an easy example.

This also extends to innovation practices such as targeted advertising, geotargeting or personalization, which are key to the consumer experience.

Added to that, we should be wary of all attempts to outlaw encryption for both commercial and personal use.

In recent weeks, FBI Director Christopher Wray has once again called on Congress to ban the use of encryption, an overreach that would put billions of dollars’ worth of data at risk overnight and leave us vulnerable to foreign hackers.

He is joined in these efforts by Sens. Lindsey Graham, R-S.C.; Tom Cotton, R-Ark.; and Marsha Blackburn, R-Tenn., who introduced a bill that would forever ban this important cryptographic invention, warning it is used by “terrorists and other bad actors to conceal illicit behavior.”

The reason encryption remains a powerful tool in the arsenal of companies and agencies that handle our data and communications is because it works. We must defend it at any cost.

While there is plenty to be concerned about when it comes to online breaches and hacks, consumers should be able to benefit from an innovative marketplace of products and services, unencumbered by regulations that all too often restrict progress.

This balance is possible and necessary, both if we want to have a more secure online experience and if we want to continue to have the best technology at our disposal to improve our lives.

Originally published here.

Are Consumers Getting the Short Stick on Data Privacy?

On a Monday, there is a data leak affecting half a billion Facebook accounts, by Tuesday a bot has scraped 500 million LinkedIn accounts. On Wednesday, Stanford University announces a hack that exposed thousands of social security numbers and financial details. Then Thursday, the world’s largest aviation IT company announces 90 percent of passenger data may have been accessed in a cyber-attack. And so on. The cycle is endless.

The sheer number of reports of data leaks, hacks, and scams on affected accounts has now grown so gargantuan that consumers and users are left numb. It might as well be the soaring national debt total —the higher the number, the less we care.

But breaches of private data matter. And consumers should be rightly ticked off.

Because for every company screw-up, hacker exploit, and insecure government database, there are thousands of firms and organizations doing it right, keeping users’ data secure, encrypted, and away from prying eyes.

And although states like California, Virginia, and Vermont have passed privacy and data laws, many of these provisions too closely resemble the European Union’s troubled General Data Protection Regulation (GDPR) in making it more difficult for legitimate businesses to secure data, not less.

When large data breaches occur, consumers who have been legitimately harmed should have their claims heard in court.

But the current patchwork of regulations across the U.S., including in the tech-centric state of California, place too much of a burden on those who are follow the law and do right by their customers, and risk creating different rules in different jurisdictions. To avoid this, a national framework on data and consumer privacy will need to take shape.

While we should always be vigilant about potentials for leaks and hacks, a chief concern of a smart and common-sense data privacy bill should be in championing innovation.

For every new health data company, logistics firm, or consumer wearable, proper data collection and retention are a core value. The more that rules are uniform, clear, and do not create barriers to entry, the more innovation we will see when it comes to data protection.

We should incentivize firms to adopt interoperability and open data standards to ensure data is portable and easy-to-access for users. Major social media networks now allow this prevision, and it has been the standard for website data for several years.

If that becomes the standard, consumers will be able to choose the brands and services that best cater to their needs and interests, rather than just companies left standing in the wake of overregulation.

At the same time, if we are to have a national privacy bill, we should enshrine the principle of technology neutrality, where government avoids decreeing winners and losers. That means that regulating or endorsing various formats of data, algorithms, or technology should be determined by firms and consumers, not government agencies without the knowledge necessary to make good decisions. The EU’s recent attempt to designate the “common phone charger” as the micro-USB connection, at a time when USB-C connections are becoming the industry standard, is an easy example.

This also extends to innovation practices such as targeted advertising, geo-targeting, or personalization, which are key to the consumer experience.

Added to that, we should be wary of all attempts to outlaw encryption for both commercial and personal use.

In recent weeks, FBI Director Christopher Wray has once again called on Congress to ban the use of encryption, an overreach that would put billions of dollars’ worth of data at risk overnight, and leave us vulnerable to foreign hackers.

He is joined in these efforts by Sens. Lindsey Graham (R-SC), Tom Cotton (R-AR), and Marsha Blackburn (R-TN), who introduced a bill that would forever ban this important cryptographic invention, warning it is used by “terrorists and other bad actors to conceal illicit behavior.”

The reason encryption remains a powerful tool in the arsenal of companies and agencies that handle our data and communications is because it works. We must defend it at any cost.

While there is plenty to be concerned about when it comes to online breaches and hacks, consumers should be able to benefit from an innovative marketplace of products and services, unencumbered by regulations that all-too-often restrict progress.

This balance is possible and necessary, both if we want to have a more secure online experience, and if we want to continue to have the best technology at our disposal to improve our lives.

Originally published here.

Are Consumers Getting the Short Stick on Data Privacy?

On a Monday, there is a data leak affecting half a billion Facebook accounts, by Tuesday a bot has scraped 500 million LinkedIn accounts. On Wednesday, Stanford University announces a hack that exposed thousands of social security numbers and financial details. Then Thursday, the world’s largest aviation IT company announces 90 percent of passenger data may have been accessed in a cyber-attack. And so on. The cycle is endless.

The sheer number of reports of data leaks, hacks, and scams on affected accounts has now grown so gargantuan that consumers and users are left numb. It might as well be the soaring national debt total —the higher the number, the less we care.

But breaches of private data matter. And consumers should be rightly ticked off.

Because for every company screw-up, hacker exploit, and insecure government database, there are thousands of firms and organizations doing it right, keeping users’ data secure, encrypted, and away from prying eyes.

And although states like California, Virginia, and Vermont have passed privacy and data laws, many of these provisions too closely resemble the European Union’s troubled General Data Protection Regulation (GDPR) in making it more difficult for legitimate businesses to secure data, not less.

When large data breaches occur, consumers who have been legitimately harmed should have their claims heard in court.

But the current patchwork of regulations across the U.S., including in the tech-centric state of California, place too much of a burden on those who are follow the law and do right by their customers, and risk creating different rules in different jurisdictions. To avoid this, a national framework on data and consumer privacy will need to take shape.

While we should always be vigilant about potentials for leaks and hacks, a chief concern of a smart and common-sense data privacy bill should be in championing innovation.

For every new health data company, logistics firm, or consumer wearable, proper data collection and retention are a core value. The more that rules are uniform, clear, and do not create barriers to entry, the more innovation we will see when it comes to data protection.

We should incentivize firms to adopt interoperability and open data standards to ensure data is portable and easy-to-access for users. Major social media networks now allow this prevision, and it has been the standard for website data for several years.

If that becomes the standard, consumers will be able to choose the brands and services that best cater to their needs and interests, rather than just companies left standing in the wake of overregulation.

At the same time, if we are to have a national privacy bill, we should enshrine the principle of technology neutrality, where government avoids decreeing winners and losers. That means that regulating or endorsing various formats of data, algorithms, or technology should be determined by firms and consumers, not government agencies without the knowledge necessary to make good decisions. The EU’s recent attempt to designate the “common phone charger” as the micro-USB connection, at a time when USB-C connections are becoming the industry standard, is an easy example.

This also extends to innovation practices such as targeted advertising, geo-targeting, or personalization, which are key to the consumer experience.

Added to that, we should be wary of all attempts to outlaw encryption for both commercial and personal use.

In recent weeks, FBI Director Christopher Wray has once again called on Congress to ban the use of encryption, an overreach that would put billions of dollars’ worth of data at risk overnight, and leave us vulnerable to foreign hackers.

He is joined in these efforts by Sens. Lindsey Graham (R-SC), Tom Cotton (R-AR), and Marsha Blackburn (R-TN), who introduced a bill that would forever ban this important cryptographic invention, warning it is used by “terrorists and other bad actors to conceal illicit behavior.”

The reason encryption remains a powerful tool in the arsenal of companies and agencies that handle our data and communications is because it works. We must defend it at any cost.

While there is plenty to be concerned about when it comes to online breaches and hacks, consumers should be able to benefit from an innovative marketplace of products and services, unencumbered by regulations that all-too-often restrict progress.

This balance is possible and necessary, both if we want to have a more secure online experience, and if we want to continue to have the best technology at our disposal to improve our lives.

Originally published here.

Cryptocurrency regulations are the wrong way to go

An overly conservative regulatory approach is a danger to the innovative potential of blockchain technology…

Recently, the prices of cryptocurrencies like Bitcoin made new headlines: After reaching a staggering all-time-high, major companies like Tesla have joined the hype, pushing the price ever higher into the sky.

The European Union is in the process of implementing another AMLD, anti-money laundering directive, which puts a larger regulatory burden on crypto-currency providers. The legal and regulatory for the blockchain that the EU is aspiring to could do the same.

In recent months, a plethora of news stories tinted cryptocurrencies in a negative light – from Facebook banning ads for cryptocurrencies and ICOs to China restricting access to foreign crypto exchanges for its citizens and lastly, banks banning cryptocurrency purchases on their credit cards.

It is not news that volatility in the crypto markets exceeds that of traditional stock exchanges by a couple of magnitudes. From late 2013 to early 2015, cryptos underwent a draining bear market that came to an end with exponential price explosions in the following bull market.

Shortly following any crash of cryptocurrencies, some people feel validated to voice their prediction of the end of Bitcoin and cryptocurrencies and call for harsher crackdowns of the technology as a whole. In some, this volatility awakens a deeply-entrenched skepticism of a new technology that’s still in its infancy.

But this overly conservative regulatory approach is a danger to the innovative potential of blockchain technology. Instead of focusing on the volatile nature of the crypto market and equating it with manipulation or dismissing it as a sheer gamble, crypto skeptics should learn more about the transformative nature of the technology behind many cryptocurrencies.

Despite their popular label in the media, many of them are not, in fact, primarily currencies.

The use cases of distributed ledger technology span from delivering aid efficiently to refugees, using blockchain to build a digital identity, enabling scientists to use your safely stored genomic data and a myriad of other fields of application.

Many crypto skeptics refuse to inform themselves on the multitude of use cases of blockchain technology across several industries. Solely focusing on the volatile price does not leave enough room to ponder upon the many ways this newly emergent technology might change our lives in the near future.

During the recent Senate hearing on cryptocurrency regulations, the chairman of the United States Commodity Futures Trading Commission (CFTC) J. Christopher Giancarlo had some encouraging words for the primarily younger generation interested in blockchain technology.

Talking about his niece’s interest in Bitcoin, Giancarlo stressed that any future regulations should not be dismissive, but rather respectful of the younger generation’s fascination with blockchain technology:

“It strikes me that we owe it to this generation to respect their enthusiasm about virtual currencies with a thoughtful and balanced response, not a dismissive one,” said Giancarlo.

Elaborating further, Giancarlo stressed that regulators should have a positive outlook on the future of this technology. While doing so, he seemed quite knowledgeable, even going as far as explaining the meaning of crypto-related terms like ‘HODL’ and ‘kimchi premium’.

For Giancarlo, regulating cryptocurrencies should have the aim of cracking down on fraudsters and fight market manipulation, not to stifle the flourishment of a new technology whose many advantages he acknowledged.

In this way, consumers should be given the opportunity to educate themselves on the different use cases of blockchain technology and have the liberty to invest in projects they deem promising.

Instead of stifling innovation and consumer choice, such a regulatory framework that provides enough space for creative exploration would ensure that future advancements in the cryptosphere are acknowledged as such and gradually find themselves changing traditional banks, corporations, and government operations.

Originally published here.

Is this North Carolina Congressman hawking Bitcoin?

Sometime last week, Neeraj K. Agrawal, the communications director for the DC-based cryptocurrency think tank Coin Center, tweeted a link to an empty website: whitehouse.gov/bitcoin.pdf.

The idea he was trying to convey, in Internet speak, is that hopefully, one day we can look forward to the day when the Bitcoin whitepaper would be hosted on the White House’s website.

That would signal that the executive branch has endorsed elements of the cryptocurrency, and hosted the fundamental founding document to build confidence in the government using Bitcoin as a unit of currency.

That’s futuristic, crypto-fueled optimism that was nothing but a cheeky tweet in that moment.

Taking that to the next level, tech investor and entrepreneur Balaji Srinivasan put forward a challenge: which forward-thinking country or US state would host the Bitcoin white paper on their main domain?

Enter North Carolina Congressman Patrick McHenry.

U.S. Rep. Patrick McHenry (R-NC)

Hailing from Gastonia, a town I once worked in as a newspaper reporter, McHenry represents the 10th district in the northwestern part of the state, home to NASCAR drivers, the mighty Catawba River, and stretching to the stunning Blue Ridge Mountains.

He once represented part of Gaston County in the State House and was later elected to Congress as one of the youngest congressmen in 2004.

As the ranking member on the Financial Services Committee, McHenry has often been involved in regulatory debates and discussions on cryptocurrencies and financial projects, including Facebook’s Libra project.

At least in previous statements and letters, McHenry usually joined hands with his Democratic colleagues to oppose any competition to the US dollar, as we’ve noted in past press releases.

However, it seems McHenry is changing his tune on the future of innovation in the cryptocurrency space.

On Wednesday, he took on the challenge originally posted by Agrawal and followed by Srinivasan: he posted the Bitcoin whitepaper to his own website.

Not only that, but he stated that “policymakers should be on the side of innovation and ingenuity, which are vital to American competitiveness,” and urged his colleagues to join him.

Is this North Carolina Republican Congressman hawking Bitcoin? It seems the answer is yes.

Looking into it more, he’s grown more bullish on Bitcoin and tech-related financial services in the last two years and even clarified his position on why projects like Libra do not represent a true cryptocurrency.

Appearing on series of podcasts, including one with fellow Republican Congressman Dan Crenshaw, McHenry has been more vocal on why Bitcoin’s technology is like nothing before, and in fact, represents the future of financial and digital services.

And top it off — he posted the Bitcoin whitepaper on the congressional web server!

If McHenry’s statements are true, and if he is using his position as a Financial Services committee member to advance those ideas, I think we may have a consumer champion congressman to follow in the next two years.

As a fellow North Carolinian and advocate for consumer-friendly policies, I have been critical toward McHenry’s various positions in the past, specifically on legitimizing financial services for cannabis-related companies.

I believe the exact tagline I used was “The North Carolina Republican singlehandedly blocking progress on cannabis banking“.

Obviously, McHenry’s ideas and policies are more nuanced and deserve a closer look. I look forward to him expounding on that much more. So while we may not agree on cannabis banking, there still could be much to agree on with the congressman.

If more politicians in DC and various statehouses approached this issue like McHenry, perhaps our governments would be better vehicles for fostering innovation and helping grow consumer choice.

Kudos to you, Rep. McHenry.

Yaël Ossowski is deputy director of the Consumer Choice Center

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