Guest Post: Mark King

The debate about privacy and anonymity in cash

Apr 17, 2023

(Mark King sent me an interesting message on LinkedIn. So I thought I’d use it to try a new experiment and add a guest post to my not-a-newsletter. Please do give me your feedback, because I am curious as to whether you, the readers, think that an occasional guest post will add to the quality of the debate and discussion that I personally value. And should I post it here or to the new Substack Notes?)

Dave Birch is right to seek a debate, but it’s non-trivial to arrange in the UK, starting with having a permanent civil service unable to question the Minister’s public endorsement of some fashionable misunderstanding. Yet those of us retired or escaped are old and wise and never wrong, but sometimes not quite right.

The Lords now have too many single issue fanatics, to the phrase of the late Bernard Levin, and the UN is otherwise entangled, but perhaps the OECD can help us to get real harmony, and not the EU or Chinese version (unison) nor the US sort (antiphon).

The position feels much as it did in the ‘90s when trying to pick up the pieces after the Clipper Chip saga: an excellent solution for what it was designed for (US public sector use), and a complete no-no for what it was suggested as a panacea for.

Then as now, the two main blocks appear to be inconsistent vocabulary and the explicit constraints of Germanic law (including anglo-speaking saxon-thinking US policy). Any system which would not work with a copy of itself is not a sound basis for a unified international model.

Clearly ‘the answer’ has to include blockchain; it may well not look remotely like anything we who understand the details of distributed systems might call blockchain, perhaps no more than a Merkle forest, but it will have to be called blockchain – just like privacy has grown in one generation from ‘shutting the door but not locking it’ to a fundamental human right like paid holiday that we still can’t explain to the Yanomami.

There seems to be an aspiration for a business model of providing so-called ‘trust services’ that we never needed before – and who better to provide them than the banks? It’s not obvious that going from my bank-managed wallet to yours is just more complex and less easily accountable process than the current system of accounts. And let’s forget not innovation, which, like trust, is terribly important, just like the supposedly technology-neutral technical standards were are encouraged to promote, rather than worrying ourselves about inherent trustworthiness.

We should be thinking of cash as just a degenerate case of bonds: ones with immediate maturity. At some point the laws of physics need to make an appearance. These days you can have a bank run in London before the speed of light allows the news to get to Tasmania. So we may have to dust-off the policies from the days of Clipper ship speed limitations. Either the issue of what happens when (not if) there is double spending of tokens needs to be addressed, or we look for something such as the spooky Quantum action-at-a-distance so the recipient gets/observes the toquen (which can only be done once in the universe, so would work for Martian settlers) and is then automatically issued with a fresh one since the central bank’s paired anti-toquen has just collapsed. Like car engines, we don’t have to even pretend to understand them to use them. Getting lawyers to understand causaloids is left as an exercise for another generation.

Guest Post: Mark King

The debate about privacy and anonymity in cash

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