Mt. Gox. The collapse. The official story goes that it was hacked many times, starting in 2011. Whether Mark Karpeles, the CEO during its heyday, was aware, cared, or was complicit in the heists of over 800k in bitcoin, the theft was epic in nature, and the cause was simple: wrest control of all the funds from your clientele, centrally locate the funds into one entity’s control, and then watch the funds disappear.
This vicious cycle has been going on since man traded feathers for beads. The outcome is never new, but the latest spin on it certainly is.
This centralized system hasn’t ever worked out for consumers in many centuries, but now the latest technology of the world can really exploit this failed paradigm to epic proportions in the very near future. In the 21st century of mainstream finance, it looks like the usual suspects are ready to turn this pyramid scheme up a notch, and occupy a nation’s wealth in the process.
How would you like your government, the largest private bankers, and even Google and Microsoft, to work together to centralize all of your financial interests under their own privately-maintained control grid? Sounds pretty sweet, right?
Haven’t I seen this before?
Ok, just don’t ask J.P. Morgan Chase, Home Depot, Target, or the U.S. Government about getting hacked and losing the financial and identity information for tens of million of people. Those were just isolated security breaching incidents. This time, it’ll all work out just fine. Here’s how.
The test location? The United Kingdom. The masterminds in question? The Cabinet Office and the central banking and services industries. The Plan? A massive, centralized digital database or “digital vault” (that sounds much more secure, doesn’t it?) that will hold all of the most important financial and personal information of the country’s most loyal test subjects therein.
The loyal test subjects will provide their address, phone numbers, tax details, where they are registered to vote, driving records and benefit claims, as well as information about their mortgages, pensions and bank accounts to a centrally controlled 3rd party of the government’s choosing.
A “digital passport” would be created, later this year as a prototype for the new system. The aims, besides centralizing all of the people’s information within a third party, are to replace and update the account opening process for things like banking accounts. Instead of providing a physical passport or bank statements, everything is already in the “digital vault.”
Strangely, this has met with some critics who see ways that this could go wrong, based on several recent events, worldwide.
"By its very nature this 'vault' will instantly become a honeypot for hackers intent on stealing our valuable information,” the director of Big Brother Watch, Emma Carr, tells The Telegraph. ”With high-profile cyber attacks occurring on a regular basis, the public will rightly be concerned that their data could be compromised.”
Don’t you trust your Government?
How would all of this extremely valuable information be secured and not used by those responsible for protecting it? Hopefully, no private company involved would look to make money monetizing and selling a list of such information to marketing firms that could net returns in the many millions of pounds. That would be very unethical, even illegal.
"At present, the public has little control over their data and given very little information about who has access to it and for what reasons," Ms. Carr said. "If this project goes ahead, the public needs to be given clear information about how their data will be used and how they can maintain control over it.”
Benefits for The State include tracking those who are avoiding taxation, at least at the commoner’s level. Also, isolating those who may or may not qualify for government benefits and increase the ability to micro-manage those under scrutiny.
The Telegraph received documentation on how this was conceived to work, masterminded by the tax Incentivized Savings Association and The Savings and Investment Policy Project. These are not-for-profits funded by the banking and financial services industry. Here is the outline of the master plan:
"Whilst a simple authenticated ID could be very beneficial of itself, additional functionality can transform the combined application into a powerful tool. We refer to this as a Digital Passport and it would enable a consumer to manage many aspects of their savings including opening of an account or purchasing a financial product more quickly and easily; transferring savings between providers; sharing information with selected third parties to assist in managing savings; maintaining up to date records with all providers.”
In order to protect consumers, the initial service would be “opt-in” only, afford only the highest levels of data security, and provide information to third-parties only after the customer grants permission.
And where do profiteers like Google and Microsoft fit into all of this? They turn this process into smartphone apps, making it easier than ever, and much cooler, for this valuable information to be shared, centralized and privatized.
Those who do not learn from history…..
If you take out all the historical data of such centralized schemes going south on the common man, from Mt, Gox, to J.P. Morgan Chase, this still can start out good and go bad, down the road. The Military Draft didn’t start out as a forced entry by penalty of imprisonment based solely on your age and government ID number. It was voluntary, initially.
The Federal Income Tax system wasn’t initially a legalized scourge, pillaging every citizen’s finances to support a government’s rampant largesse. It was, initially, just a small government supplement that was pushed through by only the wealthiest of the elite. TSAs at your local airport, initially, were not at every airport, attacking every customer’s rights and civil liberties, a legalized shakedown. Almost fifteen years later, harassment at the airport is as integral as the airplanes themselves.
Initially, everything sounds faster, easier, and more convenient. It’s within the fine print where you find out you’ve sold your soul, and what the real cost of doing centralized business is. Do you ever read the dozens of pages of “Terms and Conditions” before entering into these agreements? No, and corporations know it. There’s the rub. You wouldn’t understand it, even if you did.
Remember that this is an “opt-in” program. What happens when someday you aren't asked to “opt-in” anymore? You just default into the program. Then, you won’t be able to “opt-out.” Your private finances, your digital keys, are no longer yours to control. Your privacy has become centralized, meaning it has been sold to a third party. This is how it always starts. It's better, right up until the day that it is much, much worse.
Every country will have their own financial Mt. Gox, with their own Mark Karpeles. Someone who loves being in charge, has a kickback here, another kickback there, and really doesn't care what happens to you or your money. I’m sure everything will work out just fine. They’ll have it all under control. The question is: Will you?
The answer for this initiative is the same as what it was for the poor souls who invested in Mt. Gox. The best way to protect yourself is to never give up total control in the first place.