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The Double-Edged Sword of Blockchain Technology May See China Recreate Orwell’s 1984

Xi Holding a Blockchain Orb of 1984

Despite the promise of these innovations, there is a growing concern that governments will begin to use blockchains as a tool to further oppress their citizens, creating permissioned networks that restrict access to capital and essential services on the basis of one’s reputation.

Core features such as its immutability could be used by governments to keep a permanent record of citizens regardless of whether they wish to exercise their right to be forgotten.

These are just some of the nightmarish scenarios observers are starting to see the Chinese government bring to life through the aid of blockchain and other cutting edge technologies. Through research, BTCManager will share some of the latest social experiments being implemented in China, and how they are highly emblematic of the classic dystopian novel 1984 by George Orwell.

China’s Social Credit Program

When he’s not rewriting the rules to make himself ruler for life, Chinese president Xi Jinping has been working to slowly implement a nationwide digital “social credit” system.

Developed in 2014, the system gives every citizen a private credit score, which can go up or down based on a set of rules that have little to do with one’s ability to manage money, and more to do with their social behavior. Actions like bad driving, smoking in non-smoking zones, purchasing too much alcohol, buying too many video games or posting fake news online can be enough to reduce your social score.

Much like a low credit score, a low social score implies that the person becomes severely limited in their choices in life. Some Chinese citizens have already been banned from flying or traveling via train (both domestically and internationally).

Other punishments include banning children of offenders from attending the best schools, restricting access to good jobs and intentionally slowing down Internet speeds. The last punishment is reserved for people who offend the government by playing too many video games, wasting money on unnecessary online purchases or spreading fake news.  

What makes China’s social credit program troubling is the fact that someone who has never met the individual in question can place judgment on whether that individual is a model citizen based on something as innocuous as their online purchases or interest in video games. The criteria for a model citizen is highly subjective, and so to place the fate of a person’s entire professional and personal life prospects in the hands of government officials (who just like all humans are capable of corruption) is problematic enough to be considered a major human rights issue.

The government plans to rank all of its citizens by 2020. With the advent of blockchain technology, the social credit system could eventually be transferred onto an immutable database, meaning that all current and past offenders would have a permanent record of their past “misdeeds.” Such a record is something that could not only limit their quality of life for the rest of their days but could even disrupt their children and grandchildren’s lives.

To add this, China’s highly intrusive CCTV monitoring systems now includes facial recognition, which allows police to watch your every move on any street corner and not only identify who you are, but also your social credit score.

Chinese National Cryptocurrency

The banking system has always operated as an extension of a government’s power. Even in “free” countries like the U.S., it doesn’t take much for the government to instantly shut down bank accounts if they view the owners as a threat to national security.

Thankfully, the use of cryptocurrencies or even simple cash can serve as a way for innocent people who are being suppressed by their government to still get access to their funds.

What makes Bitcoin so useful is the fact that it is decentralized, meaning it is immune to large scale government censorship and (for the most part) can always be accessed by those who need to escape highly inflated and restrictive fiat currencies, like in the case of Venezuela.  But what happens when the national fiat currency of an oppressive nation decides to adopt a national cryptocurrency?

This is what China is now contemplating and is already restricting access to other competing cryptocurrencies in the process. The implications of a national cryptocurrency could be just as bad, if not worse than their social credit system. A national cryptocurrency would make it significantly easier for the Chinese government to directly tie all digital bank accounts to a citizens social credit score.

This means in addition to flight restrictions and your children being banned from attending certain schools; the government could decide to cut your paycheck in half simply for showing up late to work, or worse yet, cut off all access to your money. All of your transaction history would be recorded and tied to your identity, making it even easier for the government to penalize you for purchases that they deem to be wasteful.

The irony of it all is that the Chinese government wouldn’t even have to force citizens to adopt the national cryptocurrency, as the very act of not doing so would be seen as rebellious and would lead to your social credit score being lowered.

Freedoms under Attack

Based on what commentators are seeing today in China, blockchain technology could potentially be the final missing piece the government needs to implement a full-scale oppressive system, one where ideas like freedom of speech, assembly or even simple expression could be eradicated entirely.

Under this system, social inequality would take on a whole new meaning, as any attempts to achieve upward mobility would be stifled by the permanence of one’s social credit score.

The most obvious solution is for the crypto space to develop more sophisticated privacy-focused cryptocurrencies that can evade the already deeply entrenched (and soon to be blockchain-enhanced) surveillance system that the Chinese government has established.

Ultimately, combating China’s overreaching system of control will require the opposition to engage in a battle of policy-making and technological disruption, neither of which will guarantee that the current trajectory can be reversed. However, if this path continues unchallenged, we may find ourselves remembering Satoshi Nakamoto less for his brilliance as an innovator and more for his misguided creation of a society destroying technology.  

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