by Mark Goodwin and Whitney Webb, Unlimited Hangout:
The patent hoarding developers and investors associated with PayPal and Google who built the first iteration of e-commerce and digital advertising have turned to the blockchain to fulfill their vision of total financial surveillance and the circumnavigation of government-issued money.
Data is the most liquid commodity market on the planet. In the modern computer and smartphone era, everywhere you go, everything you say, and everything you consume is quantifiable among the nearly infinite spectrum of the digital information market. The internet today, along with other digital technologies for computation and communication, serves as comprehensive e-commerce infrastructure, facilitating the entire life cycle of designing, producing, distributing, and consuming a wide array of data. Due to expansive growth in both the hardware and software sectors, the seamless transition of existing data, or information goods, from traditional analog formats to digital formats is easily achievable, not to mention the collecting, storing, querying, and distributing of data formats in ways otherwise infeasible in the analog world.
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A preliminary examination of digital data reveals that, while they all exist as purely bits and bytes, their respective markets undergo distinct economic transformations with each technological maturation. For example, mass surveillance was never practical at a large scale when the creation of even a single photo meant hours of labor within a specialized photo development room with specific chemical and lighting conditions. Now that the proliferation of smart grids has led to a camera on every city street corner, and the mass adoption of smart phones has placed a microphone in every pocket, and the rise of a truly global internet has birthed the means to transmit said data at zero cost across the planet, the market conditions for mass surveillance have unsurprisingly given rise to mass surveillance as a private sector service. Mostly, we have seen this new market take shape in the form of popular, free-to-use yet for-profit social networks, email providers, and search engines.
As the global financial system has embraced the computer age, the parsing of a user’s banking and financial information have become one of the most valuable and efficient means for public and private sector organizations to glean and amass information about any individual. This technological maturation furthered with the integration of the internet, as the infrastructure providers of the DotCom boom at the turn of the millennium quickly monopolized the market of banking information. They accomplished this through the invention of e-commerce via advances in encryption and telecommunication technology. Only a decade later, at the start of 2009, the internet as a commerce platform led to an otherwise impossible proliferation of a novel database structure known as the blockchain –– an immutable and public ledger with an entry created for every financial transaction. In the case of Bitcoin specifically, information itself has become a commodity, and a nearly trillion dollar market has developed around upholding the distributed database across tens of thousands of nodes across the globe.
While Bitcoin and the associated blockchain industry are often positioned as a bastion of freedom and a means to circumnavigate centralized power structures, the reality is that – even while economic policy and the ability to debt pardon is taken away from nation state central banks – the means of upholding the trustless settlement of information as a commodity now solely lies within the infrastructure providers themselves. These infrastructure service providers include the energy companies powering the server farms, the telecommunication firms building and maintaining the fiber optic cables or satellites of the global broadband internet system, and the software firms processing, creating, and distributing search results and content across their various iterations of network types.
This piece focuses on the network of developers, investors, and figureheads behind the first iterations of online commerce that appeared right before the turn of the millennium. It should perhaps come as little surprise that many of the same venture firms and patent barons behind the DotCom boom, enabled by internet information brokers such as Google, and the ensuing e-commerce revolution dominated by the rise of PayPal, are once again heavily influencing the creation, the lobby, and the infrastructure of issuance itself as the next guided evolution of the global financial system takes form via the digitalization of the dollar on the blockchain.
Our most recent article, The Chain of Custody, ended with Xapo’s Wences Casares and Paxos’ Charles Cascarilla joining BlackRock’s iShares team in ringing the Nasdaq opening bell for the January 11 launching of the 11 Bitcoin spot ETFs. This was a critical moment in the evolution of the previously described bitcoin-dollar system and, while Casares’ invitation was presumably due to his development of Xapo’s infamous bitcoin custodial solutions (later sold to BlackRock’s custodian Coinbase in 2019), Cascarilla’s appearance is perhaps less obvious at first glance. A long time friend of Casares, Cascarilla founded Paxos purposefully to build out the highly regulated infrastructural needs of a blockchain economy, with a specific focus on U.S. dollar stablecoin issuance –– a task he described as “a strategic national security” priority for the United States during testimony before the House Financial Services Committee in December 2021.
“Well, I think one way to frame this is thinking of money as a product. And maybe we don’t always do that because it’s so ubiquitous and we all use it every single day. But it really is a product. And if you think of it as a product, is it meeting the needs of users. Is it meeting the needs of the economy as it continues to shift and become much more digital? And I think the answer is no. And that’s what stablecoins are providing is a way of having money have different properties, become a different product, adapt to new technology. And this is an important shift that’s happening. And if the dollar is not able to respond to this new technology, to the new needs of users, then someone else will, something else will…it’s crucial for the US dollar to be able to meet these changing needs. And if it does, I think it actually is likely to increase its ubiquity even more. Because the reality is people want dollars, not just digitally in the US, but they want them all over the world.
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