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PJ Media encourages you to read our updated PRIVACY POLICY and COOKIE POLICY.

Bal Masqué

Global terrorism and cryptoviral extortion may seem unrelated but they both rely on the feasibility of anonymous or encrypted cooperation between non-state actors. Ransomware is made possible not only by asymmetric encryption, which makes kidnapping files possible, but also by anonymous digital money like Bitcoin, which makes illicit payments practical. Terrorism needs secure messaging to reach out to "Lone Wolves." In their own ways both ISIS and the Petya virus illustrate the weakness of the Westphalian State model by posing challenges that could formerly not be mounted by groups without territory.

The irony is the Bitcoin blockchain itself contains the record of transactions, but ownership of the digital currency is obfuscated by encryption and/or mixing:

Bitcoin was initially conceived as a way for people to exchange money anonymously. But then it was discovered that anyone could track all Bitcoin transactions and often identify the parties involved. Bitcoin operates by giving each user a unique public key, which is a string of numbers. Users can transmit money in the form of digital bitcoins from one public key to another. This is made possible by a system that ensures a user has enough bitcoins in his or her account to make the transfer. The use of the public keys gave users a sense of anonymity, even though all of the transactions were visible on the public Bitcoin blockchain, which lists all transactions. Over time, experts and private companies have developed highly effective methods of de-anonymizing those public keys.

And there are ways to re-anonymize them.

There's an arms race between the centralized Internet of Things and the decentralized world of peer-to-peer everything, where all parties wear masks. By extension, it is also a contest between one world order and its challenger. It's a close fight between the decentralizers and the centralizers. There is much good in this: privacy; the gig economy; Jack Ma's attempt to create a peer-to-peer business platform "connecting small business enterprises in remote, rural and under-developed regions of China directly to the global market place" to name a few.

Alibaba platforms like Alipay and Ant Financial have indeed revolutionized peer-to-peer sales and micro finance, while ensuring trust and security for billions of daily transactions. Other platforms such as CAINIA seamlessly connect logistics resources and facilitate global trade management for cross border commerce. It’s true that for millions of previously excluded market participants in China, long-standing barriers to entry have been eliminated.

But for all the good it might do, the same technology can power ISIS and cyberwarfare. It cuts in both directions. In good and bad ways the 21st century may see a shift in power between the Westphalian states and individuals/affinity groups, in favor of the latter. Perhaps we're already seeing this in the fracturing of 20th-century political monoliths like the EU and to some extent, the United States. It is becoming increasingly easy for factions to live among, listen to and do business exclusively among themselves and ignore the others except as they have to trade with them.