Quite obviously we’re big fans of creating capital efficiency with better software and data tools. In fact, it drives our mission at 10XTS. But we are also very aware of the potential downside risks, which drive some of the legitimate, philosophical origins of cryptocurrency in general.

Jeremy Bentham and the Panopticon

I’m an avid reader of philosophy (I know, nerd alert), and draw a lot of my own beliefs from many of the historical greats.

In the late 1700’s, an English philosopher named Jeremy Bentham enumerated some controversial ideas about social reform. Among his many musings, he believed power should be visible and unverifiable.

Remember back to your childhood school days. Remember when the school principal visited the classroom? Kids straightened up and worked harder because the big boss was there. Now imagine if the principal was always there. They wouldn’t necessarily be watching you specifically all of the time, but you knew they were there.

This is the power of surveillance and the behavioral psychology underpinnings of the “panopticon.”

The panopticon is a disciplinary concept from Bentham, which was brought to life in the form of a central observation tower placed within a circle of prison cells. From the tower, a guard can see every cell and inmate but the inmates can’t see into the tower. Prisoners will never know whether or not they are being watched.

Through this seemingly constant surveillance, Bentham believed all groups of society could be altered. Morals would be reformed, health preserved, industry invigorated, and so on – they were all subject to observation.

Other Philosophers Disagreed

Another French philosopher, Michel Foucault, was an vocal critic of the panopticon. Foucault argued the panopticon’s ultimate goal is to induce in the inmates a state of conscious visibility. This assures the automatic functioning of power. To him, this form of incarceration is a “cruel, ingenious cage”.

Foucault compared this form of disciplinary observation to a medieval town under a strict quarantine to stamp out the bubonic plague. Officials must strictly separate everyone and patrol the streets to ensure villagers don’t leave their homes and become sick. If villagers are caught outside, the punishment is death, which is sort of ironic because you died from catching the plague anyway.

In Foucault’s village, this constant surveillance – or the mere idea of constant surveillance – creates regulation in even the smallest details of everyday life. Foucault calls this a “discipline blockade”. Similar to a dungeon where each inmate is sequestered, administered discipline can be absolute in matters of life or death.

The Modern Panopticon Already Exists: Data

In today’s era, we can more readily identify the risks of panopticism in new technologies than in old brick prison towers. Philosopher and psychologist Shoshana Zuboff highlights what she calls “surveillance capitalism”.

Concerns over this sort of monitoring date back to the beginning of the rise of personal computers in the late 80s. Zuboff outlined the PC’s role as an “information panopticon” which can monitor the amount of work being completed by an individual.

Today this seems more applicable. Employers can get programs to covertly track keystrokes of staff working from home to make sure they really are putting in their hours. Parents can get software to monitor their children’s mobile phone use. Governments around the world are passing laws so they can collect internet data on people suspected of planning terror attacks. Even public transport cards can be used to monitor physical movements of citizens.

This sort of monitoring and data collection is particularly analogous with the panopticon because it’s a one-way information avenue.

When you’re sitting in front of your computer, browsing the web, scrolling down your newsfeed and watching videos, information is being compiled and sent off to your ISP.

In this scenario, the computer is Bentham’s panopticon tower — and you are the subject of which information is being extracted.

On the other end of the line, nothing is being communicated, no information divulged. Your online behavior and actions can always be seen but you never see the observer.

The EU has responded to this with a new regulation within GDPR, known as “the right to an explanation”. It states users are entitled to ask for an explanation about how algorithms make decisions. This way, they can challenge the decision made or make an informed choice to opt out.

In these new ways, Bentham’s panopticon influences our society. Lack of transparency and one-way communication is very disconcerting, especially when viewed through a lens of control.

Then again, you might also argue to ensure a society functions, it’s useful to monitor and influence people to do what is deemed good and right.

The Panopticon of Digital Money

So add panopticon, computers, data, and now money. This is where it gets scary.

What happens when a government has such overwhelming, instantaneous visibility into every aspect of your financial life — and furthermore can flip a switch to instantly freeze every asset and transaction?

Some say this is good and necessary to combat the evils of the modern world… drug cartels, terrorists, Bernie Madoff…

But has the government ever gotten something wrong? Was there ever an anomaly in the system to cause a bad outcome for an innocent person?

Well, duh!

I mean, we don’t have to look very far to find many news stories about draconian over-reach and even death resulting from errant government agents.

So this is the age old question between the balance of regulating behavior for the good of society vs. handing the government a massive hammer to use at will — with likely outcomes for innocent people.

I don’t quite know what the answer is — and like I tell people, we’re shovel sellers, not gold miners… err… policy-makers.

For me, it’s no different than a firearm, which can be used to hunt for food or protect one’s self — or to murder millions of people in an ethnic cleansing. It all depends on who is using the tool.

Rest assured, we are not oblivious to the implications of the things we’re working to develop.

These things matter — a lot. We’ve reached an era where the technology and tools have outstripped our ability to contemplate the domino effects.

About Michael Hiles

Founder CEO of 10XTS. Developing enterprise software and information architecture since 1979. Managing director of Founder Institute Cincinnati. Bourbon, coffee, Legos, things that explode. Husband & daddy.

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