With one of his latest executive orders, President Trump is moving against TikTok and its association with Chinese parent company ByteDance, as well as Tencent, which manages WeChat. The executive order seems to be mostly targeted at WeChat and TikTok, social media apps that have very different audiences in the United States, from members of the Chinese diaspora to Gen Z influencers. While there is lots of ambiguity behind the executive order itself (and the possibility that it won’t stand), the one thing that is very clear is that it represents another wave of data and technology nationalism.
Slowly, the world is carving itself out into spheres of tech influence, where only companies based in certain countries can have access to the phones and userbases of its citizens. Ironically, in approving this action, Trump is helping the United States become more like China when it comes to technology: firewalling the reach of applications to domestic companies that are firmly under the thumb of rule of law and regulation, and will cooperate in many matters — from national security interests to financial ones. Ironically, TikTok is banned in China too — and its founder once received a harsh reprimand and was forced to apologize and shut down a previous app for “content […] that was incommensurate with socialist core values.”
Cryptocurrencies are part of a wave of free and open source technologies that are distributed in nature across borders. With a wave of data and app nationalism comes the very real possibility that the only way individuals across hostile jurisdictions can easily communicate and transfer value with one another comes with digital currencies and apps that don’t come associated with any nation in particular. This is especially true of bitcoin, whose mysterious creator has never been definitively traced and which cannot be pinned down to one national camp or another.
We now live in a world where it’s entirely possible that digital variants of major currencies will enter into competition with one another. And while restrictions on cryptocurrencies exist, most notably in China, the reality is that it is much harder to ban a protocol than it is to ban a specific app — and cryptocurrencies have been more resilient to the ban then many American corporations.
Apps come attached to companies with legal liabilities that can be forced or compelled to stop service in one country or another — this is what has happened with Facebook and Google
Distributed protocols are run on servers and nodes around the world — even though VPNs and Tor are banned or frowned upon in China, they are still used.
Cryptocurrencies are also technology that is used even though their trade is banned in China. It’s very hard to totally ban protocols and self-custody after all, when access points and nodes can be numerous and self-hosted. It’s easier, by contrast, to keep a centralized company which relies on a range of IPs to serve their content out.
The advantages of centralization are easy onboarding and a smooth experience for users. Having an incentivized centralized reason to sell ads to keep AI and machine learning models finely tuned to user experience is something that a centralized for-profit company might do best.
Yet in a world where that’s turned on its head, it might be open source standards that win. Witness Hong Kong citizens flocking to free and open source Signal on both the iOS and Android app stores as centralized apps flee, unable or unwilling to cooperate with a security state under new management and the turn to certain cryptocurrencies.
Not only is there a sense that open source standards are one of the only ways to maintain communications and financial transactions, but the transparency of open source, once seen as a neat feature, has now become a must-have in a world where centralized apps report data on their users to their respective security states.
People who use Skype have reason to fear that their communications are being stolen by the NSA — people who use WeChat have reason to fear that the Chinese state is eavesdropping on them. Only in open source and audited guarantees of privacy and security can people feel more secure in domestic and cross-border settings.
This matters because the transfer of financial value in a digital setting is a heightened version of trust in digital communications. We expect our financial transactions to happen in a secure fashion. With privacy being a new norm in digital communications, that feeling should extend to financial transactions. Open standards that are transparent and which cannot be fully coopted by any state will become a consumer norm and expectation.
Another consideration: with any advent of the digital yuan or digital dollar, the way the two systems play with one another will be rough and managed on both sides, with plenty of individual censorship — you can think of much more granular penalties and censorship than the rough back-and-forth on tariffs, capital limits (in the case of China) and sanctions now. Censorship and penalties can be applied all the way down to individual retail customers, and not just political leaders. This is a power that will not go unnoticed in any prolonged economic dispute.
As privacy fears mount around the world, cryptocurrencies and other free/open source technologies are emerging as stronger options for people to bridge political gaps and create value with one another despite the differences of their respective countries.
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