Amber Baldet on Surveillance Capitalism
Download Episode MP3 File
The file will open in a new window. Click down arrow to download the file.
Interview location: New York
Interview date: Wednesday 6th March, 2019
The line between data collection for commercial use and surveillance by the state has become blurred. Where the NSA tracks online user activity for crime prevention, Silicon Valley behemoths have become increasingly hungry for user data with the goal of building ever more targeted advertising solutions.
Within the world of cryptocurrencies, the requirement for KYC/AML checks has blurred the lines between data collection and state tracking.
Privacy is often touted as a fundamental human right, but our moves are tracked both online and in the real world at an increasingly alarming rate. In this interview I talk with Amber Baldet about the growth of surveillance capitalism, the impact on society as well as question recent Coinbase decisions and Web 3.0.
00:05:28: Amber’s perspective on the present day Crypto markets
00:07:45: What Amber is working on at Clovyr
00:11:41: Why is privacy not viewed as a pressing issue in design
00:15:05: Discussing the concept of surveillance capitalism
00:22:16: How can we use data without the sinister surveillance aspect integrated?
00:26:55: Discussions around the sinister side of data collection
00:29:02: Amber’s opinion on Coinbase purchasing Neutrino
00:37:49: Amber’s Background story
00:41:02: Chain analysis and the implications surrounding surveillance in Crypto
00:43:21: The importance of privacy in Bitcoin and other cryptocurrencies
00:51:14: Discussing decentralize web architectures and Web 3.0
01:01:51: Outlook for the future
01:03:25: How to stay in touch with Amber and final comments
SUPPORT THE SHOW
If you enjoy The What Bitcoin Did Podcast you can help support the show my doing the following:
Become a Patron and get access to shows early or help contribute
Make a tip:
Leave a review on iTunes
Share the show and episodes with your friends and family
Subscribe to the newsletter on my website
And a big thank you to Vidyen.com.
Connect with Amber:
Mentioned in the interview:
Amber’s article: The currency of the future is personal data
My article: The Decentralised Threat to Advertising
Matthew Green’s article: Why I’m done with Chrome
Multicoin: The Web 3.0 Stack
Other relevant WBD podcasts:
A big thanks to my WBD Maximalist Patrons for helping support the show: JP Petit, Logan Shultz, Steve Foster, Tony, Gordon Gould, David Burlington, Jesse Powell, Beam, Wiel Menger, Robert Romney, Jason DiLuzio and Yan Pritzker.
Peter McCormack: Morning Amber, how are you?
Amber Baldet: Good morning! I’m great. How are you?
Peter McCormack: Very good, thank you. Thank you for coming on the show. I want to showcase how much I care about women and I heard you’re a woman.
Amber Baldet: Hold on, I got to go! All right, I see how this is going to be, continue.
Peter McCormack: That cracked me up!
Amber Baldet: Earlier in my career I feel like you always feel happy to get a little bit of attention and over time you realize what is and is not necessarily positive attention and can kind of pay it forward.
Peter McCormack: I don’t really want to get into gender because it scares the crap out of me! So firstly, is the earth now flat?
Amber Baldet: Still by all accounts, no, still on a globe! But maybe if we all share in the collective delusion enough and just dream really hard! It’s like ‘when moon’, right? When flat?
Peter McCormack: I haven’t watched it yet. I saw it on the listing and I was like, ‘ah, can I really put myself through it?’
Amber Baldet: I like that you’re obliquely referencing and sub tweeting things live, as though everyone else on the planet follows my Twitter stream.
Peter McCormack: It’s how I research. I basically do the last two weeks of tweets and we get something from that. Okay listen, I’m not going to do your origin story because I’ve heard it before and I think other people have and it kind of gets a bit boring doing them all the time. I think we should get into some of the juicy things. But I think before we start it’s always good for me to understand the person I’m with perspectives on certain things. So it would be really good to know your perspective on the market at the moment and where you are positioned and what your thoughts are on the Bitcoin vs Ethereum vs all the other stuff.
Amber Baldet: Okay. My perspective on the market is that there’s lots of different markets and I think that we’re headed for some difficult times globally, based on what’s happening geopolitically worldwide and that has trickle down effects or knock-on effects to a lot of different markets. It certainly probably wasn’t helpful to be conflated with the wind-down of the bubble in the cryptocurrency markets over the last year, has additional follow on impacts if you’re trying to get funded or spin up new projects or you’re an artist and you’d like to find a nice Patron. These things don’t exist in a vacuum.
But in general, I’m happy that there’s a bit of a slow down. I’m not happy that people got hurt. But I am happy from an institutional perspective. I think that there was a big rush to put out products that might not have been really ready for prime time and that these institutions really respond to client demand. There certainly has been a drop off in client demand of late, from say hedge funds looking for custody or something like that. So them having some time is good, enterprises move slowly.
On the public markets, I try to pay as little attention to that as possible, to be honest because I try to spend more time thinking about and working on is more about kind of the systemic interactions of this technology, how we’re deploying and orchestrating things. What is the art architecture stack of the future look like? There will certainly be micropayments, cryptocurrencies, tokens and various things in that, but I think it’s just one of many different changes that will happen to the landscape of the internet over the next decade.
Peter McCormack: Okay. Can you just tell me a little bit about Clovyr? I’ve read some, but can you tell me a little bit about what you guys are doing, what you’re working on and what the progress is?
Amber Baldet: So we are working on lots of really cool masterplans that some I can and some I can’t talk about I guess. What is very concrete right now is kind of a DevOps and orchestration layer around creating decentralized applications or applications which can be decentralized. There are some other stabs at the similar space kind of happening now, but there’s certainly not anything dominant. Most of the solutions that we see are focused on, ‘oh so you want to deploy the Blockchain app’ and they really only play to people that have already made that decision in the first place.
So I think there’s a much wider developer pool of people that are like, ‘I don’t know what’s happening over there in that Blockchain land, but we don’t really want to touch that.’ So when you think about what kind of applications people want to create, there’s some that start by saying, ‘We’re building a DApp’. There’s others that start by saying, ‘I didn’t want to be able to challenge a centralized business model’ and you start by deconstructing why it is that the current incumbent is so dominant, so Etsy or Patreon or something. Then there are very smart people that are looking at myriad different ways to try to challenge that and it’s not all the same architecture that runs on some coin. There are lots of different ways to go about that.
So facilitating that in a way that’s super developer friendly, but allows you to build user friendly applications as well and thinks about decentralization, not as something that arises from network topology, but rather that is an ongoing process and different parts of this overall system that we have, can have different degrees of power bottlenecks and simply understanding the trade-offs between them and creating systems that are more accountable. So helping people build those things is what we’re working on. At which point someone will probably say, but Enterprise Blockchain! Because that’s what I was kind of known for I guess.
This same framework is completely able to deploy your permission network to your enterprise thing and your Kubernetes cluster. You can have the same thing and I think it’s important to bridge that gap. We don’t really want to just have the consumer to consumer apps on one side and business to business stuff on another side and never the twain shall meet. That’s part of the problems that have arisen in the status quo power imbalance that we have in the current market structures. So helping businesses understand why it is that they would want to use something, that in some way decentralizes some part of their business, why would you want to do that? Well, it’s not because they feel altruistic. It’s going to be because they can solve a problem that they couldn’t before.
Right now, a lot of that looks like not so much, let me help you move this post-trade workflow and do like a lift and shift of existing infrastructure. I think that’s been done. But a lot more about how are you thinking about your data strategy for the next 10 years. One of the best things that have come out of all this Blockchain hype has been just a crazy inflow of research in time and in money into fundamentals of cryptography and in making things that have been around for a long time, like secret sharing or short signatures or whatever. But to make these things more usable within dominant systems. So they have been around, but they’re not really used, so secure multiparty compute for example. Being able to bring these principles into people’s everyday business processes, allows them to solve things in ways where previously you just needed these silos and intermediaries.
Peter McCormack: I definitely want to get into that. But as we spoke beforehand, sometimes there’s a juicy subject to get into that other people aren’t covering and I really enjoyed your article for Quartz.
Amber Baldet: Thank you!
Peter McCormack: Obviously the timing’s quite relevant as we spoke about. So I’m interested in this surveillance capitalism and I’ve written about it myself once but more with regards to the advertising industry because my background is there. I think before we start, something that’s quite interesting is, I read a Tim May quote and actually put it out on Twitter this morning, just out of interest to see what the feedback would be.
I don’t know if you’ve heard it, but this was his last article for CoinDesk and he said, “I can’t speak for what Satoshi intended but I sure don’t think it involved Bitcoin exchanges that have draconian rules about KYC/AML, passports, freezes on accounts and laws about reporting suspicious activity to the local secret police. There’s a real possibility that all the noise about governance, regulation and Blockchain would effectively create a surveillance state, a dossier society”. It’s a bit like, whoa!
Amber Baldet: Yeah, well there’s a reason I’m on the board of the Zcash foundation. It’s important to pay attention to. I think it’s interesting to see on both sides of the fence, which sounds perhaps too binary, but in the world of permission ledgers and some of these projects. For example, I worked with the monetary authority of Singapore on one of their projects, but these kinds of unified ledger systems all trickle up to a single route which has visibility to a single entity. They’re not really being designed to provide privacy from that central actor. They could, but they’re not.
Similarly, a lot of the other corporate pilots that are more, not necessarily about creating representations of digital currency, but are more about data sharing or workflow processing etc. There are ways you could design them to facilitate something like ‘take back your data’. But they’re not necessarily being designed that way because there’s not an incentive to do so, other than to put it in a press headline right now. Then you have this other side of the fence where people are saying, well, the privacy should be baked in, out here in Bitcoin land. But it turns out that once it operates inside this larger ecosystem that the edges are very complicated and we’re seeing the exact same kind of… I guess it is literally surveillance by the same kind of compliance and requirements creeping in there as you’d see elsewhere.
As always the crux of the argument is choice, and you could take your Bitcoin and do something different with it. You can run it over Tor, you can self-custody, you can do all those things. It’s just that the barrier to entry for most people is pretty high right now and the risk that you take on may not outweigh the benefit that you get and every person has to create their own personal threat model and risk model to decide what the right solution is for them.
Peter McCormack: Right, so the freedoms that Bitcoin have provided us, have also given us new dangers.
Amber Baldet: With great power comes great responsibility!
Peter McCormack: But also this reaches outside of Crypto. We’re talking about the Silicon Valley behemoths as well, who operate similar models to say the NSA. So I think what would be good is to unpack that. Can you just, for the people who don’t fully understand, but explain what surveillance capitalism is to you and the background to the article and why you wrote it. I’ll share it out in the show notes, but I think it’d be good just to give that background.
Amber Baldet: Yeah, it’s an interesting story. I mean it’s interesting for me, I don’t know if it’s interesting for anyone else. But for me this goes back a couple of years at least in this term, which I first heard from Aral Balkan, who leads Ind.ie which creates ethical software and it has some really cool projects, but talks a lot about the incompatibility of most models of publicly traded companies or even venture capital being essentially in conflict with creating things that are good for the common good.
So I had initially heard it from that, but I guess he got it from Shoshana Zuboff, who’s a professor at Harvard, who recently just last month finally published her book of the same name. So we were out there saying this to people, everyone said, ‘wow, this is this cool world we’ve never heard before, this neat phrase’. But now it’s entering really the common lexicon, which is wild to see a new word catch fire in the collective consciousness because it really just so accurately nails what it is that we’ve ended up with systemically here.
It’s that we have businesses that derive their business value from an ever-increasing ingestion of data and that, leaving machine learning aside for a second, but even just to this point, if you’re creating a company now, let alone the behemoths like Google or Facebook or such, but if you are creating a company, you are immediately faced with the need to deliver metrics about how great that company is doing. What is your attraction? Who are your users? What do they want? What is your product market fit? In order to answer those questions, you need to collect information on them.
Then maybe we could make sure that our buttons are placed in the right place on our screen if we just had a recording of every user session. There’s third-party companies that will do that for you and then say that they’ve anonymized the sessions. So there’s this tension between knowing that really we don’t want to go after, you know Bob Jones, like we’re not trying to go after this specific person, we just want to understand you as a person. But in so doing, you inadvertently give up information across a number of platforms, even if they’re anonymized, when cross-referenced are very trivial to de-anonymize, especially when you get into recurring patterns. Like, I’m a teacher, I go to the same school, back and forth every day. There are very few people that are going to have the same kind of patterns as I do.
So we end up with businesses that rely on this increasing ingestion of data and an ethos as machine learning came into it, of just more data will always be better. We don’t know why yet, but we just need more of it. Let’s throw some kind of fuzzy math at it and we’re getting actionable results and we’ll put it on our Powerpoints and make some, you know, business business! Unfortunately, as you have a variety of data breaches or you have subpoenas or national security letters or just mismanagement or insider threat, there’s any number of ways that this data can be misused in ways that hurt people.
I think what people are waking up to now though is that, as we saw with the Cambridge Analytica scandal is that that was not misused, that was not a data breach, that was business operating as designed. It’s simply that it was not designed to help or to be good for users. It was designed to be good for intermediary businesses. We’ve said for years, if you’re not paying for it, you are the product. But I think people are now starting to understand that a little more intrinsically.
Peter McCormack: The Cambridge Analytica scandal, that’s pretty sinister what happened, yet I don’t feel like there was a big wave of people who left Facebook because of it. I think we’ve known for years that Facebook doesn’t have the most ethical policies, yet people still don’t seem to… I mean you look into why people don’t care enough.
Amber Baldet: Absolutely! Every couple of years there’s some sort of privacy Pearl Harbour and everybody says we’re going to be outraged and we’re going to leave Facebook and you post about it on Facebook. A couple of people leave, but most people don’t. It’s interesting actually that she said apathy because I’m speaking at South By Southwest next week and the title of my presentation is “Money, Apathy, Cryptography, The Fates of Internet Societies” and that’s exactly it. If you look back at well-meaning cypherpunks 20 years ago who were saying we need to win hearts and minds and people need to wake up to this reality.
Some people have, maybe there’s a bit more of a tide behind it now, but I just fundamentally don’t think that changing everyone in the world’s minds to understand and come to the same worldview is a thing that seems like it’s going to happen. So that’s why, when we’re designing things at Clovyr, not to plug that, but the way that we think through architecture design is about, how do you deliver background wins on security and privacy in ways that people don’t have to necessarily care about it. So if you’re a developer, maybe it saves you a couple of hours to not have to worry about setting up Let’s Encrypt Certificates. But if as a user, we’ve gotten a lot more of the internet to run over SSL through Let’s Encrypt, it has done amazing work.
But you can design applications that can say take advantage of libraries that deliver various sorts of privacy features, where they’re easier to use, you’re more likely to incorporate them. There’s just story after story. This graveyard of wonderful technologies that people don’t use because smart people would like to spend more time doing R&D on the things that they’re smart about. Then making them really understandable to other people. It’s also relatively well tested, that there’s this constant cycle that when you don’t understand something, you think it’s very hard and then you study it and then you think, ‘I was stupid to not have understood this before. Everyone else must already know this’.
But that’s not true. As we develop this very deep knowledge in specific domains, in order to get that knowledge and the benefits of what you’ve learned to escape that domain, you have to have both relationships across domains to understand how other people think. But, you have to think about what the blind spots are and how to deliver into those gaps of other people that what you know is relatively unique.
Peter McCormack: So I read an article by, I think it was Matthew Green, who wrote about Chrome when Chrome updated so that it was integrated with my phone and my desktop. I was kind of like, okay, that’s a bit too much. So just as an exercise, I went through removing all my Google accounts, removing on my Google data, switching off all my tracking on my phone. Then I remember I was going out. I think I was in San Francisco and I actually found it a bit of a pain not having some of the more advanced data knowing where I was, knowing a bit about me. So I ended up switching some of it back on. How do we find a balance whereby we get convenience without the kind of sinister side?
Amber Baldet: That’s exactly what people are working on now with these kinds of DWeb/Web 3.0 sorts of applications, a single architecture for which, as I mentioned, I do not think we have hit on yet. But the ability to not have such a stark tradeoff between privacy or security and convenience, we’re just now starting to be able to thread that needle. I think you’re right, the end user cares about being able to find on the map where you’re going and you’re going to give up your location data if that’s the only way to figure out where you’re going.
But we need to understand the entire supply chain of data and apps and things that get to that point where you are required to give up that data. It doesn’t have to be architected that way, but it is right now. Now bootstrapping systems that allow us to share decentralized information. It’s super complicated, the idea of decentralized Google and things is hard. But I think that we’ll see more early applications that don’t necessarily try to tackle that stuff.
Those are very hard problems. But you’re seeing things like, could we do something like Google sheets or Google docs, but in a way where you don’t need a centralized coordinator that has insight and censorship rights over everything that’s in my Google doc. Honestly, do I care if I’m planning somebody’s birthday party over some Google sheet, whether or not Google puts one thing before another thing? No. But there’s a reason that enterprises will not use Google sheets, especially for financial services. It’s very important who did what before what and that they are the people that say, who did what before what.
So in designing solutions that can meet some complex enterprise challenges, there’s actually really great opportunities to deliver that to consumer market where it would be very, very complex to bootstrap a consumer network because there’s not the will necessarily. But if it becomes more delightful and more fun, I think Brewster Kahle from the Internet Archive… It was cool when I was researching for the talk I gave at Crypto Springs all of the various ways that people describe the decentralized web because this idea has been around forever, we are actually re-decentralizing the web now!
But, so Brewster Kahle from the Internet Archive had mentioned that one of the characteristics of successful applications is simply that they have to be fun. That’s not an appeal to your better philosophical nature. It’s just fun and I think that’s where we need to kind of focus.
Peter McCormack: So do you envisage… It’s almost like privacy is going to become something like a sector? We’ve had Cleantech and Crypto. It will become something that is competitive and invested in by funds, ironically maybe in Silicon Valley?
Amber Baldet: Yeah. I think investment in things that look like privacy tech in the pitch deck is definitely happening. Consumer adoption of applications because they pitch privacy is very small. Instead, again, you want to focus on what is it that I’m getting as a user. I think Scuttlebutt is a good example of this in that, if you watch some of their videos about what does the user get when they use this application, which is kind of like a cross between Twitter, Facebook, Messenger, it’s a social thing!
But you discover people locally from your local network and then you have much more granular control over how people see you, what kind of names you use and everything in the ways that they present it is over the course of a relationship, how would this benefit the human connections as you talk to someone over the internet and your relationship grows and then maybe it falls off and how do you manage that. It was just a delightful way I thought that they presented it, when behind the scenes what they’ve done is like a heavyweight amount of engineering to make this kind of peer to peer stuff palatable. So props to them!
Peter McCormack: Amazing! So you talked about earlier the sinister side of data collection and the harms that can be done. What are the harms that we are not really aware of? Because I talked to you before about that people don’t really care about Facebook having their data. They don’t care enough. There’s apathy. I switched my Google things back on. What are the sinister things happening beyond this just being natural competition for them?
Amber Baldet: That’s a tough one. I mean there are the real threats and there is the landscape of potential threats. The things that are happening right now probably include domestic surveillance, which may or may not be constitutional I guess. But we’re also looking at this from a perspective of… Or I am looking at that when I say that from living in the west. If you look at internet freedoms around the world and there was a good list I just saw the other day of ranked from least free down.
But in countries like Saudi Arabia or Russia and China, there are already demonstrable social impacts on the way that data is collected and used. We certainly have that in America as well, but it’s a little more subtle, I guess, in a lot of our control happens to just come through making everybody want to consume things. It’s a little less explicit! But that also is dependent on how I mentioned, what the current threat versus a potential future threat is. So depending on how you think authoritarianism might evolve in a previously or currently democratic countries, you need to plan for some worst case scenarios. It is incredibly difficult to backtrack or change these things later.
We see that even in the silly Crypto communities where people start, they say we’re going to start centralized and then give away this power and it’s complicated. It’s hard to understand when… Once you have the power it’s very difficult to let go. There’s not a lot of historical precedents where it’s worked out.
Peter McCormack: It’s funny because you mentioned Crypto. Obviously, it’s been an interesting week with what’s happened at Coinbase. I’m still not fully into the details of it. I’ve read a lot about what’s happened. What’s your kind of broad opinion on what happened with Coinbase and Neutrino?
Amber Baldet: Well, I think that, as Motherboard quoted me as saying, I think that how Coinbase chooses to implement compliance and controls will impact a lot of people simply because Coinbase has opened so many accounts. Right now they are what would be considered systemically important within that small corner of the universe of people that have opened cryptocurrency accounts.
So their design choices matter and who they have built these things matter because people bring their philosophies and their ethos and what they have designed before and the solutions that worked and the shortcuts that they’ve taken. People bring all of that to every new project that they have. It’s called learning! So it certainly was concerning to see people that have previously worked on not surveillance capitalism, but literal surveillance technology for nation states be involved in that kind of decision.
Peter McCormack: Yeah, I sometimes criticize Coinbase and then sometimes have a certain amount of sympathy for them, in that they’ve done an awful lot for onboarding people into the world of Crypto and certainly Bitcoin, but seemed to have made a number of missteps along the way. But now they’ve grown into the biggest exchange. I think they’re becoming more like a Fintech company. They’re naturally the first place that regulators are going to look and I guess that they’re going to have the pressures of investment from Silicon Valley, pressures from regulators, that they almost have to create something that complies. What would be plan B?
Amber Baldet: Absolutely. I do not envy Brian Armstrong right now. It’s a little bit like the Facebook story. They were moving fast, breaking things, being the outsiders, then all of a sudden there was a little more scrutiny and you as you grow, in order to keep growing, which not only investors demand but the business model demands, you have to figure out how to make it work. I mean, if you look at Shapeshift and some of the other stories recently, it’s a struggle to figure out how to deliver these products in a regulated world.
If you are a US citizen who can only open an account via some channels, somebody needs to figure out how to provide that. So I guess the counter-argument is everybody should simply figure out how to custody all their own stuff and only use DEXs and we should all kind of put it all underground and live in our bunkers. But that’s the exact same argument that has failed to work for the cypherpunk communities. As I was mentioning, most people will not pursue that product. So I understand why they need to work on it, but they’re out front, being the first in the world to figure this stuff out.
So I try not to talk as much about my time at JP Morgan anymore for both legal and personal reasons since I’m working on other things now. But I remember when it was that Chase said, you could no longer fund a Coinbase account from your credit card and the general public outrage about that. When really what was happening was that you cannot use a credit card to fund any brokerage account. It’s considered margin lending. It’s money you don’t have, you’re investing money you don’t have.
Peter McCormack: It’s irresponsible.
Amber Baldet: Well that’s a moral judgment, but it is definitely money you don’t have, which you probably would usually get charged for in a different way than credit card APR. It would be a cash advance or something. You can still use your debit card. But the general outrage was that people don’t like Crypto. Whenever I say Crypto like that, I mean like #crypto otherwise I mean cryptography. But what was actually happening was that Coinbase was finally being recognized as more like a traditional broker-dealer. So there is a process of figuring out how to lay the existing rules onto this new world and where it fits in and where it doesn’t fit.
At the time obviously, there was a lot of public outcry about Jamie Dimon’s ongoing comments about Bitcoin, which we do not need to discuss. But from a point of consumer protection, saying this looks risky at a time when the market was very high, can you imagine the story that would have happened if instead, they’re like, ‘this looks great, everybody all in’ and then you had this market downturn. So the perception of consumer protection, if not necessarily always the ability to execute on consumer protection is something that’s important to regulated institutions and it’s important that they deliver that message.
Peter McCormack: By the way, I don’t see the JP Morgan fit with you.
Amber Baldet: Why do you say that?
Peter McCormack: I just don’t see it. Did you go to work dressed the same as you do now? Were you the anarchist within JP Morgan?
Amber Baldet: Are you saying I’m dressed like an anarchist just because I’m wearing a Sex Pistols t-shirt?
Peter McCormack: No, no! Come on, look, you’ve got several colours in your hair. You’re like me, you’re covered in tattoos.
Amber Baldet: A suit covers a lot of things! I know you didn’t want to talk about my background I guess, but I was interested in political science and economics, that was what I studied in school. I did a lot of computer science stuff more on my own, but I always wanted to understand why the world worked and why it is the way that it is. I understand that a lot of people go straight into trying to fight the power, but I had a slightly more nuanced approach of wanting to understand and be close to said power. So it was an amazing opportunity.
JP Morgan was not the first financial organization I worked at. I worked at Old Lane, which was Vikram Pandit’s hedge fund. He went on to be the CEO of City. I was working at Old Lane during the Lehman collapse and coming out of that entire thing, I was working on re-architecting their systems, where the back end was a mess. It’s amazing, you’re doing quant trading of 10,000 trades a second on the front end and on the back end, you can barely reconcile anything. So just this long history of wanting to be close to where the decisions were actually made so that I could just simply understand them.
I think that’s because… The joke when I was in school, was ‘if you want to make money, study finance. If you want to understand why other people are making money, study economics’. So I was never a banker. I was always a technologist, but it was a complete simple stroke of luck and that this zeitgeist happened where I happened to be on a team doing machine learning things, which happened to sit next to the team that was starting to look at Blockchain things.
Peter McCormack: Did you ever debate Bitcoin with Jamie Dimon?
Amber Baldet: I can neither confirm nor deny this question. To have the opportunity where they said, ‘we need to explain this to extremely senior level people’ and you can’t just walk in and be like, ‘here’s proof of work’. So I remember reading the Bitcoin White Paper in like 2011 in a cafe on the Lower East Side because all my friends wouldn’t shut up about it and it was just this kind of thing. It wasn’t this big deal that we needed to Tweet about all the time.
So simply having at that point what is considered a long memory, even though it’s only four years. But the longer memory of what information security and what computer science and what computer history is like going back decades has always fascinated me. In order to create this new world, you can’t just come at it from a consultant handing you a PowerPoint and saying, ‘you’re in charge of the Blockchain now’. That’s why a lot of these institutions have struggled. So it was an amazing opportunity and it was total luck. But I guess 99% of luck is putting yourself in that position where I was already there.
Peter McCormack: Yeah, I don’t really believe in luck! Just back to Coinbase and actually more looking at things like chain analysis. I always get this kind of like creepy feeling about these companies, yet whenever I read about them, what they’re doing, it’s kind of like, ‘we’re stopping terrorists and criminals and dark markets’. What should we be concerned about with regards to surveillance in the world of Crypto?
Amber Baldet: All technology is dual use. Every tool is a weapon if you hold right. It’s important I think to try to stop bad stuff. The challenge is us collectively as a society deciding what is bad stuff. There is stuff most people agree on and it’s pretty codified in international sanctions list and if you’re going to be doing business, you comply with it or you don’t do business there. But it trickles all the way down to whether or not you believe that sex workers should be able to have bank accounts. So understanding that it’s really up to them as a business to choose how they wield those tools and what their philosophy is.
Figuring out how to use technology that can be dual purpose is not a new problem. It’s something that we’ve struggled with going back to say the Crypto wars of the nineties, when the public key encryption that we all use today and is instrumental to say even Bitcoin signing, was considered a dual-use munition under export controls in the US. It’s a long process to engage with and change these kinds of things.
There’s still arguments about whether or not we should be ‘backdooring’ strong cryptography in the US. Australia recently implemented a law that undermines that, it affects whether or not you can do business and build products that will run in places that have requirements to distribute golden keys to controlling authorities. So this is a well-trodden landscape. Security companies that do pen tests or discover bugs and vulnerabilities have had long discussions about what a coordinated “responsible disclosure” should look like. So we can learn a lot from what has already come before us I think.
Peter McCormack: So I tried to think about it myself and I was like, ‘okay, I think something like chain analysis is a natural conclusion to having this kind of pseudo-private technology that the government doesn’t know much about’. And I’m saying, ‘okay, all right, so they want to try and stop criminals and terrorists, whatever’. But I was thinking, well why should I really care? Why should I care? Then I was thinking.
It’s known that my entry into crypto was buying Bitcoin to buy a treatment for my mother when she was dying. We wanted to get her Cannabis oil, which is illegal in the UK, totally illegal. It’s kind of this grey area where it’s like, ‘okay, here’s the law and I abide by most of the law, but this is when my mother is dying. I don’t give a fuck. Right. I’m going to buy a treatment and I don’t care if I’m breaking the law.’ Then I’m like, I don’t want to be tracked by a company doing this and then receives and have some police knocking on my door saying, ‘you’ve been buying drugs online with Bitcoin’, because that to me is kind of bullshit. So that’s the kind of area I’m like, ‘okay and now I don’t want to be tracked’.
Therefore, how important do you think things like… Well, you obviously think Zcash is important, but how important therefore do you think privacy in Bitcoin is and Monero and do you have any personal views on wider privacy currencies?
Amber Baldet: Absolutely. I mean, I think your example is a great one. I tried to come up with as many more flippant examples as I can. Something like, if you bought an engagement ring, would you want it automatically posted to your Facebook page? No! There are lots of reasons that people should want to have some semblance of privacy and they’re not all about nefarious goods. There’s been plenty written about just because you want privacy does not mean that you’re doing something wrong. It’s been explained many, many times. But I do think that privacy is a fundamental right, but also having a society that functions is an important right or an important goal!
So figuring out how to walk between those two spaces is exactly what some of this work, like what’s Zcash is doing, I think, yeah, privacy is super important in systems like Bitcoin and Monero and others and I’m really excited. I think the way that Monero has been able to adapt, with adding i2p and some other feature additions, has been super cool. It’s all awesome research and it’s a cool functioning system.
Their wallets are infinitely more usable than Zcash’s and that’s why people use it. Again, people don’t use it partially because they don’t really understand differences in privacy models. But if you just put two things up and you say privacy coin A, privacy coin B and one has a usable experience and the other looks like Windows 98 and you can’t even send shielded transactions and you can send a shielded transaction to Coinbase, but you can never get your money back. Those are problems. So there’s a lot to work on. I don’t think Zcash is in any way perfect.
But what’s exciting about it is the privacy work being done at the protocol layer. Privacy is not… It’s not a binary state. It’s something that can exist, again, kind of up the stack. Zcash’s privacy happens cryptographically at that lowest layer with the ZK-snarks. But then on top of that, you can have something like a mixed network that would obscure the metadata around your Zcash transactions and all of these kinds of things can be applied in a different mix and match ways across different networks to end up in different outcomes. But the normal human is just never going to really understand the intricacies of that. I mean, I try and I still feel like it’s extremely complicated.
Peter McCormack: The other thing that kind of scares the crap out of me a little bit is… One of my favourite interviews I did was with Alex Gladstein from the Human Rights Foundation?
Amber Baldet: Yeah, I presented with him at the Oslo Freedom Forum, he’s awesome.
Peter McCormack: Are you going this year?
Amber Baldet: Maybe? My family’s Norwegian, so that was my first time to get to Oslo, during Oslo Innovation Week.
Peter McCormack: Okay, so he’s invited me. I’ve never been Oslo so I’m looking forward to it. I’m actually meeting up with him tonight in Chicago to talk to him. I find the guy fascinating and now I’ve got beyond my own personal ambitions of getting rich from Bitcoin, which isn’t going to happen. The more time I spend with him, the more I realize what Bitcoin can do under authoritarian regimes and other technologies he’s talked to me about this.
So all this merged to me this week where I was thinking and Alex Gladstein explains to me these amazing things that crypto technologies and cryptocurrencies can do for people in authoritarian regimes. I’m like, okay, that’s cool. Now we have these companies analyzing the Blockchains and employing potentially hackers who’ve supported people in authoritarian regimes and we’ve kind of got this big kind of messy battle between trying to give freedom and then people try to attack that freedom. I’m just like, what the fuck?!
Amber Baldet: Yeah. I mean I was really hoping when all this happened we’d be like all wearing cyberpunk coats. But, yeah there’s not enough leather in society for how terrifying it really is. When I was a kid, I loved nothing more than the X Files and of course movies like Hackers. I got my first 9,600 baud modem and was hanging out on the BBS’ talking to people at universities who didn’t know I was a little girl, which is a weird thing to say about the internet these days, but at the time was very freeing to be anonymous on the Internet.
This was the world that people foresaw. This is what we saw coming, was this kind of land of cyberspace. It’s what John Perry Barlow talked about in the Declaration of Independence of cyberspace, that we thought that there would be this democratic revolution through cyberspace, but it turns out that it actually simply reinforces and re-implements existing nation-state politics in a more nebulous way. That is almost like a Cold War, but it’s not so much a Cold War as an invisible war to most people. But this has been going on for decades.
One of my dear friends, Chris Wysopal, who was in a group called ‘The Loft’ back in the day. They got to testify to Congress in the mid-nineties about how the Internet was fundamentally broken, through things like BGP attacks and things which are still completely viable by the way. But they were there giving this message and it was not really heard.
I was lucky enough to get to testify to Congress this year to the House Agricultural Committee when they were trying to figure out, cash, security, commodity, what do we do with cryptocurrencies? I felt like I had a couple of options. I can simply go and opine on the questions that they asked. But I feel like it’s a relatively short term view of the challenges and really my responsibility there was to speak to the wider audience in the future saying, “hey, we told you. We told you this was going to happen!” If we weren’t planning for this “Internet of value” to be systemically important infrastructure, not just to economics, but to politics and society in the same way that the Internet has become, we’re focusing on the wrong problem.
We’re not really fighting yesterday’s war, but we’re definitely off rearranging deck chairs on the titanic somewhere, while other countries are absolutely getting ahead of us. So it’s a challenge.
Peter McCormack: Just one final thing I wanted to talk to you about, just because I’ve seen you comment on it and I’m a bit like… So I used to work in the web development industry, I used to have my own agency making websites for people to make money and not really making much myself! But I went through Web 1.0 and for me, there wasn’t this time where Web 2.0 happened and we all went ‘oh here’s Web 2.0', it was more of a retrospective of things and technologies that came in place. I’m not a technologist, I was just in a salesman.
Amber Baldet: Do you remember when Web 3.0 was supposed to be the semantic web in 2009?
Peter McCormack: Yes, it’s been talked about a lot. I read Multicoin, Kyle Samani’s view on Web 3.0 and I looked at the stack and I’ve got to be honest, I’m not really technical and I think sometimes, maybe that’s why some people listen to my podcast because I just ask the dumb questions. But I looked at it and I went, ‘Huh, really?’ I don’t buy that Web 3.0… I don’t think anyone can define what Web 3.0 is. I think Web 3.0 will be whatever people tend to pick up and use. That’s my first point. Secondly, I just don’t buy this entire decentralized web architecture and it feels like sometimes people are defining Web 3.0 to justify their own business. How do you feel about that?
Amber Baldet: I think that is a good summation of the current state of play. It’s a little complicated. As I mentioned earlier, I was researching these different views of what people thought the decentralized web or Web 3.0 was precisely for that reason because, me being apparently old, I remember that when Web 3.0 was supposed to be the semantic web and Tim Berners-Lee saying this is how it’s all going to be and we’re all going to mark up all of our websites. It didn’t really go anywhere. It ended up being, ‘well, you need to mark up your post this way if you want the card to display properly on Facebook’. But that’s not exactly the same as having this shared global ontology, that was supposed to make things universally connected, like hyperlinks but better.
If we at why that didn’t really work out, partially it’s because asking just regular web developers or somebody who wants to write a blog to understand a shared global ontology and then mark up their things accordingly sounds complicated. But also because we saw how easy it was to gamify SEO by just throwing the right keywords. Google completely ignores the keywords field at this point. It makes a lot more sense as natural language processing. What became more prevalent or even it’s kind of analogues that are a little clunkier.
It’s a lot better to parse the actual content that you see and then not to make a call about what that content is. Google got really, really good at that and because of that, they’re able to show you the thing that you want, almost before you even know that you want it, because they know that the map is not the territory and the markup doesn’t matter. What’s there on the site matters. We’re starting to see that now push into video as well, which was always harder to do previously.
So machine learning kind of killed the semantic web in the same way that the business models and the ad tech also contributed to it not being able to monetize this stuff. The loss of RSS and XMPP, these things hurt the idea of open adversarial interoperability where, I don’t know if you remember friend feed and stuff, but we were supposed to be able to aggregate and have these open communities or Trillion where you could pull together all of your different chats into Pidgin. This is all stuff that the kids are probably like, what are these words? But you know, this was back when the web had a lot more open connectivity and the business models ended up pressuring people to move into these kinds of silos.
Now when we talk about decentralized web, fundamentally I think it should be about figuring out how to crack open those silos and it does require something like adversarial interoperability. We have to figure out in the absence of those companies being incentivized or regulatorily forced to give you access, how are we going to let people take their own data and create alternative systems?
So when you look at architecture diagrams like that and we have one from Clovyr that I lovingly called the Webber-Next Stack because I literally was like, ‘I don’t know, is this Web 3.0? Is It DWeb? What is this? I don’t know’. But what was important in creating it, was like can we map something like BitTorrent onto this? Will it function with this stack that we have, based on what things are considered to be… You have to make a choice in order to have a functioning application. You need to make a choice at a networking layer. You need to make a choice at various components of the stack, but you don’t have to do it in one way. Can you map something like BitTorrent here? Can you map something like a Polkadot driven application or substrate? Can you map something like an enterprise, Ethereum use case? Can you map something like just these permissioned post-trade workflows?
Or can you map something that really is like; I’m just an artist and I’m a musician and I have my website and I run a BTC pay server. So I just want to accept payments in a way that circumvents the rest of the rails. But maybe I run a Wix website so someone else does my hosting. As we were talking about, where you choose to decentralize, I think decentralization is a terrible word, where you choose to take back some power from the rest of the powers that be, right now requires that you take on an undue amount of control over it. So let’s say you wanted to add this kind of BTC pay server, you literally have to spin this up yourself and I know a lot of musicians, I don’t know a lot of them that know a lot about infrastructure and would probably have a tough time with that.
So the more that we can componentize these types of things, the reusability of something like Stripe provided was huge. So many of these DApps right now look like ColdFusion, CGI-bin, like stuff from the 90s and I mean more like the enterprise side I guess. It’s a wreck and it’s not maintainable. It’s not extensible. It doesn’t plug into anybody’s pipeline. It’s all just like we’ve forgotten everything we learned about developments over the last 30 years and are just so enamoured with the Blockchain that we have to make it work.
That’s what I like about the Webber-Next and I think what I’d like to do is empower people. When you say choice, you need to have a choice at each of these layers. That doesn’t mean you modularly mix and match random crap together..That’s not how computing works, but it does mean that you need to understand what the problem is that you’re solving and you need to choose a tool that solves that specific problem, not be just, stuck into this tightly vertically integrated platform solution. That to your point really is driving a specific ethos, business model, coin valuation, whatever.
Peter McCormack: So Web 3.0 is kind of a myth right now?
Amber Baldet: Yeah, but people’s desire to take control from some of the platforms that are right now… Sometimes people are getting kicked off from some of these platforms, right? There’s maybe good reasons people are getting kicked off and maybe bad reasons that people are getting kicked off. But there are certainly displaced populations. So how has this kind of diaspora going to find a new solution? Did you know that you could actually run your own website? I know it’s shocking. The files, they’re just inside the computer and then they’re accessible on the internet. I know it’s a joke, but most people today that are not hyper-technical, have never been in charge of their own infrastructure and probably have no desire to be.
So again, some of these new tools, previously I was talking about some of the cool new cryptography tools that let us do new things, but now we’re talking about stuff like [Inaudible] that allow you to have this kind of web operating system, in completely new ways or kind of the shift towards serverless architecture, which right now really just means somebody else’s server, but it doesn’t have to!
These kinds of shifts and these are really much larger scale paradigm shifts that will affect the entire web regardless of what is happening, like with the price of Bitcoin. So I think that they play together and there’s going to be really cool things that happen at the intersection of them. But yeah, I’m focusing a little bit more on the technology side than the cryptocurrency side at the moment.
Peter McCormack: Well that’s cool because that sounds interesting to me. That sounds like a future where maybe we start to break down the power of the large behemoths, the large Silicon Valley companies and it becomes a lot easier for people to create their own businesses, take control of their data, take control of their own experience on the Internet. But hope that’ll obviously you have to come from people making tools that are easier for everyone, but that sounds kind of cool. I like that world.
Amber Baldet: Yeah, I think it sounds really cool. I think the problem that an artist who can’t accept, sub $1 payments on Patreon anymore because of their payment model or because their art is considered too controversial. The problem that they’re trying to solve is not that they want to take back their data, it’s that they need to connect with the people that get their art. So I don’t think we’re going to be able to sell them on taking back their data, but they might end up with having their data as a result anyway.
Now you’ve got a different problem, which is that people are like, ‘what do I do with this?’ Because they didn’t really ask for it and so there’s an entirely different class of what could be intermediaries or additional businesses, that can help people manage those things, hopefully in a more consensual way than they are now. I mean if you imagine that you’ve got how many different terms of service and what not have we signed? I can’t even imagine, it would be a full-time job to simply manage the risk or monetization of your data. Maybe that’s a new job that somebody has, but it shouldn’t be everybody’s job.
Peter McCormack: All right. Well listen, I’ve got one final closing question. So we seem to have more tools available now and more tools coming that allow people to create their own businesses, create a bit of freedom for themselves. Yet we also seem to have more tools that are giving nefarious parties ways to track us or to do sinister things. So we’ve got this kind of battle. Are you more optimistic or more pessimistic about the future? Big Question!
Amber Baldet: I mean I’m never really optimistic. I think that the battle is worth fighting. I think that if most people knew what they were up against, they’d know that in most senses we’ve already lost. But that doesn’t mean that civilization is over. I like to try to not so much think about it as; this is a war and we’re on different sides, as much as; these are all neighbourhoods and we all live in them and we are trying to choose how to govern them.
I guess in some places the Homeowner’s Associations are a little more authoritarian and murderous than in others. But I think we get into trouble if we start thinking of life and humanity as simply a battleground. So I try to stay hopeful or if nothing else, design so that people that are more hopeful than I am can make their better ideas work.
Peter McCormack: Very cool. Thank you so much, Amber. This was amazing. Can you just tell people how to stay in touch with you? Who you want to hear from? who you don’t want to hear from?
Amber Baldet: You can stay in touch with me. The easiest place is probably Twitter, where I’m @amberbaldet. My DMs are open. That does not mean that I can respond to everyone that DMs me because there are certainly a lot of trash fires in there. Who do I want to hear from? People that for whom this resonates I guess. Who do I not want to hear from? People that just slide into my DMs and are just like, ‘hi’ and then three days later, like ‘whatever bitch,’ so that would be probably not! I see your eyes are like, whoa! That’s the school-friendly version!
Peter McCormack: So my DMs are open and I mean I get the odd weird thing, like begging letters or people asking me to shill something. But certainly, there is a difference between the weird things that a girl will get and a boy will get. From all my friends I speak to on Twitter and all the people I’ve got to know in the Crypto community, you’ve suddenly got 15,000, 20,000, 30,000, 40,000 followers, they’re saying that they get some really weird shit and abuse!
Amber Baldet: Oh yeah. I mean we could have a fun, “hate reading Amber’s tweets” sometime. I used to print them out and put them behind my desk with the profile icon covered with a troll face. I’m fueled by rage, so I think it’s great! Bring it, I’ve been on the internet longer than you have!
Peter McCormack: This was great. Thank you, Amber.
Amber Baldet: Thanks for having me!