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Friday, February 19, 2016

Apple's Encryption and Blockchain Solutions

Many readers already know that Apple Computer is resisting a federal court order to modify its software to allow an encryption bypass and indefinite password attempts, as requested by federal authorities investigating the San Bernardino terror attack in 2015.

There are bigger issues at work here. The last two decades have seen a trend -- under both Republican and Democratic administrations -- for an expansion of government authority over private enterprise.

Here, the issue boils down to an important objective, being used to justify the government requesting and a federal court ordering a private enterprise to change its product.

There are precedents, of course, when safety or health are involved. But here, the request is to help the government do its job.

Here is the troubling implication: The government is declaring and imposing a duty on a private business, yet not compensating the business for its burden.

This is a form of conscription, a form of the expropriation of private property, on the basis of an asserted (and yes, an important) government objective, by the government.

This is the same premise behind eminent domain, the taking of the private for the asserted good of the public.

This is no different, really, from the troubling trend of government agencies coming down on business managers and imposing all sorts of duties and obligations to root out wrongdoing -- but critically, without compensating, protecting or giving the targets of this imposed burden any resources with which to undertake this imposed task.

The unfairness is illustrated by the fact that the targets (Apple today, corporate managers in the last decade) become unpaid and unindemnified deputies of the government, charged with extra responsibilities (and liabilities), yet ironically possessing NONE of the protections enjoyed by government workers.

This is a tax on business. This is a tax on the people who work in business. These impositions are burdens and punishments. And it makes you wonder whether there is another agenda at work here. Something beyond the cover of a top priority investigation. Is it a power grab, a desire to assert government control over private innovation? And could this even be a way to weaken the anti-hacking protections consumers enjoy, so that prying government eyes can access data without those pesky warrants and subpoenas?

The objections seem rooted in objectors' warranted lack of trust in human institutions, and particularly (but not exclusively) the government. This condition is actually avoided by, and is the basis for the appeal, of blockchain technology.

And blockchain, lest we forget, is based on a ledger of all activity and all data which is publicly-available, immutable and, perhaps most crucially, decentralized. That decentralization feature means the data is uniquely not susceptible to attack, deformation, corruption or inaccessibility.

Ordinarily the vast majority of people would cooperate with a government terror investigation. But this case is inadvertently becoming a cause célèbre for a protest of a terror investigation. Many tech industry players are warning -- not as loquaciously as they should -- that the government's measures pose a potential grand threat to information security and consumer protection. But I wonder whether this is a new attack in a stealth campaign, to nationalize private industry.

If the authorities were more interested at building trust, they might receive much more cooperation from tech innovators. But that trust requires a demonstration of action that would inspire confidence. Remember, this is the same federal government which elects to selectively enforce -- or not enforce at all -- existing federal immigration laws on the books for years, in the wake of the same terror threat which is invoked to justify government encroachment on rights in a different scenario. I sense the tech industry and other private enterprise players see these requests as an effort for the government to make itself a dominant partner and overseer. I believe that is the spectre which they feel, and fear.

Eric Dixon is a New York lawyer who works extensively with blockchain and cryptocurrency innovators and startups.

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