The Political Economy of Global Private Currencies

This dissertation examines regulatory responses to global private currencies (GPCs). Through detailed analyses of the history and evolution of private digital currencies, and through case studies of the United States, the European Union, and China, this dissertation identifies five factors that condition regulatory responses: (1) compliance with anti-money laundering (AML) laws, (2) compliance with systems built for fiat currencies, (3) degree of transparency in operations, (4) culture of sovereignty within the nation, and (5) great power competition with other nations. Throughout the dissertation, various political, economic, social, technological, legal, and environmental (PESTLE) characteristics of GPCs are highlighted. This dissertation also proposes a ‘game transformation framework’ (GTF) by combining these PESTLE factors with concepts from game theory. A 2x2 game structure is used to analyze strategic interactions between governments in the three case studies and GPCs on a spectrum between cooperation and conflict

The Critique of Digital Capitalism: An Analysis of the Political Economy of Digital Culture and Technology

Anything that can be automated, will be. The “magic” that digital technology has brought us — self-driving cars, Bitcoin, high frequency trading, internet of things, social networking, mass surveillance, the 2009 housing bubble — has not been considered ideologically. The Critique of Digital Capitalism identifies how digital technology has captured contemporary society in a reification of capitalist priorities. The theory proposed in this book is the description of how digital capitalism as an ideologically “invisible” framework is realized in technology. Written as a series of articles between 2003 and 2015, it provides a broad critical scope for understanding the inherent demands of capitalist protocols for expansion without constraint (regardless of social, legal or ethical limits) that are increasingly being realized as autonomous systems no longer dependent on human labor or oversight and implemented without social discussion of their impacts. The digital illusion of infinite resources, infinite production, and no costs appears as an “end to scarcity,” whereby digital production supposedly eliminates costs and makes everything equally available to everyone. This fantasy of production without consumption hides the physical costs and real-world impacts of these technologies

"The authority of the steam" : power dynamics of digital production in the Bitcoin blockchain

This thesis offers a critical investigation of the Bitcoin currency and the operation of its technical structure, i.e. blockchain technology. The main objective of the research is to identify and describe the specific power dynamics performed by and through this digital phenomenon. “Power dynamics” are framed in this work largely in terms of authority and sovereignty. To structure an exploration of such dynamics, the narrative is overarched by four different notions of “utopia” —as paradox, ideal, no-place, and imagined governance— that address the following main questions always underpinned by the general inquiry on power: What is the Bitcoin Blockchain? Where is it located? How are power relations performed in it? And how are power relations modified in relation with previous institutional systems? The thesis addresses distinct notions of authority in Bitcoin through the observation of its historical, spatial, and organizational characteristics. It maps the techno-political emergence of the blockchain system, the geographical distribution of Bitcoin’s infrastructural network, and the strategies for governance involved in its development as software. Based on the observation of these settings, this thesis argues that Bitcoin posits a restructuration of power dynamics through the automation of code, in particular, through its process of production. In order to develop this restructuration, the power dynamics of the Bitcoin blockchain are weighted against authority models of the state’s institutions. The thesis builds upon existing political theories of Empire (Hardt and Negri), protocol (Galloway), and the Stack (Bratton) to develop a critical account of Bitcoin’s power dynamics. The work sits in between the disciplines of Media Theory, Software Studies, Political Theory, and Digital Methods, and makes use of qualitative and quantitative methods to empirically support the former argument

Trustless communication across distributed ledgers: impossibility and practical solutions

Since the advent of Bitcoin as the first decentralized digital currency in 2008, a plethora of distributed ledgers has been created, differing in design and purpose. Considering the heterogeneous nature of these systems, it is safe to say there shall not be ``one coin to rule them all". However, despite the growing and thriving ecosystem, blockchains continue to operate almost exclusively in complete isolation from one another: by design, blockchain protocols provide no means by which to communicate or exchange data with external systems. To this date, centralized providers hence remain the preferred route to exchange assets and information across blockchains~-- undermining the very nature of decentralized currencies. The contribution of this thesis is threefold. First, we critically evaluate the (im)possibilty, requirements, and challenges of cross-chain communication by contributing the first systematization of this field. We formalize the problem of Cross-Chain Communication (CCC) and show it is impossible without a trusted third party by relating CCC to the Fair Exchange problem. With this impossibility result in mind, we develop a framework to design new and evaluate existing CCC protocols, focusing on the inherent trust assumptions thereof, and derive a classification covering the field of cross-chain communication to date. We then present XCLAIM, the first generic framework for transferring assets and information across permissionless distributed ledgers without relying on a centralized third party. XCLAIM leverages so-called cryptocurrency-backed assets, blockchain-based assets one-to-one backed by other cryptocurrencies, such as Bitcoin-backed tokens on Ethereum. Through the secure issuance, transfer, and redemption of these assets, users can perform cross-chain exchanges in a financially trustless and non-interactive manner, overcoming the limitations of existing solutions. To ensure the security of user funds, XCLAIM relies on collateralization of intermediaries and a proof-or-punishment approach, enforced via smart contracts equipped with cross-chain light clients, so-called chain relays. XCLAIM has been adopted in practice, among others by the Polkadot blockchain, as a bridge to Bitcoin and other cryptocurrencies. Finally, we contribute to advancing the state of the art in cross-chain light clients. We develop TxChain, a novel mechanism to significantly reduce storage and bandwidth costs of modern blockchain light clients using contingent transaction aggregation, and apply our scheme to Bitcoin and Ethereum individually, as well as in the cross-chain setting.Open Acces

Reconciling the conflict between the ‘immutability’ of public and permissionless blockchain technology and the right to erasure under Article 17 of the General Data Protection Regulation

This thesis focuses on the issues between a blockchain technology and the new European Union General Data Protection Regulation (GDPR). The Blockchain technology is a rather new technology which potential has been recognised only in the recent years. Essentially, a blockchain is a distributed database in which data is stored in blocks, which form a chronological chain of blocks. Blockchains have many types and possible use cases, but this research focuses on public and permissionless blockchains, which primary objective is to enable individuals to transact with each other without centralised intermediaries. The GDPR entered into force on 25 May 2018. The GDPR was not drafted taking account of distributed ledger technologies, such as the blockchain technology, which has raised several points of tension between the regulation and the technology. The primary focus of this thesis is on the conflict between the ‘immutability’ of blockchain technology and the right to erasure under Article 17 of the GDPR. One of the main features of blockchains is the immutability, that is to say, data on old blocks is extremely difficult to modify or delete. This feature seems prima facie to conflict with Article 17 of the GDPR that provides data subjects with the right to request erasure of their personal data under certain conditions. Firstly, this thesis analyses the current state of the conflict. Before analysing the conflict, the research addresses two essential preliminary questions: the question about anonymisation and personal data and the question about allocation of responsibilities on blockchains. After that, different solutions proposed to reconcile the conflict are analysed to understand the current situation. While public and permissionless blockchains currently may infringe Article 17 of the GDPR, there are potential solutions for the conflict in the future. The second purpose of this thesis is to identify relevant legal problems and propose how to address the problems in the future. Blockchain developers should consider data protection obligations already in the design phase. From the legal side, this research has provided flexible interpretations for the legal problems that could help to comply with the right to erasure. There is a need for a flexible approach to the problems between the regulation and the technology

The Contemporary Face of Transnational Criminal Organizations and the Threat they Pose to U.S. National Interest: A Global Perspective.

Traditional organized crime groups have consistently posed issues for la w enforcement; however, the contemporary TCOs present an even greater security risk and threat. TCOs thrive in countries with a weak rule of law and present a great threat to regional security in many parts of the world. Bribery and corruption employed by these groups further serve to destabilize already weak governments. These TCOs also present a major threat to U.S. and world financial systems by exploiting legitimate commerce, and in some cases creating parallel markets (“Transnational Organized,” 2011) . Finally, one of the most significant threats posed by contemporary TCOs is their alliances and willingness to work with terrorist and extremist organizations. This paper will focus on contemporary TCOs by giving a brief overview of the most common criminal enterprises associated with these groups, the nexus between various TCOs, the nexus between TCOs and terrorist and extremist groups, case studies highlighting the nexus, and the threats they pose to U.S. national interests

Culture and Code: The Evolution of Digital Architecture and the Formation of Networked Publics

Culture and Code traces the construction of the modern idea of the Internet and offers a potential glimpse of how that idea may change in the near future. Developed through a theoretical framework that links Sheila Jasanoff and Sang-Hyun Kim’s theory of the sociotechnical imaginary to broader theories on publics and counterpublics, Culture and Code offers a way to reframe the evolution of Internet technology and its culture as an enmeshed part of larger socio-political shifts within society. In traveling the history of the modern Internet as detailed in its technical documentation, legal documents, user created content, and popular media this dissertation positions the construction of the idea of the Internet and its technology as the result of an ongoing series of intersections and collisions between the sociotechnical imaginaries of three different publics: Implementors, Vendors, and Users. These publics were identified as the primary audiences of the 1989 Internet Engineering Task Force specification of the four-layer TCP/IP model that became a core part of our modern infrastructure. Using that model as a continued metaphor throughout the work, Culture and Code shows how each public’s sociotechnical imaginary developed, how they influenced and shaped one another, and the inevitable conflicts that arose leading to a coalescing sociotechnical imaginary that is centered around vendor control while continuing to project the ideal of the empowered user

Bit Bang 8: Digitalization

This book is the 8th in the Bit Bang series of books produced as multidisciplinary teamwork exercises by doctoral students participating in the course Bit Bang 8: Digitalization at Aalto University during the academic year 2015–2016. Digitalization has brought great opportunities for economic growth, productivity gain and job creation in our societies, and will change the way industry will operate. Bit Bang 8 addressed the topic of digitalization from the perspective of its economic, environmental and social sustainability. The course elaborated on the interconnectedness of these phenomena, and linked them to possible future scenarios, global megatrends and ethical considerations. How will digitalization shape our future? How can we prepare can prepare our societies to respond to these changes? Working in teams, the students set out to answer questions related to the digitalization and to brainstorm radical scenarios of what the future could hold. This joint publication contains articles produced as teamwork assignments for the course, in which the students were encouraged to take novel and radical views on digitalization. The Bit Bang series of courses is supported by the Multidisciplinary Institute of Digitalisation and Energy (MIDE). Previous Bit Bang publications are available from http:/mide.aalto.fi