Centralization Strikes Again - April 2021 Edition
“One of my favourite words is sousveillance. It is the opposite of surveillance. Surveillance means to look from above; sousveillance means to look from below. In their dream of nation-states controlling all of our financial futures, they made one major miscalculation. It’s a hell of a lot harder for a few hundred thousand people to watch 7.5 billion. What happens when 7.5 billion of us stare back?” — Andreas Antonopoulos
Where has centralized technologies, including those who limit our access to it, failed us this month? Let’s take a look at our April month-in-review:
Timeline
Apr 1 - HSBC bans users from buying Microstrategy (MSTR) stocks in investing accounts due to relationship with Bitcoin and virtual currencies. HSBC confirms on April 12th. Source
Apr 13 - Google shadowbans searches for “riots” following eruption of Minnesotan protests over the killing of Daunte Wright. Source
Apr 13 - China issues sweeping warnings to 34 Chinese internet companies for breaching antitrust laws that aim to stymie monopolies and anti-competitive practices. This comes after the government of China lobbed a $2.75 bn fine on Alibaba. Source Source
Apr 13 - Discord updated its guidelines to restrict NSFW content on its iOS platform, much to the ire of some users that received bans for being on furry erotic art servers. Source
Apr 14 - Widespread reports of Robinhood users who are unable to execute crypto orders due to “pending” messages during Dogecoin rally. Robinhood denies wrongdoing. Source
Apr 15 - Bitcoin mining facilities in Xinjiang, China experience widepread government-sanctioned power outages, causing Bitcoin prices to plummet around the world. Source
Apr 15 - Subreddit WallStreetBets re-sanctions any discussion of cryptocurrencies after temporarily lifting its ban on BTC, ETH, and DOGE discussions. Source
Apr 16 - HSBC adds Coinbase (COIN) to the list of crypto-related stocks it won’t allow its users to purchase. Source
Apr 16 - President of the European Central Bank Christine Lagarde claims citizens value privacy but not anonymity in their currency. Source
Apr 16 - Turkey bans the use of all cryptocurrencies as a form of payment citing “irreparable” damage and transaction risks. Source
Apr 19 - Rogers Wireless customers in Canada experience major outage due to software upgrade, sparking awareness over telecommunications consolidation and costs in Canada. Source
Apr 21 - Trading and withdrawals abruptly halted on Turkish cryptocurrency exchange Thodex, after its CEO was found to have left the country the day before under mysterious circumstances. Source
Apr 26 - Following Chinese director Chloe Zhao’s historic Best Director win for Nomadland at this year’s Oscar’s, widespread censorship in China has taken place online, including removal of any mention of her name and her movie. Source
Apr 28 - Cloud infrastructure provider DigitalOcean admits to large-scale data breach involving the leaking of billing names, addresses, and credit card information. Source
Apr 30 - Turkish authorities detain 83 individuals, including the siblings of Thodex CEO, in an ongoing saga with the Turkish cryptocurrency exchange. Source
If any newsworthy bulletins about centralization have been missed this month, please reach out via email or Twitter - we will get it added! There’s just too much to keep up with, and we’d deeply appreciate your contributions (credits will be attributed!) as we continue to track the failures of centralized models.
Op-Ed
On Digital & Financial Inclusion
Zimbabwe was one of the first countries to adopt a digital currency. Since 2011, the people of this country have been able to pay for virtually anything with their mobile phones using Ecocash, a payment solution that allows users to perform financial transactions instantly using their mobile phones, without having a bank account. This might suggest that Zimbabwe has found the Holy Grail of financial inclusion - yet the reality is quite different.
It all started in the late 90’s when Zimbabwe’s currency collapsed and inflation rose by 231,000,000% (yes, you’re reading it correctly: two hundred-thirty one millions percent). Subsequently, in 2009 the local currency was replaced by a more stable multi-currency system dominated by the USD. However, due to currency exchanges, goods that used to cost 99 cents, or less, now cost 1 dollar (and change was not possible). Econet, the leading mobile company, saw this as an opportunity and in 2011 launched EcoCash, a digital money service. The aim was to return financial power back to the people and allow them to perform microtransactions using a digital currency.
This sounds awesome, until you dig deeper into EcoCash, because digital does not necessarily mean decentralized - as stated in the T&C: “Account means Your EcoCash account administered by Econet.”
So someone else manages your money, not you. And it gets even worse as you keep on reading:
“We may at any time close the account or restrict access to Your Account without prior notice to you.”
The list of reasons EcoCash can close someone’s account without prior notice includes: EcoCash “suspect fraud” (whatever that means..); the account is dormant (90 days inactivity); and you drop them as your mobile provider. If you’re not a faint of heart, you can read here the complete list of reasons why you might find yourself unbanked.
To sum up, one company not only has the power to leave people unbanked overnight, it leverages its power to aggressively promote and lock users in its mobile plans - so much for financial inclusion.
Nevertheless, a solution exists: using stablecoins and Layer2 solutions. Stablecoins are Ethereum cryptocurrencies designed to reduce price fluctuations. Layer2 solutions cut transaction costs and enable scalability - making the adoption of stablecoin in everyday life cost-effective. In this way, users would have control over their wallets and would not be left vulnerable to the slightest whim of Econet.
Thank you to Costanza Gallo (from Golem Network) for her contribution to this month’s edition of our newsletter.
If you would like to contribute to the Op-Ed in next month's edition of Centralization Strikes Again, then please email tim.ho@chainsafe.io. We would love to hear your thoughts on how we can leverage decentralized technologies as a solution to the many problems centralized systems present for humanity!
Like all great things, our newsletter starts humble and, well... unpolished. If you have any feedback, please don't hesitate to send them my way.
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