Is an Anonymous Society Possible? Vitalik Buterin Exposes the Dark Side of Anonymity in Crypto
Vitalik Buterin debated with Vinay Gupta on the politics of anonymity. Photo by Michael Ciaglo/Getty Images.
Key Takeaways
- Vitalik Buterin recently engaged in an online dialogue with Vinay Gupta.
- Gupta argued that as much economic and political activity as possible should be anonymized.
- However, Buterin countered that such an “anonymous society” would be impossible in practice.
While anonymity/pseudonymity is one of the crypto movement’s founding principles, it has often been sidelined as blockchain technology has become increasingly mainstream over the last decade.
Nevertheless, the moral and political ramifications of anonymity remain among the most debated issues in space.
Adding his two bits to the debate in a recent X post, Ethereum founder Vitalik Buterin dismissed the notion of an “anonymous society,” arguing in favor of a “more multidimensional notion of identity” instead.
Vinay Gupta on Anonymity
In a recent online dialogue with Vinay Gupta, a renowned cypherpunk who helped launch Ethereum in 2015, Buterin countered Gupta’s maximalist stance on anonymity.
In Gupta’s philosophy, “We don’t want a society of entitlements and exclusions: we want an anonymous society where nobody knows, or cares, that we might be a dog or an AI.
Referencing Jeremy Bentham’s nineteenth-century surveillance metaphor, he added, “We have to blind the world to as much of our identity as possible because there alone is a counterbalance to The Panopticon.”
Gupta’s rant about anonymity was in response to a recent article in which Buterin argues for “plurality” in on- and off-chain governance.
In Gupta’s view, Buterin’s approach risks watering down the self-sovereignty that is so central to the crypto movement, and his focus on plurality distracts from that original mission.
The Pros and Cons of Anonymity
Of course, most people would agree that online anonymity is a double-edged sword, offering both benefits and drawbacks.
On the positive side, anonymity provides privacy, allowing individuals to express themselves freely without fear of judgment or repercussions.
This can be particularly important for those living under oppressive regimes, where anonymity enables dissidents to share their views and information safely. It also plays a crucial role in protecting whistleblowers, victims of abuse, and those discussing sensitive topics.
However, the veil of anonymity also has its downsides. It can encourage negative behaviors, such as trolling, cyberbullying, and the spread of misinformation, and it hinders law enforcement efforts to track down criminals.
To realize the benefits of anonymity without creating a system without accountability, Buterin’s “multidimensional” approach emphasizes removing an identity from certain realms of activity (such as financial interactions between individuals) but retaining it in others.
Real-World vs. Crypto Governance
While Gupta’s anonymous society is envisaged in the context of online interactions, offline politics are inevitably rooted in fixed identities. Nonetheless, he argued that we should “redesign real-world systems not to require identity.”
The disagreement between Gupta and Buterin thus contributes to a larger debate over the extent to which decentralized governance mechanisms popular in the crypto space could be applied to real-world commercial, legal, and political systems.
As the Ethereum founder argued in a 2021 article, “On the Limits of Cryptoeconomics “:
“Governance by economics is not ‘efficient’ […] because it is inherently vulnerable to 51% of the stakeholders colluding to liquidate the company and split its resources among themselves. The only reason why this does not happen much more often “in real life” is because of many decades of shareholder regulation that have been explicitly built up to ban the most common types of abuses.”
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