The need to increase financial access has been met with the use of biometrics as a form of authentication and identification. In order to better understand the role of decentralized systems and cryptocurrencies, we must first call into question the integrity of centralized systems.
The Age of Biometrics
Biometric authentication is becoming increasingly common throughout a range of digital applications and security systems. It can be used to unlock your phone, authenticate you at the airport, or give you access to services traditionally provided by governments and financial institutions.
Earlier this year, Banorte — one of Mexico’s largest banks — announced its plan to introduce easier to use phone-based solutions:
“With this innovation we will improve the customer experience and increase the security of operations, thus contributing to the strengthening of the financial system from the Banorte branches.” — Marcos Ramírez Miguel, General Director of Grupo Financiero Banorte
Why should a person have to walk into a physical branch when the entire operation has been made possible via a mobile phone?
“Globally, 1.7 billion adults remain unbanked, yet two-thirds of them own a mobile phone that could help them access financial services.” — The World Bank, Financial Inclusion on the Rise, But Gaps Remain, 2018
While such a solution is great in theory, it does however beg the question: Are these systems secure? And more importantly, are people aware of the risks involved?
Consequences of Using Biometrics
What happens if you are unconscious and someone uses your hand to unlock your phone? What happens if a police officer or a court force you to unlock your phone (see article: The FBI Forced A Suspect To Unlock His iPhone With His Face). These are very real concerns which have already happened to people.
“The difference between a password and a biometric identifier is great under the law [US] — you have a right not to reveal the contents of your mind, which includes things like a password, but your fingerprints are a part of who you are and you expose them to the public every day…” INC.COM, 2016
It does not take much time to recognize that people in desperate situations (the unbanked, refugees or people from underdeveloped regions) are already vulnerable, confused, and looking for any possible aid they can get. Are we to assume that they are all aware of what it is that they are giving away?
“ID2020, a collaboration among Microsoft, Accenture, and the United Nations that will use biometric data and the blockchain (distributed ledgers) to create an encrypted, permanent, and shareable means of identification for all refugees.” — Banking on Refugees, Project Syndicate, 2019
Yes, biometric-based digital systems will allow people to gain access to banking, healthcare, and other important services. But what concerns me is that despite the overall drive for these platforms — wrapped up in a “do good” packaging — little attention is given to personal privacy, safety of data retention, accessibility, and most importantly the type of meta data that is collected and shared.
For example, a digital ID system called Aadhaar was introduced by the government of India as a way of on-boarding it’s 1.3B citizens. Their method proved to be greatly successful as more than 1.1B registered. However, it was done in an intrusive and forceful manner. As mentioned by the New York Times:
“The government has made registration mandatory for hundreds of public services and many private ones, from taking school exams to opening bank accounts… The poor must scan their fingerprints at the ration shop to get their government allocations of rice. Retirees must do the same to get their pensions.”
Despite the red flags, one of the leading engineers behind the system assures us that “the people themselves are the biggest beneficiaries”. The reality, on the other hand, begs to differ:
“Although the system’s core fingerprint, iris and face database appears to have remained secure, at least 210 government websites have leaked other personal data — such as name, birth date, address, parents’ names, bank account number and Aadhaar number — for millions of Indians.”
Moreover, many laborers within India — due to the nature of their work — have “no readable prints, making authentication difficult”. Another studyfound that “20 percent of the households in Jharkand state had failed to get their food rations under Aadhaar-based verification — five times the failure rate of ration cards.”
An article by the Los Angeles Times further explores the negative impact. As described, one individual “came to the enrollment office less out of excitement than desperation: If she didn’t get a number, she worried that she wouldn’t be able to eat.”
“If your PIN number or password leaks, you can change it. You can’t change your fingerprints.”
Not surprisingly, India’s ID system has been a part of many controversial discussions. Some people suggest that such tools and systems could be used by political parties to “snoop on citizens”.
China’s citizenship rating system, a biometric-based surveillance system, is another example. A system which is being used to monitor and rate personal aspects of an individual’s life, essentially modifying people’s access level to services — depending on their behavior.
It is one thing to have a system which is voluntary, giving people the ability to opt-in and out, and another to enforce it by law.
Digital Dictatorship — coming to a city near you
If you are thinking you are safe from such tools because you are living in a “free” and “Western” country, then think again. The citizen rating system of China is on its way to Australia, as mentioned in an article by The Epoch Times:
“CCP [China’s Communist Party] views Australia as a testing ground for programs it wants to spread to the West. After Australia comes Canada, then the United States — in an apparent imitation of Mao Zedong’s strategy to “surround the cities with the countryside.”
Are we to believe that such powerful organizations are really that altruistic? Have we not learned anything from the immense sacrifice made by Edward Snowden? Should we ignore the huge surplus of power that has been delegated to various institutions as a result?
Mexico’s Dance With Biometrics
While Mexico is still in the infancy stage of implementing biometric systems to provide financial systems or otherwise, we must still consider the wrongful destination of this path. With that in mind, let us ask the followup question: can decentralized applications and cryptocurrencies provide us with a better alternative?
“Decentralized self-sovereign identity and reputation systems are going to overshadow the need for centralized security systems. Biometrics is an invasion of privacy. Worse than an invasion of privacy. It’s just not necessary.” — Brian Taylor, Decentralization Software Architect, 1M5
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