Opinion by: Casey Ford, PhD, researcher at Nym Technologies
Web3 rolled in on the wave of decentralization. Decentralized applications (DApps) grew by 74% in 2024 and individual wallets by 485%, with total value locked (TVL) in decentralized finance (DeFi) closing at a near-record high of $214 billion. The industry is also, however, heading straight for a state of capture if it does not wake up.
As Elon Musk has teased of placing the US Treasury on blockchain, however poorly thought out, the tides are turning as crypto is deregulated. But when they do, is Web3 ready to “protect [user] data,” as Musk surrogates pledge? If not, we’re all on the brink of a global data security crisis.
The crisis boils down to a vulnerability at the heart of the digital world: the metadata surveillance of all existing networks, even the decentralized ones of Web3. AI technologies are now at the foundation of surveillance systems and serve as accelerants. Anonymity networks offer a way out of this state of capture. But this must begin with metadata protections across the board.
Metadata is the new frontier of surveillance
Metadata is the overlooked raw material of AI surveillance. Compared to payload data, metadata is lightweight and thus easy to process en masse. Here, AI systems excel best. Aggregated metadata can reveal much more than encrypted contents: patterns of behaviors, networks of contacts, personal desires and, ultimately, predictability. And legally, it is unprotected in the way end-to-end (E2E) encryptedcommunications are now in some regions.
While metadata is a part of all digital assets, the metadata that leaks from E2E encrypted traffic exposes us and what we do: IPs, timing signatures, packet sizes, encryption formats and even wallet specifications. All of this is fully legible to adversaries surveilling a network. Blockchain transactions are no exception.
From piles of digital junk can emerge a goldmine of detailed records of everything we do. Metadata is our digital unconscious, and it is up for grabs for whatever machines can harvest it for profit.
The limits of blockchain
Protecting the metadata of transactions was an afterthought of blockchain technology. Crypto does not offer anonymity despite the reactionary association of the industry with illicit trade. It offers pseudonymity, the ability to hold tokens in a wallet with a chosen name.
Harry Halpin and Ania Piotrowska have diagnosed the situation:
“[T]he public nature of Bitcoin’s ledger of transactions […] means anyone can observe the flow of coins. [P]seudonymous addresses do not provide any meaningful level of anonymity, since anyone can harvest the counterparty addresses of any given transaction and reconstruct the chain of transactions.”
As all chain transactions are public, anyone running a full node can have a panoptic view of chain activity. Further, metadata like IP addresses attached to pseudonymous wallets can be used to identify people’s locations and identities if tracking technologies are sophisticated enough.
This is the core problem of metadata surveillance in blockchain economics: Surveillance systems can effectively de-anonymize our financial traffic by any capable party.
Knowledge is also an insecurity
Knowledge is not just power, as the adage goes. It’s also the basis on which we are exploited and disempowered. There are at least three general metadata risks across Web3.
Fraud: Financial insecurity and surveillance are intrinsically linked. The most serious hacks, thefts or scams depend on accumulated knowledge about a target: their assets, transaction histories and who they are. DappRadar estimates a $1.3-billion loss due to “hacks and exploits” like phishing attacks in 2024 alone.
Leaks: The wallets that permit access to decentralized tokenomics rely on leaky centralized infrastructures. Studies of DApps and wallets have shown the prevalence of IP leaks: “The existing wallet infrastructure is not in favor of users’ privacy. Websites abuse wallets to fingerprint users online, and DApps and wallets leak the user’s wallet address to third parties.” Pseudonymity is pointless if people’s identities and patterns of transactions can be easily revealed through metadata.
Chain consensus: Chain consensus is a potential point of attack. One example is a recent initiative by Celestia to add an anonymity layer to obscure the metadata of validators against particular attacks seeking to disrupt chain consensus in Celestia’s Data Availability Sampling (DAS) process.
Securing Web3 through anonymity
As Web3 continues to grow, so does the amount of metadata about people’s activities being offered up to newly empowered surveillance systems.
Beyond VPNs
Virtual private network (VPN) technology is decades old at this point. The lack of advancement is shocking, with most VPNs remaining in the same centralized and proprietary infrastructures. Networks like Tor and Dandelion stepped in as decentralized solutions. Yet they are still vulnerable to surveillance by global adversaries capable of “timing analysis” via the control of entry and exit nodes. Even more advanced tools are needed.
Noise networks
All surveillance looks for patterns in a network full of noise. By further obscuring patterns of communication and de-linking metadata like IPs from metadata generated by traffic, the possible attack vectors can be significantly reduced, and metadata patterns can be scrambled into nonsense.
Anonymizing networks have emerged to anonymize sensitive traffic like communications or crypto transactions via noise: cover traffic, timing obfuscations and data mixing. In the same spirit, other VPNs like Mullvad have introduced programs like DAITA (Defense Against AI-guided Traffic Analysis), which seeks to add “distortion” to its VPN network.
Scrambling the codes
Whether it’s defending people against the assassinations in tomorrow’s drone wars or securing their onchain transactions, new anonymity networks are needed to scramble the codes of what makes all of us targetable: the metadata our online lives leave in their wake.
The state of capture is already here. Machine learning is feeding off our data. Instead of leaving people’s data there unprotected, Web3 and anonymity systems can make sure that what ends up in the teeth of AI is effectively garbage.
Opinion by: Casey Ford, PhD, researcher at Nym Technologies.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
They demolished most of the “blue wall” at the general election, and now the Lib Dems are eyeing up Labour voters.
Strategists see an opportunity in younger people who, over the course of this parliament, may be priced out of cities and into commuter belt areas as they seek to get on the housing ladder or start a family.
Insiders say the plan is to focus more on the cost of living to shift the party’s appeal beyond the traditional southern heartlands.
“There’s a key opportunity to target people who were 30 at the last election who over the next five years might find themselves moving out of London, to areas like Surrey, Guildford,” a senior party source told Sky News.
“We also need to be better at making a case for a liberal voice in urban areas. We have not told enough of a story on the cost of living.
“We need a liberal voice back in the cities – areas like Liverpool, where there is strong support at a council level that we can use as a base to build on.”
Liverpool is a traditional Labour heartland but in January lost its first local authority by-election there in 27 years to the Lib Dems.
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Carl Cashman, the leader of the Lib Dems on the city council, says it’s a result that shows the potential to make gains in areas where the party came third and fourth at the general election.
Image: Carl Cashman is the leader of the Liverpool Liberal Democrats
“One of the cases I have been making to the national party is that Liverpool should be a number one target.
“We are almost at the end of the road when it comes to the Conservatives, so we need to start looking at areas like Liverpool,” he said, adding that Manchester, Sheffield and Newcastle could also be ripe for the taking.
However, the party faces a challenge of making a case for liberalism against the rising tide of populism.
Sir Ed Davey, the party leader, is trying to position himself as the only politician who is not afraid of holding Reform UK leader Nigel Farage to account.
He has recently unveiled a plan to cut energy bills by changing how renewable projects are paid for and says he will boycott Donald Trump’s state dinner. It is these green, internationalist policies that insiders hope can hoover up support of remaining Tory moderates unhappy with the direction of Kemi Badenoch’s party and progressive voters who think Labour is more of the same.
However, strategists admit it is difficult to cut through on these issues in a changing media landscape, “when you’re either viral or you’re not”.
‘Silly stunts’ here to stay
Farage has no such problem, which Davey has blamed on a national media weighted too heavily in favour of the Reform UK leader, given the size of his party (he has just four MPs compared to the Liberal Democrats’ 72).
But the two parties have very different media strategies. This week, on the same day Farage held a Trump-style press conference to announce his immigration deportation plans, with a Q&A for journalists after, the Liberal Democrat leader went to pick strawberries in Somerset to highlight the plight of farmers facing increased inheritance tax.
Image: Sir Ed Davey takes part in strawberry picking with Tessa Munt, the MP for Wells & Mendip Hills. Pic: PA
Some Lib Dems have questioned whether the “silly stunts” that proved successful during the general election are past their shelf life, but strategists say there will be no fundamental change to that, insisting Sir Ed is the “genuine nice guy” he comes across as and that offers something different.
The Lib Dems ultimately see their strength as lying not in the “airwaves war” but the “ground war” – building support on the doorstep at a local level and then turning that into seats.
“Our strategy is seats, not votes. Theirs is votes, not seats,” said the party source, suggesting Farage’s divisiveness might backfire under a first past the post system where people typically vote against the party they disklike the most.
“The next election won’t be about who is saying the meanest things.”
‘Don’t underestimate us’
There is broad support within the party behind that strategy. Cllr Cashman said a greater use of social media could help attract a younger demographic, along with putting forward “really fundamental, powerful liberal ideas” on issues such as housing.
But he said Davey is “never going to do the controversial things Farage does”.
“The way we reach people, the traditional campaigning, is what makes us strong. Just because we are not always on the airwaves, do not underestimate us.”
Image: Reform UK leader Nigel Farage. Pic: PA
For Liberal Democrat peer and pollster Dr Mark Pack, there are reasons to be confident. On Friday, the party won a local council by-election in Camden, north London – “Sir Keir Starmer’s backyard” – with a swing from Labour to the Lib Dems of 19%.
It is these statistics that the party is far more focused on than national vote share – with Labour’s misfortunes opening an opportunity to strategically target areas where voters are more likely to switch.
“One of the lessons we have learned from the past is that riding high in opinion polls doesn’t translate into seats.
“We are really focused on winning seats with the system in front of us. There is a route to success by concentrating on and expanding on what we have been good at.”
Deputy Prime Minister Angela Rayner should face an ethics inquiry over her tax affairs, the Conservatives have said.
It comes after The Daily Telegraph claimed Ms Rayner, who is also housing secretary, avoided £40,000 in stamp duty on a second home in East Sussex by removing her name from the deeds of another property in Greater Manchester.
Stamp duty is a tax paid in England and Northern Ireland when someone buys a property over a certain price.
The newspaper also claimed Ms Rayner previously suggested the Greater Manchester home remained her primary residence, saving around £2,000 in council tax on her grace and favour home in central London.
Conservative chairman Kevin Hollinrake has written to the independent adviser on ministerial standards, Sir Laurie Magnus, requesting he investigate whether Ms Rayner broke ministerial rules.
In a letter to Sir Laurie, Mr Hollinrake described Ms Rayner’s arrangements as “hypocritical tax avoidance, by a minister who supports higher taxes on family homes, high-value homes and second homes”.
As housing secretary, Ms Rayner is responsible for overseeing council tax and housing policy.
Mr Hollinrake said the statements she had given on her residency were “contradictory”, but conceded she had broken no laws.
A spokesperson for Ms Rayner has said she “paid the correct duty” on the purchase “entirely properly” – and “any suggestion otherwise is entirely without basis”.
A Cabinet Office spokesman added that Ms Rayner “has followed advice on the allocation of her official residence at all times”.
Reform UK’s deputy leader has defended a ban on a local newspaper handed down by a council leader in a free speech row.
Nottinghamshire County Council leader Mick Barton banned its Reform councillors, who hold 41 of 66 seats, from speaking to journalists from the Nottingham Post, its digital site Nottinghamshire Live and its local democracy reporters on Tuesday.
This came after the newspaper published an article reporting on two Reform councillors allegedly saying they could face suspension if they did not back Mr Barton’s preferred structure for the reorganisation of the council.
Richard Tice, Reform’s deputy leader, has defended the ban, telling Sky News’ presenter Jonathan Samuels that Nottinghamshire Live “distorts and completely acts in an irresponsible way” and therefore councillors were “entitled to say ‘we’re going to talk to other parts of the media, not yourselves'”.
When challenged that this was going against the principle of democracy, Reform UK’s deputy leader replied: “That’s the whole point of a democracy. You pick and choose who you speak to, and sometimes you speak to friends, sometimes you don’t.
“But it is equally that a media organisation does have a responsibility also to present some things in a sensible way, presenting both sides of a debate or an argument. And that was the issue.”
Natalie Fahy, senior editor at Nottinghamshire Live, told Sky News she was “absolutely gobsmacked” by Mr Tice’s comments, as he “knows absolutely nothing about what the Nottingham Post publishes day in day out”.
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She said: “As a newspaper regulated by IPSO (Independent Press Standards Organisation), we are actually allowed to be biased if we want to be, but we try to maintain an overall balance on our coverage (…) We’ve not distorted any facts whatsoever.”
Image: Mr Tice said he wants to be held to account by people “who are not completely distorted and biased”
Mr Tice was asked whether he only wanted to be held to account by people that he likes and agrees with. He replied: “I want to be held to account by people who are going to be rational, sensible and not completely distorted and biased.”
“That’s not a democratic society, that’s not free press. Sometimes there is going to be negative stuff, and sometimes we will be going to have to criticise stuff. It’s very dangerous what he (Mr Tice) said – you can’t just have a positive, unquestioning press,” Ms Fahy warned.
She added that the Nottingham Post was not an anti-Reform publication and that its journalists appreciate that many of their readers vote for Reform. “We just want to find out on behalf of our readers what they voted for,” Ms Fahy said.
‘Rehearsal for Nigel Farage’s government’
Ms Fahy, who alerted Mr Tice to the ban before he spoke to Sky News on Friday, urged Nigel Farage to get involved.
“This is a rehearsal for Nigel Farage’s government – he needs to step in and say that this is not acceptable behaviour if he wants to be taken seriously,” the senior editor warned.
But Mr Tice indicated that Mr Farage would not wade into the row, saying: “It’s a local row and I’m sure they’ll sort it out.”
The ban might not end with the Nottingham Post, as Mr Barton, the Nottinghamshire County Council leader, warned his party would also “not be engaging with any other media outlet we consider to be consistently misrepresenting our politics, actions, or intentions”.
Image: Nigel Farage
As part of the ban, the authority will also stop sending press releases to the outlet and won’t invite them to council events, although it cannot prevent them from attending public meetings.
Ms Fahy published an opinion piece after the ban was announced, telling readers: “Reform UK makes huge noises about respecting free speech, transparency, honesty and being straight-talking. This boycott flies in the face of all of that. When the press is not welcome, you know democracy itself is in danger.
“If we’re heading for a Reform government, you’ll see this echoed on the national stage. And maybe at some point, people will look back and wonder where it all started. If we don’t fight back against this authoritarian edict, we’re heading down a very dark and dangerous path for everyone in this country.
“Grow up Mick Barton, and start accepting a free press is there to hold you and your councillors to account. You’ve got my number and I am waiting for your call.”
‘Not just press being shut out’
The leader of the opposition at Nottinghamshire County Council, Conservative councillor Sam Smith, said on X: “The free press play a key role in keeping residents informed of actions being taken by decision makers and in return the press express the views of residents to the politicians and public in publishing balanced articles.
“As a leader of the county council, I welcomed that scrutiny. Sometimes it was tough reading, but it helped ensure my team and I were always focused on delivering on the priorities of local residents.
“It’s not just the press Reform are shutting out in Nottinghamshire. It’s the voice and views of residents.”
Mr Barton said the decision had not been made “lightly”, adding: “It is not about silencing journalism, it is about upholding the principle that freedom of speech must be paired with responsibility and honesty.”