Bitcoin has long been considered an anonymous coin. In many ways, the anonymity of money is a useful service. We can not, however, entirely exclude the criminal environment. It is impossible to think only that politically persecuted journalists or discriminated individuals would need anonymity. In fact, the first who adopted the bitcoin to hide their identity were offenders.
Then we have to come to a compromise solution with the authorities. Let us agree that there are laws that protect the social status and understand that they must be imposed. Whether we agree or disagree, whether we are well or not, the police will anyway begin to catch up with the blockchain technology. Companies in the private space also contribute to efforts to spill the ecosystem of the weeds.
Bitcoin is not at all a fiscal paradise. However, it leaves the idea of ??having control over your own money. To the most considerable extent, this remains true. The Bitcoin loophole is still a costly process, and no public institution will start investigating and tracking blockchain transactions at random without firm evidence or suspicion.
Larger companies have helped police and are trying to identify suspects who use bitcoin. As a result, better offenders migrate to other cryptomonads.
Bitcoin is the most popular cryptocurrency. For a long time, it managed to get rid of the criminals’ stigma. Still, it helped hackers to make ransomware attacks – blackmail schemes, such as the WannaCry attack. Hackers “take hostage” all the contents of the computer, block the user from accessing the data and ask for money for unlocking. Offenders use bitcoin to make redemption easier without having to show their identity. Bitcoin has also been associated in the past with the sale of drugs, money laundering, and human trafficking.
Companies and governors, after bitcoin
Even if bitcoin users can keep their secret identity, they can not disclose any information that might be useful to the authorities. Each bitcoin transaction is recorded on the blockchain, a publicly accessible register of all purchases made using cryptomonads. The blockchain is “a handy source of truth,” according to Jonathan Levin, co-founder of Chainalysis. The Chainalysis is a software that analyzes blockchain data and can help authorities link information.
Chainalysis combines analysis with other publicly available information to identify users. Practically, they follow public addresses, the alphanumeric string used on the blockchain, and track where the money goes. It is a technique that can be used to identify whether bitcoin-fiated exchanges come from gambling winnings, for example.
The tools that use Chainalysis are crucial to the authorities. From 2015 until now, the company has been accommodating in investigating the US Internal Revenue Service (IRS), the Federal Investigation Office (FBI), the Security and Exchanges Commission (SEC), Europol and others. In most cases, according to Levin, the investigators turned to Chainalysis when they already had some clues, such as a bitcoin address found in the confiscated computer of the suspect. If they can prove that a suspect is using a bitter exchange, then they can use a court order to get more information from that exchange.
The government is also interested in tracking the flow of money on the blockchain. They are interested in knowing if traders are accepting bitcoin, report it and pay the related fees. See all about it here.
Moreover, cryptomonads exchanges have become clients of analytical firms. In many places, it is not clear to what extent the legally required transfers are to know their customers and make sure they do not do money laundering. However, it is difficult for exchanges to open accounts with banks if they do not prove that they understand who they are.
Anonymity, a complicated but possible process
However, the authorities are not precisely rooted. There are all kinds of methods by which the investigators are fogged. The best known are mixing services, which take the bitchers from several users and combine them before sending them to different addresses at different times. More importantly, some newer cryptomonads, especially zcash and monero, are made to hide the information that Chainalysis, BlockSeer, and other companies use to track the money. Infractors with better knowledge of technology have already gone to these systems that can not be tracked. Last month, Chainalysis confirmed that WannaCry hackers managed to change part of the money they earned in bitcoin on monero before the service they used could mark them as criminal.
The scalability for decentralized systems is much more difficult than for regular web applications. On the other hand, for each company goes through scalability issues at times. All of them need to accommodate more users from one point to the next. It is, therefore, a familiar and comfortable to understand the problem. Instead, the anonymity is nuanced and comes with awkward questions. What data should be private? Why and who does not have to see them? Looking for the benefits that blockchain can bring to financial systems – immutability, resistance to censorship and innovation – what are we losing? Do we have to get used to living and trading without the trades to enjoy these benefits? However, there is a more severe problem. If all we do is build a coin easier to control? We’re talking about the money-war. Bitcoin wants to create a society without money in the future. We’re working on spreading the bitcoin.
If in reality, we are building an infrastructure for future financial control? It’s a thought as a cold shower. We are talking about the idea that you need to get to be your own bank and have power over finance. In the meantime, we advocate the use of a public register that is easy to follow. If we rebuild the financial markets, then we should build a future that gives them the power to individuals, not to people interested outside. Who needs anonymity on blockchain? Agree that the government oversees the financial market, and I can understand that. In many places around the world, we still have the luxury of trusting the government and social institutions. Perhaps you do not need a financial system that is immune to censorship by the government. I assure you, however, that you have a badge of one who protects you from identity theft, indiscretions, and visionary neighbors. In the blockchain space, this day-to-day anonymity struggles to create exciting applications.
Read additional info: https://en.wikipedia.org/wiki/Blockchain
Let’s think of blockchain medical applications that can not be manipulated or put on a public blockchain without endangering patient confidentiality. Identity, management of accreditations, free sales of digital goods and a significant part of traditional finances that cannot operate safely on an open register. Here I am thinking of many types of transactions and loans. We have to discuss the different approaches to maintaining anonymity today, about the applications that need it and about the future of anonymity on the blockchain.
There have been significant developments and significant technology changes in the last century. Moreover, the birth of bitcoin and cryptomonads are among them. People do not have to be reluctant to such changes. Instead, learn about them and to adopt them in daily life for the benefits they bring. What do you think? Is it beneficial to invest in bitcoin and blockchain technology?
