Transparency versus anonymity has been a hotly contested debate in the cryptocurrency industry. The debate however, has mostly been framed by one side as a way to hide their activity from government and law enforcement. The other side has made the rebuttal that anonymity provides cover for illegal activities and terror financing; which they are certain we are all guilty of. The truth lies somewhere in the middle, and both sides raise some valid points.
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Since Edward Snowden stole top secret documents from the NSA in 2013, demands of increased transparency have become commonplace. According to intelligence officials, Snowden downloaded up to 1.5 million files. These files detailed everything from the government secretly collecting telephone records on millions of people, to collecting data on people via Facebook and Google, and much more. Although what he did was technically treason, his actions were certainly warranted given that the scope of such data collection clearly infringed on civilians fourth amendment rights.
After all of this transpired, and calls for increased transparency became more frequent, it's surprising that many people who are in cryptocurrency want to develop software that decreases transparency. Some of the same people who were part of the pitchfork carrying mob, demanding the government be more transparent, are now actively working on and promoting software that reduces transparency. This software could just as easily end up removing any hope we have at mutual transparency and a more open, honest society.
Ironically, without the cover of anonymity, Satoshi Nakamoto would have never been able to release Bitcoin without being persecuted by those who were threatened most by an alternative monetary system. But now that cryptocurrency has gained a solid foothold, and is clearly not going away, the most common reason for complete anonymity is to hide something you shouldn't be doing. Privacy on the other hand is a necessity, and as an ordinary individual there is no reason that your name needs to be publicly attached to your complete transaction history. If it were, anyone could know where you shop, your spending habits, and your typical schedule.
Wikileaks, an international non profit organization founded by Julian Assange, whose slogan is 'we open governments', has been fighting for increased transparency since 2006. Since it's founding, Wikileaks' anonymous sources have blown the top off of countless international scandals including many high profile instances that featured prominent political figures. You could say he was the first to create widespread awareness of just how much the government hides from the taxpayers who fund them. Mr Assange knows all too well how a morally bankrupt monetary and payment system can impact the lives of civilians - in 2010 his bank account was frozen and Mastercard refused to process transactions for his website. All because he was attempting to hold people accountable for their misdeeds.
If politically unstable governments started using anonymous digital currencies and were able to completely hide their financial records from any audit trail, there is no telling the level of corruption which could breed. Anonymous currencies will destroy any opportunity the people of these countries have at holding their government accountable through the transparency an open distributed ledger could offer. Ask yourself which is better, a chance at hiding your wealth from the people, or the certainty that everyone shares a mutual transparency with no backroom deals in government monetary systems. Since corrupt governments thrive on obfuscation and deceit, anonymous currency only stands to empower them. On the other hand, wouldn't it be nice to know what your representatives are doing with your tax money, the moment they do it?
We don't like to think about this, but what happens when our technology gets into the wrong hands? Sometimes we share technology with our allies to keep them safe, only to have it fall into the hands of people who want to use it to harm us. The same goes for anonymity enhancing blockchain features, in the wrong hands they could be used as a tool for warfare. For example, how encrypted messaging apps have allowed terrorists to covertly plot attacks. I'm sure the creators of these apps never thought their invention would be used to plot the murder of innocent civilians, nor did the inventor of cryptographic ciphers.
I'm not advocating against personal privacy, because it is a basic human right, and I really enjoy mine. However we need to think about what happens when increased privacy is used for nefarious purposes, and when does providing privacy enhancing services become obstruction of justice?