Privacy-centric cryptocurrency is on the rise, most prominently ZCASH, DASH and Monero (XMR). Most misconceptions of these currencies are revolving around the fact, that anonymity is bad - and thus can be used for illegal or hidden activity.
Monero (XMR) is not only a currency for the "Dark Web", as mainstream media Motherboard (Vice) wants us to believe.
Reddit user Alex from localmonero outlined in a reddit post on XMRtrader, why Monero is more than a "currency for criminals", as it is often dubbed.
Here is a repost of the main points alex makes:
- You are traveling through parts of a country with a medium to high violent crime rate. You need to use some of your Bitcoin to pay for something. If every person you transact with knows exactly how much money you have, this is a threat to your personal physical safety.
- You are a business that receives a payment from a supplier. That supplier will be able to see how much money your business has, and therefore can guess at how price sensitive you are in future negotiations. They can see every single other payment you’ve ever received to that Bitcoin address, and therefore determine what other suppliers you are dealing with and how much you are paying those suppliers. They may be able to roughly determine how many customers you have and how much you charge your customers. This is commercially sensitive information that damages your negotiating position enough to cause you relative financial loss.
- You are a private citizen paying for online goods and services. You are aware that it is common practice for companies to attempt to use ‘price discrimination’ algorithms to attempt to determine the highest prices they can offer future services to you at, and you would prefer they do not have the information advantage of knowing how much you spend and where you spend it.
- You sell cupcakes and receive Bitcoin as payment. It turns out that someone who owned that Bitcoin before you was involved in criminal activity. Now you are worried that you have become a suspect in a criminal case, because the movement of funds to you is a matter of public record. You are also worried that certain Bitcoins that you thought you owned will be considered ‘tainted’ and that others will refuse to accept them as payment.
Please post in the comments if you have other use-cases and examples!
Both transparency and anonymity have their place in society. When talking about use of public funds, transparency is important. When discussing buyer rights anonymity is important. I think you have a great article here -- you can follow it up with what times transparency is needed. Of course, these two are antithetical to one another. If you can make it dark, then it means that the transparent record isn't perfect. But, that I think reveals more about how society thinks -- these two opposites need to exist.
Very good points, thanks for the comment. If you have any other readings, please post here in the comment section. I would very much want to make the privacy discussion a bigger topic, as with current regulations and outlooks in US/Asia/EU we are definitely going into the wrong direction. Anonymous currencies in this context are very much needed.