The Fight For Your Crypto Has Started, Here’s Why It Matters

Privacy.

You may not give it much thought, until it’s gone.

We’re living in a time of technological revolution. It is happening on the roadway with the advent of autonomous vehicles. It is happening in the home with remote learning and communications. It is happening in the financial markets with blockchain.

Decentralization is a key component to cryptocurrency, with the potential to transform economies in countless ways. It is a mechanism that allows a project to perform according to its design without interference from regulatory agencies. Centralization, on the other hand, has always been the norm, and with this comes the tangible reality that a few powerful forces have too much control over who is allowed to participate in financial markets. 

As a result, we find ourselves in a challenging position. One in which technology has improved the decentralization of data as a whole, but that gives regulatory powers unfettered access, and eventually control, over your finances. 

The fight for your cryptocurrency privacy has started. Here’s why it matters more than ever.

When Trust Is Lost: The Nature Of Trustless Immutability

For cryptocurrency to work effectively, it needs to allow everyone to transact with efficiency, speed, and at a low fee. For cryptocurrency to thrive, you need to be able to replace the idea of trusting the brand of a company like your bank, with something entirely new. “Trustless”, or the ability to not need to trust the other party you’re transacting with, is the new “trust”.

One of the brilliant aspects of the Bitcoin white paper was the realization that it could resolve the issue in financial transactions that plagued us the most: needing banks and bankers, regulators, and lenders to manage our transactions. While they had effectively helped us grow over previous decades, they had lost our trust in recent years.

A perfect example of this, and the catalyst for financial innovation, was the 2008 market crash. With a domino effect felt around the world, a pseudo anonymous developer named Satoshi Nakomoto proposed a solution. Blockchain, and the cryptocurrency Bitcoin that ran on it, was the answer.

Bitcoin’s creator, Satoshi, designed a solution: removing the middle-man entirely. This was not for the sake of restoring trust, but to retire it completely.

The system wouldn’t require that you use a 3rd party to transact between another. There would be no need for 3rd parties at all, as the trust would be built directly into the system. 

The cryptocurrency built on blockchain. It wouldn’t deny you service because of your worldview and it couldn’t single you out because a political leader targeted you as a dissident. In fact, you wouldn’t be singled out at all, because the network running the blockchain wouldn’t know, or care, who you are.

Or so seemed the premise of the concept as a whole. 

The Fight For Your Crypto Began Ages Ago, You Just Didn’t Know It

The idea that a peer-to-peer electronic payment system could operate without you being approved based on your identity, status, or beliefs seemed like the answer to broken trust in financial institutions, and a necessary technology for a new economy.

At first, there was little concern from regulators, but the illicit use of Bitcoin on the dark web placed the idea of anonymity on their radar, and from that time forward, it has been used as leverage to paint cryptocurrencies in a bad light.

Although it has been repeatedly shown that less than 3% of blockchain activity involves illicit activity like money-laundering, payments for illegal services, drugs, or weapons, because blockchain made it possible for you to transact without being exposed to rigorous background checks, born was the idea that the purpose of using cryptocurrencies was evading detection.

Unfortunately this idea stuck amongst regulators, and fuelled their drive to obtain more and more information about the people who transact on the network.

And this is where the fight began, unbeknownst to most blockchain users.

Privacy And Trust In The System

The idea of privacy has been challenged aggressively with the implementation of KYC/AML rules, or “know your customer, anti-money-laundering”. Once again in this system, you’re forced to rely on trust of those in power, those maintaining the system as a whole.

You have to trust a centralized exchange, hoping they will protect your data with the highest level of security. You have to hope and trust that for whatever reason, this exchange, the banks, or crypto platforms won’t freeze your account. That a regulatory body or the financial institution themselves won’t use arbitrary reasons to freeze your account either, or perhaps succumb to regional unrest or government pressure to do so, based on scenarios you weren’t even aware of. You have to trust those that manage and maintain the system, rather than trust the system itself.

The unfortunate reality is that this trust is not often upheld or maintained, as financial institutions, regulatory agencies, and corporations seek ever new ways to overcome your right to privacy and view your data.

In the future it seems, your only option will be to lose your ability to transact freely, or to use smart systems like PriFi to maintain your privacy.

Privacy, Now More Than Ever

Privacy is the right of every human being. We aren’t guilty by default, needing to prove we  obtained our money from a credible source, that our transaction is going to another credible citizen, or that we shouldn’t be financially restricted because of some arbitrary reason.

Quite the opposite actually. We are innocent until proven guilty. And yet this doesn’t seem to be the nature of how our financial future is developing.

The reality is that assuming you’re guilty by default benefits powerful organizations, regulatory agencies, and technology companies far too much for them to turn down the opportunity to collect and store your financial data.

Web 3.0 will allow these same companies, and the regulatory bodies that hold jurisdiction over them, to access your data on the blockchain – an immutable source that holds all of your transactions that have ever taken place.

It isn’t just unsettling, it is maddening that the information of your transacting with friends, family, and businesses whom you want to support, is accessible by entities who know how to access it. While seeming to be of little concern now, because your data is forever stored on the blockchain, it holds the potential to be used against you, in any capacity, in the future. 

And because that is possible, it threatens your ability to maintain financial freedom in the future.

Defining Our Web 3.0 Future

Web 3.0 is coming quickly, and there is a rush to define what it looks like. 

The internet we have all become familiar with allows us to connect to economies and relationships across the globe. With Web 3.0, there are contrasting visions of what the future of finance will look like. Dramatic leaps forward in bandwidth and technological upgrades, virtual reality interoperability, and thousands of real-time points of data can help or hinder the freedoms we hold dear.

The version we hope for could mean an internet with the same decentralization and freedom to transact that Satoshi envisioned with blockchain. The ability to interconnect the unbanked, to fund and support projects that help push our world forward, or to transact across the globe without the need to trust a third party with our data.

It is equally possible that Web 3.0 goes the other route. Where everything becomes about the collection of data. Where blockchain is used to track every move with a global digital ID, where finances are controlled through centralized banking digital currencies (CBDCs), and where restrictions can be made at the press of a button.

If blockchain technology continues to be used to join your financial profile with your public behavior, it is easy to imagine how your human rights could be violated without any clear or direct recourse.

This is why private finance (PriFi) should be a critical focal point of our blockchain development.

PriFi Is The Smart Answer

The more you understand about privacy, the more you realize it is the defining, potential point of failure in our global economy. We see the world moving in the direction where your online interactions could have a direct impact on your ability to participate in this new economy.

PriFi, or private finance, gives you power in return. It is the ability to enjoy the benefits of blockchain technology without the burdens of unwarranted, exposed data. Protocols created by Haven, Monero, and Oxen, for example, are designed to maintain the integrity of the blockchain while removing the inherent weakness the blockchain presents: unintentional transparency.

While the public, immutable nature of blockchain is a positive for accountability and verifiable accuracy in transactions, it comes at the cost of forensic data exposure to users. With PriFi, this happens no more.

Privacy in finance is not just a possible solution, it is an available solution that is here, now. If you research the topic, with solutions by protocols like Haven, you will see that when privacy is focused as the top priority, it opens the door to continued improvements in blockchain as a whole. 

While the path is being paved today by PriFi leaders like Haven and protocols like Monero, one thing is for certain: privacy will be the one pivotal feature worth fighting for. It will make the difference between the Web 3.0 world we want, or the Web 3.0 future we fear. 

I say let’s move in the better direction.

Harlequin

Once Harlequin discovered crypto in 2014, the question ‘what is money’ took hold and Harlequin became fascinated by the possibilities of decentralizing trust. Working in the tech industry, it was clear to Harlequin that we all have very little privacy in the digital world. Harlequin wanted to change this. Upon discovering Haven, these two passions collided and the concept of a private stablecoin ecosystem immediately made sense. If you’re interested in joining the conversation and learning more about PriFi stablecoins, you can learn more by going here: https://havenprotocol.org/

For publishing articles on our website get in touch with us over email or one of the accounts mentioned below.

Latest posts by Guest Author (see all)