The Battle for Financial Privacy – Why PriFi is a Win for Investors

“The future is already here – it’s just not very evenly distributed.“ – William Gibson. 

The quote is sobering in a number of ways. 

– Advertisement –

Take blockchain technology as an example. 

On one hand it can be used to liberate those who’ve never had access to banking, have never been able to build meaningful wealth, or partake in the financial systems we have today. But on the other hand it can be used by regulatory bodies and corporations to peer into our daily financial lives, control our ability to build wealth, or restrict our financial transactions with ease.

The capability for uplifting potential and crushing control is there in the technology itself, it simply depends on how it’s used, and the agenda of those who control it. Which is why, as we progress into the dawn of a new Web 3.0 and metaverse future, we want to be very mindful that we integrate private finance (PriFi) into the foundation of the technology itself.

Clarifying Misconceptions About Blockchain Privacy

PriFi is a combination of the words privacy and finance, similar in nature to its sister term, decentralized finance (DeFi). But contrary to common belief, privacy and blockchain technology do not go hand-in-hand. It is not a given, unlike you may have been led to believe.

Blockchain technology used in DeFi isn’t private. Sending Bitcoin from one wallet to another is not private. Nor are buying NFTs with Ethereum or Solana. 

In fact, aside from PriFi blockchains like Haven or Monero, anyone can see any transaction on every blockchain. Wallet details, time details, and transaction details are all clearly visible. And as many exchanges or wallet addresses are controlled by centralized organizations, finding out personal information behind an address is but a short request away by a government, or a quick sale away by a centralized exchange.

Right now, that’s worrisome but not a dire situation…yet.

The situation becomes dire and irreversible when regulatory bodies and companies find opportunities to exploit their agendas with blockchain technology. 

When they make moves to coerce, pressure, or simply exchange your private financial data. Or, as government based stable coins emerge, when regulatory bodies have direct and complete access to all of your financial data, and can restrict or control your digital spending with ease, it is at this point that it will be too late.

And herein lies the problem. 

We’re progressing forward with blockchain technology with little consideration to privacy. Thankfully there’s a solution: PriFi. 

Let’s explore why privacy in blockchain is a big concern, and how PriFi solves this challenge today.

Regulatory Overreach: A Huge Concern

Let’s get something out of the way first: regulatory bodies around the world are full of people just like us doing their absolute best with incomplete knowledge. Everyone is looking out for their own self interest, ensuring that they do the best given the circumstances. 

Oftentimes however, regulatory bodies act in their own best interest, the people running them acting in theirs, above the interests of the citizens they are supposed to be looking out for. Overstepping boundaries, if convenient, possible, and in support of the regulatory bodies own interest can be done, then more often than not it is the path taken. 

An example would be the rules and regulations after 9/11, or the overreaching rules of our current pandemic situation.

At other times regulatory overreach is a little more to the point. 

Take for example, China’s implementation of the world’s first central bank backed digital currency (CBDC), the Digital Yuan. A pilot released in January earlier this year allows the party to have complete insight and control over the financial lives of those who use it.

Transactions can be seen. Wallets can be locked. Tokens that are sitting for time periods deemed “too long” can be burned. 

Who you send your digital Yuan to and what you buy can and will be used against your social credit score – which could give you better rates if you follow the rules, and lock you out of your ability to buy a house if you don’t. 

Unfortunately in this case, the immutability of the blockchain makes this scenario worse, for your transactions from today can never be deleted or altered in the future. What you do now, could be used against you decades in the future.

The revelations of Edward Snowden—who discovered and revealed the worst mass-surveillance scandal in American history— show that regulatory bodies actively overstep the boundaries of privacy, and even spy on their own citizens.

While these revelations sparked a conversation that loosely continues today, in the blockchain space, most have not even considered the downside of lack of privacy – which is why PriFi (private finance) is so important.

Corporations will continue to exploit your privacy for profit

Corporations regularly use and trade your data, monetizing it and selling it off to the highest bidder, or otherwise using it to enhance their own profits. 

We’ve seen Facebook giving personal data of millions of its users to the British consulting firm Cambridge Analytica via an application – which then allowed them to potentially influence elections. 

Data is regularly traded, shared, or exploited to allow algorithms to improve, to drive advertising to products you have never thought about, or to keep you triggered in your echo chamber – meanwhile driving large profits for the companies that use them.

The reality is that when all of this information finds its way to an immutable blockchain, it will be there for anyone to see and exploit forever.

If future behaviour can be accurately estimated from past behaviour, then we can speculate as to what might happen after widespread adoption of blockchain, if we do not have privacy and PriFi as a main focus:

• You will be targeted without your explicit consent. Not just behavioural targeting as is standard today, but targeting based on your actual financial data and interactions on the blockchain. 
• Where you’ve spent your cryptocurrency, what wallets you’ve sent it to, what dApps you interact with, can all be linked with your phone’s unique identifier, your computer, and may be cross referenced with other sites you use – giving companies, regulatory bodies, and others wonderful insight into who you are and how you behave.
• You will not have a choice in how that blockchain data is extracted or used as it is there for anyone to see or tap into.

This is the blockchain world we’re progressing forward into. Including PriFi in the conversation provides an alternative. An alternative that involves personal choice—the choice of when and with whom you share your information with.

And that brings us to our final point:

Equal and transparent access means access for everyone (good or bad)

To think that your information is limited to the overreach of regulatory bodies, or the profit seeking motives of corporations is to miss the point. The blockchain is open to all, for an indefinite period of time. 

All can see your financial transactions, forever.

Just as it is not uncommon today for nefarious actors (scam artists, con artists, hackers etc.) to misrepresent themselves on social networks or steal your data, so too will this be common in our blockchain future.

What if these bad actors had access to better information? Financial information?

Blockchain transparency means everyone can see into the blockchain and watch your financial life unfold. It means hackers, doxxers, scammers and thieves will enjoy the same access to transparent, public blockchains as regulatory bodies and corporations alike.

That means they’ll be able to tell where the funds are flowing and determine all manner of personal information about you. A simple step, hack, or social engineering trick away will unlock your personal identity. 

Yes, the very same KYC identity that you had to provide to trade, use that app, or recover your password.

This could make you an easy target of nefarious activities in the future. PriFi not only protects your financial data from overreaching regulatory and corporate eyes, but also from the growing complexities of online thiefs or hackers.

Outtro & Summary:

There is a new world on the horizon. 

One where privacy is mitigated by technology and where regulatory bodies and corporations peer into all we do. The adoption of the blockchain will only accelerate this development, making information permanent on the decentralized applications and technology that we use. 

But there is a better future in our grasp. A solution that allows you (the user of Web 3.0, the metaverse, and blockchain dApps to name a few) to control what information is being released when and to whom.

Just as the Brave browser protects you from advertising trackers, so too does PriFi protect you from financial tracking on the blockchain. 

PriFi is the only option that’s arisen to counteract this groundswell of erosion to our right to financial privacy. It is the only option that allows you to choose who can have access to your financial data on the blockchain and when. And it is an option that exists right now, as you read this article.

PriFi protocols like Haven, Monero, and Oxen continue to innovate private financial solutions on the blockchain and provide the insight that you need to protect your financial information in this decentralized world. 

Understanding how to protect yourself is going to be critical as the future unfolds. Will you remain at the mercy of regulatory bodies, companies, and nefarious actors – hoping that nothing bad happens on the blockchain? 

Or will you think about how private finance, a PriFi future can help you safeguard your blockchain future?

Rarecommons

Rarecommons fell down the rabbit hole of blockchain technology in 2017, quickly realizing that the privacy aspects of the technology are still in its infancy. After looking into available alternatives, Rarecommons chose to support the Haven Protocol project and community, to help its Monero-based private stablecoin ecosystem develop and reach a broader audience. Convinced that innovations like Haven Protocol help us all to see what is possible and set the stage for a brighter future, Rarecommons helps push the Haven technology to new heights. Take a look and join the community by going here: https://havenprotocol.org/