Bitcoin vs Banking [infographic]
Bitcoin is unique in its approach to privacy. Uneducated observers lament its advantages for illicit activities, but the blockchain keeps track of every transaction and who has how much coin. The revolutionary part of this system is the fact that one must divulge his or her Bitcoin address to lose anonymity, which leaves us with a new kind of privacy–conditional privacy.
Most people who support privacy rights are worried about corporations and governments, and there are plenty reasons why you might not want to reveal your Bitcoin address. Suppose you were or wanted to support a gay rights group in Russia, or an Occupy movement in the United States. Maybe you want to register a political website, in a country where that’s not allowed. Drugs might take the spotlight in Western countries, but anonymity has real uses in other parts of the world.
We have no reason to spy upon ordinary citizens, but anonymity has a different meaning when it comes to people in power. Few will fight for the privacy rights of stock exchanges, banks or governments, as that has failed throughout history. If we want to avoid bank collapses, insider trading, and inhumane secret programs, we have to know what they’re doing with our money.
Once you realize that Bitcoin’s psuedo-anonymity accomplishes exactly that, it’s easy to see why many institutions don’t like cryptocurrency: it encourages a society in which privacy is a privilege, reserved for those we don’t trust with our lives and future. The arrival of exchanges like CoinFloor–which are fully auditable by the public via the blockchain–puts many traditional exchanges in a shaky position. Shouldn’t we wonder why they’re not as forthcoming?
The possibilities for reducing economic corruption are just the tip of the iceberg. Now imagine we paid our taxes via Bitcoin. True, mixers to anonymize a person’s bitcoins exist; we can detect if such a system were used, however, and that politician will have to answer some questions. We could conceivably construct a program to trace how all of our money were used, which would shed welcome light on black budgets, how campaigns are financed, and the entire lobbying industry.
Like most ideas spawned by crypto, this is a fairly radical suggestion, and far from becoming a reality. As people start to understand crypto, however, the possibility of a society that runs this way will become harder to ignore. Some traditional institutions won’t enjoy the transition, but we’ve got no reason to avoid it–those in positions of power should have nothing to hide.
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