When Companies Track Purchases, Bitcoin Privacy Is More Important Than Ever

It is vital to inform bitcoin users about best practices in sending and receiving bitcoin.

Below is an excerpt from Marty's Bet Issue #1260.

Note prepared for the Wannsee conference. (Source)

via Reuters

Attacks on transactional privacy are a poignant example of why bitcoin is so important. A global standards body, based in Geneva, approved last week the ability of payment processors to issue a merchant code to companies selling firearms to consumers. It is hoped that the merchant code will allow law enforcement agencies to track down criminals using those firearms to do crimes more effectively. However, one can be certain that a list like this could lead to further abuse by despots.

This type of surveillance is possible because of the fiat system, which has been in place for the past five decades. Because KYC/AML (know-your-customer/anti-money laundering), is injected into every financial layer that people interact with, it has made it impossible for the individual to escape the Eye of Sauron. This problem cannot be fixed from within. There is zero chance that governments or their corporate partners will wake up and decide they have a moral obligation to stop spying. There is only one way out. Build a new financial system that does not allow this kind of surveillance to be forced on the public. This is what Bitcoin offers.

Bitcoin's privacy guarantees are poor and most people get bitcoin from trusted third parties who engage in KYC/AML surveillance. These subpar privacy assurances and user behavior will change, however. People will become more knowledgeable about bitcoin as the tooling improves. It will be difficult for chain surveillance companies to identify end-users if there is a culture of no address reuse and coin control. As bitcoin adoption rises and people move their UTXOs to wallets they own because it is easier and more powerful, the circle economy of bitcoin transactions that never reach services instituting KYC/AML monitoring will grow significantly. This will only exacerbate the problems facing chain surveillance companies.

Imagine a world where merchants accept bitcoin from customers using BTCPay Servers that they control. At some point, the amount of transactions that can be made that are not tied to KYC/AML will reach a critical point. The type of labeling currently used by payment processors to attach to gun purchases will become impractical.

This is the future we need to work towards. It is therefore crucial to inform current and future bitcoin users about best practices for sending and receiving bitcoin. Although it is easy to track transactions on chain right now because people have linked their UTXOs with KYC'd services to track them, I believe that normalizing this type bitcoin usage will help to reduce the negative effects of KYC-linked use.

No matter what the powers that are try to convince you otherwise, financial privacy is not a bad thing. We have the power to create a future that allows financial privacy. Only action is required to make that future a reality. Get out there and teach others how to accept and send bitcoins using the right tools. Also, make sure to keep improving those tools to make them as accessible as possible to everyone.

By: Marty Bent
Title: When Companies Track Purchases, Bitcoin Privacy Is More Important Than Ever
Sourced From: bitcoinmagazine.com/business/companies-track-transactions-bitcoin-privacy-is-important
Published Date: Wed, 14 Sep 2022 07:00:00 GMT

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