Why ‘Surveillance Coin’ is gaining popularity
If you thought your cryptocurrency transactions were anonymous or private, you were wrong.
In 1948 George Orwell penned a novel about a dystopian future. A future with continuous war, doublespeak, propaganda, and omnipresent government surveillance.
The story takes place 36 years into an imagined future — in the year 1984.
Nineteen Eighty-Four (1984)
In its own right, nineteen eighty-four is a literary classic. This novel introduced the public (at large) to the concept of pre-crime, with terms like thoughtcrime and thought police.
The book also introduced us to a dystopian future that included totalitarianism, mass surveillance, and a multitude of examples of the violations of personal freedoms and expression.
Any sound that Winston made, above the level of a very low whisper, would be picked up by the telescreen; moreover, so long as he remained within the field of vision which the metal plaque commanded, he could be seen as well as heard. There was, of course, no way of knowing whether you were being watched at any given moment. How often, or on what system, the Thought Police plugged in on any individual wire was guesswork.
— Part I, Chapter 1, Nineteen Eighty-Four
Sadly, it would seem we already live in an advanced version of an Orwellian future, complete with telescreens, which could easily be our mobile phones.
It has become an interesting turn of events where many of the themes and concepts first introduced in Nineteen Eighty-Four are now part of our daily lives.
Life in 2021
Almost 75 years after George Orwell penned Nineteen Eighty-Four, we seem to be living in an increasingly dystopian world, more similar to the novel than we could have imagined.
There are many ways in which our present reality can be compared to an Orwellian novel, which would be a novel in itself. However, for this article, let’s talk about the Orwellian version of mass surveillance.
Sadly, blockchain technology fits nicely into an Orwellian future due to its ability to offer omnipresent surveillance of all cryptocurrency transactions.
Welcome to Blockchain Analytics
Blockchain analysis is the process of analyzing the transactions on the blockchain as well as third-party data to determine the actors in a transaction.
This is easier than most people think.
To start with, the blockchain is a public ledger. Transactions posted on the blockchain reveal the receiving address, the sending address and the value of the transaction.
The transaction value, receiving address & sending address are all public.
This is true for Bitcoin and 99.9% of all cryptocurrencies.
The Blockchain is a Public & Transparent Ledger
It doesn’t matter if you use Bitcoin or any other cryptocurrency — all transactions on the blockchain are public and transparent.
And there are many Blockchain Intelligence organizations that work with law enforcement to de-anonymize blockchain transactions to determine the parties to a transaction.
The blockchain may be the greatest technological innovation since the internet yet, it also allows for the mass surveillance of financial transactions like we have never before seen.
99.9% of Cryptos are Surveillance Coins
With the increasing sophistication of blockchain analytics combined with the KYC requirements for all major exchanges, it is no longer possible to transact in Bitcoin or almost any cryptocurrency privately or anonymously.
This is the reason for the increase in the use and popularity of the term, surveillance coin. People are coming to realize that Bitcoin and cryptocurrencies are not private or anonymous.
Bitcoin was once marketed as the ‘Swiss bank in your pocket’. What they forgot to mention was all transactions are also public.
Big Brother is Watching
Orwell also introduced us to the term Big Brother - an organization or government that exercises close surveillance of its citizens. With KYC requirements and the utilization of blockchain analytics companies, all cryptocurrency transactions can be monitored and will be tracked, in an eerily Orwellian way.
Enter: Privacy Coins
There is a very small sector of the cryptocurrency market that does offer private and anonymous transactions and these are known as privacy coins.
The most well-known privacy coin is Monero.
What makes a privacy coin different from a ‘surveillance coin’ is the sender, receiver and value of the transactions are obfuscated before they are published on the blockchain — effectively making the transaction public but also anonymous and private.
There are currently about 30 different cryptocurrencies that offer private transactions but only two (that I am aware of) offer ONLY Private transactions - Monero and Pirate chain. The other privacy coins offer privacy as an option.
Privacy — It all started with the CypherPunks
Before Bitcoin, blockchain and Satoshi Nakamoto, there were the Cypherpunks.
The Cypherpunks began as a small group of individuals from the San Francisco bay area, most notably Eric Hughes, Timothy May and John Gilmore.
During the early 1990s, while the internet was still in its infancy these individuals came together to discuss the implications and future of privacy and anonymity in this new online world.
It was in 1993 when Eric Hughes wrote the Cypherpunk Manifesto which helped to solidify many of the ideas this group believed in.
In A Cypherpunk’s Manifesto, Eric Hughes states…
“Privacy in an open society requires anonymous transaction systems.
Until now, cash has been the primary system.
An anonymous transaction system is not a secret transaction system.
An anonymous system empowers individuals to reveal their identity when desired and only when desired; this is the essence of privacy. “
Unfortunately, when Team Satoshi built bitcoin, neither privacy nor anonymity were central to its architecture.
The Rise of Anonymity & Privacy
It’s strange how a novel written almost 75 years ago can so well describe the increasingly dystopian future we find ourselves in. A central theme in this novel is the erosion of privacy & anonymity and it’s something we already see happening with the recording of financial transactions on the blockchain.
For those looking for anonymity and privacy, there are privacy coins.
Although privacy coins currently represent less than 0.01% of the total number of coins on the market, it’s likely with the increase in awareness of surveillance coins and the increasing need for privacy, we will see an increase in the use, adoption, and development of privacy coins as well as the privacy ecosystems that support it.
For those astute crypto investors with an eye to see, this may become one of the fastest-growing (niche) sectors within crypto.
