Kostis Maninakis
Jul 27, 2017 · 1 min read

This is totally incorrect and a common fallacy being propagated by the media.

Many cryptocurrencies are not untraceable. Quite the contrary, they are even easier to trace than any Fiat currency. Since every single transaction that has ever happened in the blockchain is available for public viewing, tracing and examination forever this can potentially expose transactors more than ever before. Search the web with “bitcoin blockchain explorer” for some examples.

What blockchains provide is strong, although not full in all scenarios, anonymity. When a transaction is made, the sender and receiver are recorded as a scrambled string of characters, a hash value that has no direct ties to any specific person.

But the anonymity is partial, as I said, since one can trace back some public wallet address someone else has on his website for donations and see where he sent those funds later, if that’s another known public receiving address (e.g. of a store/service), etc.

And that’s really just one of the anonymity issues. Another one is that at some point, a cryptocurrency holder will have to exchange his cryptocoins to Fiat currency. At that point, anyone who has traced the money flow down to that address, has now a name and possibly a face to that, since all Fiat bank accounts have all the KYC credentials of the client. Cryptocurrency exchanges are swiftly becoming regulated for this exact reason.

There are innumerable cryptocurrencies out there but I’m commenting predominantly on the basis of bitcoin which is by far the one with the most trade volume.

Kostis Maninakis

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I enjoy writing about code, entrepreneurship, life and anything in between. https://maninak.github.io

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