How To Protect Your Private Data Online

There are many situations when a user needs to make anonymous payments. Anonymity implies that it is impossible to associate a transaction or collateral data with a specific person.

Disadvantages of modern payment systems

Most modern fiat wallets, such as Qiwi in Russia or PayPay in the US, require the user to confirm his phone number and/or email address when creating an account. This is done partly for the convenience of the customer, so that he could restore his access to the wallet, and partly for control. At any moment, the law enforcement authorities can request the information about the sender and the recipient of any transaction from the platform owners, citing the anti-money laundering laws.

Many payment systems require registration and account verification, otherwise they strictly limit the functionality. For example, an anonymous Qiwi wallet can hold no more than 15 thousand rubles. In order to extend the limit, you will have to provide your ID data.

What is the solution?

Cryptocurrency can help maintain anonymity. It works on a blockchain technology without the control of centralized authority, and without data centers that store information about users. Anonymity is ensured by conducting transactions without being tied to identities, but simply between wallet addresses.

The wallet address works based on a pair of keys, public and private. The public key is needed to specify the address, and the address, in turn, is what users see when they want to transfer funds to you. The private key is a tool to ensure that the owner has access to his funds.

The advantages of using cryptocurrency compared to fiat money

• No control from the authorities. Blockchain networks do not depend on the government of any country, and do not require expensive infrastructure.

• Simplicity and accessibility. There is no need to create an account, register or verify your identity. It’s enough to install a wallet on your phone or computer and start operations right away.

• No restrictions. Age, gender or nationality of the user is absolutely not important. In addition, there are no limits on the amount of money held in the account, or on the size of the transactions.

• No intermediaries and taxes. It results in lowering the cost of transfers, increasing the speed of transaction, minimizing risk of errors, absence of human factor, transparency and decentralization.

• Fragmentation. The fact that cryptocurrencies can be fractionalized into tiniest parts opens additional opportunities for both ordinary users and companies.

Stablecoins are worth mentioning separately. They have all the advantages of cryptocurrencies, but are always worth exactly the same as some external asset. For example, the MCR cryptocurrency rate is equal to the Russian ruble exchange rate. T allows to use the convenient Russian currency completely anonymously, without providing any personal information.