Why is Anonymity not the Problem with Crypto Currencies?
Back in 2014, Bill Gates Praised Bitcoin as “Better Than Currency”
He said — “Bitcoin is better than currency in that you don’t have to be physically in the same place and, of course, for large transactions, currency can get pretty inconvenient”
Exactly on 27th of March, Bill Gates conduted a Reddit AMA session where when asked about his opinion on Crypto Currencies, he replied:
Image read — “The main feature of crypto currencies is their anonymity. I don’t think this is a good thing. The [government’s] ability to find money laundering and tax evasion and terrorist funding is a good thing. Right now crypto currencies are used for buying fentanyl and other drugs so it is a rare technology that has caused deaths in a fairly direct way. I think the speculative wave around ICOs and crypto currencies is super risky for those who go long.”
Here’s the link to the full reddit thread of discussion. After that, he was screwed badly on Twitter.
A moderator of the /r/bitcoin subreddit provided a more detailed response, pointing out that “the main feature of cryptocurrencies is their immutability and their ability to support trustless transactions,” rather than anonymity.
And it’s true, Anonymity is not the Problem with Crypto Currencies.
Blockchain based currencies (like Bitcoin and Ethereum) is a protocol to transfer values just like Email (SMTP) is a protocol to transfer information.
Email is a protocol (Simple Mail Transfer Protocol), yet we send emails as if they were letters. Are they letters or not? It’s just a bunch of ones and zeroes. Does this make it any less real than an actual letter?
Similarly, Bitcoin and Ethereum is a protocol, yet we send bitcoins as if it was money. Is it money or not? It is just a bunch of ones and zeroes. Does this make it any less real than actual physical money?
Bitcoin/Ethereum is a protocol. It’s just software, running on a set of rules that needs to be followed in order to participate in the network. They are money because that’s what the software makes it seem to be, but the truth of the matter is, it is just pure information.
When I transfer 2 ETH to a friend’s Ethereum Address, the transaction gets stored on blockchain:
- MyEtherAddress (0x…..): -2
- FriendEtherAddress (0x…..): +2
If I make another transaction of 5 ETH:
- MyEtherAddress (0x…..): -5
- FamilyEtherAddress (0x…..): +5
And the balance of my Ethereum account will be the difference between the sum total of ETH received and sent. It’s that simple.
It’s nothing more than pure information stored on different nodes (super computers) spread all over the world and backed by nothing physical.
The software you use makes it function like money the same way SMTP makes Emails function like letters, as a correspondence between people, with somewhat reliable certainty that the messages transmitted are secure and valid.
Two criminals can use SMTP Email protocol to exchange information anonymously without being notified. But that doesn’t mean the protocol has no value and simply reject it.
What we can do is build a program on top of protocol to track the activities. And that’s what services like Gmail and Yahoo Mail do. They are just an interactive user interface to manage emails on top of SMTP protocol which discourage spams and irrelevant emails. And even you can build your own software on top of SMTP Email Protocol.
Similarly, 2 criminals can use Ethereum to exchange values anonymously without being notified. But that doesn’t mean the protocol has no value and simply reject it.
What we can do is build a program on top of Ethereum protocol. And that’s what Government must do to minimize anonymous activites as well as maintain the privacy of individual participants which discourage frauds and crime. You, me and anyone can build programs (Smart Contract) on top of Ethereum Protocol.
Related read: Government of Canada exploring the potential of Ethereum Blockchain
*Omnilayer is nice venture which facilates custom digital assets and currencies on top of the bitcoin blockchain. However, Ethereum blockchain is most widely used for this purpose.
The real capabilities of Ethereum Blockchain based Smart Contract is far beyond our thinking. Following are some usecases:
- It can be used to securely conduct the nation wide Elections transparently leaving no chance to manipulate the results.
- It can be used to shift all the banking transactions on Blockchain which can be accessed by government, banks and account holder itself.
- It can be used to store the details of users.
- It can be used to Implementing Decentralized Autonomous Structure in a company, organisation or a non profit venture (We already applied this model in our crypto project, MoatFund).
- It can be used to tokenize the equity shares of companies on Blockchain.
This all means that the protocol will run with full transparency, complete accountability and complete immunity from any human interference. While the network lives the contracts will execute exactly the code they were created to execute, without any exception, forever.
Before we know it, the world will be using the Crypto protocols like we use Email today — as a basic utility for transferring information, but in this case, the information will have value.
We are building a crypto protocol (MoatFund) — to shift all major activities of Fund Managing Industry — managed by smart contracts protocol deployed on Ethereum Blockchain which is publicly accessible and that can govern the full ecosystem of fund managing functionalities. The protocol is not biased towards one group of users to benefit another.
And that’s how we are disrupting Fund Managing Industry.
Any Questions? Feel free to join our telegram group or discuss with us on our forum.
Want to Invest in MoatFund? Participate in the MoatUnit Offering at our website — https://moatfund.com
