Category Archives: General

Bitcoin: Anonymous Money… Sort of

2011/04/11

Filed Under : General

Bitcoin has been getting a lot of attention in the recent months.  And for good reason too.  The US government’s financial policies are putting the dollar on the brink of a precipitous decline.  Smart people are taking their money out of fiat currencies and buying tangible things such as gold and other commodities to prevent their wealth from getting swallowed up by runaway inflation.  In a world where a central authority corruptible authority who may not have your best interests at heart can manipulate the money supply, where can one turn?  Who can you trust?

Enter bitcoin and it’s advocates who, if you listen to them, make it sound like the second coming.  True, bitcoin does have a lot going for it.  A nation independent, anonymous, decentralized currency based on industry standard encryption and featuring commission-less transfers of any amount.  Sounds like the holy grail right?

Most things that sound to good to be true are, in fact, too good to be true and bitcoin is no different.  First off, while you can transfer bitcoins without knowing the name of the other party you do have their bitcoin address which, due to the nature of bitcoin, allows you to see EVERY transfer that address has been a part of since the dawn of bitcoin: January 3rd, 2009 at 18:15:05 GMT.  How’s that for a paper trail?  And while it’s true that you can generate an unlimited amount new addresses out of thin air and thereby making each transfer separate from the other, in practice it doesn’t look like many people are doing that.  I can tell you that as of today, the EFF has received 3,378.63 bitcoins, Anonews 135.61, Erowid 227.483.  The list goes on.  If has their bitcoin donate address online, chances are you can see their entire bitcoin history.

How’s that for privacy?  I’m not sure I like having every transaction I’ve ever made available to everyone to see.  Imagine finding out that the “private” donation you made to nambla.org is potentially traceable back to you.  Not too reassuring is it?

On the other hand, what if EVERYONE was this transparent?  Imagine if anyone could look at the US budget to analyze, critique or just plain hold them accountable.  What if the government opened it’s books and allowed the public to scrutinize every transaction.  How gloriously revolutionary that would be.  Yet I doubt that will ever happen.

 

As far as I’m concerned, bitcoin is a kickass idea that I hope gains more accolades as well as users.  I, for one, will gladly let anyone invade my privacy to see how many bitcoins I have.  Check out 1HpVUGyw4kdktDMrrPzMLaX1nLm7ZRdff8 and make that number grow!

Bonus points to someone who can guess who I donated recently.