The popularity of cryptocurrencies has also given rise to ‘crypto crimes’ where perpetrators use these digital currencies to execute their illegal activities.
In a video interview with Forkast News, blockchain lawyer Maria Blecher said that there is a misconception that cryptocurrencies provide anonymity, but actually, they only provide pseudonymity, meaning, any crypto users can still be traced.
This anonymity myth might be what hackers behind the Colonial Pipeline incident were thinking when they broke through the refiner giant’s system and demanded $5 million worth of cryptocurrencies as payment. Later on, the Federal Bureau of Investigation was able to recover $2.3 million from the paid ransom.
Bleacher said: “You’re having a public key recorded permanently on a ledger forever. And anyone can see that.” She also added that it also serves as a shortcut for authorities to trace someone.
Cashless society is a surveillance society
In the interview, she also recalled one of the photos she saw from the Hong Kong demonstrations, where protesters insisted on paying cash for their train tickets instead of paying electronically.
The reason behind this is that protesters don’t want to leave a digital trail that can associate them with the ongoing protests.
Bleacher said that this fear highlights the capability of a digital-centric society to track everyone without their consent. That is why technologies that provide true privacy and anonymity is really important today.
Cryptos and CBDCs under surveillance
Governments around the world, especially the U.S. are starting to implement policies that would enable them to track cryptocurrencies, and ultimately, their users.
They are also launching a crypto competitor called Central Bank Digital Currencies or CBDCs which are also digital currencies but provides governments with more tight-grip control compared to cryptocurrencies.
Image courtesy of Cointelegraph News/YouTube
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