Bitcoin has been hailed as the antidote to monetary colonialism and the key to unlocking the shackles of poverty and corruption for millions of people suffering within the world’s worst totalitarian regimes. However, the blockchain technology that underpins bitcoin and other cryptocurrencies is a double-edged sword. It could be used in a direction where it is used by an oppressive regime to impose complete surveillance and control over its subjects.
The bitcoin blockchain is a publicly visible distributed ledger that shows every transaction made since its inception in 2009.
It is a financial system that is not only public by default, it can never be made private, and nothing can ever be taken away or removed from it.
This creates a transparent and honest transaction system, but could also be used to trace every transaction a citizen makes.
The transparency of data held on blockchains has raised fears that governments could use stored transaction information for an unprecedented surveillance scoop.
This has led to the creation of many privacy coin projects, Monero being the best known.
Privacy coins are cryptocurrencies that hide transactions on their blockchain to maintain the anonymity of its users and their activity.
Privacy coins such as Monero and Zcash provide additional layers of anonymity for users looking to avoid oversight from a centralized authority.
A cryptocurrency project that puts transaction data privacy first is Ghost ($GHOST).
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the Ghost Cryptocurrency ($GHOST) allows transactions to use a state-of-the-art escrow pool to protect and clear transaction history.
Speaking to Express.co.uk, Ghost’s Jake Waters said: “There’s nothing private about bitcoin or ethereum for reference.
“Analysts can trace the origins of transactions as well as trace them back to a specific IP address and ultimately your bank account.”
A centralized authority could control the lives of its citizens. If purchasing power is controlled by programmable money, that money could be limited, or turned off and on, to punish wrongdoers or reward loyal citizens.
One example that could be abused in this way is China’s nascent central bank digital currency.
If the digital yuan were tied to China’s social credit system, an individual’s ability to purchase goods and services could be restricted and their access to certain areas of the country controlled.
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Mr Waters added: “There is an understatement with digital identities and central bank digital currencies, CBDCs.
“The state controls everything.
“They control every aspect of your life, including your future.
“As we saw with Canada, the state doesn’t even need a CBDC to control your funds or your life for that matter.
“They will close your bank account and limit your ability to travel, making you a prisoner of your own country/state.
“Private coins are the future of freedom.
“It’s the only answer to fighting the state’s ability to control your life.”