Topic: Widespread adoption may result to lesser anonymity, one of my biggest fears. (Read 245 times)

I don't agree. I think the reason why governments have reservations in approving and fully supporting Bitcoin is not its anonymity. After all Bitcoin is not really that anonymous. It has been proven a number of times that Bitcoin's limited anonymity could be broken. I think the real reason why governments won't completely support Bitcoin's adoption is decentralization. It would be next to impossible for governments to attack or shut down Bitcoin when the time calls for it. That definitely caused a chilling effect to them. That means they're deprived of control. That's unimaginable to them.

Bitcoin will really come to its stage where we can use it freely, an alternative to fiat, but for sure it will always be monitored by the government, thus losing the essence of anonymity. Expect that the government will make it centralized in the future, from totally decentralized taking its slowly to become centralized in the future. That is the consequence once it will be free of use and be accepted the government, everything comes highly regulated because its the least they can do knowing they can't totally stop its existence.

You know, everyone who works in the cryptocurrency market has a choice. He can remain anonymous on it and count on the fact that as the popularity of crypto grows, the number of his clients will increase, or he can connect to the regulated maistream market and the number of his clients will immediately double or triple.
Unfortunately, in this case just money talks.

Sadly, that's where we are heading. If we want more adoption, we need to accept that anonymity will be compromised in some way. Because people want assurance in this market, so the legal businesses want to know their customer themselves as per mandate of their respective government. This will also lessen scammers, like it or not. But if you want to maintain your anonymity as much as possible, then, better be cautious where you submit your KYC docs.

We would really be going into that path considering that crypto is really getting some attention now then government would really be targeting platforms or services which are engaged nor get involved with crypto

since this is the only way that they could really be able to deal with and not totally able to touch up literally or technically so they wont really be having any options which would be ending up to this.

Lets just accept that fate because we are really heading that way and its something that cant be stopped.

Of course, anonymity is what governments don't like most. Anonymity makes them lose control, and this is the most important tool for them to hold power.
The integration of the world of cryptocurrencies and the one regulated by governments is slowly happening and it will certainly increase. This is simply because companies that want to operate in an official, regulated market must register and from then on are subject to the laws of the country in which they operate.
However, some services or companies that will only operate on the cryptocurrency market will remain on the market and these will remain anonymous.

In answering your question directly, I see no possibility that any government would agree to make any activity completely anonymous.

No government will approve that they can't get to control or at least regulate it. Everything will have an eye from the government, so most likely its anonymity will be lessen eventually. As from being decentralized going into being centralized, that will always be the case just like those decentralized exchanges that are forced to ask for KYC, otherwise they will not permitted to operate. Same thing with bitcoin, if it aims for its widespread adoption, then the government should always take part on it.

Does the cryptocurrency community itself want anonymity? These days if we should look into it you would see that most people don’t really care about privacy anymore, all they care is that cryptocurrency should continue to gain more adoption so that the value would increase and make them profit. Most of the people here just care about profit and nothing much.

Assuming that the community were really interested in anonymity, then they wouldn’t really be bothering much about adoption, because much adoption for sure means that the government would like to get Into the circle. These days nobody is now choosing Bitcoin for transaction, they just want it as an investment. I also fear that very soon Bitcoin wouldn’t be anonymous any longer, because of the type of regulation and tactics that the government are trying to start using now.

Bitcoin is a highly independent currency, it was created with the intention of carrying out transactions quickly and safely, without the need to be approved by third parties, which means that no government or banking authority had dominion over it. Currently, many leaders have noticed the great power and value that this asset has achieved and continues to acquire, so they were forced to accept it or completely exclude it from their country; those who decided to approve the BTC took their own measures to try to maintain some control and of course acquire profits, if they do not take these restrictions they will not obtain a benefit, so their only option is to violate the privacy of their users.

Absolutely right. Over time, anonymity in cryptocurrency will fall. Cryptocurrency is decentralized, but the rules for its circulation on the territory of states are established by these states. Anonymity, no doubt, can be maintained until the cryptocurrency enters the exchanges and exchangers. And there are more and more rules that are established by states. If legal entities participate in the cryptocurrency market, then it is even easier for states to control them.

Cash is anonymous.

But, there's no point in using this technology if what they want is control. The technology frees, gives the control to the mob, if they know how to do it, and respects privacy. This is the core principle. If that's not in your interest, which as history shows, wasn't, isn't and will never be, then don't mess with it. Simply use an SQL database where you'll save each person's balance and whose supply can be changed at any time for any reason.

Call it Central Bank Digital Currency, which gives more prestige, and you're done.

This is not an issue in my own opinion. Regulations can still stand as check mates to ensuring anonymity is not abused if the really want to deal with it. As long as not everyone is open to Bitcoin transaction every address is linked directly to a centralized exchange in a way and as such even the anonymity we claim is not a total one

Let’s be plain with ourselves, we all know for sure that there is no way that the government will ever accept Bitcoin with the way it is. Like you have said, if they should accept it the way it is, and then it means losing power and control, and not having power and control over something is what the government can deal with. They always want to make sure that they are in control of everything that is happening in a country. And Bitcoin has been one thing which seems to be above the government, because there is no way that they can control it. But now it seems like they are coming out with a solution to the problem that they have.

"Cash" - Fiat currencies are also Pseudo anonymous ...but you do not see them being obsessed with that...do you? That is just an excuse for them not to accept it as legal tender... because they know that they cannot manipulate Bitcoin like they are doing with Fiat currencies. 

Take my word.... When governments of this world start to create their own "Fiat" linked Blockchain technologies... they will not have an issue with using Crypto.... because they will manipulate the Supply & Demand and they will smack a lot of KYC onto it. 

Because this is what really Bitcoin is. Bitcoin was created to remove any entity or people to control or become middlemen for payments in financial or transferring a payment with value to one another. Power of decentralization.
Government should be aware of this, and for me, it is normal that some governments are very strict on Bitcoin because of said reason, but they really can't do anything just to impose such laws about cryptocurrencies, it's their only way sure as of the moment.

The government can let bitcoin fully work in each country without trying to find out who the big players behind the big transactions are. But it seems the government knows that if they can get involved in the system, and try to enforce its rules, it could pass more taxes on to the government. The government seems to want to collect taxes on all matters relating to its citizens. Under the pretext of regulation for cryptocurrencies that the government can't fully control, they hope that they can see people who are already using large amounts of bitcoin so that the government can get big taxes as well.

Anonymity vs Decentralization

I believe that decentralization of bitcoin is the major issue preventing its widespread adoption and not anonymity. If the government can centralise bitcoin and control everything about it, they won't care much about the identity of anyone. If they suspect a particular wallet and target it and cannot de-anonymized the owner, they could simply free it and have all the funds in it.
Reasons such as;
Anonymity;
Energy consumption;
Volatility; etc are all mere and frivolous. Their main problem is the decentralization of bitcoin.

The people in the government should also understand why some of  us wants to be  anonymous, they have reason. Currently, there is still possibilities in my country that BTC will be ban. Future still is uncertain.

The regulations will actually make the adoption way faster so the resistance for now are from the users who wants anonymity. The government can forget about them actually, but once they are going to use their BTC in exchange for fiat,  its where they will also need to reveal themselves.

Isn't that what regulation is all about, and the reason why government of the world emphasise heavily on it, there is no way government will adopt btc fully without enforcing control. It has always been something the government dream about so doubt they will give that important part up.
I actually don't understand why you feel bothered about this since you are already dealing with exchanges and the likes at some point, it is similar, government won't care much about your assets except you give them a reason to.

I am not entirely sure about this, I mean yes it's obvious that widespread adoption could cause the governments to take a look at it closely, and it does mean that they will put more laws around it which will result with us not being able to use it anonymously but at the same time it would still just make sure that the money you have could be hidden if you prefer to. How?

You could buy monero and withdraw it that way and then use it anyway you want, or even at bitcoin it is "semi" anonymous that way. This is why I believe that some parts are not anonymous anymore with the new laws but it is still not fully watched neither and can be done something.

It is claimed sometimes to be an obstacle, but it's not a very fair concern. For example, cash is not being tracked, people can largely use it with providing zero ID, and sometimes in significant amounts. Moreover, if the matter is IDs, one could try to legalize BTC but demand custodial wallets for it to be used as legal tender, of example. And yet it's not happening, not causing widespread adoption. I think there isn't enough interest in adopting Bitcoin, both in political circles and in populations, often. Also, volatility and scaling are sometimes major issues as well.

Price of adoption, recognition, acceptance, acknowledgment, etc. Some things many say they want for Bitcoin. Would have been naive to expect less anonymity, and this was probably recognised early on (hence cryptocurrency alternatives that are actually aimed at maintaining and increasing anonymity).

I'm happy with private use, which, just like any other activity with desired increase in privacy, will require more deliberate use. To keep the state in check, always.

I'm okay with that.

That's the main pain point for the governments behind their slow movement in making a decision about cryptocurrencies. Banking system is a fully trackable system and work closely with the government agencies. With cryptocurrency, anyone can maintain anonymity if he/she isn't buying from a centralized KYC enabled exchange.

That's why every government is trying to bring in regulations around it. Tgey are not allowing centralized exchanges to operate without having a robust kyc system. Tax reports burdens are increasing etc. I believe that's the way forward here because governments won't allow anything that lowers their control on money circulation.

Well, depends. Bitcoin isn't going to become less anonymous, however the companies, and exchanges operating with Bitcoin will. Since KYC (Know Your Customer) will likely be stepped up specifically on companies transacting in cryptocurrency, and I imagine the reason given by the governments will be the risk of no accountability, and therefore increases the potential for crime.

My argument would probably be that criminals probably don't want their transactions on a public ledger, but maybe that wouldn't be enough. So, while I do agree that KYC in certain circumstances makes sense, you're not going to be seeing me encourage the use of it, because of the privacy invasion, and the fact that users like me, and you are restricted, just because some users use it as a means of paying/selling illegal activities.

I don't know what the solution is to this, if we do want more adoption, then we likely have to come to accept that companies will be heavily scrutinised, and heavy handed KYC will likely be implemented. However, if you aren't planning on using a exchange, and assuming that P2P (Peer to Peer) exchanges aren't required to change by law, then there are ways to do it while keeping your privacy intact. Although, I do believe P2P exchanges will also be required to keep KYC in the future. I'm not sure how they would go about that, since data protection does exist, and you can't rely on someone who knows nothing about keeping sensitive data secure, so it'll likely be through the P2P platform, which again basically defeats the point of P2P since a centralised platform will be keeping your data on file, and very likely selling it.

In my opinion there are two reason why government are not adopting Bitcoin.

1. Those governments which have officially adopted Bitcoin were going through economic crisis and Bitcoin was the best option available in that situation.
2. Government wants to control everything and especially finance and with Bitcoin it is not possible. You need to regulation and it is not that easy as every country has different economic issues.

Depressingly as bitcoin adoption increases so will the loss of anonymity. As bitcoin associated organisations/companies/businesses grow they will be more and more prominent. With this rise in recognition comes a rise in regulation  as governments don’t want to lose out an any tax income. With government envolvement comes AML and KYC. Unfortunately, I believe it’s inevitable - it’s just a matter of time

There may be a lot of users who will be forced to submit their data to platforms to finally withdraw the BTC that is put on hold. I'm currently in a situation which my coins are stuck in a platform that is asking me to send documents. I'm still in a dilemma whether its worth submitting or not. This could be the result of the Central bank and the government tracking users in our country.

But I don't think it will prevent the widespread adoption when people will also be seeking ways to save their money from inflation. The profit to be made when their money is into BTC is much tempting than keeping fiat in the bank.

I do understand why so many governments could not just adopt Bitcoin and let their people use it especially as a currency and it is because this is something that they can't control or manipulate anytime...unlike their own national currencies. However, we are hoping that in the next few years, the success of Bitcoin in El Salvador can make other countries realize that Bitcoin is unstoppable and is not their real enemy and that it can even be helping their country, their people and their economy in the long run.

They could, but they don't seem to be willing to, as it means losing power and control. At first they didn't like the idea of Bitcoin, but since they realized they couldn't get rid of it, they tolerated it, now what they do is try to control it as much as possible with AML/KYC laws to the max.

The way I see it, in a few years the use of Bitcoin with privacy is going to be even less than it is now.

The biggest issue limiting most government consider and majorly the reason why bitcoins adoption has been slow is in my opinion the anonymity involved and the inability for government to directly be a party to your transaction.
If there were no such issues, gaining widespread adoption will not even be a topic for discussion as it would have happened already or almost done being adopted I think.

Can the governments of the world let bitcoin become fully in use in their respective countries without pushing for lesser anonymity and a way for them to monitor the system?