This week witnessed some stirring events that might be viewed as a nightmarish reality or bright potential for those with a keen eye on the privacy quotient of cryptocurrency. A discerning incident raised eyebrows when Arkham Intelligence, an analytics firm, announced the creation of an intel bounty marketplace, specifically to identify the owners of multiple cryptocurrency wallets. Forcing us to ponder, Arkham Intelligence boldly claimed that eventually, everyone’s blockchain identity would be undeniably linked with their real-world identities.
Critics argue that Arkham’s quest is misguided and encroaching on the necessary privacy individuals deserve. The irony wasn’t lost when Arkham’s own customer data was incidentally leaked – a not-so-subtle nod towards the dangers of breaching privacy in the pursuit of transparency. The ripples of this event spread quickly and led to critical discussions about the security of regulated exchanges, such as a proposed spot bitcoin exchange-traded fund by BlackRock that plans to share customer details including personal identities.
In the eyes of authorities such as the U.S. Securities and Exchange Commission (SEC), these arrangements are meant to deter market manipulation rather than play big brother. Arkham’s intel exchange, can offer market transparency that gives small scale traders and investors a chance to level the playing field against the more resourced participants. However, the arguments surrounding this are two-fold.
For those who view cryptocurrency strictly as a trading asset, increased transparency is welcomed. It provides insights into the mind of the market’s big players, which could be beneficial for the everyday trader. Yet, the issue becomes far more contentious if cryptocurrency is perceived as an actual currency. The danger lies in potentially weaponizing blockchain identity bounties against the weak. The fear is not baseless, as witnessed in a past data breach at a crowdfunding website, where donors to a legal defense fund were outed, sparking a heated cultural war.
While the decentralised nature of cryptocurrency networks makes it difficult for transfers to politically unfavorable recipients to be thwarted, the lack of privacy could arm internet bullies with a new set of weapons. If blockchain addresses become de-anonymized, not only would it benefit retail traders but could also hand-out ammunition to the dark side of the web. A delicate balance is needed, one that prioritizes both fairness in trading practices and ensures privacy – both essential for the potential future of blockchain technology.
Source: Coindesk
