What does the 'anonymity' of virtual currencies such as Bitcoin mean?

In recent years, much attention has been paid to virtual currencies such as Bitcoin and Ethereum. Many virtual currencies adopt a decentralized management system that does not have a central bank, and it is often appealed that ' anonymity is high ', but 'what characteristics of virtual currency does anonymity show?' The 'merits of high anonymity' are hard to imagine. Therefore, the Coin Center , which studies cryptocurrencies and distributed computing technologies, explains the anonymity of cryptocurrencies.

We must protect our ability to transact privately online --Coin Center

Coin Center receives questions from government officials and lawmakers who have a negative image of anonymity, such as 'I hear that cryptocurrencies are highly anonymous, but what should I do to deal with them?' It is said that there are many cases. In fact, virtual currencies are often used for fraudulent purposes, and there have been many reports of large-scale money laundering detections using virtual currencies.

However, the blockchain technology that is the basis of virtual currencies guarantees reliability by making it possible to completely track the transaction history, and anyone can easily grasp the flow of funds. For this reason, cryptocurrency experts have stated that 'money laundering using cryptocurrencies is impossible', and it can be said that 'secret transactions' that government officials are worried about are difficult.

Voices that Russia may use virtual currencies to avoid economic sanctions, experts point out that 'money laundering using virtual currencies is impossible' --GIGAZINE

If 'secret transactions' are difficult, I wonder what kind of characteristics are said to be 'virtual currency is highly anonymous', but Coin Center says ''anonymity' in virtual currency'. Does not mean the ability to prevent tracking, but the ability of an individual to keep his or her information private. '

For example, when using electronic money that does not use banknotes or coins, an intermediary such as a financial institution is required for transactions. At this time, the intermediary can record the details of the transaction, and the information 'who paid how much at what place' will be lost. While this information is useful for 'preventing fraud' and 'assisting criminal investigations,' it can also be misused by the government for public surveillance.

As long as you use e-commerce, it is impossible to escape from the above information gathering. For this reason, Coin Center recommends using 'cash' such as banknotes and coins rather than e-commerce to protect privacy. At the same time, he acknowledged that online transactions have become mainstream in recent years and cash is not an appropriate transaction method, and argued that it is necessary to popularize electronic monetary systems such as virtual currencies without intermediaries. I am.

The Coin Center said, 'Electronic monetary systems come with benefits as well as costs. To deal with costs, it is necessary to put in place similar regulations as cash, rather than uniformly banning electronic monetary systems. We are calling for legislation to popularize the electronic monetary system. '

in Note, Posted by log1o_hf