Privacy is a hot topic these days. Sadly, it is probably not as prominent in conversations as it should be. We know governments are spying on us at every turn. Then we have corporations, which made surveillance into a capitalistic proposition.
One of the drawbacks to cryptocurrency, according to critics, is the fact that it lacks privacy. Every transaction is open for all to see. While wallets are pseudo-anonymous, the ties to the legacy financial system, i.e. fiat, means that most have left a trail. Identities are revealed when wallets are tied to centralized exchanges.
Of course, what gets overlooked is the existing monetary system is similar. It is true that the ledgers of banks are not open for all to see. That said, we do have hacks which expose a great deal of personal data. Then we have governments ability to monitor what is going on. This is done either through court orders or backdoors that were included with the software.
Since our monetary system is in the digital world, this is the state of affairs.
Could crypto end up changing this?
Vitalik Buterin Proposes Privacy Added To Ethereum
Cryptocurrency is a process.
An issue that detractors of cryptocurrency have is they are stuck in time. Their views are based upon what they see before them today. This is not how technology works.
If we time travel back to 1990, how would we have summarized the Internet at that point? There were critics then which stated nothing would come of it. The idea of social media, only payments, and mobile communications was not in the discussion.
Remember, this was invented for information flow, mostly for military and academia. What resulted was unforeseen except to a few in-tune futurists.
Are people viewing cryptocurrency in a similar manner? I think this is the case for most who look at the issue. The detractors tend to not excel at futuristic thought. They are mired in their present ways of doing things, often trying to protect what they have going.
With Buterin, he is always thinking about what can be implemented into that network's roadmap. He is now of the opinion that it is time to start looking towards privacy.
Of course, this will get the government hacks screaming into the night. People like Elizabeth Warren, who feels government has the right to everything people have, will assert that will just be used by criminals.
In an April 11 roadmap, Buterin argued for incorporating privacy tools into Ether (ETH) wallets and implementing privacy-enhancing norms and features in the Ethereum ecosystem and protocol. He explained that the roadmap in question is a short-term solution that requires limited changes to the base protocol along with supplemental long-term updates.
It sounds like he envisions a multi-phase process. However, the key here is the fact that he is looking to get something moving in that direction in the short term.
Buterin recommends adopting privacy-enhancing systems such as Railgun or Privacy Pools by existing wallets, according to the plan. When funds are sent with those wallets, he argues that users should be greeted by an option to “send from shielded balance,” which anonymizes the transaction, and should be “ideally turned on by default.”
This is something that I believe crypto advocates can get behind.
Wallet: More Than Just Finance
At the core of this issue, in my opinion, is the fact that I envision wallets being more than just a financial repository which funds can enter and exit. As we move deeper into the digital world, one's identity will be incorporated there.
What I mean by this is not one's real information but, rather, their online life. We could call this our digital twin. The entryway to our entire existence will be through the key system that crypto uses. Today, we call them wallets since the origins were financial. However, as other aspects of our lives are integrated into this process, it will be a repository for our digital lives.
When we view things from this perspective, it is easy to understand how privacy takes on a much greater meaning. We are no longer discussing privacy with regards to money. Instead, it is to our entire digital lives. Of course, with the extension of the digital into the physical, with things such as mixed reality and digital overlays, we could be talking about entry into our homes.
Do we want this out there for all the world to see?
Corporations will look to fill this void promising privacy and security. If we have learned anything from 30 years worth of the Internet, it should be these companies are incapable of this. In fact, governments are apt to fall victim also as they are regularly hacked.
It is evident how this quickly moves away from crypto to a discussion about blockchain. Incorporated into this is network security, something that Web 2.0 failed at.
Is Vitalik thinking in these terms? I have no idea. Nevertheless, projecting this out a decade or two into the future reveals what might be needed.
Here is where the evolution for crypto (and blockchain) must occur. Systems have to develop to provide this to users.
It could be there is a lot more at stake then we are focusing upon.