Bitcoin and Anonymity

zorroIt wasn’t that long ago that the anonymity of most purchases was a given. Someone who walked into a store to buy something with cash would never have dreamed that it would be possible to trace that purchase later. Even people using checks or credit cards rarely had to think much about the possibility that someone would actually see that purpose, since the large and extraordinarily powerful computer systems that now make it possible to sift through the data at high speed just didn’t exist at the time.

That sort of quiet anonymity evaporated over time. Now, even a person who goes into a store to pay with cash can often be identified by the ubiquitous security cameras. Storage is so cheap that it’s possible to keep security video for an extended period of time. Retained GPS and tower data from your cell phone signal may also indicate that you were in a particular location, and those records can be held by the telephone companies and authorities for years. The police even have devices that are designed to pretend to be cellular towers for the purpose of tracking the public.

In spite of all of this, the possibility of making a purchase quietly and anonymously has not entirely evaporated. Instead, technology has enabled us to do it at an entirely new level. Tools called crypto currencies make it possible to possess a kind of money that doesn’t have to be tied back to your identity. Instead of having to trust a central authority to hold onto your funds and to guarantee that it’s really you who owns the money in the account, these currencies rely on math to prove who is the legitimate owner of a particular piece of the overall available wealth. It can even be spent without leaving any sign of who had it or who was involved with the transaction.

For people who have been uneasy about the disappearance of anonymity, currencies like Bitcoin are a great advancement. After a long period of technology being used almost exclusively against the average person, it’s finally come around and started to enable greater privacy and personal control.