The rise of privacy coins: we only care when privacy is at risk

Summer. Sunlight filters through my curtains. The weather forecast predicts one of the hottest days of the year, but I'm still frozen in bed, reluctant to move, with the weight of the world pressing down on me. My phone screen turns on and the first bitcoin#:~:text=A%2029%2Dyear%2Dold%20Bitcoiner,three%20bitcoins%20worth%20around%20%24207%2C000.” target=”_blank” rel=”nofollow”>holder It catches my attention: “29-year-old Bitcoiner was robbed and murdered in kyiv for $200,000 in bitcoin.” The warmth outside feels distant compared to the chilling realization that danger is hiding in plain sight in a world where privacy is increasingly elusive.

The story offers no insight into how criminals discovered the man's bitcoin (btc) holdings. However, the alleged attackers have been charged with premeditated murder, robbery, and concealment, suggesting that they managed to track down and learn sensitive information about the victim's btc.

Privacy is not just a convenience; It is a fundamental right

After reading the news article, I remembered a guest post by Neeraj Agrawal on Bankless, crypto-privacy-is-humanitarian” target=”_blank” rel=”nofollow”>noble “crypto privacy is humanitarian.” Agrawal makes a compelling case for the critical role of privacy tools in today's world and highlights how “crypto privacy can be a matter of life and death.”for people living under repressive governments. He gives several examples where the ability to maintain privacy through cryptocurrencies has provided a vital means of escaping the oppressive financial restrictions imposed by powerful intermediaries.

Their examples include protesters in countries like Belarus and Nigeria, the political opposition in Russiaresistance fighters in Myanmar, Afghan civilians fighting under sanctions and a nfts-helped-chinese-dissident-artist-badiucao-evade-censorship-ep-369/?utm_source=substack&utm_medium=email” target=”_blank” rel=”nofollow”>Chinese Artist avoiding censorship.

Agrawal's points highlight that privacy is not simply a convenience but a matter of survival for many people around the world. However, focusing solely on these extreme cases can create the misconception that privacy is only essential in extreme situations. In reality, privacy is a fundamental right that should not need justification. This narrative also reinforces the idea that those seeking privacy or resisting Know Your Customer protocols must be hiding something illicit, further stigmatizing the pursuit of personal privacy.

The prevailing narrative tends to place privacy concerns on a spectrum: on the one hand, there are criminals who hide illegal activities, while, on the other, activists and freedom fighters evade prosecution. Both are considered to operate outside the law, but one is villainous while the other is celebrated, even though the laws may be oppressive or unjust. However, this dichotomy misses the vast majority of people in between: average individuals who value their privacy without a dramatic story to justify it and nothing to hide.

Privacy is like oxygen: its value only becomes evident in its absence

The growing popularity of privacy currencies appears to be closely related to the growing number of central banks exploring central bank digital currency. According to a survey by the Bank for International Settlements, 94% of the 86 participating banks saying they were looking at a digital version of their national currencies. This represents an increase of 90% from 81 respondents in a 2021 survey by the BIS, an umbrella organization of the world's central banks. In response to growing concerns about the erosion of financial privacy, privacy coins have emerged as a possible solution.

Furthermore, privacy coins mainly attract media attention only when our privacy is infringed. For example, ethereum (eth) co-founder Vitalik Buterin emphasized the need for privacy in cryptocurrency transactions following reports that he used privacy tool RailGun to hide the transfer of 100 eth. According to Wu Blockchain, which cited data from Arkham Intelligence, Buterin had been gradually interacting with the privacy tool over the past six months, using smaller amounts of eth.

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Following the news of Buterin's actions, privacy-focused digital assets like Monero (XMR) saw an immediate increase in value, with an average price increase of more than 5%. Despite their critical role in ensuring financial privacy, advocates of privacy protocols are often stigmatized and viewed as paranoid conspiracy theorists or extremists.

Society is suspicious of anyone who does not conform to the transparency standard. This shaming of privacy-conscious people serves as a subtle tool for social control, normalizing complacency. From there, it's a slippery slope toward a surveillance-driven society, where personal data is easily collected, manipulated, and used as a means of control.

How Big Is crypto Crime Really?

Illicit activity remains a concern within the world of cryptocurrencies, with some being harmful to honest users (such as scams and hacks), while other actions, such as bypassing government-imposed capital controls, may seem challenging to unjust systems. Critics of privacy coins often focus on their use in illicit activities, but fail to put this issue in a broader context. Blaming the tools instead of addressing underlying human behaviors makes no sense.

Illicit activities have existed for centuries and are not specific to any particular technology. While cryptocurrencies can be used for illegal purposes, these actions would persist with or without them. The focus should be on addressing the root causes of these problems, not on demonizing the tools themselves.

According to the United Nations Office on Drugs and Crime, traditional financial systems are crypto-crime-really/” target=”_blank” rel=”nofollow”>responsible for up to $2 trillion annually in money laundering, a figure comparable to almost the entire market capitalization of all cryptocurrencies. Additionally, more than 99.9999% of bitcoin transactions occur on exchanges that comply with anti-money laundering regulations.

In January 2023, Chainalysis crypto-crime-report-introduction/” target=”_blank” rel=”nofollow”>reported that cryptocurrency transactions linked to illicit addresses amounted to $24.2 billion, representing only 0.34% of the total cryptocurrency transaction volume that year. This marked a decrease from 2022, when illicit activity accounted for $39.6 billion, or 0.42% of transactions.

One challenge in analyzing the scope of illicit activity is the distinction between holders of cryptocurrencies and those who actively use them for transactions. Many users acquire btc simply to hold it for long-term investments, meaning that a higher percentage of active users may be involved in illicit transactions. This discrepancy adds complexity to the ongoing debate over cryptocurrency regulation.

However, it is ridiculous to argue that the majority of privacy coin holders engage in illegal activities. This narrative undermines the fundamental principles that drive many web natives3: freedom of essential human rights and privacy being one of them. For these people, privacy is not just a shield against bad actors or intrusive authorities; It is a form of liberation, a way to claim autonomy over your personal data and transactions. They do not hide illicit behavior, but rather remain steadfast in their belief that privacy is a fundamental human right, one that should not be compromised or criminalized.

The idea that seeking privacy involves committing a crime is a dangerous oversimplification. Just as freedom of expression and the right to assembly are protected regardless of how they are used, privacy deserves the same unconditional respect.