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Author Topic: Blockchain's gift of Pseudonymity and how we lost it  (Read 181 times)
LeGaulois
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August 27, 2018, 11:58:24 PM
 #21

As you know, Bitcoin is not the first cryptocurrency, there were several before. The idea of a decentralized currency dates back to the 1990s and 2000s. Cypherpunks, Crypto-anarchist, and cryptographers are the real people behind the idea and advocating privacy
for several decades now [1]


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Yes, the world may know the origin (sending wallet), the amount that was transacted and even the destination (receiving wallet).  But that's all there is to it.
Not really, if you use a web-based wallet, an exchange platform, and similar I can know from where you coins where sent and where they have been receiving. It can be pretty easy to know this

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Take for example the "cache & cookies disclaimer"
I am crying when I see any, oh man it killed my surfing activity, it gets my nerves really:/

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Breach of privacy was a problem of great concern, and great minds understood that it has to be addressed. And as many of us loved the Incognito Mode of Google Chrome, Blockchain brought us pseudonymity for crypto transactions
There is an adage saying "Years ago, it was costly to get any information online, now it's costly to get it private"
The pseudonymity the blockchain tech gives us is not only for crypto transactions you need to have a broader vision. It's for your financial privacy.

The pseudonymity is lost as soon as you cash out your bitcoin to a bank, true that. However I am going to tell you a truth: the majority doesn't care about privacy, Bitcoin is their cash cow, see yourself they are even ready to send a selfie with their ID card to any ramdom website they never heard of.

How many tools we have focusing on privacy? From operating systems to browsers, email services, CMS, ISP, and so on... Almost nobody is using any, but still yelling online when something happens like the facebook scandal.  Roll Eyes

@franky1
I always like reading your opinions but can you stop to complain about LN, I will start to think you are paid by Roger Ver if you continue Grin

[1]
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However, we have to go back several decades to understand the true origins of this technology and its eponymous currency.

In the 1990s, as the Internet truly emerged for the general public, a group of mathematicians, cryptographers, computer scientists, and hackers formed to advocate for the protection of privacy, particularly through the use of cryptography. The “cypherpunks“, including the creators of Wikileaks, militate for the use of encryption tools in order to avoid the growing risks of intrusion by states or private companies into the private lives of individuals.

Cypherpunks
Timothy May is one of the major contributors to the Cypherpunk mailing-list, on which he broadcast in 1992 The Crypto-anarchist Manifesto written in 1988, a founding and visionary text with a libertarian tendency, which brilliantly describes the digital revolution we are currently living.

“Cypherpunks think privacy is a good thing,” writes Tim May, “and want more privacy. They recognize that those who want privacy must afford it and not simply expect governments, corporations or other huge, faceless organizations to give them privacy out of benevolence. Cypherpunks know that people have had to create their own private lives for centuries, with murmurs, envelopes, closed doors and secret mails.

A year later, Eric Hughes, one of the members of the small group now called cypherpunk, published a crypto-anarchist manifesto, A Cypherpunk Manifesto. He, in turn, takes up the idea that privacy must be preserved from the possible drifts of the Net and that the system of anonymous exchanges must be generalized

He, therefore, calls on all cypherpunks to write encryption programs to protect themselves from illegal wiretapping by governments or companies. Privacy is necessary for an open society in the electronic age, he wrote prophetically. Privacy is no secret, however. A private matter is something that you don’t want everyone to know about, whereas a secret matter is something that no one should know about. Privacy is, therefore, the power to select those to whom the world will be revealed. The major texts of this current are all accessible on the Nakamoto Institute website.

Based on public algorithms, the most famous encryption solutions were born in the 1990s and have continued to develop and gain legitimacy. Having reached a stage of maturity, but still insufficiently adopted by the general public, these solutions can enable anyone to protect their correspondence and sign their exchanges, data or documents electronically.

One of their fundamental strengths lies in their independence from any central entity. The trust established between two people is based solely on mathematics, which makes it possible to free oneself from any trusted third party, state or private.

At the same time, the Internet has seen many innovations appear on its network, such as the web, email, and voice over IP. Available to all, these technologies are largely based on our digital uses and are all based on open technology protocols. However, while electronic payment services appeared in the 1980s with magnetic stripe and then chip bank cards, no open technology has specifically come to offer alternatives to these tools on the Internet.

Initiatives for monetary systems and autonomous payments have not been lacking since the 2000s, with almost successful proposals such as B-money or Bit Gold. Designed by Nick Szabo in 1998, Bit Gold is a decentralized digital money initiative that operates extremely close to Bitcoin, but has not managed to solve the classic problem of double spending perfectly (Nick Szabo remains one of the most listened to figures in the Bitcoin community and is often even presented as the real Nakamoto).

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August 28, 2018, 12:41:11 AM
 #22

Your use of the word "blockchain" only brings confusion. Bitcoin was created pseudonymous, and blockchain was created as a part of Bitcoin's protocol, but later various people ripped it from Bitcoin's protocol and started calling it "blockchain technology" and hyping it as a solution to everything, and at that point pseudonymity was long forgotted, especially with the private and permissioned blockchains.

Next, banks and exchanges are not the only weak points for privacy, literally any other service that knows your identity can try to trace your wallet and then sell this data to interested parties. The solution right now is mixing services and privacy coins, in the future there might be some protocol updates that will improve privacy.

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August 28, 2018, 08:15:50 AM
Last edit: August 28, 2018, 08:30:46 AM by BitcoinFX
 #23

Thank you for the time BitcoinFX.  The video by the way was not bitcoin related, yet is one of the free ideas of thinkers & visionaries that may appall others while making other free thinkers applaud, pretty much like how bitcoin came to be.

Going back to your reply though, as much as peer-to-peer transactions within four walls may be the securest form of passing information, the necessity of internet connection is pretty much needed.

Bitcoin transactions need confirmation & distribution. I think it would impossible to do that offline. The design was for a peer network to decide that the transaction is legit and pass that information to everyone else and make sure the transaction is recorded on everyone else's ledger.

So i guess we really could not take the internet out of the equation at all.

Indeed. I'm well aware of the fact that that video is not directly related to Bitcoin, although perhaps we spelled peer-to-peer 'wrong'.  Cheesy

I was just trying to get folks to think outside the box in this regard.

Yes A goes to B, but does it always need to go directly? What alternative channels of 'trust' might we utilize, circumvent, protect or obfuscate between parties and how?

Think steganography, mesh networks, radio frequencies, morse code, sending physical hardware through the postal system etc.,

At one time it was thought that finding a solution for the double spending problem was impossible or improbable, until Satoshi came along.

Your OP question asked if we lost blockchain's gift of pseudonymity - not directly if we lost speed, security, privacy or trust (and for some the ability to transact freely and openly without hindrance, fear or oppression) - which are obviously all related factors when using Bitcoin, in this regard.

- https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country_or_territory
- https://en.wikipedia.org/wiki/Internet_censorship


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August 28, 2018, 09:29:55 AM
 #24

The original design was for transactions to remain pseudonymous from end to end, and the public records remained as such until you cash-out.  It is here that we lost the pro-privacy gift of the blockchain.

The moment you cash-out your bitcoin to a bank or an exchange or to any other means that requires a real world identity, pseudonymity is lost. Satoshi's rally for privacy goes down the drain. Your identity is uncovered. They can already trace your bitcoin wallet address and all other wallet addresses you transacted with.

The effort of pseudonymity is lost. But is there really a way out? Can we really remain pseudonymous to continue the blockchain's rally for privacy?

You are absolutely correct! But do we have a wayout? Can we really use bitcoin or any other crypto for our daily expenses like buying groceries or buying fuel for vehicle etc.? The answer is NO and that is the reason why we have no other options than to give away the pseudo-anonymity to make our bitcoins useful. Have we had the choice of using bitcoins for our daily expenses, we would have loved to retain that! We are giving this away because we don't have any options available!

There is only one way out as I see it! We need more merchants to adopt bitcoin as a payment option. When I say merchants, I do not mean Expedia or Starbucks because they are not merchants who sells daily products like groceries and domestic goods. unless and until we see merchants accepting cryptos as a payment option, we are forced to give away our identity because we have no other options than to exchange it to our local currency before we can use it.

At this point of time, adoption is very much important to see bitcoin to grow to the next level. HODL and trading is all right but the growth will only be fueled if we can use bitcoin as a currency in our daily lives. Otherwise, all will go down in drain if it continues to remain as an investor's asset.     

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August 30, 2018, 03:27:57 PM
 #25

The original design was for transactions to remain pseudonymous from end to end, and the public records remained as such until you cash-out.  It is here that we lost the pro-privacy gift of the blockchain.

The moment you cash-out your bitcoin to a bank or an exchange or to any other means that requires a real world identity, pseudonymity is lost. Satoshi's rally for privacy goes down the drain. Your identity is uncovered. They can already trace your bitcoin wallet address and all other wallet addresses you transacted with.

The effort of pseudonymity is lost. But is there really a way out? Can we really remain pseudonymous to continue the blockchain's rally for privacy?

You are absolutely correct! But do we have a wayout? Can we really use bitcoin or any other crypto for our daily expenses like buying groceries or buying fuel for vehicle etc.? The answer is NO and that is the reason why we have no other options than to give away the pseudo-anonymity to make our bitcoins useful. Have we had the choice of using bitcoins for our daily expenses, we would have loved to retain that! We are giving this away because we don't have any options available!

There is only one way out as I see it! We need more merchants to adopt bitcoin as a payment option. When I say merchants, I do not mean Expedia or Starbucks because they are not merchants who sells daily products like groceries and domestic goods. unless and until we see merchants accepting cryptos as a payment option, we are forced to give away our identity because we have no other options than to exchange it to our local currency before we can use it.

At this point of time, adoption is very much important to see bitcoin to grow to the next level. HODL and trading is all right but the growth will only be fueled if we can use bitcoin as a currency in our daily lives. Otherwise, all will go down in drain if it continues to remain as an investor's asset.     
Adoption is important and great for sure, but the more I'm involved, the more I feel Participation is the correct word for what's truly needed. You're talking about inability to buy groceries with crypto? How about you check OpenBazaar decentralized marketplace at openbazaar.org (openbazaar.com for web browsing of the marketplace)? Groceries are already there, domestic products of multiple origins are there, services are already there, p2p cryptocurrency exchange is already there, digital items, illicit goods, life saving generic drugs - all of this and much more is already there with global shipping and direct payments in cryptocurrencies, but how many people at least know this? How many of them have actually used it? What about you?  Huh If it's there - get it there, if it' not - help in bringing it there by offering your service to other users. All of that for free and everybody in the community is a winner here.  And yet it's been there for some time already, decentralized, free, pseudonymous as the bitcoin itself and... and lacking participation by that very same community which is mostly whining about lacking options to spend their cryptos, while too busy bountyhunting, promoting zero real life value ICOs and running back to the corrupt institutions of the pre-crypto economy whenever they got a buck from cryptos, lol  Wink
Not sure about the anonymity, but I definitely don't think Satoshi envisioned BTC with having necessity for fiat gateways implementations... If it can be free/independent - it really should be. That's what I got from the whitepaper at least... Hopefully more people would understand this as the network matures. Hodl and trading might be all right, but increasing usability of the network or participating in transferring of the fiat economy functions to blockchain is the good ol' black here.  Cool

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