One of the major reasons that Bitcoin was so highly prized and adopted by those who wanted a digital, borderless, currency was because it was anonymous. Bitcoin had its first real use case a coin for dark web purchases as it protected the spender’s identity.
However, as mainstream adoption grew it became clear that the regulators and lawmakers would not allow for totally free and libertarian level anonymity on transactions and started enacting rules to keep tabs on transactions – such as KYC and AML.
Mostly, the Bitcoin community appreciated that for Bitcoin to thrive, the anonymity of the coin would have to take a back seat and a big drive of regulated and controlled products and programs around the cryptocurrency industry bloomed.
However, the ’20s may well see the rebirth of the drive for anonymity of cryptocurrency; this is according to Coinbase CEO Brian Armstrong. He sees privacy features as being one of the biggest integrations for blockchains going forward from this year.
More room for anonymous coins?
While anonymity in Bitcoin has been curtailed somewhat, there has been the growth of privacy and anonymous altcoins coins. However, these coins have been heavily cracked down on as their added edge seems to be in direct conflict with what regulators want.
Stil, Armstong is of the opinion that these coins will become more prized in the coming years
“Just like how the internet launched with HTTP, and only later introduced HTTPS as a default on many websites, I believe we’ll eventually see a “privacy coin” or blockchain with built-in privacy features get mainstream adoption in the 2020s.”
A balancing act
Indeed, the desire for privacy in transactions is still very prevalent, and it is one of the reasons why users are getting more frustrated with banks and financial regulators. Also, it must be remembered that the desire for privacy does not always equate to nefarious uses.
That is still the issue though as it is impossible to determine if a transaction is being used for nefarious purposes if it remains anonymous and it allows for those wanting to break the law to hide behind the desire for reasonable privacy.
Even with Armstrong’s predictions, one has to wonder who this balancing act will be struck. Regulators are trying to combat the financing of terrorism, money laundering, and other illicit acts, and it seems unlikely they will bend to the want of privacy.