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Comment by ballenf | Hacker News Reader

What she doesn't state is that central bankers are going to be the biggest supporters of cryptocurrency once they get to endorse one that is fully trackable (BTC fits the bill pretty well on that front).

It's one of the unexpected paradoxes that cryptocurrency is going to be the greatest threat to privacy since the cell phone and not many people see it coming.

This is the reason I agree with her -- it will further consolidate power.

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Indeed, this is one of my primary points as well. I've been trying to tell people like Max Keiser that for all its good, BTC is not anonymous, which is one of the primary functions of cash. The totalitarian surveillance society would love to track everyone's purchases.

On top of that, the other problem is that in a fiat fractional reserve system, there's not much stopping the big central bankers from poofing some old currency into existence so they can buy up lots of BTC et al.

That's why right now I am leaning towards Monero and similar at least semi-anonymous coins (without having to use a tumbler separate).

I see the privacy potential of cryptocurrency the same the privacy potential of the internet: for the average person it will be a disaster.

As a counter point, you could argue that the pseudonymous nature of cryptocurrency is simply another technological hurdle that, like the scalability problem, can be overcome in time.

Yep, and we pretty much know what the solution will look like: zero-knowledge proofs, such as the ones used by ZCash.

zeroCash is a pretty good starting point to a solution to the privacy problem.

Not really. The trouble with deanonymization in a network is that as soon as anyone fails to follow the proper privacy protocol, the entire network can be unmasked through the social graph.

For example, Flickr users have been identified by their Twitter connections:

https://arstechnica.com/tech-policy/2009/03/pulling-back-the...

I would imagine Palantir has been working on this since cryptocurrencies started being becoming popular, even though they have denied it[0]. Or somebody else such as SABR[1].

[0] https://www.coindesk.com/palantir-quantum-bitcoin-cloud-mini... [1] https://bravenewcoin.com/news/sabr-palantir-for-the-blockcha...

Verge would be another cryptocurrency that comes with anonymity baked in and considering it uses TOR network, I'd venture to say it is the best tool for protecting your privacy.

and of course, just like real money, it's in the interests of those holding large amounts of it "go along to get along". the big banks know that, that's how they operate. this announcements almost seems like a dog whistle to those new elites and extant elites who may want to diversify their holdings.

so if this comes to pass, it effectively captures the interests of the now-wealthy first-adopters, who are presumably the most ardent proponents of the societal 'benefits' as well.

and then, we are back to square one, with a monied super-class effectively imposing the will of the bankers on the general populace through the very act of holding and controlling the wealth (which is ultimately owned by the state).

the more things change...

> It's one of the unexpected paradoxes that cryptocurrency is going to be the greatest threat to privacy since the cell phone and not many people see it coming.

Unless people adopt a currency like Monero which is fungible and where privacy is default. People just need to recognize that privacy is for everyone. I think everyone inherently knows that, but when it comes to technology, they don't realize they're giving their privacy up.

The difference between a cellphone and Monero (in this context), is that a cellphone can be tracked.

That’s why we shouldn’t talk about BTC that much anymore. It was a breakthrough but nobody but those heavyly invested in the ecosystem would want to see it succeed on a large scale. There are alternatives being developed which will have better tradeoffs and properties. I am somewhat interest in IoTA and Algorand for example. Both are very different from each other and to BTC so it demonstrates the space of possibilities out there.

Let’s hope we don’t do a VHS or HTTP this time around!

https://z.cash/technology/

http://zerocash-project.org/paper

I think Op's point is that the cryptocurrency "supported" by the central banks might be as trackable as bitcoin. Sure Zcash has, at least for now, a way to ensure anonymity but this ensures it might not be in running contention for the "central bank supported cryptocurrency".

It's pretty easy to trade your BTC for any altcoin on an exchange, and then trade it back. I bet there will be automated, decentralized exchanges to do it, too.

This is rididulous. How many dark markets accept cash? Bitcoin works just fine for them.

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