{"id":2708,"date":"2020-09-25T20:04:55","date_gmt":"2020-09-25T20:04:55","guid":{"rendered":"https:\/\/timestampmag.com\/?p=2708"},"modified":"2020-09-25T20:04:55","modified_gmt":"2020-09-25T20:04:55","slug":"the-threat-privacy-coins-present-to-governments","status":"publish","type":"post","link":"https:\/\/timestampmag.com\/2020\/09\/25\/the-threat-privacy-coins-present-to-governments\/","title":{"rendered":"The Threat Privacy Coins Present to Governments"},"content":{"rendered":"<ul>\n<li><strong>The cryptocurrency &#8211; one of several rapidly growing privacy coins &#8211; offers privacy by obfuscating all parts of a transaction: the sender, amount, &amp; receiver by using ring signatures.<\/strong><\/li>\n<li><strong>Governments, at a fundamental level, seek to control the flow of information and communication.<\/strong><\/li>\n<li style=\"font-weight: 400;\"><strong>Governments are not being complacent about the threat of privacy coins.<\/strong><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The United States Internal Revenue Service recently announced its<\/span><a href=\"https:\/\/govtribe.com\/vendors\/ciphertrace-inc-dot-7e0x3?__cf_chl_captcha_tk__=48487ae0cb70250a313d0e74d9fd768a352076ea-1600400130-0-AZwMx8gyXY1UN5zGyQowxCYnje6JA5TC-KSaYcUInn03DGEtiYlEssD7B6a9oxwksR09eyjEWoSBsKidxEOa7QsaVh3nWmGzHn-MBosM10-EsZpBgvlJMjcQEbRwcyz99Mso7usvl2fgbD6Y_mfs1IzBUpISkbARDR5dnRP2kvGgotZvli4kw0xypqFjJImTb16oHc-vA0qVEI9-kWsS7MgHj3NSp9mflNa1ra9BzSsKNE_ZSXNVqozr_Vi3CPL3LwAbezsR-uqPcWB3FSF0uVux0Ja_VAAoeqP96rr9lq7a3amxWlu3Dr31iCA6NIN_UpdPkzXfmN009Kjj35o8lXsfgFaLm4v0B0dnk5zo0BLcP6ueY8UEynEBSbgGOkZhUDXMYtcCjYXz0IjaJVC1ad7Es9gE4O7UdrQYp3MGeCGtTvXEDmXYucgWjE8vU01zJFnjzZbqdzA2HFDSPSz4D9dgelBCruOao9Us79hS-Uz6AbgJEoo7yxTWfV_iaascTzvczeGL1XJoIRSvm5czF4-Olf2_EOKOKGOQgFxqWegPSvEHaraPXDa46LAHQ8gdRHlG6qPiIaiS-x--IftpxyE\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\"> offering of up to $625,000 <\/span><\/a><span style=\"font-weight: 400;\">for anyone who can crack the seemingly untraceable privacy coin Monero (XMR).<\/span><\/p>\n<p><img fetchpriority=\"high\" decoding=\"async\" class=\"wp-image-2709 size-medium aligncenter\" src=\"https:\/\/timestampmag.com\/wp-content\/uploads\/2020\/09\/image2-300x200.png\" alt=\"\" width=\"300\" height=\"200\" srcset=\"https:\/\/timestampmag.com\/wp-content\/uploads\/2020\/09\/image2-300x200.png 300w, https:\/\/timestampmag.com\/wp-content\/uploads\/2020\/09\/image2-1024x683.png 1024w, https:\/\/timestampmag.com\/wp-content\/uploads\/2020\/09\/image2-768x512.png 768w, https:\/\/timestampmag.com\/wp-content\/uploads\/2020\/09\/image2.png 1350w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/p>\n<p><span style=\"font-weight: 400;\">A shy acknowledgment that they do not have enough control of the impending shift to a more cashless society, the bounty is the first step in recognizing the complex capabilities needed to solidify their position as a regulator &amp; <a href=\"https:\/\/gda.capital\/\" target=\"_blank\" rel=\"noopener\">Financial system<\/a>.<\/span><\/p>\n<h2><b>We Are Already In a Cashless Society<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">\u201cCashless,\u201d a word often used to frighten the late majority and Laggards, is already a prominent movement in the developed world. Countries such as Finland, China, and notably Sweden, (thanks to the famous <\/span><a href=\"https:\/\/www.swish.nu\/about-swish\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">payment app Swish<\/span><\/a><span style=\"font-weight: 400;\">,) where instant payments can be made between two parties, claiming over two-thirds of the Country\u2019s population. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">While the cashless concept gains further traction, there are mixed emotions on the adoption.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Proponents reference <\/span><a href=\"https:\/\/www.businessinsider.com\/swedens-reduced-cash-circulation-means-black-market-crimes-increase-2018-6#:~:text=Cash%20circulation%20is%20in%20steep,surge%20in%20other%20unconventional%20crimes.\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">lower crime rates<\/span><\/a><span style=\"font-weight: 400;\">, less money laundering due to a constant digital paper trail, and more straightforward currency conversion when traveling internationally. Detractors announce possible breaches, privacy concerns, and what happens if the grid goes down in a Safe store catastrophe scenario.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Whether a cashless society is <\/span><a href=\"https:\/\/timestampmag.com\/2020\/02\/20\/is-the-banking-system-compromised\/\"><span style=\"font-weight: 400;\">welcomed or uninvited<\/span><\/a><span style=\"font-weight: 400;\">, the adoption occurs via traditional methods such as plastic cards backed by centralized Financial institutions &amp; Governments.\u00a0<\/span><\/p>\n<p><img decoding=\"async\" class=\"wp-image-2710 size-medium aligncenter\" src=\"https:\/\/timestampmag.com\/wp-content\/uploads\/2020\/09\/image4-300x200.png\" alt=\"\" width=\"300\" height=\"200\" srcset=\"https:\/\/timestampmag.com\/wp-content\/uploads\/2020\/09\/image4-300x200.png 300w, https:\/\/timestampmag.com\/wp-content\/uploads\/2020\/09\/image4-1024x683.png 1024w, https:\/\/timestampmag.com\/wp-content\/uploads\/2020\/09\/image4-768x512.png 768w, https:\/\/timestampmag.com\/wp-content\/uploads\/2020\/09\/image4.png 1350w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/p>\n<p>&nbsp;<\/p>\n<h2><b>Why Do Governments Seek Control?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Governments, at a fundamental level, seek to control the flow of information and communication. In this subset, that communicated information is that <a href=\"https:\/\/gda.capital\/solutions\/#capital-markets\" target=\"_blank\" rel=\"noopener\">Financial<\/a> with communication habits meticulously documented.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Under the current implementation of a cashless society, the convenience of payments is exchanged readily for data. The amounts, frequencies, and locations are recorded at all times to map out user behavior. Whether it\u2019s under the guise of better product placement or public safety, it is beneficial for a government to know when and how its people are purchasing.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The transactions reliably take place\u00a0 due to trust in the current institutions that control the currency &amp; data. Control of this knowledge can be beneficial to prevent illegal trade &amp; upkeep foreign sanctions.\u00a0<\/span><\/p>\n<h2><b>Enter Monero<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Unlike other private coins with a private option( Z cash, DASH), Monero is the leading privacy-oriented cryptocurrency that is always private.The currency sometimes favored by the<\/span><a href=\"https:\/\/cointelegraph.com\/news\/sodinokibi-crypto-ransomware-switches-from-bitcoin-to-monero-to-hide-money-trail\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\"> criminal underworld<\/span><\/a><span style=\"font-weight: 400;\">, operates on a Layer 2 network implementing RingCT and stealth addresses.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The cryptocurrency offers privacy by obfuscating all parts of a transaction: the sender, amount, &amp; receiver by using ring signatures. When a transaction is made, the signature is combined with other signatures from the Monero <a href=\"https:\/\/timestampmag.com\/2020\/06\/02\/libra-an-enhancement-to-facebooks-business-ecosystem\/\">blockchain<\/a> acting as decoys to make it impossible to tell which produced the output, leaving the transaction untraceable.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Another issue <a href=\"https:\/\/timestampmag.com\/2020\/04\/15\/what-is-monero\/\">Monero<\/a>(XMR) covers is fungibility. Cryptocurrencies such as Bitcoin can be traced back to their original minting. Monero cannot due to its use of stealth addresses, a one-time address derived from a public address, creating a separation between addresses where outside observers cannot see amounts sent.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This process can ensure that XMR cannot be tainted when received, while Other cryptos can be traced to possible illegal or malicious activity. Wallets with tainted crypto can be flagged, investigated, and possibly denied use on specific platforms.<\/span><\/p>\n<h2><b>Taxes on Privacy Coins<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Not just Monero, but other private coins such as Zcash or Dash pose a significant issue to regulatory agencies. By offering such shielded transactions, governments can\u2019t keep track of the\u00a0<\/span><span style=\"font-weight: 400;\">flow of currency. They don\u2019t know who has how much &amp; can\u2019t reliably decode where transactions are taking place.\u00a0\u00a0<\/span><\/p>\n<p><img decoding=\"async\" class=\"wp-image-2711 size-medium aligncenter\" src=\"https:\/\/timestampmag.com\/wp-content\/uploads\/2020\/09\/image1-300x200.png\" alt=\"\" width=\"300\" height=\"200\" srcset=\"https:\/\/timestampmag.com\/wp-content\/uploads\/2020\/09\/image1-300x200.png 300w, https:\/\/timestampmag.com\/wp-content\/uploads\/2020\/09\/image1-1024x683.png 1024w, https:\/\/timestampmag.com\/wp-content\/uploads\/2020\/09\/image1-768x512.png 768w, https:\/\/timestampmag.com\/wp-content\/uploads\/2020\/09\/image1.png 1350w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/p>\n<p><i><span style=\"font-weight: 400;\">\u201cThe Internal Revenue Service is engaging outside contractors to assist our Revenue Agents in calculating taxpayers\u2019 gains or losses as a result of their transactions involving virtual currency\u2026\u201d <\/span><\/i><span style=\"font-weight: 400;\">\u2013 the United States Internal Revenue service <\/span><a href=\"https:\/\/cryptotrader.tax\/blog\/irs-hires-tax-professionals-to-audit-crypto-tax-returns\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">statement of work<\/span><\/a><\/p>\n<p><span style=\"font-weight: 400;\">Private coins help parties evade sanctions &amp; taxes, causing concern to the enforcement of law in a regime.\u00a0<\/span><\/p>\n<h2><b>Government Pushback<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Governments are not being complacent about the threat of privacy coins. There are ways they can strike back to cease the legitimacy of the coins. One method being the End-user license agreement or EURL. EURL gives a company the right to remove the software from the end users&#8217; computer considered malicious by the company.<\/span><\/p>\n<p><i><span style=\"font-weight: 400;\">\u201cPrivacy coins and distributed exchanges will soon be outlawed\u2026You have, absolutely, the right to financial privacy. Ignore unconstitutional laws.\u2019\u2019<\/span><\/i><span style=\"font-weight: 400;\"> John Mcafee, Founder Mcafee Anti-Virus\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Theoretically, a government could ask a company such as Microsoft to remove Monero, Zcash, or any other private coin from Windows computers. An instance of this has already happened where Japan&#8217;s Financial Security agency FSA has banned private coins like Zcash, dash &amp; Monero.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The decision happened after a <\/span><a href=\"https:\/\/www.investopedia.com\/news\/japans-fsa-bans-private-cryptocurrencies\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">hacking attempt on the Japanese trading platform Coincheck.<\/span><\/a><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-2712 size-medium aligncenter\" src=\"https:\/\/timestampmag.com\/wp-content\/uploads\/2020\/09\/image3-300x200.png\" alt=\"\" width=\"300\" height=\"200\" srcset=\"https:\/\/timestampmag.com\/wp-content\/uploads\/2020\/09\/image3-300x200.png 300w, https:\/\/timestampmag.com\/wp-content\/uploads\/2020\/09\/image3-1024x684.png 1024w, https:\/\/timestampmag.com\/wp-content\/uploads\/2020\/09\/image3-768x513.png 768w, https:\/\/timestampmag.com\/wp-content\/uploads\/2020\/09\/image3.png 1349w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/p>\n<p><span style=\"font-weight: 400;\">Companies&#8217; voluntary approach would avoid a constitutional battle between those who believe financial privacy should be a fundamental human right, limiting access to the coin without drawbacks in the public domain.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Governments can also control the narrative of the initial public introduction to these coins. Suggesting the <a href=\"https:\/\/timestampmag.com\/2020\/05\/04\/development-trends-in-the-top-20-altcoins\/\">currency<\/a> be primarily linked to money laundering and illicit activity to perpetuate a villain narrative.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">KYC compliance protocol is a legal verification of a customer\u2019s business practices to confirm the clients&#8217; transaction history&#8217;s legitimacy to comply with Anti-money laundering laws.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The cryptocurrency &#8211; one of several rapidly growing privacy coins &#8211; offers privacy by obfuscating all parts of a transaction: the sender, amount, &amp; receiver by using ring signatures. Governments, at a fundamental level, seek to control the flow of information and communication. Governments are not being complacent about the threat of privacy coins. The [&hellip;]<\/p>\n","protected":false},"author":12,"featured_media":2640,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[30,334,4,336,114,335],"_links":{"self":[{"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/posts\/2708"}],"collection":[{"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/comments?post=2708"}],"version-history":[{"count":5,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/posts\/2708\/revisions"}],"predecessor-version":[{"id":2719,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/posts\/2708\/revisions\/2719"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/media\/2640"}],"wp:attachment":[{"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/media?parent=2708"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/categories?post=2708"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/tags?post=2708"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}