Cryptocurrencies – Anonymity Is Taken (Not Given)

The arrest of fellow citizen Gal Vallerius is all over the news in France. The case highlights the fallacy that cryptocurrencies enable criminal activities through providing anonymity – they don’t.

Anonymity Is Like Power

If something (or someone) pretends to offer anonymity, it is always a sales speech because anonymity, much like power, is never offered to people. It is something people take. Futhermore, much like power when an individual has it, it is an everyday fight to keep it.

Here is an excerpt from the affidavit in the criminal case against Gal Vallerius: Gal Vallerius Case Excerpt is a service that connects people from all over the world to trade Bitcoins. You may want to use them because they provide a fast way to move money but it is important to understand that such services do not provide anonymity – and never will.

Their Terms of Service are clear about their position: “ will fully co-operate with any law enforcement authorities or court”.

Strong Cryptography Is Not Anonymity

When criminals get arrested, it is not because investigators have broken some cryptographically strong algorithms and protocols. Yet each time anonymity is sold somewhere, the speech is about strong cryptography and state-of-the art security protocols (CryptoNote-based coins etc).

  • Using untraceable and esoteric coins may create weak spots with the need for fiat conversion – especially if the value converted is substantial.
  • Mixing coins may involve additional steps to organize and negotiate the mixing transactions, any of these steps may collaterally compromise the anonymity of participants despite a smooth and successful mixing.
  • It takes more than cryptography to prevent real-world activity from being connected to online activity.
  • Taking payments from a transaction partner whose identity can be exposed may compromise anonymity.

Thousands of criminals have been arrested while using only cash for their illegal transactions and it was not because the DEA found their fingerprints on the Benjamins.

The Barking Dogs

The internet forums are sometimes filled with naive questions:

  • Is Monero anonymous?
  • Is Dash more anonymous than Monero?

It is very much like asking if the word “dog” barks.

I have good memories of Brittany, a peaceful and quiet country side region in France. The real dogs here are always barking in the early hours. This is where Gal Vallerius chose to settle. And I can understand why in regards to anonymity.

My 2 satoshi.

L'ELLez près de sa source by Moreau.henri (Own work) [CC BY-SA 3.0]L’ELLez près de sa source by Moreau.henri (Own work) [CC BY-SA 3.0]

Frederic Rezeau

Founder at Litemint. Developer with 10+ years of experience working for financial firms BGC Partners and Crédit Lyonnais Bank (Crédit Agricole) in London and Paris. Honorable Mention Prize Winner at the 2014 Linux Foundation & Samsung Tizen App Challenge. Co-founder of Israeli-based video game company Massive Games. Founder of award-winning UK-based studio Okijin and Magnetwork.

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