The Surge of Surveillance Usage is Molding Bitcoin's Privacy to Its Roots

Eventually, the Government, who are no experts when it comes to cryptocurrencies, also entered the conversation. They particularly shared more interest in cryptocurrency tracking rather than cryptocurrency. The US government has injected $6 million on developing transaction mapping tools. 

The pressure from the government eventually made exchanges to find a way to keep a track on all transactions and enhance the security and safeguard themselves against the potential attacks of hackers and misuse by criminals.

The exchanges have also stepped up their game and are on a continuous lookout to track and trade the transaction from the customer’s fund, right from the start. 

The Rise of Market Surveillance Tools

As the interest peaked, it morphed into a business and it led to multiple companies entering the field. As the traceability grew, one of the basic principles of bitcoin, which it was renowned for it took a bad hit. The decentralizing nature of bitcoin is what people are enamoured by, but with all the tracking, eyebrows were raised that it was getting erased from its core.

A U.K. based financial technology start-up launched itself amidst the demand and had only one goal in mind- trace bitcoins, identify any illicit activity carried out by through it and update the government with it their private partners regarding the movement done by the coin.

This was no biggie as Bitcoin tracking is not an uphill climb. Every transaction of it is transparent and makes it way to a public ledger i.e. blockchain. Even Police relies on the technology used by the eclipse in their investigations. Banks also utilize it as a feature of security, and it aids in doing business in bitcoin more proficiently and alerts them if there is any suspicion regarding money laundering. 

The IRS has brought Chainalysis, another elite player from the crypto space, onboard and it helps in sniffing out the danger of customers using bitcoin to evade tax.

Things took a twist when new cryptocurrency entered the fray. Bitcoin was pretty translucent, but currencies like Monero had added privacy-enabled features. Launched in 2014, primary purpose Monero wanted to achieve was to be immensely untraceable and private. This turned into a bit of trouble for the exchanges and surveillance companies and laid the platform of a new market mainly monero-driven. 

It caught the attention of criminals or people with nefarious intentions and Monero became the go-to currencies to carry out evil deeds, according to a CNN report. 

“I absolutely think Monero is going to change how cybercriminal payments are made,” Flashpoint analyst Olivia Rowley told CyberScoop. “In terms of actually bringing cybercriminals to court, it’s all about privacy. That’s the whole point of Monero. It’s going to make investigations a lot trickier.”

The focus has been on Bitcoin for so long but now the realization is kicking in that cryptocurrencies like Monero pose a similar if not bigger threat.

Enhanced Transparency, But at What Cost?

The basis of bitcoin and what enticed people in the first place was its decentralized nature. However, with all the tracking prerogatives in play, that has definitely been harmed.  The bitcoin community has mixed opinions about it, While for a few it was a boon as things became more crystal clear and added a sense of security, others felt their privacy got invaded. Satoshi Nakamoto’s primary vision was a world where the individual is in command of his coins, away from the hassle.

The decentralization feature was key, but now with the invitation was given to these forensic companies by government or exchanges has definitely left the whole concept of privacy a bit humbled. While it definitely carries pros, but the type of cons which changes the very core of the foundation usually leaves people more vexed.

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