The Prospect Of Near Complete Anonymity Essay

712 Words Jan 27th, 2015 3 Pages

The prospect of near-complete anonymity in financial transactions has been a much-lauded feature of the Bitcoin. This praise typically originates from those who support anti-government, and libertarian views of the financial system and Internet commerce. Those with more moderate views see that utility exists in a financial system that provides a level of anonymity for those operating within it, but it is understood that the funding of undesirable behaviors must be limited and some regulation must exist.

Anonymity is preserved in Bitcoin transaction because all that is required to be disclosed to a counterparty in a transaction is the public key of a randomly assigned Bitcoin address. A new address may be acquired at anytime, free of cost. A Bitcoin user does not need to provide any information that could link an individual or entity to the address. The only information maintained as a record of a transaction is the listing of the transacting Bitcoin addresses in the Block Chain. Although the Block Chain can be viewed by anyone on the system , anonymity is preserved by the inability to link individuals to addresses. These features of the Bitcoin protocol make it difficult to identify undesirable behaviors such as money laundering of criminal proceeds, drug trafficking, or terrorism financing. Excluding anonymity, the benefits of Bitcoin for criminals around the world is that “a [Bitcoin] user only needs access to a computer, tablet, or smartphone” in order to…

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