Cryptocurrency and Privacy - An Introduction to the Interface

Abstract

The largest and best-known Cryptocurrency in the global economy is Bitcoin but it is only one of approximately 2,000 cyptocurrencies in circulation today. A Bitcoin was worth 8,790.51 U.S. dollars as of March 4, 2020 and all the Bitcoins in the world were worth roughly $160.4 billion. In Bitcoin you don’t need to explicitly register or reveal your real world identity, but the pattern of your behavior might itself be identifying. This is the fundamental privacy question in a Cryptocurrency like Bitcoin leading to emergence of Privacy coins such a Monero and Zcash that utilize complex cryptography to achieve the greater Privacy levels with more anonymity features. However, in the zest for increased Privacy with focus on anonymity in Cryptocurrency transaction, the law and order issues are compromised wherein it would be near to impossible for the law enforcement agencies to track criminals dealing in money laundering, terrorist financing, tax evasion and other frauds by using Crypto currencies. In this background, it is necessary to understand “Cryptocurrency and Privacy” as an interface to better comprehends the subject of Cyptocurrency which is very dynamic in technology with multiple global implications on the economic and legal front. The present work aims to study Cryptocurrency in the context of Privacy. The foundational concepts and definitions of the two competing subjects: ‘Cryptocurrency and Privacy’ is taken up for better understanding the background of the interface. Tor, an anonymous communication network is referred in brief to state that the dilemma in the Privacy context is not unique to use of Crypto currencies technology in so far its negative effects are concerned . The conclusion suggest for finding an appropriate balance between an individual’s privacy and State’s security in Cryptocurrency technology.