The following is a guest post from Roni Rose and Jack Stern.
The average crypto investor can’t do much to prevent people from trading on the black market; you can’t stop them from buying and selling child pornography, narcotics, stolen identities, and other dangerous and illicit products. While the majority find these people’s purchases to be despicable, many turn a blind eye to the fact that their investment in a privacy token is bulking up these criminals’ wallets.
The ethical dilemma of using or holding private and untraceable currencies is defined as such: Should we accept that our spending habits and private information be easily available to government institutions and other data mining behemoths, or should we support the use of these currencies in the name of our right to privacy, while knowing full well that they are used for the darkest and most nefarious transactions?
Most investors likely won’t consider these issues when investing, or brush them off with something along the lines of “The US Dollar is also used in criminal activity — perhaps we should stop using that.” They fail to consider the volatility of cryptocurrencies — with a limited supply for each currency, their purchase of a privacy coin contributes to the wealth of its other holders — criminals included.
Should someone who is innocently seeking to maintain their privacy willingly give it up so as to not strengthen criminals’ buying power?
It’s no secret that people have been using crypto for the black market since its conception. Bitcoin was the currency of choice for the notorious Silk Road, a darknet black market website that could be used to buy explosives, weapons, hitmen, drugs, and more. This was before bitcoin was widely understood to be pseudo-anonymous, meaning that transactions between wallets can be traced and identified. In fact, this is how the Silk Road founder, The Dread Pirate Roberts, was caught.
Now that new privacy coins are becoming increasingly difficult to trace, the reality of this phenomenon becomes much more problematic. These currencies are fueling a hotbed for criminal trade.
Concurrently, it is only becoming more apparent that the digital services and companies we use in our day-to-day lives are easily tracing our transactions online. With companies like Facebook and Google monetizing the data of our conversations, purchases, and online searches, consumers are being used as the cash cows for their profits while losing loads of their private information to the highest bidder. It makes sense that people would want to use a currency that offers them some semblance of privacy.
As someone who values her right to privacy in this digital age, but is also easily susceptible to the lightest ounce of my Jewish mother’s guilt, this is a dilemma I ponder every time I tune-in to the crypto world, or read an enthusiastic posts about the rise of the privacy token.
There are certainly pros and cons, and this matter is a perfect example of giving up privacy for security. If you have any thoughts on the ethics of purchasing and using privacy coins, share them in the comments below — I’m curious to see how others feel about these tradeoffs.