TL;DR: Privacy coins (like, say, Monero) have a bad rap for the simple fact that they are private. Law enforcement doesn’t like this, nor does “the establishment,” because they love control and fear losing it.
Peer-to-Peer Electronic Cash of the Future Will Include Privacy
Bitcoin (the very first cryptocurrency) began as a privacy coin, too — not in the same way as Monero, but CoinJoins have been possible from day 1 in theory. The main reason that BTC isn’t a privacy coin today is simply because of the high fees.
But, Bitcoin Cash (BCH) functions similarly to BTC and has low fees. This opens up all kinds of possibilities, like the upcoming CashFusion. This turns BCH into a real contender in the domain of privacy coins.
The bad rap comes from the fear that the establishment will crackdown on privacy coins, but in the long run you just can’t stop decentralized systems. Sooner or later, most people will simply choose to have financial privacy because of the obvious benefits.
Market Gives People Choices
The market gives people choices, and the fact that there are over 2,000 cryptocurrency projects is a testament to the frictionless freedom available with free open source software (FOSS). Cryptomarkets already have their own ‘money momentum’ and are driving business and innovation, and as one politician admitted recently, are “an unstoppable force.”
This may be alarming to some people. How will we catch criminals in this kind of future? How can we continue to maintain a safe and stable society? Is this going to lead to anarchy?
It is, of course, debatable how much cryptocurrencies will erode the power of nation-states over time. Opinions range from not at all to completely. But, it’s safe to say that governments and cryptos will continue to coexist for a while.
Will Cryptocurrencies Weaken Society’s Ability to Maintain Law and Order?
The question then becomes: will cryptocurrencies weaken society’s ability to maintain law and order? I would say: No, not significantly, for 3 key reasons.
First, financial privacy doesn’t prevent a person from being caught in a criminal act. If you steal a television and sell it for crypto, you can still be caught stealing the television, or you could be caught possessing or selling stolen property. Although blockchain analysis could be a useful tool, its absence doesn’t mean law enforcement becomes impotent, especially if those resources are redirected to other places.
Secondly, even if you could wave a magic wand and make privacy coins disappear from the planet, the bad guys will just find another way to make financial maneuvers. Crypto may make things easier, but it’s far from their only option.
A Better, Safer Place
Third, because nation-states’ power will decline to some degree, the world will be a better, safer place. Remember, governments create all wars. Governments have caused more death, destruction, and suffering than all the petty criminals combined.
And finally, even if you could prevent people from gaining financial privacy, it doesn’t make sense to punish everyone just because of a few bad actors. In other words, the cost of giving bad actors privacy is far outweighed by the benefit of protecting good actors.
As a famous US Founding Father said: “Those who would give up essential liberty, to purchase a little temporary safety, deserve neither liberty nor safety.” – Benjamin Franklin
Bitcoin inherits the sentiment that gave birth to the creation of America and, perhaps more significantly, the embracement of personal sovereignty. The Founders fought for the freedom to not have their economic activity garnished by tyrants an ocean away or by occupying soldiers invading their colonial homes. In the same spirit, bitcoin seeks to move the world forward into the next stage of sovereignty. Privacy solutions ensure the modern-day counterparts of occupying tyrants are defeated once again.
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