What Is Sexaholics Anonymous?

Because the data exchange between the nodes of the blockchain follows a fixed and predictable algorithm, the blockchain network does not need to be trusted and can exchange data based on addresses rather than personal identities.

For users, a big attraction of cryptocurrency technology is its ability to conduct anonymous transactions. This type of hidden, unclear, or obscure transaction is called obfuscation.

Anonymity is important

The confidentiality of information and the security of transactions are the advantages brought by the anonymity environment of distributed ledger technology (DLT).

Confidentiality

Technically, most platforms that involve computing instructions will ensure the confidentiality of input data, generated output data, or use homomorphic encryption methods in secure distributed transaction ledger.

Jeremy Epstein, CEO of Never Stop Marketing, said:

Anonymity is indeed an important feature for many people in the crypto world. People in this industry are soberly aware of the pros and cons of technology, so they know the 'digital traces' left by almost every type of activity.

For the layman, the simplest example is that blockchain.info often changes addresses for wallets within its platform. This method can effectively prevent transaction tracking for specific wallets.

However, platforms like PIVX (Decentralized Open Source Cryptocurrency Project) have chosen a hybrid mechanism to achieve anonymity.

Manipulation and control

With a Wall Street Journal article on the potential of Facebook and Google, Epstein made the point that large companies like to control public opinion. He said that platform users who lack anonymity protection are often more vulnerable to manipulation by others.

Confuse

The coin mixing function of PIVX is based on CoinJoin. CoinJoin can connect two wallet users who initiate payments at the same time, both of which are unknown. You can then mix and encrypt transactions, making it difficult to determine where the transaction is going.

The deployment of PIVX is performed in a decentralized mode and is completed by the network masternodes. This provides another layer of privacy protection for transactions. Although full anonymity cannot be guaranteed, if the malicious participant controls 50% of the current master nodes, his chance of removing transaction anonymization protection is also less than 0.5%, because transactions on this platform are mixed 8 times.

Epstein also mentioned other examples of privacy and anonymity deployments, including OpenBazaar's integration of Tor to improve transaction anonymity and Zcash.

Two sides of a coin

Hrishikesh Huilgolkar, Innominds blockchain developer, believes that anonymity is important in blockchain transactions. Huilgolkar said that all claims that cryptocurrency transactions such as Bitcoin are "censorship-resistant" are not accurate in his opinion.

According to Huilgolkar, if a miner decides not to handle the sending and receiving of a transaction between addresses, it proves that the transaction was reviewed by the miner. If transactions are anonymous, miners cannot decide which transactions to prioritize and they cannot review. He explained:

There is a reason to guarantee user privacy. Every time a user sends a transaction, his address will be exposed. With the address, the corresponding encrypted network value and the exchanges that this user often uses can be found. This information can eventually become a weapon against this user, such as social engineering, attacks, extortion, or law enforcement processes in areas where cryptocurrencies are determined to be illegal.

Huilgolkar also mentioned DApps (decentralized applications). Usually different companies use different private chain platforms, and their DApps are also different. Therefore, such companies do not want their DApp transactions and other activities to be exposed to competitors.

At the same time, if necessary, trusted third parties, such as the regulatory authorities, will review the transactions, which will lead to more and greater challenges for corporate blockchain privacy. Especially for special DApps such as gaming, transaction privacy is the most basic function.

Disadvantage

However, Huilgolkar also acknowledged that anonymity can cause rampant illegal transactions. In such cases, it is difficult for law enforcement to target offenders. In addition, he also believes that low transparency will affect users' trust in the technology, because they cannot directly understand the generation process of currency, inflation rate and other blockchain transactions.

Huilgolkar said that the zk-SNARKs used by Zcash is the best example, and requires user trust to set it up. Once mishandled, an attacker is likely to generate an unlimited amount of money without everyone's knowledge. In addition, Monero transactions are not completely private, and specific transaction information can be found through data analysis.

Social discrimination

Nwali Chibueze, founder of the Nigerian Bitcoin exchange Sungrace Exchange, said privacy and anonymity are the basic rights of everyone in any civilized society. Chibueze said that most responsible governments are convinced that each of their citizens has the right to protect their privacy, including transaction privacy. He also believes that transactional privacy can be used to address social discrimination.

Currency privacy does not necessarily mean encouragement for illegal transactions. Some people may suffer from discrimination-prone diseases and are therefore reluctant to buy medicines in a traceable trading system. In this case, as long as the purchase of illegal drugs is not involved, the anonymity and privacy of transactions should be encouraged.

Fight against crime

Considering that anonymity involves criminal activity and can be dangerous, Epstein also mentioned updates to criminal procedures.

He explained that such challenges must be addressed by governments, law enforcement and regulators.

Epstein says:

Criminals may take advantage of this innovation, but I don't want us to do more than pay for it. Law enforcement, regulators and governments must all adapt to this new environment, which will be a challenge. Nonetheless, the advantages of this technology far outweigh the disadvantages. It guarantees personal freedom, personal freedom and privacy. In addition, people no longer need to be manipulated by 'big data' companies.