He or she, on condition of anonymity, wrote an essay for The Bitcoin Policy Institute. It begins with “Financial privacy – and, more specifically, the requirement to obtain informed consent prior to the collection and use of another’s personal financial information – is critical to individual freedom.” From there, she goes to Mordor and back. Is the banking insider involved in anything? Or is the banking insider just following the bitcoin party line? Let’s examine what she or he said and find out.
But first, we shouldn’t separate this paragraph from the opening lines. It accompanies and integrates them.
“Due to the dual threats of an exponential rise in cybercrime and increased government surveillance and control of financial transactions, individual financial privacy is and has been attacked on multiple fronts and the real costs are starting to manifest in obvious ways.” .
This is a very important topic and the world should discuss it thoroughly as soon as possible. This banking insider is doing governments a favor by explaining to them how bitcoin privacy works. The essay also reads as a preemptive strike against possible Tornado Cash-like sanctions against the bitcoin network.
About the author / The Banking Insider
Normally, we don’t interrupt the flow of the article with the author information, but this time it’s important. If readers don’t believe the banking insider, they won’t take his words of wisdom seriously. This person knows what’s going on.
“The author chooses to remain anonymous to protect his identity and the company he works for. They have worked at several publicly traded financial institutions in the area of fraud prevention and mitigation; from basic tactics to corporate strategy and policy “.
They also worked in “identity verification” and are involved in KYC and AML “compliance and reporting”. The banking insider currently works at a bank, helping it to “prevent fraud and comply with existing regulatory guidelines on customer identity.” Their warning to governments and citizens is as chilling as it is necessary.
“As someone who has seen identity theft disrupt the lives of countless victims, I know how important financial privacy is in protecting consumers from the scammers and criminal networks that have proliferated over the past 15 years. It is estimated that global losses from fraud equates to 6.4% of global GDP, reaching a staggering $ 5.38 trillion in 2021. Experts cite the protection and protection of personal financial information as one of the most important actions a person can take to mitigate these threats “.
And since we’re giving credit where it’s due, The Bitcoin Policy Institute it defines itself as “a non-partisan and non-profit organization that researches the political and social implications of Bitcoin and emerging monetary networks”.
BTC price chart for 09/22/2022 on FX | Source: BTC/USD on TradingView.com
The banking insider on privacy
According to the banking insider, “cash provides the highest level of privacy.” Second, we have credit card companies or banks, in other words “third parties that transact on our behalf”. Using them, there is “a relatively high level of privacy” because those companies are “legally obligated not to disclose our transaction information to others without our consent”.
You know who ranks third, “since Bitcoin is a public and open ledger, a user’s transaction history is publicly available to everyone.” The transparency of the bitcoin network means that “anyone can see all the transactions in the past related to holdings in that wallet address and, in many cases, how much Bitcoin is in the wallet!”
This brings us to prevention. In case lawmakers are considering directing a Tornado Cash-like attack on bitcoin:
“Bitcoin users who don’t want to share their entire transaction history or equity when transacting with a merchant can use collaborative transaction tools to bring their financial privacy on par with other payment methods. These tools provide a service similar to what Visa offers its users today; protect transactional details from both the transaction counterparty and outside observers.
It’s not just that collaborative transactions aren’t a crime. They are absolutely necessary for the system to guarantee privacy.
“These collaborative transaction tools demonstrate a clear benefit to end users, but are viewed with suspicion by policy makers and financial institutions that are enabling cryptocurrency exchanges and services, as these tools are also conceptually attractive to criminals who want to try. to “break the chain”. “of visibility on the sources of their funds”.
In the end, the banking insider is just saying that bitcoin users deserve “the same level of financial privacy that Americans are legally entitled to for day-to-day transactions, regardless of how those individuals choose to pay or get paid.” And that the system is different enough to deserve a new set of rules. And that this is no small thing.
“As Bitcoin users grow through regulated exchanges, lawmakers need to ensure that their financial privacy is protected at the same level as all other regulated payment channels. If this is not addressed soon, the global threat that fraud poses today will only accelerate. “
Remember, “experts cite protecting and protecting personal financial information as one of the most important actions a person can take to mitigate” privacy threats.
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