Tuesday, October 12, 2021

Why hide things? Privacy matters if you want mass adoption.

why hide things?

Price manipulation: Sofia is the only mechanic in a small town. One of her customers paid for an oil change with Bitcoin. Sofia later looked up his address on the ledger and saw that the customer's wallet contained enough Bitcoin for a new Lamborghini. Next time he needed a repair, she doubled her prices.

Financial surveillance: Oleg's parents send him some Bitcoin to pay for textbooks, then continue to snoop on his Bitcoin address and activity. A few months later, Oleg sends some leftover Bitcoin to the public donation address for an organization that does not align with his parents' political views. He does not realize that they are still monitoring his Bitcoin activity until he receives a furious email from his parents, berating him.

Supply chain privacy: Kyung-seok owns a small business providing family catering services for local events. A large food company uses blockchain tracing to identify most of his regular clients. The corporation uses this list to contact Kyung-seok's customers, offering similar deals for 5% less.

Discrimination: Ramona finds her dream apartment, conveniently close to her new job in a great neighborhood. Every month, she promptly pays her rent in Bitcoin. However the landlord notices that some of the payments track back to a legal online casino. The landlord personally despises gambling, and unexpectedly chooses to not renew Ramona's lease.

Transaction security/privacy: Sven sells a guitar to a stranger, and gives the buyer a Bitcoin address from his long-term savings wallet. The buyer checks the blockchain, sees the large sum of money that Sven has saved up, and consequently robs him at gunpoint.

Tainted coins: Loki sells some of his artwork online to save up for college. When he pays tuition, he is shocked to receive a “payment INVALID” error from the school. Unbeknownst to Loki, one of his paintings was purchased using some Bitcoin that was stolen during an exchange hack the previous year. Since the school rejects any payment from a blacklist of “tainted” Bitcoins, they refuse to mark the bill “paid.” Loki is in an extremely difficult position: the Bitcoin that he saved has already been transferred out of his account, yet the tuition bill is still unpaid.

(excerpt from a wonderful free book with some edits)

(replace "Bitcoin" with your favorite coin that doesn't value its user's privacy)


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