Ugly Truth About Blockchain

The Ugly Truth About Blockchain, And How PriFi Helps Solve It

Editorial Team Avatar
Feb 8, 2022
9 min reading time

Decentralized Finance (DeFi). NFTs. Meme coins.

The cryptocurrency world has blossomed beyond simple buzzwords over the past five years to signify entirely alternative ecosystems. Ecosystems of finance, art, or transaction capabilities allow any individual to interact with and build wealth in a new way.

The decentralized applications (dApps) and smart contracts that fuel them, allow trustless transactions to take place across decentralized networks around the world. 

All of this is powered by blockchain technology. A technology that stores information in immutable (unchangeable) records for all time, this information is open and accessible to anyone who has the technology.

It’s a utopian style dream, that has accelerated thousands of new application developments, and has connected millions of people around the world.

But the dark framework of blockchain technology should have every user concerned. 

As the technology gains mainstream adoption, so too will it attract the attention of those with ulterior motives. Those who understand just how flawed blockchain’s framework is, and who look to exploit it for their own purpose.

What is this weakness, why should we all be concerned, and how can we strengthen the technology? This article will explain.

Flawed Foundations

No, the dark underbelly or framework of blockchain technology is not the terrorist activities or the money laundering that has purveyed the media. Naturally, wherever money is concerned, we are going to have activities of this nature. However, as has been proven time and time again, these bad actors tend to prefer cold hard cash, and billions have been moved using the traditional banking sector with sinister intent.

No, the dark framework of blockchain technology is not about this. It’s about something far more serious. 

It’s about your inability to delete data, and your lack of financial privacy. It’s about your privacy being eliminated in our rapidly evolving blockchain world.

Unfortunately, when using almost every mainstream crypto currency there’s no privacy option. Your data is stored on the blockchain, linked to other blocks of information, and is recorded, forever, in a format that is nearly completely accessible.

Anyone with the technical know-how can watch your every transaction and trade—and can even go so far as to link your wallet address to personal information. Be they local or foreign governments, corporations, or politically or socially motivated interest groups, even “that guy from Twitter” can snoop on your financial records. 

It feels silly even saying this is a huge concern. Most of us do not think about this level of transparency until a problem happens and it’s too late.

But it’s worth remembering that this level of financial surveillance is not possible in the traditional banking system. Nefarious actors and corporations cannot directly see your financial data. 

Yes, various parties can extract limited amounts of information from debit and credit cards that you use, but the finer details of your financial transactions are restricted and limited to only certain regulatory agencies, or extreme hacks and scams.

Contrast this to cryptocurrency and blockchain: public decentralized ledgers, housing transactions created since the genesis block of each blockchain, are available for anyone and everyone to see. Scammers, hackers, corporations, and local or foreign governments.

When linked to basic internet surveillance technology (IP address, MAC addresses, connected to crypto on and off-ramps), it becomes a trivial exercise to extract personal information connected to your blockchain data.

This is the foundation we’re building on. And this weakness is what PriFi aims to strengthen.

Corporations and Control of Your Data

The truth is, too much transparency leaves us exposed to a series of threats from anything less than the ideal world. And as you may have realized, we do not live in an ideal world.

The unfortunate fact is that we continue to sacrifice privacy for convenience. Trading our data and personal information for small improvements in productivity, entertainment, or otherwise. Making matters worse—most of us have done so without even knowing what it is we’ve lost. Just click on the terms and conditions and let’s be on our way.

The purposefully complex documents and regulations that have been constructed have allowed our banks, trusted financial institutions, and companies to gather data on us, selling it to the highest bidder without our express and informed permission. Involved parties end up earning billions of dollars in the process, leaving us at a loss, unable to reverse the mega-trend in this direction.

Regulatory bodies both local and foreign, aiming to control their populace and society, use these same technologies to overreach in their information requests, looking for any nuanced data to accelerate their cause. 

As Snowden released, programs exist to collect all phone data over given periods of time, allowing breaches of privacy to the very core. 

Blockchain technology makes these problems worse. 

Permanently recorded data, stored on blockchains that anyone can view, amplifies the existing problems and challenges we’ve already been experiencing.

In an ideal world blockchain technology would have privacy built directly into the code, allowing you to choose which advertisers receive your attention by controlling and distributing our metadata,which regulatory agencies were able to peer into your financial records, and how much a company might be able to see. 

We’d live in a world where governments and corporations respect boundaries, ask permission, and share in some of the wealth creation from the data that we create. 

But until that ideal exists, we need strong privacy protocols to help us protect our information. We need private finance, or PriFi built into the blockchain itself. 

Privacy A Human Right Worth Fighting For

Quite literally defined as a Human Right in the United Nations Human Rights Declaration, privacy should simply be expected in the developed world. 

Yet without change, we’re rapidly losing ground to those who would want to take privacy away.

Even if you’re not a persecuted minority, the scrutiny over our private lives is a direct violation of our privacy and a threat to our dignity as people. We all deserve to financially transact with those who we want, purchase the goods and services we want, and earn a living in whatever legal way we find beneficial to ourselves.

We deserve to partner with who we want, talk about what we want, and think what we want.

Unfortunately, as it currently stands, our web technology is set up to allow predictive algorithms, infused with metadata taken without our consent – to be used ‘against’ us. 

Sci-fi concepts like ‘predictive behavior monitoring’ straight out of Minority Report aren’t far away. We’re already pushing forward in this direction with the likes of social credit scores in China.

Without any privacy modifications to blockchain, this will become worse, allowing regulatory agencies to see, shut down, and freeze your ability to financially transact or even have a legal financial existence.

It is why here, in the midst of mainstream adoption, private finance, or PriFi should be on your radar.

For these pervasive intrusions aren’t just a challenge for the Chinese. 

Author bio:

This is a challenge for every citizen in every nation, as Canada, the United States, and the UK – both democracies and dictatorships alike – will forge ahead with their own surveillance programs. Programs that will be amplified by the data provided from blockchains and central bank digital currencies (CBDCs) built on this technology. 

PriFi then becomes a very important concept in our digital future.

Moving Into The Future With PriFi

“Arguing that you don’t care about the right to privacy because you have nothing to hide is no different than saying you don’t care about free speech because you have nothing to say.” – Edward Snowden

By incorporating multiple layers of cryptography into the blockchain technology itself, PriFi protocols like Haven or Monero, protect your personal information and encrypt your transaction information by default. 

They provide a hedge against the relentless pursuit of your financial information, blocking nefarious people, corporations, or regulatory agencies from peering in.

And rather than giving those in power carte blanche to do whatever they want with your data, you control insights into your financial information – sharing it with only those parties who you deem acceptable. 

The future is rapidly approaching, and blockchain technology seems to be the foundation on which it will be built. Will we repeat the same mistakes of Web 2.0 – allowing corporations to extract and leverage our data, and regulatory agencies to collect and siphon all financial information on the blockchain? Or will we build a stronger foundation and a better future?

PriFi isn’t a brand or a company. It’s not a thing you can buy. A service you can order.

PriFi is about protection. PriFi is about freedom. It’s about choice. 

PriFi is a movement to strengthen the foundation of the future, and protocols like Haven, Oxen, or Monero already have the technology in place.

Hopefully other blockchains follow suit. Freedom in the ‘new world’ depends on it.

Author bio:

Harlequin

Once Harlequin discovered crypto in 2014, the question ‘what is money’ took hold and Harlequin became fascinated by the possibilities of decentralising trust. Working in the tech industry, it was clear to Harlequin that we all have very little privacy in the digital world. What was challenging was how oblivious the average person is to the dangers of this. Harlequin wanted to change this. Upon discovering Haven, these two passions collided and the concept of a private stablecoin ecosystem immediately made sense. Harlequin is committed to understanding and promoting tools that we can use to preserve our privacy and our freedom, and is passionate about educating others in the space. If you’re interested in joining the conversation and learning more about PriFi stablecoins, you can learn more by going here: https://havenprotocol.org/

Featured Image: Unsplash.com

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