One of the draws of cryptocurrency is the privacy of transactions, along with the fact that it is not regulated. That anonymity may disappear in the future as governments try to gain some form of control over the digital currency phenomenon.
Advances in technology and law enforcement tools could mean the end of anonymous transactions, according to Garrick Hileman, an economic historian at the University of Cambridge. Government officials would especially like to crack down on transactions handled in the realm of the dark web.
Hileman explains, “It’s like taking a blood sample from Lance Armstrong from 2005 — at that time, there was no way to test for the particular drug he may have been using, but through preservation you can, retroactively.”
Bitcoin has experienced a surge in value throughout the past year, soaring 1,000 percent against the dollar. This drastic change in the popularity of cryptocurrency has caused investors and financial executives to take a closer look at digital currency, with many voicing concerns.
Criminals have seized on cryptocurrency as a way to get away with financial crimes and money laundering, as well as making illegal purchases. This has already spurred European and UK authorities to start cracking down on Bitcoin.
Because blockchain transactions are recorded, law enforcement officials of the future may be capable of going back and discovering the details of sales and users, even if they do not currently have this ability.
“We will see a lot more of this,” shares Hileman. “Anything that can be made can be unmade.”
According to Hileman, Bitcoin has already proven to be less anonymous than many people had originally believed. As a result, some altcoins, such as Monero (XMR), have gained popularity on the dark web. Privacy technology is also evolving on a regular basis, and services are in place to launder digital tokens to make them less traceable.
However, Hileman warns that the cryptography behind these systems is not as strong as people may think and has never been mathematically proven to be completely secure. Quite simply, no one has been able to crack it yet.
Hileman believes it is just a matter of time, but that doesn’t mean that it will be anytime soon. He explains that it is hard to guess when these algorithms will be cracked, but people should be prepared for it to happen.
Meanwhile, just heed the warning, and keep in mind that your cryptocurrency transactions may not remain a secret forever.