Why anonymity should not be a dirty word

Part of the mystique of Bitcoin lies in its entrance to the world. It was given to us by an unknown person who did a wonderful job of maintaining the anonymity they obviously craved. Nearly ten years on, and despite the estimated $7.5bn in Bitcoin held by Satoshi as an incentive, no-one has managed to uncover their identity.

Today the situation is very different. Teams are expected to provide full details, including names, photos, LinkedIn profiles, business addresses and pretty much everything bar their personal measurements.

DeusExMachina put a poll out today asking if a Crypto Twitter personality should have to forego their anonymity to advise a project and 52% answered that they should. This is crazy. If a CT personality is being asked to advise it means they have garnered (justifiably or otherwise) trust from enough of the community. Why then does knowing their name make a difference? Would we think of Satoshi differently if we knew what country they came from or what experience they had?

Yet people demand this in the name of ‘transparency’. This is partially as a result of the sheer number of anonymous scams in the past but it is also increasingly a shortcut for investors to skip the arduous nature of due diligence; if there is a name, there is someone there against whom they can claim. It skips the need to actually review the project properly, something which most are not capable of.

However, it is a shame that more teams do not remain anonymous, particularly those which operate at the edges of the law (which contains a lot more of the interesting uses for decentralised technology). Why? Because it removes the threat to their personal freedoms that can be held over them.

The topic is pertinent today as the first death markets began to surface on Augur, some of which focus on Donald Trump. Whilst I do not think facilitating such a market necessarily contravenes the law against threatening the President (I’m not a lawyer), this is a project co-founded by an American citizen (Joey Krug). I cannot imagine that assassination markets facilitated by a US based operation (even if the Foundation is located outside the borders) against the US President will go down too well.

Place your bets

Krug also happens to be co-CIO at California based Pantera Capital. Whilst the team have claimed previously that there is the option for validators to not pay out unethical markets and that there is no kill switch I am sure they would be able to alter the project (through a fork if necessary) if sufficient pressure was applied on them. By foregoing their anonymity teams increase the likelihood of the risk to both the project and their own freedom. All of this is without getting into the more basic debate surrounding the restrictive gambling laws in the US.

Augur is a prime example of a project which would arguably have been better launched by an anonymous team. As Matt Odell noted, this may have limited the amount they could raise in an ICO but hopefully this is a trend we can reverse in the future, where teams are judged more on their output rather than solely their reputation or advisor list.

Going public also increases the risk to important developers. Kevin Pham received significant pushback for noting that the central figureheads of other cryptoassets (such as Vitalik Buterin) would become targets themselves, given the damage it would do to the ecosystem if someone as instrumental to Ethereum as Buterin is were to be killed. Despite the furore it caused, can anyone really argue against the central point?

It also increases the risks of being targeted by thieves or organised crime syndicates. The wealth of someone like Buterin (who just today linked a wallet with $5m of cryptoassets in it to his PeepEth account) is well known, but there are now hundreds of projects which have raised tens of millions of dollars in funding. All thieves have to do is track them down using the ample details the team themselves made public, many of whom we can be sure will not be storing their assets in a manner befitting the millions they now possess.

There is a certain complacency amongst many in crypto that they will not be targets, but if we are truly just at the start of the DLT revolution then we may see asset prices rise 10–100x further. This only increases the riches that will be on offer to those with ill intentions.

Furthermore, it is not just teams that should consider being anonymous, it is everyone involved in crypto. Advertising you have 1–5 BTC now could in 10 years’ time be as likely to make you a target as those who publicised their 1,000+ BTC holdings in the past.

Without great difficulty (changing name, moving house etc) you cannot regain your anonymity once you give it up. We have seen many examples since the dawn of social media where old posts come back to bite their author. You may have to hold your cryptoassets for 50–60 years. Err on the side of caution.

Note: This article was first published at FlatOutCrypto.com




Find my work covering the cryptoasset space at flatoutcrypto.com and follow me @flatoutcrypto

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Find my work covering the cryptoasset space at flatoutcrypto.com and follow me @flatoutcrypto

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