There is not much market for anonymity in digital currency

Chapter 0 Introduction

Bitcoin is not a highly anonymous digital currency. Its anonymity is just a compromise. Because Bitcoin does not provide very strong anonymity, it provides a gap in the market, leading to the emergence of a batch of digital currencies that advocate anonymity. Including Darkcoin, Monero, Dash..., and recently a new coin called Zcash has appeared, which has attracted a lot of attention in the Chinese community. Many people think that this coin will have a great demand and the price will definitely rise. But I think the market demand for anonymous payment is not large, and the market demand for payment functions with anonymity as the main feature is even smaller, just to cater to the hype.

Chapter 1: We will need less and less privacy

Anyone who has integrated into modern urban life should have some understanding that privacy is a business, and you can exchange your privacy for money. For example, filling out a questionnaire to get a gift, applying for a credit card, registering an account for free... These are all us giving away part of our privacy, such as exposing your mobile phone number, revealing your address, etc., and then the merchant will give you some benefits. This is a kind of exchange, and the market is very large. The more privacy you expose, the greater the benefits you can get. For example, if you want to apply for a credit card, you have to give all your income, address, social relationships, purchasing habits, etc. to the bank, and the bank will only give you a short-term interest-free loan with a validity period of only more than 50 days.

Most of us would rather pay for all purchases with credit cards in order to get a credit card limit increase and a 50-day interest-free period. Therefore, mainstream payment habits do not require anonymization.

Nowadays, the cameras in China's first-tier cities are almost everywhere. Whenever you step out of your house, there will be cameras filming you. Not to mention that everyone now has one or more smartphones with cameras. These phones may capture your actions anytime and anywhere, and then upload them to the Internet. The newly released iPhone 7 also has three cameras, which can take 3D photos. This is really called having no privacy. But do we care? Or do you have the ability to object? Really not. Most people are still happy to live in such a highly monitored situation because it is safe. The public security in China's big cities is so good. As long as you don't do evil, few people are afraid of being filmed. On the contrary, we are very happy to take selfies and show off in various ways. Taking photos is not enough, and we also take videos, and if that's not enough, we live broadcast.

We are not afraid of being photographed no matter what we do, so do we still have a strong demand for anonymity when it comes to buying things? On the contrary, mainstream values ​​like to show off our shopping lives. We are happy to show off most of the things we buy. Think carefully, is there anything that we would hide after buying for fear that others would find out? Very few, except for doing bad things, there really are not many. Why? Because we like to socialize. We humans are social animals and cannot stand being away from the attention of others. So we have to constantly show our presence.

So privacy is just a transaction. We have the need for anonymity, but we will be more attracted by the benefits that can be obtained by exposing privacy, and thus we will actively give up the need for anonymity.

Chapter 2: Living on the Internet, it will become too difficult to protect privacy

We are now living more and more on the Internet, where is the privacy on the Internet? The existence of big data mining technology makes it impossible for us to protect our privacy. The Internet and big data technology, plus the networked terminal cameras that can be seen everywhere, you really can't protect your privacy well.

Big data technology uses the method of cross-recurrence. As long as you leave a trace on the Internet, you can find out what you have done. As long as you use Didi to take a taxi, you will expose your location; as long as you swipe your credit card, the bank will know what you bought; if you chat on WeChat, Tencent will know everything you are talking about... If you want to completely protect your privacy on the Internet, you can hardly live a normal life.

In addition to being able to understand your details through cross-replication, the Internet and big data are even more terrifying because they observe you from a full perspective. They are like God, seeing every aspect of you clearly. You use WeChat to communicate, and now Tencent knows almost everything about Chinese people's communication; you use e-commerce to make purchases, and Taobao can know what you have bought and even guess what you will buy next; when you travel, Amap knows your location, and they even track and record your trajectory... Then you say, damn, I don't believe it, I want to hide, you throw away your smartphone, fold your credit card, hehe, you still can't hide, there are cameras on the street taking pictures of you, and there are people taking pictures of you with their phones. You really can't hide. The Internet and big data know every aspect of you, it is visible from a full perspective, how can there be any privacy.

When we install various apps, most of them will ask to read your text messages, location, contacts, etc. We all agree to all of them. But there is nothing we can do. If you don’t agree, you will not be allowed to use it.

There is also a kind of privacy that only exists in fixed social relationships. For example, you will block your parents in your circle of friends so that they don’t know that you are still eating barbecue in the middle of the night; you definitely don’t want your wife to know that you have hidden private money, but you will talk about how much private money you have in front of your friends. But the social structure on the Internet is completely broken up, all weak connections, and we don’t care about exposing our privacy to strangers at all.

So, in front of the Internet and big data, anonymity becomes almost impossible. Since it is impossible, just enjoy it.

Chapter 3: Bad people and bad deeds make less and less money

We may think that there is always demand for pornography, drugs and gambling, and anonymous payment is definitely indispensable in these areas. In fact, with the development of the times, the demand for these areas has become smaller and smaller.

In Freakonomics, there is a case that a drug dealer still lives with his mother. The book analyzes that selling drugs is actually a business that does not make money. The development of the times has made it easier to make money by doing things properly and being a good person than by being a bad person. If you work as a food delivery person or driving a Didi taxi, you can earn 5,000 or 6,000 yuan a month without risking your life, but if you steal or rob, not only will your life be threatened, but you will also not make any money. This is how the times are, making good people make more money and killing all the bad people. It is not that our morality is higher, but that the accumulation of wealth requires more knowledge and wisdom, and being a decent person requires more knowledge and wisdom.

The progress of the times has either made the market demand for "pornography, drugs and gambling" smaller and smaller, or it has been formalized. Everyone has found that since there is such a demand at the bottom of human nature, it is better to allow it, introduce appropriate supervision, and do not hurt others. As a result, the pornography industry has also been legalized by many countries and governments, and the gambling industry is even more so. The legalization of drugs is also progressing very quickly. Even in China, the development of the free market has made these three industries more and more inclined to decriminalization. In China, gambling is almost a national entertainment, and the call for the decriminalization of the sex industry is overwhelming on Weibo. We, the general public, also enjoy watching celebrities taking drugs, and do not think that they have done anything against the law.

With the development of the times, these economic activities that have very high requirements for anonymous payment are gradually becoming less in need of anonymity.

Chapter 4: Anonymous Payments Are Just a Small Trick to Protect Privacy

When we found that privacy could be exchanged for benefits, we ruthlessly abandoned it. We found that under the attack of the Internet and big data, we were completely unable to protect our privacy, so we had no choice but to surrender. When we found that it was becoming less and less profitable to be a bad person and do bad things, anonymous activities became less and less.

Our desire for anonymous payment is not just to protect privacy, but to buy things without letting others know. However, we care less and less about privacy. How big a market will this little trick of anonymous payment have? No matter how big the demand is now, it will only get smaller and smaller in the future.

Therefore, those digital currencies that focus on anonymous payment are facing a very embarrassing situation. In the long run, the market demand they cater to will inevitably become smaller and smaller, and the market value that supports them will also be in a long-term downward channel. The space for hype of digital currencies that focus on anonymity will also become smaller and smaller. Anonymous payment is a false demand for the flow society.

There are always some technical geeks in the market who study anonymity every day. Including Bitcoin, many developers are thinking about improving its anonymity, including the famous leader of Bitcoin core dev, the big demon against expansion, Gmaxwell, who proposed the CoinJoin mixing technology to improve the anonymity of Bitcoin. In fact, it is a futile task. The market demand is really not big. The current anonymity strength of Bitcoin is enough. You can just change the address every time you pay.

Some people in the Core dev team like to do these little tricks. One of the purposes of limiting the block size is also for anonymity. They hope to make the total amount of block data smaller so that it can run better in the dark web. This is really not doing serious things, but doing things with no future. Expansion is the serious matter of incorporating the world's serious economic activities into Bitcoin. Anonymization is just to cater to those dark bad guys and bad things.

Chapter 5 Conclusion

When we found that privacy could be exchanged for benefits, we ruthlessly abandoned it. We found that we were completely unable to protect our privacy under the attack of the Internet and big data, so we happily surrendered. When we found that it was becoming less and less profitable to be a bad guy and do bad things, anonymous activities became less and less. The anonymity of digital currency is a false demand for mainstream society.