Bitcoin not ideal for cyber crime, says Filecoin Foundation chair (ft. Marta Belcher)

Word on the Block | Forkast.News

Back in early May, a ransomware attack on Colonial Pipeline forced the company to pay the hackers US$5 million in cryptocurrencies. Earlier this month, the U.S. Department of Justice announced that the FBI had successfully recovered US$2.3 million of the ransom in Bitcoin.

Those who really understood Bitcoin — and blockchain technology’s digital trail of crumbs that led to the crypto’s recovery — were gobsmacked. What could those cybercriminals possibly have been thinking?

Pioneering blockchain lawyer Marta Belcher — general counsel at Protocol Labs and special counsel to the Electronic Frontier Foundation, a digital privacy rights advocacy group — , says many people still do not realize that Bitcoin is not anonymous — it is pseudonymous.

“You're having a public key recorded permanently on a ledger forever. And anyone can see that,” Belcher explained, in a video interview with Forkast.News. “The authorities can see that. In some ways, it's a shortcut for law enforcement.”

Instead of something very traceable by the government, Belcher says having a truly decentralized device for finance is essential to privacy and civil liberties.

“I like to think about this photo that I saw from the Hong Kong protests. There are these photos where there are these long lines at the subway stations because the protesters wanted to buy their train tickets using cash because they didn't want their electronic purchases to place them at the scene of the protest,” Belcher said. “That really underscores that a cashless society is a surveillance society and the importance of certain technologies that can enable anonymous transactions.”

Belcher told Forkast.News that this is how anonymity can enhance civil liberties, and also why privacy coins — fully private and anonymous — matter.

Nevertheless, the U.S. government and governments around the world are applying similar levels of surveillance to cryptocurrencies as they do to the traditional financial system. The U.S. Department of Justice has named privacy coins “anonymity-enhanced cryptocurrencies” and insists that they are potentially criminal — this fends off the possibility of people making anonymous transactions through cryptocurrencies.

Belcher views the central bank digital currency movement in the same way — as a type of government surveillance that could potentially threaten civil liberties. Hypothetically, when CBDCs are given to people as their only financial tool, every action can be traced by the government.

“People really need to understand that financial transactions are a window deep into someone's life, deep into their politics, deep into what they're doing, their location. And that these types of transactions are incredibly sensitive,” Belcher said. “I'm very concerned about the idea of all money being digitally administered by a government.”.