The Battle Over Online Privacy

Starting December 1st, cryptocurrency users who use a VPN or Tor to stay anonymous may get infected with FBI malware if suspected of a cybercrime. Normally, the FBI needs to know the location of the user/computer to get a warrant to investigate the crime in that district, but this update of Rule 41 will allow the FBI access to any user regardless of location.

If you’re unaware of how the Bitcoin network works, transactions are pseudonymous, where users reside under a wallet address, which can sometimes be tracked back to an associated IP address. Bitcoin users who want to stay anonymous can use a VPN or Tor to replace their IP address with a different location.

If you live outside the US, well you might want to read what the EFF says:

the Rule 41 proposal implicates people well beyond U.S. borders. This update expands the jurisdiction of judges to cover any computer user in the world who is using technology to protect their location privacy or is unwittingly part of a botnet. People both inside and outside of the United States should be equally concerned about this proposal.”

But this update to Rule 41 hasn’t gone unnoticed, there’s currently a bill from Congress called H.R.5321 (Stopping Mass Hacking Act), introduced to stop Rule 41 before it comes into effect. Unfortunately, the likelihood that this bill could get passed is small due to it being an election year and there isn’t a sense of urgency to pass it in Congress because some don’t find it important.

Privacy Solutions

Monero, Dash, and Zcash have been in the spotlight recently because all three have private transaction technology. Each cryptocurrency has different features that enables their private network.

Monero (XMR) has recently been in the spotlight because it was added as a currency to the darknet. Monero uses cryptography so that the transactions on the blockchain aren’t visible to the public. It uses a ring signature, which is a group of signatures with at least one real participant, so there is no way to tell which signature is real.

Dash technology uses something called PrivateSend, where multiple users send the exact same input into a single transaction with several outputs. The technology allows the transactions to be seen but no transaction can be directly traced.

Zcash, a new cryptocurrency that is set to fully launch October 28, 2016, broadcasts the payments publicly, but the sender, receiver, and the amount of the transaction remain private.

Even though Bitcoin is pseudonymous and public, services now exist that allow more privacy with bitcoin transactions. Tumbling services essentially work like shuffling a deck of cards, except someone else is shuffling the cards. Tumbling comes with risk because it usually requires sending private keys to a shady third party. 

Big Al

Bitcoin enthusiast. I work part-time as a cryptocurrency investor and trader.
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