4 ms·

Would it be possible to create some form of anonymous digital currency? Personally I think it would be sad purely for cultural reasons to completely move away

by kypro 4y ago

Would it be possible to create some form of anonymous digital currency? Personally I think it would be sad purely for cultural reasons to completely move away from physical currency, but I think if there were some verifiably anonymous way to make transactions digitally I'd probably be okay with it. I'm sure there would still be some state issued physical currency which you could trade or deposit at a bank if people wanted to some for the novelty of it. For me, like most people, the primary concern is the power it gives the state. It seems clear society will continue to move away from using cash, regardless of what the state mandates. In the UK there are already plenty of retailers who won't accept cash payments. So I think whether we like it or not, we probably need to be proactive to ensure the inevitable move towards cashless is done in a way that protects our freedoms.

eru 4y ago
> Would it be possible to create some form of anonymous digital currency? Yes. Zero knowledge proofs might be some way to get there.
- kragen 4y ago
  that's how zcash and monero work
coldtea 4y ago
Digital is always prone to being lost/tracked/etc. You need to keep some "wallet" of credentials or something, there's always a trail, etc. For societies with no trouble, that might seem fine. In societies (which can include a huge chunk of the world) with turmoil, dictatorships or hostile governments, war, and so on, it's impossible to have the anonymity and portability of cash in digital form, while also being able to use it (a) without electricity, (b) without internet access, (c) without a trail
- deleted 4y ago
  [deleted]
- kypro 4y ago
  I don't disagree. Similar issues exist with most digital technologies though and that doesn't stop their adoption – outside of the situations you describe digital solutions tend to be more convenient. I mean I'm not going to stop using Google Docs because one day I might not have electricity. I think if you live somewhere where you're concerned about the government your best bet isn't physical state issued currency, but owning commodities like gold. I'm not sure your concerns are specific to cashless, but digital solutions generally.
  - coldtea 4y ago
    Yes, but Google Docs, or any word processor for that matter, is an inessential nicety. Access to means of storing value and exchange, on the other hand, is a necessity.
dotnet00 4y ago
Monero makes for a strong anonymous digital currency. But it also suffers from all the inconvenient benefits a truly anonymous digital currency offers that cash does not and which governments and casual users tend not to appreciate (for understandable reasons).
- bheadmaster 4y ago
  > But it also suffers from all the inconvenient benefits a truly anonymous digital currency offers that cash does not If you mean that it's used for criminal activities, how is it any different from cash in that manner?
  - dotnet00 4y ago
    The difficulty in tracking and the ease with which large transactions can be done in it would be a big differentiator from cash and one of the things government wouldn't like about it. While it doesn't bother me personally, it would be an issue of any digital truly anonymous currency as far as governments are concerned. That said, I was referring to more mundane things, like how most people aren't used to the responsibility that comes with that kind of currency (eg if you accidentally send to the wrong address, the money is essentially irreversibly lost). Cash, being a physical item is less prone to some of these issues and because it isn't entirely fungible (with bills having serial numbers), there are various things that can be done with cash that can't with a truly anonymous digital currency, like tracking stolen currency and/or reissuing it.
sacrosancty 4y ago
The New Zealand government is working on a central bank digital currency but it has requirements for AML and terrorism funding so they refuse to make it anonymous. I'm sure most governments are similar. They just need one reason like that and then they can poke around in people's spending for whatever reason they want. There'll always be some bogeyman that the general population or international pressure leads them to track people for.
bheadmaster 4y ago
Does Monero fit the bill?
pjc50 4y ago
The issue I see is that the privacy of cash is non-scalable. This results in an equilibrium where ordinary transactions can be untrackable, but you can't quite move hundreds of millions in or out of the country in a suitcase. For digital currency it's just a number. One cent or a trillion dollars are equally easy to transfer. This tips the balance in favor of the "grey" and "black" economies. Long-term, that's likely to be destablizing. (Grey being roughly "not technically legal but the average citizen doesn't care", such as paying people small amounts of cash so they can avoid tax, and black being "illegal and also agreed to be bad for society")
Arnt 4y ago
Germany had something like that ("kontoungebundene Geldkarte"), it failed. You could store money on the card itself and use it to pay without trace and without a network connection. You could do that with the card that almost everyone carried around, and also the anonymous kontoungebundene variety. The former was traceable given enough cooperation, the latter not. It failed, and after 10-15 years of steady decline almost all banks have now stopped issuing new cards with this function. Paying to maintain a system people don't care to use is unattractive. I think it's fair to say that the system failed because it wasn't traceable. People wanted insight into their own card. The design which blocked tracing also blocked insight. That's not the whole story, there were other reasons, but that reason is both relevant and significant.
- oblio 4y ago
  > I think it's fair to say that the system failed because it wasn't traceable. People wanted insight into their own card. What do you mean by insight? You couldn't check the balance on your card?
  - ilammy 4y ago
    How about monthly statements? Purchase history? Stats, analytics, budgeting? In a mobile app? Without you personally or the merchants you buy stuff from having to do anything for that?
    - oblio 4y ago
      Are we comparing things against cash or against digital stuff? > How about monthly statements? Purchase history? Stats, analytics, budgeting? In a mobile app? Without you personally or the merchants you buy stuff from having to do anything for that? Cash has none of these. Let's not move the goal posts.
      - Arnt 4y ago
        The general public is not required to keep the goalposts still. The organisations that set up the system surveyed the public to learn why >80% never started using it and the users dropped off. The common answers included things like "can't see my own recent activities", "can't see how much money there is on the card" and "adding money to the card is a hassle", all of which were truish and IMO were side effects of features intended to make use of the card untraceable. If you can't deliver a realtime feed of the transactions anywhere you can't deliver such a feed to your own smartphone either, see? And if you could deliver one to your smartphone, the system could also deliver a feed to other authorised destinations, and what's authorised, exactly? Can the card be traced to an authorising party? If not, how can you ensure that the destinations receiving a feed a really authorised? That kind of thing.
Nursie 4y ago
Actually this might be a case for GNU Taler - unlike cryptocurrencies it’s specifically designed so that merchants do not have anonymity, so tax can still be assessed, but users do.
- bheadmaster 4y ago
  > it's specifically designed so that merchants do not have anonymity, so tax can still be assessed This is one of the biggest selling points of GNU Taler - it's not designed to circumvent the government, it's designed to cooperate with it. It is perhaps one of the few privacy-focused systems that have a chance of getting widely adopted in a legal way.
kragen 4y ago
yes zcash monero grin and other implementations of mimblewimble also, currency has been digital for thousands of years; plausibly it's what digits were invented for in the first place

by kypro 4y ago

eru 4y ago

> Would it be possible to create some form of anonymous digital currency? Yes. Zero knowledge proofs might be some way to get there.

kragen 4y ago
that's how zcash and monero work

coldtea 4y ago

Digital is always prone to being lost/tracked/etc. You need to keep some "wallet" of credentials or something, there's always a trail, etc. For societies with no trouble, that might seem fine. In societies (which can include a huge chunk of the world) with turmoil, dictatorships or hostile governments, war, and so on, it's impossible to have the anonymity and portability of cash in digital form, while also being able to use it (a) without electricity, (b) without internet access, (c) without a trail

deleted 4y ago
[deleted]
kypro 4y ago
I don't disagree. Similar issues exist with most digital technologies though and that doesn't stop their adoption – outside of the situations you describe digital solutions tend to be more convenient. I mean I'm not going to stop using Google Docs because one day I might not have electricity. I think if you live somewhere where you're concerned about the government your best bet isn't physical state issued currency, but owning commodities like gold. I'm not sure your concerns are specific to cashless, but digital solutions generally.
- coldtea 4y ago
  Yes, but Google Docs, or any word processor for that matter, is an inessential nicety. Access to means of storing value and exchange, on the other hand, is a necessity.

dotnet00 4y ago

Monero makes for a strong anonymous digital currency. But it also suffers from all the inconvenient benefits a truly anonymous digital currency offers that cash does not and which governments and casual users tend not to appreciate (for understandable reasons).

bheadmaster 4y ago
> But it also suffers from all the inconvenient benefits a truly anonymous digital currency offers that cash does not If you mean that it's used for criminal activities, how is it any different from cash in that manner?
- dotnet00 4y ago
  The difficulty in tracking and the ease with which large transactions can be done in it would be a big differentiator from cash and one of the things government wouldn't like about it. While it doesn't bother me personally, it would be an issue of any digital truly anonymous currency as far as governments are concerned. That said, I was referring to more mundane things, like how most people aren't used to the responsibility that comes with that kind of currency (eg if you accidentally send to the wrong address, the money is essentially irreversibly lost). Cash, being a physical item is less prone to some of these issues and because it isn't entirely fungible (with bills having serial numbers), there are various things that can be done with cash that can't with a truly anonymous digital currency, like tracking stolen currency and/or reissuing it.

sacrosancty 4y ago

The New Zealand government is working on a central bank digital currency but it has requirements for AML and terrorism funding so they refuse to make it anonymous. I'm sure most governments are similar. They just need one reason like that and then they can poke around in people's spending for whatever reason they want. There'll always be some bogeyman that the general population or international pressure leads them to track people for.

bheadmaster 4y ago

Does Monero fit the bill?

pjc50 4y ago

The issue I see is that the privacy of cash is non-scalable. This results in an equilibrium where ordinary transactions can be untrackable, but you can't quite move hundreds of millions in or out of the country in a suitcase. For digital currency it's just a number. One cent or a trillion dollars are equally easy to transfer. This tips the balance in favor of the "grey" and "black" economies. Long-term, that's likely to be destablizing. (Grey being roughly "not technically legal but the average citizen doesn't care", such as paying people small amounts of cash so they can avoid tax, and black being "illegal and also agreed to be bad for society")

Arnt 4y ago

Germany had something like that ("kontoungebundene Geldkarte"), it failed. You could store money on the card itself and use it to pay without trace and without a network connection. You could do that with the card that almost everyone carried around, and also the anonymous kontoungebundene variety. The former was traceable given enough cooperation, the latter not. It failed, and after 10-15 years of steady decline almost all banks have now stopped issuing new cards with this function. Paying to maintain a system people don't care to use is unattractive. I think it's fair to say that the system failed because it wasn't traceable. People wanted insight into their own card. The design which blocked tracing also blocked insight. That's not the whole story, there were other reasons, but that reason is both relevant and significant.

oblio 4y ago
> I think it's fair to say that the system failed because it wasn't traceable. People wanted insight into their own card. What do you mean by insight? You couldn't check the balance on your card?
- ilammy 4y ago
  How about monthly statements? Purchase history? Stats, analytics, budgeting? In a mobile app? Without you personally or the merchants you buy stuff from having to do anything for that?
  - oblio 4y ago
    Are we comparing things against cash or against digital stuff? > How about monthly statements? Purchase history? Stats, analytics, budgeting? In a mobile app? Without you personally or the merchants you buy stuff from having to do anything for that? Cash has none of these. Let's not move the goal posts.
    - Arnt 4y ago
      The general public is not required to keep the goalposts still. The organisations that set up the system surveyed the public to learn why >80% never started using it and the users dropped off. The common answers included things like "can't see my own recent activities", "can't see how much money there is on the card" and "adding money to the card is a hassle", all of which were truish and IMO were side effects of features intended to make use of the card untraceable. If you can't deliver a realtime feed of the transactions anywhere you can't deliver such a feed to your own smartphone either, see? And if you could deliver one to your smartphone, the system could also deliver a feed to other authorised destinations, and what's authorised, exactly? Can the card be traced to an authorising party? If not, how can you ensure that the destinations receiving a feed a really authorised? That kind of thing.

Nursie 4y ago

Actually this might be a case for GNU Taler - unlike cryptocurrencies it’s specifically designed so that merchants do not have anonymity, so tax can still be assessed, but users do.

bheadmaster 4y ago
> it's specifically designed so that merchants do not have anonymity, so tax can still be assessed This is one of the biggest selling points of GNU Taler - it's not designed to circumvent the government, it's designed to cooperate with it. It is perhaps one of the few privacy-focused systems that have a chance of getting widely adopted in a legal way.

kragen 4y ago

yes zcash monero grin and other implementations of mimblewimble also, currency has been digital for thousands of years; plausibly it's what digits were invented for in the first place