We all use money in our daily lives. Some of us use paper bills, some use electronic forms of money while some economies rely heavily on barter systems and commodity based money like gold. No matter what form of money you use, you shouldn’t be required to pay for things with your private information along with each payment. This is where bitcoin has immense privacy enhancing features for transacting value both on and offline.
Before the invention of electronic money, the only way that you could pay for things was with cold hard cash. Cash came in many forms and up until the invention of fiat money the preferred form of cash was gold. Since gold is way to difficult to transport in quantity, paper note representations of gold were created and still to this day, cash is the most private and anonymous means of transferring value. This is one the main reasons why cash is the currency of choice for illegal activity.
Know Your Customer (KYC)
Banks and financial institutions are required by law to collect too much of your personal information. These types of regulations often perpetuate financial exclusion and further foster global disparity by keeping the lower class out of the banking system.
In order to open a bank account in most developed nations, you need all sorts of identifying documents. Government issued photo ID, birth certificates, proof of residence and this is if you are a citizen. If you are an immigrant, things become much more difficult and often result in denial. It is these KYC regulations that are one of the driving forces behind the erosion of privacy and increasing poverty around the globe. You shouldn’t have to surrender your identity in order to store and transact value in the digital age.
Checks gave birth to all sorts of new fraud and cybercrime that had never existed before. Whenever you pay someone with a check you are revealing some very personal information about yourself. Each check has your first name, last name and address. That’s not good for your privacy. You also surrender both your checking and routing numbers on each check which can open you up to some check fraud problems. Watch the movie “Catch Me If You Can” starring Leo DiCaprio for the story of the greatest check fraudster in the world, Frank Abagnale.
Debit and Credit Cards
Every single time that you swipe your credit or debit card you are surrendering personal information about yourself not only to the vendor that you are buying from but also to your bank. With each transaction, they know where you are, when you are there, how much you spent and often times what you purchased. ApplePay removes some of this information being revealed but you still do not have private control of your funds.
One of the beautiful things about bitcoin is that you can store and transact value without having to attach your identity to your money. This is what makes bitcoin the most private payment network on the planet. Not only do you keep full control of your personal information when you spend with bitcoin but you also keep full control of your funds. It is this type of financial privacy that will enable more economic inclusivity than any existing payment mechanism in the world today.
Do you think you should have to surrender your personal information to spend money? Tell us what you think with a comment below or a tweet at @BitcoinReasons