Ah, cryptocurrency. The term and its digital coins have circulated around the world’s conversations and digital platforms like wildfire. One of the reasons for its popularity is linked to its anonymous or hard-to-trace transactions.
A Wall Street Journal report on June 2 brought up the news that the Palestinian militant group Hamas has recently seen a spike in cryptocurrency donations, citing anonymity of digital currency transactions as the main reason for the multitude of donations.
The increase in donations came after an armed conflict in May that lasted 11 days and saw some of the bloodiest combat in the region in several years drew international attention, explained Markets Insider. Even though no exact date as to when the donations started coming in has been disclosed, a Hamas official told the WSJ “There was definitely a spike” in bitcoin donations.
Because some countries view Hamas as a terrorist group, it’s allegedly had to turn to digital currencies for funding, and away from traditional banking systems, said the WSJ.
No information about which cryptocurrency was sent has been shared, so it’s hard to tell exactly how anonymous the transactions were, and will stay.
Across the world in China, where the government recently cracked down on cryptocurrencies once again, Fortune reported that crypto trading in the country was still surviving thanks to its hard-to-trace transactions.
Are cryptocurrency transactions truly anonymous and hard-to-trace? Many believe so, but just like a man in Tennessee recently discovered after his failed attempt to hire a hitman to kill his wife by paying him in Bitcoin “to remain anonymous,” that isn’t always the case.
Anonymity and cryptocurrency
Focusing on Bitcoin for the time being, the digital currency’s main website literally states “Bitcoin is often perceived as an anonymous payment network. But in reality, Bitcoin is probably the most transparent payment network in the world.”
It continues by reminding users that “At the same time, Bitcoin can provide acceptable levels of privacy when used correctly. Always remember that it is your responsibility to adopt good practices in order to protect your privacy.”
Essentially, Bitcoin is reminding us to be decent human beings. So maybe don’t try to hire a hitman to kill your wife.
As Josh Riddett from Easy Crypto Hunter explained in a video on YouTube, cryptocurrencies were more used to hide dodgy transactions eight or nine years ago when the ecosystems around them were less developed, but nowadays it’s a little trickier.
Even though someone’s name isn’t in the transaction itself, there’s always a Bitcoin address that acts as an identifier, and as Bitcoin itself says, all Bitcoin transactions are public, traceable, and permanently stored in the Bitcoin network.
It all comes down to public blockchains, “the posh spreadsheet” as Riddett calls it, which tracks every single cryptocurrency transaction.
Side note: there are some cryptocurrencies that have been specifically designed for anonymous transactions, like Monero, Dash, Verge, Z cash, and H cash, mentions Riddett. So, for instance, if the donations to the Hamas group were sent via one of these cryptocurrencies, chances are they will remain anonymous.
These work by deleting the previous transactions, not having public blockchain ledgers, and so forth.
Ultimately, there will always be some people who want to hide their identity, for whatever reason — it doesn’t always have to be illegal — just like when using a traditional bank transaction. So it again swings back to what Bitcoin essentially stated on its website: be a decent human being.