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Bitcoin's Success With Investors Alienates Earliest Adopters

Posted by timothy on from the who-has-the-gold-wins dept.

holy_calamity writes "Digital currency Bitcoin is gaining acceptance with mainstream venture capitalists, reports Technology Review, but at the price of its famed anonymity and ability to operate without central authority. Technology investors have now ploughed millions of dollars into a handful of Bitcoin-based payments and financial companies that are careful to follow financial regulations and don't offer anonymity. That's causing tensions in the community of Bitcoin enthusiasts, some of whom feel their currency's success has involved abandoning its most important features."

8 of 158 comments (clear)

  1. If you... by neo8750 · · Score: 5, Insightful

    did not see this coming then you must be new here...

  2. How do they remove anonimity? by Anonymous Coward · · Score: 5, Insightful

    I don't understand, how are they removing the anonimity of Bitcoin? They aren't changing how the algorithms work I assume?

    1. Re:How do they remove anonimity? by ShanghaiBill · · Score: 5, Informative

      I don't understand, how are they removing the anonimity of Bitcoin?

      They aren't. Bitcoins can now be used in new venues, but that does not stop private transactions. The article is just stupid. If I deposit cash in a bank, I will be recorded by a security camera. But that doesn't mean I can no longer buy stuff anonymously with cash at the local flea market.

    2. Re:How do they remove anonimity? by viperidaenz · · Score: 5, Informative

      But you can wipe your fingerprints off that cash. Coins don't even have serial numbers and the numbers on notes are not tracked in every transaction.

      You can't wipe your bitcoin address off the block chain.
      If you associate that data with a person, they're forever tied to that transaction and you can follow it.

    3. Re:How do they remove anonimity? by Immerman · · Score: 5, Insightful

      So? That's been the case with bitcoins since day one, the anonymity claims were always pure hyperbole. If you wanted anything more than security-through-obscurity grade anonymity you needed to pass your coins through an (illegal in most jurisdictions) money-laundering service and hope they didn't keep any records themselves. All that's changing is that now there's institutions joining the game who are doing their legal record-keeping duty to tie the accounts they deal with to particular people. Unless they refuse to honor any bitcoins that have passed through a money-laundering service recently nothing has really changed except the currncy is . And if they do so refuse, well then... nothing has really changed because they didn't honor *any* bitcoins previously, so your laundered coins are still just as good.

      --
      --- Most topics have many sides worth arguing, allow me to take one opposite you.
  3. Hipsters by Anonymous Coward · · Score: 5, Funny

    "I liked Bitcoin before it was cool. It's too mainstream now"

    1. Re:Hipsters by seepho · · Score: 5, Funny

      I encode my wallet file using touch tones and pressed a recording of it onto vinyl. The smoothness on the waveform of the 3/6/9 keys adds a certain warmth to my financial transactions.

  4. The only anonymity lost it the ability to convert by rahvin112 · · Score: 5, Insightful

    Bitcoin is and always will be just as anonymous as it was promised. No one EVER said exchanging Bitcoin for other currencies would be an identity protected venture. In fact it's always been assumed by anyone with any brains at all that Bitcoin is only anonymous as long as you keep it Bitcoin and don't trade it for any hard goods or currency.

    There have always been regulatory requirements that make transaction tracking easy for government when you convert to currency or goods. And this has ALWAYS been BitCoins greatest weakness because at the end of the day the currency is only as valuable as it's ability to exchange it for goods. That exchange will never be anonymous.