Public Misconception: Does Bitcoin Provide Transparency or Anonymity?

Whether experienced or inexperienced, there is a common misconception about Bitcoin: Bitcoin is completely privacy-centric. A new study by Rutgers University (a public research university in New Jersey, USA) shows that Bitcoin transactions are not as privacy-centric as people think.

In fact, Bitcoin does not provide much help in terms of anonymity. If you just want anonymity, it is better to use cash, which is the most anonymous means of currency transaction and its source cannot be traced at all.

Bitcoin is a protocol where transactions are broadcast to a distributed public ledger (blockchain). Anyone in the world can view this ledger in real time and trace the transaction from its source to its destination without registration or authorization. This can be said to break anyone's fantasy of seeking privacy or anonymity using Bitcoin.

There is a major difference between privacy-centric, anonymous, and pseudonymous. Although many people would like Bitcoin to be anonymous, it is not, so it is far-fetched to imagine that the digital currency is used for criminal activities because the truth can be traced back to the source.

Bitcoin provides a certain degree of pseudonymity. Users can be identified by their Bitcoin wallet address, and of course any other information not associated with that address will not be displayed. This concept is no different from using a nickname in a chat room, or a character name in a game. It is important to distinguish between pseudonymity and anonymity, and pseudonymity is by no means equivalent to anonymity.

Improving the convenience of using cryptocurrency

Another problem that needs to be solved for Bitcoin and other digital currencies is convenience. Experienced Bitcoin users believe that Bitcoin is the most convenient payment method in the world, and when it develops to a certain stage, it is indeed true. Researchers at Rutgers University also believe that Bitcoin is an ideal payment system. However, for novice users, psychological barriers to entry need to be overcome.

There are many ways to get Bitcoin. The most obvious way is to register a dedicated Bitcoin trading platform and buy Bitcoin directly on the platform. However, these trading platforms must follow strict anti-money laundering AML principles and know your customer KYC principles, and each user must go through an identity verification process.

You can also buy Bitcoins at Bitcoin ATMs. Although the number of Bitcoin ATMs around the world is increasing, there are still less than 1,000. In addition, most ATMs have quite high transaction fees, so it is not as attractive as buying Bitcoins on an exchange platform.

But the biggest challenge comes from people’s psychological threshold. Research from Rutgers University shows that for people who have never used Bitcoin, it is a bit difficult to take the first step, and many people are waiting for the government to introduce relevant Bitcoin property protection policies.

Rutgers University's Bitcoin research report will be released in May this year

Original article: https://news.bitcoin.com/rutgers-bitcoin-study-ideal-system-misunderstood-public/
By JP Buntinx
Compiled by: printemps
Source (translation): Babbitt Information (http://www.8btc.com/ideal-payment-system)