Governments can stop their attempts to introduce bitcoin regulations after reading the latest press release by Frost and Sullivan. The governments, especially in the Western economies are increasingly calling for stricter bitcoin regulations. European Union is attempting to clamp down on bitcoin by using Paris terrorist attacks as an excuse.
While the attempt to rein in bitcoin continues, the latest report indicates that these bureaucrats are simply wasting time and taxpayers’ money to find a solution to some problem which doesn’t exist. Vijay Michalik, a research analyst for Digital Transformation at Frost and Sullivan reiterates the already known facts with the following comment –
“True anonymity in Bitcoin is only a myth, currently there is full visibility of all transactions. While these transactions are only linked to pseudonym and not a real-world name or address, every transaction is viewable through a number of different blockchain browsers.”
Apart from decentralization, transparency is another undeniable property of bitcoin which makes it special. The transaction data is out there in the open for anyone to see, yet the system is not controlled by one single entity. The same feature also makes it vulnerable to surveillance and the anonymous nature of bitcoin is contested and proven otherwise by many.
The blockchain analysis techniques are undergoing improvement each passing day and major customers for such technologies are governments, law enforcement agencies and banking sector. Companies like Chainalysis are already there finding ways to identify, track and analyze bitcoin transactions made by individuals across the bitcoin blockchain. Various other metadata that accompany bitcoin transactions can be captured and used to track the identity of people/entity behind these transactions. Some of the important pointers that can give away the user identity include, IP addresses of the nodes and other incidental information usually associated with transactions.
Now the question is whether the governments should still be debating about bitcoin regulations and other accompanying challenges when it comes to tracking and surveillance? Also, it is time for bitcoin community to ponder over the implication of such security and privacy loophole.