It is known by the general public that the characteristics of anonymity inherent in the nature and design of Bitcoin have been one of the great advances that cryptoeconomics has brought. It is undoubtedly also that privacy (and mostly anonymity) is a rising value in the era of a global internet in which any online data is susceptible to being stolen by friends from the data of others.
But this anonymity, like everything else, also has another side of the coin that is much less obvious than the obverse. This reverse reveals how the anonymity brought by the cryptosystem may end up implying a lack of transparency that would deteriorate the publicly available information currently in the markets, especially and paradoxically affecting mainly small investors and the general public in general.
The anonymity of Bitcoin is also for strong hands
The truth is that cyberpunk "return the power of the internet to users" is both for the case of users in general, as well as for powerful users. And as powerful as they are, the portion of power they receive back is far superior to that of ordinary users.
As proof of this we have a story that has recently appeared, which reported that an unknown investor has executed a purchase order for Bitcoins worth 400 million dollars. As you may have read, everything is opacity and speculation about the large and influential Bitcoins operations of a large investor that does not know who he is, nor his motivations, nor his interests, nor has to answer to any possible participant, or to the agencies regulators ...
Come on, that the transparency in the market remains a drag on the old capital markets, where for good or ill, at least you knew who does what, and at some point you may have to explain why, especially if it is a manager of collective investment vehicles.
Undoubtedly, strong hands will be literally rubbing their hands (forgive the redundancy) to realize that they can finally do and undo at will in the market, counting on their great influence on prices and training, without having to answer for it to nothing or to anyone.
Needless to say, this extreme is not only to anonymize their operations supposedly "purely investment", but also in the case that they cross operations with the intention of manipulating prices, create bubbles, artificially break resistance to paper the small investors ... And so on until a long etcetera that we know well since markets are markets, and for which, today, in traditional markets it is infinitely easier for offenders to end up paying for their outrages.
From the anonymity of Bitcoin to the deterioration of transparency in the markets
And when we talk about the anonymity of strong hands, with all the potential consequences mentioned above, we inevitably have to talk about the lack of transparency and the detriment of socioeconomy as a whole. But paradoxically this damage is especially for small investors, much more vulnerable to this type of manipulation of the market.
These manipulations have been made crystal clear that now they can be anonymous and go unpunished, if the cryptocut does not change much with respect to the current drift). No major Bitcoin investor or any manager should have to account for their operations or the regulators or their participants. This is already serious (and twice), but also brings out of the equation not only transparency, but also the brake pedal itself of a vehicle (the markets) fast-paced by nature, and now threatens to leave of control.
This last point comes up because it goes without saying that the impunity of these manipulations will only significantly increase the number of cases of price manipulation. The problem is the human nature of some unethical investors, for whom everything is justified if it yields revenues. The problem is that there are many more profiles of this kind than we think, but they take great care to act in their fullest capacity for fear of legal consequences. Consequences that now with Bitcoin anonymity will be nonexistent.
Do not forget that we have already analyzed how the "Wall Street Wolf" himself warned of the drift that the criptomercados are taking. And this, speaking of wolves and sharks, especially of the repentant, are no longer words, but words that each of their letters should occupy a complete page in the book of the unwritten rules of the markets.
But there is a possible solution (only partial)
The truth is that there is a solution that could be used in part to alleviate these problems. It is the solution of the participatory investment crypto vehicles that we have already talked about in the article "The participatory democracy of TheDAO, or how to take advantage of collective investment and that can not deceive you". 100% transparent management; in fact there is no manager as such. But this option also has its disadvantages as the legal liability of the participants (even if they voted against a punishable investment decision) or others that we analyzed in their day.
In any case, this solution in the style of TheDAO said that it is partial because it only serves us for the part of the problem that affects collective investment and transparency with the participants. But let's not forget that, even in today's highly regulated financial world, so-called financial "chiringuitos" often proliferate, causing havoc among small investors. That will not happen under the shield of anonymity in which the unethical managers can be protected with Bitcoin.
Regarding the second problem (among the main ones) of the manipulation of values and markets in general, there is no possible solution with the current design of the Bitcoin architecture, nor with the current configuration of financial and data flows between the old and the cryptoeconomy. Here the problem of anonymity is totally connatural to the most foundational principles of Bitcoin and family, and the real problem is that nature of some individuals. It is a nature that we have already talked about on several occasions, and that unfortunately will always accompany socioeconomy wherever it goes.
We say this going on tiptoe on the subject of the latest movements of the US authorities that could end the privacy of the cryptosystem. These movements, implemented as they are being implemented, would not only end with several of the great advantages of cryptoeconomics, but could ruin the new concept as a whole, which however, do not forget, is an innovative concept of progress .
What this opacity can truly mean socioeconomically
No doubt our world today, and especially that of the markets, is an ocean with lots of sharks, crossed by rafts on board which unprotected small investors navigate. Bitcoin and crypto economics always tell you that they have brought great advantages, but another of its inevitable disadvantages is that, with its free bar of "anonymity for all", it has removed the GPS tracking of some sharks that will undoubtedly attack with impunity here and there, always by surprise, and where it is more profitable to sink the tooth.
It is urgent and necessary to start working now on a cryptosystem design that combines both privacy and anonymity with certain traceability, which at least allows to pursue financial crimes in the markets (and other crimes as well). It has been since the dark side began to take cryptocurrencies as a new playground, but it is even more so now that Bitcoin and its cousins make it easier for the light side to walk in the shadow. Solutions to this complex equation I do not have (for now), but the debate is always open to all kinds of (constructive) contributions.