Addressing the ‘Criminal Exploit’ Factor of Bitcoin
Even though Bitcoin and its underlying blockchain technology present a multitude of positive aspects, there are some concerns to take into account as well. On the one hand, it’s quite powerful to use a digital currency allowing users to send money around the world in a matter of mere seconds, with little to no transaction costs for doing so.
On the other hand, however, this also poses a risk to misinterpret the use of Bitcoin transactions. Funding terrorism attacks with Bitcoin is not impossible, although it’s still unclear as to whether or not this has ever happened in the past.
Regardless of how Bitcoin is used, the topic of how developers can prevent the usage of digital currency for illegal operations deserves further consideration. Achieving that goal is not as easy as anticipated, though, as Bitcoin is designed to be a global currency used by anyone for whatever reason. Changing the core technology of this digital currency is not something that can be done overnight.
Addressing the semi-untraceable nature of Bitcoin can play an important role in this process. Even though the blockchain allows anyone in the world to track Bitcoin payments from origin to destination in real-time, the digital currency takes on an “anonymous” aspect according to the outside world.
Private blockchains, also known as “permissioned blockchains,” or “bankchains,” are not the answer either, however. A balance has to be found between the transparent nature of blockchain technology and retaining a certain level of user privacy. The concept of a proprietary, privately regulated public blockchain could be an option well worth considering for the [near] future.
Privately Regulated Public Blockchain?
Having the words “privately,” “regulated,” and “public” in the same sentence may sound quite awkward, but there is some merit to this idea. Unlike what most people might think, a private regulated blockchain would take nothing away from the openness and transparent nature of Bitcoin’s blockchain, as it would rather bring additional tools to the table.
The community will always remain in control of a blockchain as there will never be any central authority taking control. But at the same time, a feature could be developed that will help trace and track identities of individual network users when necessary. Especially where KYC, AML and anti-terrorism compliance is concerned; such an addition could help shape Bitcoin’s legitimate image.
While a privately regulated public blockchain would require major edits to the Bitcoin source code, the concept would allow for the creation of a personal identity-linked credential authentication protocol. Many companies and institutions are exploring the boundaries of blockchain technology, and creating a new authentication protocol would be an excellent use-case.
Many bitcoin users are drawn to this digital currency for its pseudonymity, and the change to private regulated public blockchain will not change that aspect. What it will do, however, is allow regulators and government officials to determine someone’s identity when they feel the need to do so.
Some people may argue this would be a bad idea, and how it would remove Bitcoin’s pseudonymity altogether. While others may argue this would be a positive change to give Bitcoin a more mainstream appeal. It is up to the Bitcoin developers to think of a way to combine pseudonymity with the option to track individual identities in such a way that [nearly] everyone is pleased with the outcome.
AML Bitcoin Shows How This Can Be Achieved
Creating anti-terrorism technology is nothing new in the world of digital currencies, though. AML Bitcoin is the only currency to achieve this goal so far, and its underlying technology is copyright protected in the US, as well as patent pending in the EU. That being said, their team has made the concept of a privately regulated public blockchain work so far.
NAC Foundation, LLC Founder Marcus Andrade stated in a press release:
“As senders and receivers of all transactions can be revealed, any thieves or hackers who steal the AML Bitcoins can be easily traced and tracked by retrieving personal identities of the receivers from the client information database.”
“Moreover, the credential authentication mechanism behind AML Bitcoin allows a user to change the credential to stop coins being transferred out from a stolen wallet. As a result, NAC’s invention can prevent atencoins from being stolen,” he added.
Whether or not private regulated public blockchain technology will ever become a part of the Bitcoin source code remains to be seen. It would be an interesting change; that much is certain. But at the same time, developers have to keep the core values of Bitcoin in mind as well, and the community’s opinion should be weighed carefully.
What are your thoughts on introducing privately regulated public blockchain aspects in Bitcoin? Do you see a different solution? Let us know in the comments below!
Source: News Tip/PRNewsWire