kristov-atlas-interview-The-CoinFront-your-news-source-for-bitcoin-altcoin-digital-and-cryptocurrenciesCondemning crypto-currencies for facilitating terrorism — while a generation of Pakistani children now fear blue skies because it makes it easier for flying military robots to rain hellfire down upon them — is completely insane.

Anonymity and Bitcoin are in many’s eyes, intertwined. Since the early days of Bitcoin, a popular myth of the digital currency was its alleged anonymity. This side of Bitcoin drew the attention of those interested in illegal trade, a preference for privacy, or even just as part of a moral stance on the issue. This helped encourage adoption and furthered its cause.

Recent developments however have revealed Bitcoin to be far from anonymous but rather pseudonymous, meaning that the average user may not be able to associate transactions to other users. But with relatively accessible funds, investigators can.

Bitcoin, having a public ledger of every transaction at its core, presents the world with a choice. To use the blockchain with default full transparency, which could reveal to the world every purchase you make, or anonymity, which could eliminate our capacity to audit charities, governments or even corporations and how they invest our funds as donors and stakeholders.

Forces are driving development on both the anonymity and transparency fronts, and the ideal path may lay in between.

To paraphrase Andreas Antonopoulos, “Bitcoin allows for an unprecedented kind of social organization. Transparency for powerful organizations and privacy for individuals”

Though the benefits of transparency seem well understood as a powerful mark of reputation, its risks alongside the benefits of anonymity remain controversial, clouded by shouts of terrorist financing and condemned by opponents, such as advocates of the war on drugs.

In the midst of this battle of ideas stands Kristov Atlas, a security expert equaled only by Amir Taaki and a small group of others, to bring a face and clear voice in support of financial anonymity.

The Coinfront had the pleasure of interviewing Kristov Atlas on the subject.

For those that don’t know you, tell us about your professional backgrounds and some of the projects you’ve been involved with.

I’ve been studying computer science since 2003. After completing two academic degrees in the field, I worked as an analyst and researcher in computer security, for government institutions and private companies. I’ve been hired to evaluate the security of systems belonging to some of the largest corporations in the world. More relevantly, I’ve been working full time since early 2014 to educate the public about privacy and security in the crypto-finance area, and published research about a variety of crypto projects and products.

In February, I released my e-book, “Anonymous Bitcoin.” This was the first major project that I released to the public that married my background in computer security and privacy with my passionate pursuit of understanding crypto-currency technologies like Bitcoin. I wanted to provide Bitcoin users with an accessible book that explains their chief privacy concerns, and then walk readers through the most effective ways to use Bitcoin privately.

In the early summer, I published research about Blockchain.info’s SharedCoin service, demonstrating critical weaknesses in what is probably the world’s most popular Bitcoin privacy application.

SharedCoin attempts to patch some of the privacy weaknesses inherent in Bitcoin’s design by allowing Bitcoin users to mix their funds together and making them harder to trace. I hope that the Blockchain.info team will be able to address these issues and come back to us with an improved product.

During the summer, I was enlisted by the community and core developers of Darkcoin, a decentralized digital currency like Bitcoin that builds privacy-preserving technology directly into their payment network.

My research helped the community understand the successes and failures of the project to date, and helped to provide a clear roadmap for future Darkcoin development.

Why do you think anonymity is important to the world?

Privacy, in general, is about human dignity. Most of us choose to undress behind closed doors, and even the most voyeuristic among us agree that the option should be there. Increasingly our lives take place on and are cataloged by the Internet, which is architected in such a way that privacy and anonymity are closely intertwined.

Tweet: “Privacy, in general, is about human dignity

Anonymity is all about hiding in crowds. When we opt into anonymity-friendly systems, we enlarge the size of the crowd that our fellow net citizens can hide amongst. In doing so, we help to preserve their privacy.

I focus my work largely on financial privacy and security. There are some who would have you believe that somehow, when it comes to money, privacy should go out the window. I disagree wholeheartedly. Since finance is so pervasive in our life and critical to our standard of living, it generates some of the most sensitive information and deserves the most privacy.

Critics of anonymity will argue that by building such a technology into the system you will enable the sale and perhaps even growth of markets that are ethically questionable. From illegal drugs, to child pornography, etc. This is of course a common concern for the general public, what are your thoughts on this?

Twenty-six years ago, technologist Timothy May described the breathless specters of Internet danger invoked by Internet censors as “The Four Horsemen of the Infopocalypse:” terrorists, drug dealers, pedeophiles, and organized crime. There is no doubt that Internet technologies assist these endeavors, but they are a drop in the bucket compared to the crimes committed openly by the censors themselves. It’s silly propaganda hardly worth debating by any independent thinker.

Crypto-currencies make it harder for governments to commit atrocities by turning down the fiat currency spigots. Condemning crypto-currencies for facilitating terrorism — while a generation of Pakistani children now fear blue skies because it makes it easier for flying military robots to rain hellfire down upon them — is completely insane.

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Given that the U.S. Navy invented Tor. I think it’s fair to say governments and even corporations benefit from anonymity as much, if not more than the general public. How do you think this demand will play out with open source anonymity projects like Dark Wallet?

The original intent of Tor was to provide defense and spy agencies with anonymous access to the Internet. Dark Wallet could certainly help spies to move money around undetected. Ultimately, though, modern militaries are highly reliant on the dominance of fiat currencies for funding, and I suspect that crypto-currencies’ challenge to fiat currencies’ value will outweigh the benefit of their utility to the military.
Some corporations willing to take a little risk — primarily outside of the US — will find Dark Wallet to be a productivity booster as they use it to circumvent the capital controls that slow down and obstruct their business.

Darkcoin, a anonymity centric crypto currency recently announced an innovation called “instant transactions”. Do you have any thoughts on how secure this is?

Evan (Duffield, Darkcoin’s lead developer) has come up with a fascinating new application for the Masternodes in Darkcoin. Masternodes are special participants in the Darkcoin network that previously assisted users with protecting their privacy.

Recruiting those participants to make transactions much faster was a really creative innovation on Evan’s part. I expect that many tricky implementation details will arise as the Darkcoin team sets out to code the first version of this new technology.

It aspires to improve on the now-proven proof-of-work and blockchain technologies, which is a high bar to pass. Skeptics will want to see a few iterations of the technology before they can believe in its safety.

It seems that Darkcoin’s instant transactions would be particularly useful to brick and mortar businesses. However, Bitcoin is already controversial itself, and it doesn’t even feature full anonymity. Do you see merchants adopting Darkcoin in the near future?

I don’t think that the anonymous nature of Darkcoin will be much of a barrier to merchant adoption. After all, there are some areas in which Bitcoin’s privacy falls short of the legacy banking and credit system, and customers are going to want to get that privacy back when they use a crypto-currency.

The primary challenge for adoption will be an economic one. Until software can make it just as easy to accept Darkcoin as it is to accept Bitcoin, and thus challenge Bitcoin’s “network effect,” few merchants are likely to go out of their way to accept Darkcoin.

How do you think regulators will react to this kind of technology?

I think regulators will be slow to understand how problematic it will be for them. At first they will be tempted to simply ignore it, then ban it. When they realize that bans will prove ineffective, that’s when things will really get interesting.

Bitcoin and similar digital currencies are thought to be pseudonymous, and as such, most people seem to discard anonymity concerns. For example, so-called “Bitcoin 2.0″ platforms like Ethereum or NXTcoin stand a chance to be incredibly revolutionary to social organization and finance, yet they are not anonymity centric. How do you think their future might play out, if their developers don’t take anonymity more seriously?

The urgency that some Bitcoin developers lack when it comes to improving privacy is no doubt common to developers of other crypto-currencies. It’s short-sighted, because this will affect their value as payment mechanisms.

It won’t take consumers long to grow uncomfortable with merchants’ increased access to their spending habits, or employees to take note of their employer’s ability to learn what they do with their salaries.

In the case of Ethereum, we are talking about running code in the cloud, asking other nodes in the Ethereum network to execute potentially sensitive contracts. It’s a context in which privacy is going to be critical to protect, and nuanced.

To the credit of NXT, they’ve been putting a fair amount of thought into incorporating privacy technology from other, privacy-centric currencies into theirs. There’s been talk of incorporating Zerocash-based technology, and more recently efforts to make use of BitcoinDark’s privacy framework.

Now that Anonymous Bitcoin has been published, what are you working on now?

I’m working on some new information products to help people secure their bitcoins, and make their finances more private. No details to release to the public yet, but they’re coming soon.

I’ve also recently launched the Open Bitcoin Privacy Project which I hope will push the pace of progress of privacy in the Bitcoin space. There’s no time to waste in fixing the mistakes of our past in this field.
When I look at projects like Dark Wallet, Darkcoin, and the Open Bitcoin Privacy Project, I’m extremely optimistic about what we can do.

What are the low hanging fruit of Bitcoin anonymity that you urge our audience to get a hold of now?

Users should always send their left-over change from any transaction to a new address, rather than sending it back to the sending address. Blockchain.info recently added support for this in all versions of their wallet. Receiving bitcoins at a new address for each transaction, rather than reusing receiving addresses also protects privacy. These practices add ambiguity to the blockchain and make tracing coins harder, though they can sometimes be less convenient. Another way to make data mining of the blockchain harder is by using Bitcoin mixers.

In addition to protecting your privacy on the blockchain, you’re going to want to cloak your network traffic as well. Using the Tor network, for example by using Tor Browser can help tremendously with this. If using Tor seems too laborious, a simple VPN service is better than nothing.

To learn more about Kristov Atlas’s work, check out his website and follow him on Twitter.