Private money

Reclaim your financial privacy with cryptocurrencies

Published December 9, 2019Updated May 7, 2021

Arguing that you don’t care about the right to privacy because you have nothing to hide is no different than saying you don’t care about free speech because you have nothing to say.

The erosion of personal privacy is one of the many important issues in today’s society. Everything we do digitally is tracked—what sites we visit, how long and what we do there. This data is then packaged and stored, waiting to be used to convince us to buy stuff or used to attack us. Even what we do with our own money is tracked and used to figure out how to separate it from us.

One of the very good things about cash—physical coins or bills—is that there’s very little tracking on them. You can buy things with them, or give them to someone, and nobody else needs to know about it. Unfortunately people aren’t using cash as much anymore, some have even stopped accepting cash, and all commonly used alternatives come with the privacy trade-off.

Cryptocurrencies can help us with this—they’re digital and just like cash they can be used privately.

What is privacy and anonymity?

It’s easy to mix-up the terms “privacy” and “anonymity” (which I’ve done many times myself writing this chapter). They’re related, but different:

Concerns content, for example text in messages you send to your friends.
Refers to identity, for example that I, Jonas, received a text message.

In practice they often overlap. For example if all my emails were available online for anyone to read, it would be a breach of my privacy. But it would also affect my anonymity, since my name is included in the emails.

Why privacy matters

Privacy and anonymity are important issues in the modern world and there are examples of privacy violations everywhere. Before we get to some of them we first need to address why privacy matter, because today government officials, company owners, the news and regular people all ask the same questions:

Why would you want privacy? What are you hiding? Are you criminal?

It’s natural to seek privacy

When people are alone and relaxed, they do things they otherwise wouldn’t. Maybe you like to dance when you’re alone, sing in the shower or scratch yourself somewhere… nice. If you’re caught in the act you immediately stop what you’re doing and feel embarrassed.

If you don’t recognize the situation please watch the scene where Hugh Grant plays the dancing prime minister in Love Actually. Even if you do recognize the situation, the scene’s so good you should watch it anyway.

A dude dancing naked, singing his favorite song.
What’s better than dancing naked, singing your favorite song, without a care in the world?
And what’s worse than having someone catching you in the act?

I have a two year old child, and even he wants privacy sometimes. He likes to build a cabin made of pillows and hide in it, and if I disturb him he pushes me and shouts “Go away!”. After we recently renovated his room he was so happy that he had a room of his own again, which he likes to be alone in when he’s pooping (in his diaper thank god).

People may say privacy don’t matter, yet their actions tell a different story. For example Facebook’s founder Mark Zuckerberg has said that privacy is no longer a social norm, but then he buys up four homes surrounding his home because he wants privacy.

After all, we don’t have curtains or blinders on our windows because we do something illegal, it’s because we want control over our privacy.

Personal security

Caring about privacy is a natural instinct—for good reason. It’s not just about avoiding embarrassment; it’s also for your own personal safety. In fact privacy is closely related to security. Your passwords and credit card numbers are obvious examples, but there are more:

Others have important things to hide

Even if you don’t think you have anything to hide, others do. Here are some examples where lack of economic privacy is harmful:

As Snowden’s quote in the beginning of the chapter says: just because you choose not to exercise your right, why should you remove the right for others? Privacy should be a choice—not something that’s chosen for you.

Privacy is a human right

That privacy is important is widely acknowledged. It’s for example recognized as a human right by the United Nations, along with the right to food, clothing and medical care:

No one shall be subjected to arbitrary interference with his privacy, family, home or correspondence, nor to attacks upon his honour and reputation. Everyone has the right to the protection of the law against such interference or attacks.

Children’s right to privacy is also acknowledged by UNICEF:

Every child has the right to privacy. The law must protect children’s privacy, family, home, communications and reputation (or good name) from any attack.

Even the constitution of the United States—written more than a hundred years before the first computer—intends to protect our privacy:

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

We’re living in a Stasi fantasy

The Stasi, the secret police of East Germany, has been described as one of the most repressive organizations in the world. One of their purposes was to find and imprison political enemies, which basically meant anyone critical of the government.

They used 100,000 employees and between 500,000 to 2,000,000 snitches to maintain files on more than one-third of the population. There were always spies in the bars and libraries who listened to your conversations and they encouraged (or threatened) people to snitch on their co-workers, neighbours and family.

In an authoritative state, rights derive from the state and are granted to people. In a free state, rights derive from people and are granted to the state.

The goal of the Stasi was to imprison everyone critical of the regime. To do that they tried to map out the lives of everyone—where they went, what they did, what they said and who they talked to. This was painstakingly difficult and required tremendous resources.

Today we live in a society the Stasi couldn’t even dream of. There’s no need for a shady person to follow us around, because we already have a surveillance device in our pocket. All information they could ever want is already available, they just have reach out and grab it.

Back in 2013 Edward Snowden revealed that governments were doing just this.

Here are just some of the things he leaked:

As is praxis for authoritative regimes, this capability isn’t used to protect the people of the state, but the state itself. Snowden’s leaks were to the benefit of the people, yet he and other whistleblowers like him are facing the full power of the U.S. aimed at them. This despite the U.S. court finding that the mass surveillance program was illegal.

You see, all this data is stored forever, just waiting to be used to nail you for a crime. And let’s be clear: everyone has committed a crime. For example how many have ever illegally downloaded a movie or music? Or driven too fast? Not to mention old ridiculous laws that are still in effect, such as the Metropolitan Police Act of 1839, which makes carrying a plank along a pavement illegal in the U.K. (section 54).

Once the ubiquity of collection was combined with the permanency of storage, all any government had to do was select a person or a group to scapegoat and go searching—as I’d gone searching through the agency’s files—for evidence of a suitable crime.

Now, Snowden lives in exile in Russia, where the black bags of the U.S. cannot reach. He recently released his memoir “Permanent Record” that details his life leading up to the leaks. It’s a great book, but the U.S. doesn’t want you to read it. They even filed a lawsuit against him and seized the revenue of the book.

Fear is the mind-killer

The road to hell is paved with good intentions.


I think people often give up their privacy because of fear. Since the September 11 attacks we’ve been showered with fear-inducing news and propaganda, making our minds numb. This fear of terrorism (and murderers, pedophiles and other Bogeymen) has made us go to war, consent to torture (or “advanced interrogation”) and give up our human rights.

Terrorism is real and scary, there’s no denying that. But our level of fear is irrational and would be better placed worrying about cars or unhealthy food—both of which kill more people than terrorism do. Yet fear is such a powerful emotion that it prevents us from thinking logically.

For example people may be willing to give up their privacy, because it might make it easier to catch terrorists. But if we try to compromise everyone’s privacy, we’ll jeopardize the personal security of the innocent, yet the terrorists will still have access to privacy through strong encryption (with strong encryption it’s impossible for anyone to read what you write or access your data). We may think we’re more secure, but we’re really not.

If privacy is outlawed, only outlaws will have privacy.

Philip R. Zimmermann

You’re the product

It’s not just the governments of the world who are collecting our data and violating our privacy. Companies of all sort do this too, but they sell it for profit.

Alphabet Inc. (company name of Google) and Facebook are two of the most valuable, richest and powerful companies in the world. Yet their main services—search and social networking—are completely free for us to use. So where do they make their money? And where’s the product they’re selling?

The product they’re selling is you.

They’re selling knowledge about you. What you’re searching for, what sites you visit, what products you buy, what places you visit, what friends you have and what you’re talking about with your friends. With the combination of massive data collection and clever computer algorithms it’s scary what they know about you.

For example they probably know if you’re gay or if you’re pregnant (and if you are, they’ll know if it was an accident, if your parents know about it and who is the father). They might also predict—with high confidence—if you’re religious, even if you don’t want anyone to know. Or who you’re going to vote for in the next election or how likely you are to commit a crime.

And it’s not just a problem with Google and Facebook. An increasing number of companies are discovering how lucrative your data is. If you buy a Coca-Cola, the information that you bought it at this place and at this specific time might even be worth more than the Coca-Cola itself!

For example smart TVs come with a microphone that listens to everything you do, and the TV company then sell the recordings to the highest bidder. Credit card companies have full records of all purchases you make—which they sell to someone else. Even the banks, who we assume should work for us, sell our data to third parties.

What about your privacy? That’s not something they care about, because they can sell it and make lot’s of money.

Reclaiming our financial privacy

The great man theory of history says that most of history can be explained by the impact of great men. Julius Caesar, Genghis Khan and Hitler are examples of “great men”. (They don’t have to be good or even be men, just people who cause large changes.) If Edward Snowden will be considered a great man depends on the effects of his leaks; they might mark a turning point for government surveillance, and change the course of history, or they might be forgotten as a side note in the history books.

While the great man theory is interesting, wouldn’t it be better to describe modern history using a great technology theory? For example the printing press, the internal combustion engine, the atomic bomb, the transistor and the internet have had great impact on history—greater than any single person I can think of.

So instead of looking for a great man to solve our privacy problems, maybe technology is our solution? With strong encryption we can keep our messages private and our data safe, and with the great innovation called tape we can prevent our webcams from spying on us.

So far we’ve had to surrender our privacy to gain access to digital payments and even to our own money. But nobody needs to know how much cryptocurrencies we have or what we do with them. They can help us claw back some of that privacy—and isn’t that pretty great?