Posted 03 Apr 2012
Before we start understanding about Bitcoin it is very important to understand the meaning of how to obtain financial privacy. Financial privacy is of utmost importance to a customer’s personal information.
This requires ensuring that that it remains private at any cost and is not leaked outside of the financial institution. The leaking of client's financial information is a heavy cost borne by the customer.
Did you know that personal privacy is a fundamental human right? Yet the laws of many States do little or nothing to protect this vital fundamental human right.
Securing one's financial privacy in practice seems almost impossible on the grounds of the various rules and regulations of States, central banks and policies of corporations. Additionally, many options such as earlier digital currencies, buying silver or gold and barter clubs, etc. have failed to gain significant traction due to the centralization of State power.
Now this is where Bitcoin comes into the scenario. Bitcoin is a form of digital currency but that aims to fix the problem of centralization and in the process helps users control their financial privacy. What happens in centralization is that the power is vested to a central body like a central bank.
However, the successful peer-to-peer operation of bitcoins leaves no place for a central authority, or third party, to come into play with regards to the fundamental currency. This is decentralization causes Bitcoin to stand apart from other digital currencies.
Bitcoins are neither issued nor verified by any central authority. Users can generate this form of digital currency using free open-source software. Therefore, anyone and everyone can get a free Bitcoin wallet and quickly and cheaply engage in transactions.
Once generated Bitcoins can be transferred safely and securely while maintaining the secrecy of one’s identity. This is one reason why Stratfor failed to protect their customer's privacy by not accepting BitCoins.
The fact that Bitcoin uses extremely strong encryption protocols minimizes the risk of loss from hackers and identity thieves. It has been argued that this system of digital currency is difficult to use.
But new applications are being developed above the Bitcoin protocol that makes it as easy to use as email with modern email clients like Gmail, etc.
Transactions are nearly instantaneous. and micro-transactions involving a very small amount of value is possible and happens everyday You will be pleased to know that this form of digital currency can easily be exchanged with national currency or cash in under an hour via an exchange like CryptoXChange using a service like BitInstant.
The best part is that it is extremely difficult for authoritarian governments to compromise or take control of the Bitcoin protocol or blockchain. While Bitcoin is currently not illegal anywhere, or even legally defined, even if authoritarian States attempted to impede or stop Bitcoin they would likely fail because of the technical virtues of the open-source code.
Bitcoin seeks to protect financial privacy unlike no other monetary innovation to date.
But there are some disadvantages. Some control freaks who assume everyone is guilty and can never be proven innocent are overly concerned about the potential for a privacy enhancing tool.
They forget that because the only moral reason a State should exist to protect human rights and because financial privacy is a fundamental human right therefore any States should exist to protect the privacy and secrecy of individuals not of vested power interests.
BitCoin is also extremely new and some of the applications are difficult for the average user to handle. When 50 people have fax machines they do not have much value but when 50 million people have fax machines then fax machines have much more value.
So likewise is Bitcoin affected by network effects. Transactions are non-reversible; which may be just as much a feature as a bug.
Despite financial privacy being a vital fundamental human right and necessary for a free and open society there are many forces at work attempting to erode these protections and leave individuals bereft of any bulwarks against thieves, extortioners, identity thieves, rogue States, criminal gangs and other nefarious individuals.
BitCoin, a free and open-source software, provides an essential utility with a portable and defendable decentralized cryptographically protected currency.
Hopefully, you now have an idea of what of what Bitcoin is and how it can help you to take control of and protect your financial privacy. And remember: ALWAYS go that extra mile to protect your personal information by implementing stealth tactics from sources like How To Vanish The Book, The Mini-Guide To Financial Privacy. or A Lawyer's Take On BitCoin And Taxes.
