Cryptocurrencies have changed how value is moved but that’s not to say there has been no collateral damage. From funds being transmitted instantaneously to the under-served in remote locations to the un-banked accessing financial services, the world has never been the same. Yet in the midst of this, there have been losses. Drooping losses that sent reverberations across the globe.
The Coinone hack which eventually destroyed the Japanese exchange reputation - as negative as it was to the digital currency scene, highlighted how “fragile” crypto owners are. The allure of full control and the evolution of crypto-related products mean holding digital assets demand more responsibility now than ever before. And all this stems from the underpinning technology’s transparent nature.
Blockchain is Founded on Power Distribution And the Right for Privacy
Blockchain is founded on the principle of decentralization, distribution, and privacy.
Bitcoin was the first application that demonstrated that the tech was viable enough and the underlying can be maintained by the community.
As such it remains public, open-source, and developers from all corners of the world can either improve it or create other networks from Bitcoin’s source code.
While these properties define what Bitcoin is, BTC transactions are open for public scrutiny—a business opportunity for firms as Chainalysis who decode and decrypt the faces behind transactions, and are therefore not fully anonymous as previously thought.
The pseudonymous nature of all bits of data and value that floats through the Bitcoin network, therefore, represents a weakness more so for traders who wish to change coins for coins or cash without blowing their identities.
Privacy is sacrosanct. Protecting it is hardcoded in the constitutions and technically the law protects end-users from entities who try to profit from private troves of data. For this, there are regulators who oversee that submitted private data are taken care of in vaults and don’t leak.
Failure often leads to multi-billion class action suits where the plaintiffs are rewarded with millions of dollars.
Regulators Have Centralized Exchanges Under Control
As cryptocurrencies become mainstream, facilitating firms made up of digital asset exchanges and custodians, therefore, strive to be compliant with the law. This is necessary because Bitcoin, in a way, needs fiat to thrive but fiat is highly regulated and the cost of coupling comes with compromise.
Caving in, compliant centralized exchanges who support fiat pairs are increasingly demanding their customers to submit personal data when signing up before trading. Moreover, in some countries as Japan, for instance, regulators take the extra step of ensuring exchanges don’t offer margin trading or derivatives of the underlying, usually highly volatile digital assets.
Just recently, because of changes in “local laws”, Bitmex, who offer crypto derivatives and require submission of personal data compliant with Seychelles law, issued a notice barring Japan’s residents from their platform.
Similarly, Coinbase isn’t present in all countries and all traders must register before trading. Meanwhile, Binance clients may trade small amounts before submitting data but ultimately, huge amounts will eventually twist the trader to submit data.
For traders who treasure their privacy, decentralized exchanges like Uniswap may be an option but there is no way of exchanging digital assets for fiat without revealing the face of that transaction. This eaves the court open for peer-to-peer exchanges.
FATF Rules are Live but P2P Shouldn’t Blow away Privacy
Undoubtedly, common P2P exchanges, directly and securely connecting traders, have gained traction and are popular especially in Africa. However, they are not immune from the destabilizing forces of regulators from Europe and the United States who are unwaveringly demanding of compliance.
The implementation of Financial Action Task Force (FATF) rules, for instance, has forced these platforms to embark on a purging spree, banning long-time traders, and forcing account verification in the name of Know-Your-Customer (KYC) and AML. This compromises privacy, a pillar that made crypto and blockchain successful.
In the midst of this compliance wave, Bitzlato, a crypto and a peer-to-peer platform, offers an option for traders to trade several cryptocurrencies like Bitcoin, ETH, Dash, Bitcoin Cash, Litecoin, and stablecoins like USDT for fiat and without KYC. Buyers and Sellers are also not charged commission and there is a transaction protection system via a web-version and a telegram bot where crypto can be changed for fiat through payment and banking systems from 28 countries. For traders who prefer no-fiat exposure, Bitzlato has a 2monolith cryptocurrency system where funds can be exchanged for USDT or monolith stablecoin.
Through the Bitzlato referral program, users can invite friends and earn 90 percent of the service commission whenever the referral trader transacts on the Bitzlato platform. One also stands to earn eight percent of the service fee of the transaction whenever the referral creates an ad which is responded to in the P2P exchange. Over 107.9 BTC has been paid through the referral program year-to-date.
Security Depends on Crypto Holders
The evolution of crypto exchanges has obviously been rapid and innovators, despite pressure from regulators, continue to create ramps that favor the client while concurrently protecting privacy.
Still, the security of the coin depends on measures instituted by the holder. For highly valuable gems, like Bitcoin, there are recommendations in place to bulwark one’s own system to prevent a costly breach.