This is part three of my four part series on privacy coins. For greater context please read Part One and Part Two before reading the rest of this article. Part One is an introduction to privacy coins and part two is an argument for the legality and need for privacy coins. This article is an argument against privacy coins and why they should be illegal. These are not necessarily my views but I attempt to show in a fair manner why people may think this way. 

The whole point of privacy coins is to hide your finances. Who are you hiding your finances from? The government most likely. What are you hiding from the government? After all, if you are going out of your way to acquire an obscure cryptocurrency because of it's privacy features there must be a reason. And that reason might not be innocent.

Crypto Mining Malware

You may have heard about Bitcoin mining malware. This is a where you get a virus that uses your computer to mine Bitcoin or other cryptocurrencies. One computer mining crypto probably won't make much money but a whole network of them really could. Smart hackers will no longer use Bitcoin because they know it can be traced. However, a cryptocurrency like Monero uses Proof of Work and is much harder to trace which makes crypto mining malware easier to get away with. If privacy coins receive mass adoption this will become an even bigger problem.

Crypto Ransomware

Many of us have seen ransomware. Those who understand computers know better than to pay up. When I worked in a call center for Internet Repair I had older people tell me they had ransomware and that they didn't know what to do. I always advised them not to pay and to call someone like the Geek Squad who could help them with the problem (my job was only to repair broken internet because I worked for an internet provider). I have seen various ransomware demanding Bitcoin payments as well. Just like the crypto mining malware I expect to see more of it in the future requiring payment in a privacy coin like Monero; especially if they receive mass adoption.

Tax Evasion

If privacy coins receive mass adoption it could become really difficult for government's to tax their people. If all of the payments I receive for services are done with a privacy coin the government might not have a clue how much money I have earned. How in the world will they collect income tax? Small businesses may also choose to do this to illegally lower their taxation. If enough people start to do this it could become a major problem for any government. 

Money Laundering

In my book this is one of the more serious issues that privacy currency creates. Does a criminal organization want to sell slaves, drugs, illegal firearms, with traceable money? Of course not. That's why they all use cash. However, a private cryptocurrency is more powerful than cash because it can be used to make purchases online, anywhere in the world, and has the advantage of not being dependent on any government. Criminal organizations can pay people for "side work" while they continue to do their normal jobs with traceable money; thus hiding their criminal background and appearing like a normal citizen.

Rebellion

Depending on your perspective this is either the best thing about privacy currency or the worst thing about privacy currency. A rebellion movement will not want the established government to know who they are. If I was a rebel leader I would purchase guns, bombs and other military hardware with privacy currency. I would also pay my soldiers, workers, and officers with privacy currency as well; anything I can do to keep the established government from knowing who I am or how the money flows. I would also take donations from countries and organizations that are sympathetic to my cause. They might not want the world to know they are supporting a rebellion. Privacy currency would make this easier. 

Conclusion

The proliferation of privacy coins could really benefit criminal organization, rebel movements and make it more tempting to under-report taxes. Many people will look at what this will cost society and decide that it's simply not worth it. To them privacy coins are something to fear not accept. By hiding their finances criminal and terrorist organizations may be able to get the upper hand. 

Read my next article in my four part series: Final Thoughts and please make sure you read the other two articles as well if you have not already done it.