Hong Kong has descended into chaos over the past few months, with protesters kicking up a massive storm over the government’s surveillance. Protestors have torn down facial recognition towers as the government began arresting people caught protesting. In fact, Cathay Pacific’s CEO was asked to give the Chinese government a list of everyone taking part in the protests, with Rupert Hogg refusing to give up names.
As the next step in the protests against the government, businesses in Hong Kong have begun dropping fiat acceptance for Bitcoin instead. Unfortunately, this could prove to be a potentially deadly move as Bitcoin is just as traceable as using a credit card in store.
Bitcoin is Pseudonymous at Best
Bitcoin is by far the most misunderstood currency on the planet, with many people thinking it’s completely anonymous. This led Bitcoin to be used by drug dealers and human traffickers on Silk Road, and eventually to the arrest of Ross Ulbricht and his fellow Silk Road admins. Sadly, Bitcoin is only pseudonymous at very best. Throw in KYC to the mix and Bitcoin is just as easy to trace and track as when you use your debit or credit card – providing you have the regulatory clout to subpoena data from crypto exchanges.
This means that these businesses in Hong Kong that are opting for Bitcoin are essentially painting themselves with a huge target, as the second they cash that Bitcoin into HKD for the first time, the government will be able to link every transaction to and from that wallet. The same goes for shoppers, they’re facing the same risks as exchanges collect KYC when they buy Bitcoin. The government can easily trace all of these transactions back to the people that made them and arrest them at home, rather than stalking the shops waiting for people to make their move.
Stick to Cash or A Privacy-Focused Cryptocurrency
If people in Hong Kong really want to stick it to the government and reclaim their privacy, they have two options – cash or a privacy-focused cryptocurrency. Sadly, cash is still traceable to a certain extent as serial numbers can be assigned to a person when pulled out from an ATM and then checked again when a store deposits the cash in the bank, allowing the government to analyze where people are spending their money.
This leaves privacy-focused cryptocurrencies – such as Monero – as pretty solid options. Monero has implemented RingCT to obfuscate all transactional data, meaning no transactions can ever be traced back to the wallet that made it. While a handful of Bitcoin wallets do offer this level of security, the two companies offering these wallets are constantly bickering about how secure they actually are. If Samourai and Wasabi are to be believed, then it’s best to avoid using these wallets and stick to Monero.
What is happening in Hong Kong is terrible, with people losing their lives through police brutality. Hopefully the protestors and government can come to a peaceful solution, but until then, Monero looks like the best bet for businesses and consumers.
