Like it or not, central bank digital currencies (CBDCs) are ready for primetime in the new era of a fully digitalised world.
When the concept of blockchain and Bitcoin was created in 2008 by Satoshi Nakamoto, it gained favorable attention from the global community of cypherpunks and technologists. The cryptocurrency, Bitcoin, is a reward given to miners who contributed their computing resources in order to secure Bitcoin's blockchain network.
A decade after, the decentralised digital currency, not controlled by any single entity or a central bank, has evolved into one of the most important components in the technological revolution in the modern times. It has also inspired thousands of different blockchain-based projects including Ethereum, Monero and Polkadot, which aim to provide better, faster and more secure blockchains for varying use cases. It is not long before government regulators and financial institutions saw the immense potential of blockchain technology, and the challenge that they have in regulating Bitcoins and other decentralised cryptocurrencies. As a result, the concept of central bank digital currencies (CBDCs) are officially discussed in recent years.
It’s a cryptocurrency, controlled like FIAT monies
Whether or not CBDCs could have an impact on Bitcoin and other cryptocurrencies remain to be seen. At present, CBDCs are in the hypothetical stage, with some proof-of-concept programmes driven by governments from all over the world. For instance, the Bank of England proposed a blockchain-based central bank currency for the United Kingdom in September 2015, drawing direct inspiration from Bitcoin. Other countries such as Singapore, Sweden, United States and People’s Republic of China follow through with a series of pilot programs that was meant to test the feasibility of government-backed national cryptocurrencies.
While CBDCs will benefit governments and banking institutions by offering greater oversight into monetary movements, with real-time insights into how and where funds are deployed, such instruments could prove to be a bane for ordinary citizens. CBDCs, if successfully implemented, will be easily surveilled, censored and apportioned to those deemed “worthy” of participating in the new digital economy. This idea is in stark contrast to Satoshi’s vision of a decentralised digital currency, where everyone is responsible for their own financial assets and are accountable for their own transaction activities.
CBDCs will literally remove the true intent of cryptocurrencies like Bitcoin, reverting any possibility of a decentralised future. Technological companies such as Apple and Facebook will likely become the new banks, in which user data and privacy will be a huge concern for the people, since they opaquely store, leak and resell user’s personal information and transaction activities via centralised databases, that are prone to hacks. If CBDCs come into fruition, your entire financial records and digital bank balance will be at stake from regulators and bad actors, further eroding the fundamental privacy rights that every living human being should deserve.
There is still hope in preserving your privacy right
Fortunately, we’re still years away from seeing a CBDCs future. We could change the course of the future by investing our time and resources into decentralising our financial assets. Bitcoin’s permissionless blockchain provides a means of verifying financial transactions and ensuring the network’s rules governing coin issuance and double spends are maintained. Along with other reputable cryptocurrencies, the technology is ready for ordinary citizens to embrace a self-governing financial world, backed by distributed ledgers that are not controlled by any single entity or authority.
Although Bitcoin and most cryptocurrencies (even privacy coins) are pseudonymous by design, many savvy investors of Bitcoin have found great alternatives to compliment their growing Bitcoin transactions this year. Bitcoin mixing services is one of the most popular third-party privacy-focused tools to date, which is used by hundreds of thousands Bitcoin users globally.
Worry-free Bitcoin transactions, by mixing them
Also known as Bitcoin Tumbler, Bitcoin mixers are third-party online solutions that allow users to mix their coins with other users, in order to preserve their privacy. While Bitcoin wallet addresses do not reveal the identity of their owner — they could be linked to real-world identities through proper blockchain analysis tools and blockchain explorers online. Hence, Bitcoin users do face the risk of revealing all sorts of personal information to bad actors and regulators.
This is why many privacy-conscious Bitcoin users have chosen to perform additional steps to conceal their transactions by mixing their coins with Bitcoin mixers like MyCryptoMixer. Doing so can not only obscure the ties between their Bitcoin addresses and their real-world identities, it also allows them to use Bitcoin more privately and stay anonymous when using the cryptocurrency.
Take the first step and be part of a revolution
For centuries, money is the greatest weapon for governments and financial institutions. They are not about to relinquish control anytime soon just because cash has gone digital. The possible rollout of CBDCs will give rise to an unprecedented financial surveillance and control over its people. Fortunately, there are still ways for us to fight for our privacy rights. With sufficient knowledge and utilisation of Bitcoin privacy tools like Bitcoin mixers, we can still push for a wider adoption of Bitcoin and cryptocurrencies, as well as preventing our loss of privacy to centralised and regulated government bodies.