1/18 Probably not the best explanation but here's an attempt to highlight what's at stake with Coinbase ("CB") from my point of view.
Call me crazy or paranoid but a company with your personal data & your public data will not resist the temptation to combine them.
Call me crazy or paranoid but a company with your personal data & your public data will not resist the temptation to combine them.
2/18 The info transmitted on the #Bitcoin network is public. Meaning anyone in the world can watch the network & see all the addresses/transactions made. This public info is kept in a decentralized database that dates back to the first transaction and catalogs all transactions.
3/18 The public availability of this data isn't concerning to you because your true identity is masked by a pseudonymous address. Even though evidence of every transaction is captured in the database, nobody knows it's you unless you tell them or you leak sensitive information.
4/18 Then CB comes along & announces a new network analysis tool. But it's only available to law enforcement. This tool makes it easy to organize all kinds of meta data like time, date, amount, addresses involved, geo-location, & more. Even map out all your transactions.
5/18 Those amazing features are great and all but what is law enforcement going to do with a bunch of meta data connecting pseudonymous adddesses? Especially when it comes to law enforcement activities like pressing charges, prosecutions, & submitting evidence?
6/18 Well lucky for law enforcement, CB gathered all your personal information when you signed up with them. Remember? So it wasn't just the people you trusted with your address that knew your identity. It was also CB that could link your identity to all your #BTC transactions.
7/18 So law enforcement has access to this great data organization tool provided by the company with all your personal information. Which combined, remove any expectation of privacy. Why wouldn't they link private & public data to build a better relationship with law enforcement?
8/18 Typically, law enforcement would need a subpoena to access your personal information. But there is room for interpretation in CB's privacy policy. And no clear guarantee they won't combine private & public data. Here are a couple screen shots from their website. 
9/18 Multiple law enforcement agencies have signed up for subscriptions to this network analysis spyware. At first, they may claim the majority of the data will stay on CB servers but slowly & surely as much data as the gov't thinks it needs in the course of an investigation...
10/18 ...that data will trickle off CB servers into less secure gov't hands. During the discovery process of trials it may be necessary to get 2nd or 3rd opinions, the scope may need to be widened, or all the combined data might be sold outright with the subscriptions. Who knows?
11/18 But one thing is for sure, more & more data will be put in the hands of gov't agencies that have proved time & again that they are sitting honey pots. There are a couple reasons this is more dangerous than most other data sets though.
12/18 Once your KYC is linked to a #Bitcoin UTXO it creates a trail that can be followed wherever you spend it & all the tx's after that. Even after you transfer funds off CB the path is still easy to follow. The only thing protecting you is that only CB knows your identity.
13/18 What if your identity, physical address, & the amount of bitcoin you own were leaked in a gov't data breach. That's valuable information for someone in the ransom or armed robbery business. Or maybe an angry mob that's been stirred up like wasps by their own gov't.
14/18 That may sound absurd but think about a not so distant future where #BTC is trading at $300k per coin & fiat inflation has caused Zimbabwe-like situations to unravel globally. Do you think your identity & UTXO balance circulating the dark web won't make you a target?
15/18 Luckily there are some pretty awesome tools available to people interested in preserving their privacy. @COLDCARDwallet offers a way to store your private keys off-line with a ton of security features in a cool hardware device.
16/18 @SamouraiWallet offers privacy enhancing features in their mobile wallet that breaks the links between your previous transactions and your post-mix #BTC addresses.
17/18 @RoninDojoUI offers a backend server that you can host on a simple computer like @Raspberry_Pi & it's designed to integrate with your @SamouraiWallet. This way you have a private #Bitcoin full node to broadcast your transactions & no central party to log your IP address.
18/18 #Bitcoin enables anyone to be their own bank. But that takes responsibility & tenacity. The skills are not gained overnight. It's more of a life style change. You can do it. Be weary of those who preach about compliance. The old system is broken, keep it out of the new one.
