fbpx

User case #2: Privacy and digital currencies

User case #2: Privacy and digital currencies

Published 20 Sep 2019

How private is my information in the current world? Not really very secure? Could be better?

The bigger question is who else has personal data (i.e., governments, etc) ….and who own’s it?

This is the crux of the matter moving into the digital world … the sovereignty of people’s digital identity … that is, government and business is using and monetising everyone else’s digital identity.

Banks are already sharing and profiting from customer-behavioural data. The ABC reported recently[1]:

“every time we swipe a credit card, we’re handing across more information on our spending patterns — what products and services we buy, how much we’re spending and how frequently.

“This makes the banks one of the few organisations with such a full picture of our personal information.

“And right now, they have exclusive control over all this valuable data.”

Three key privacy risks with our current system:

While there are many privacy risks for personal data, here are four of the major risks in the financial world:

1.Card fraud

There were over 4.3 million fraudulent transactions on Australian cards in 2018. Fraud increased by 2.3% over the year to $574.3 million.[2]

2. Identity theft

‘Recent estimates by the Attorney-General’s Department indicate that identity crime costs Australia upwards of $1.6 billion each year, with the majority (around $900m) lost by individuals through credit card fraud, identity theft and scams.’ [3]

3. SWIFT

SWIFT (11,000 institutes in 200 countries) has ongoing issues with US government intervention in transactions in and out of the US, and NSA monitoring financial transactions made through SWIFT.

Not so secure; they like to keep quiet about hacks; happy to keep fingers pointing at crypto theft [4][5]:

‘According to cybersecurity experts there are currently at least seven different hacking collectives targeting SWIFT and most attacks go unreported.’

Crypto “inherently more privacy-oriented than traditional digital payment systems”[6]

Although digital and cryptocurrencies do not make payment structures bulletproof, there will always be concerns about deanonymisation by companies who sell transactional and identity information to others. It seems that a single digital currency (like Libra), where all transactions are kept on a secure Blockchain that adheres to financial regulation, may offer more opportunities for making payments and personal data safer.

 

Footnotes
[1] https://www.abc.net.au/life/banks-keep-lots-of-information-about-you-this-is-how-it-is-used/10912378
[2] https://www.auspaynet.com.au/sites/default/files/2019-08/AustralianPaymentCardFraud2019_0.pdf
[3] https://www.afp.gov.au/what-we-do/crime-types/fraud/identity-crime
[4] https://medium.com/@kvantorcom/top-5-biggest-swift-hacks-52fca78145c
[5] https://www.nytimes.com/2016/05/13/business/dealbook/swift-global-bank-network-attack.html
[6] https://medium.com/human-rights-foundation-hrf/privacy-and-cryptocurrency-part-i-how-private-is-bitcoin-e3a4071f8fff

Recommended Articles

The Libra digital currency: Intro to the regulatory and technical issues

12th December 2019 Hosted by The Allens Hub, a joint initative by Allens – Linklaters and UNSW.     Heath Behncke, Managing Director and Portfolio Manager at Holon Global Investments speaks on the future of digital currencies and why...

User case #1: Digital currencies may offer benefits – a closer look

It could appear counter intuitive to argue that a country like Australia with a relatively stable currency (AUD) would benefit from a digital currency. That may be the case if NSW traded mainly with Victoria and QlD but that...

Libra … A New Global Currency?

Business beyond borders with Cynthia Dearin with Heath Behncke, Founder and Managing Director of Holon Global Investments   Everybody’s talking about the Libra, a new cryptocurrency proposed by Facebook, which advocates claim could transform the businesses and the lives...

Subscribe to register your vote and participate