Freedom.
But what if that's being challenged?
Is Bitcoin broken?
And what if there's a replacement that does a
better job of delivering the freedom that we ordered?
See, Bitcoin was made to address
flaws in standard fiat currencies.
We wanted a free-flowing, decentralized currency,
not operating under the authority
of any government or central bank. And it happened.
Bitcoin can never be counterfeited or
printed by governments like dollars.
Around 80% of these were printed in the
last 30 months due to various stimulus programs.
The problem is, when you have way more
of something, it's worth less, and that's inflation.
Cryptocurrencies intended to bypass all of that.
And since transactions aren't monitored by a bank,
crypto was designed to
be secure, confidential, and private.
But in recent years, we've learned
that this isn't always the case.
As anonymous as Bitcoin may
have first appeared, it's not.
Not really, anyways, because every single transaction, start
to finish, is logged on the blockchain.
Sure, a Bitcoin address is anonymous, but if someone,
say, the FBI gets a subpoena for your internet
and email records, that anonymity is completely gone.
Check this out.
Picture is May 7, 2021. You're part of the eastern
European hacker group DarkSide.
You and your pals just seize control of the colonial pipeline,
which, by the way, happens to supply 45% of
the fuel to the east coast of the United States.
It's kind of a big deal.
So you demand and receive a ransom of 75 Bitcoin.
This is panning out to be quite the heist.
However, a month later, just when you're choosing what colored
lambo to get, the department of justice was able to
trace the transactions back to a wall containing these Bitcoin
before taking almost all of them back.
No more lambo.
Now, obviously, we shouldn't feel too much sympathy
for a group of professional cybercriminals who are
holding our country's fuel supply hostage.
But sometimes, just sometimes, you need to take
a look at extreme situations like this in
order to see the underlying story.
we can learn more about how it affects all of us.
Bitcoin and other cryptocurrencies are now so
easily trackable that there's this whole underground
business devoted to laundering crypto.
Maybe you want your Bitcoin clean because you
came into it through rather unsavory methods, or
maybe you just really care about your privacy.
Either way, this is how you do it.
Not financial advice, of course.
There's one service called the Treasure Men.
They can be found and hired on
Hydra - the world's largest dark net marketplace.
When you enlist the services of the Treasure Men, you
send them all the crypto that you want laundered.
They then take the coin after
subtracting their fee, of course.
They got to make their money.
Then they leave literal bundles of
cash for you to pick up.
Maybe this cash will be buried underground,
maybe hidden in a bush but wherever
it is, they send you the coordinates.
You go and retrieve it like buried treasure. Get it?
Now, maybe you don't fully trust a group
of anonymous money launders to actually leave a
giant bag of cold, hard cash for you.
And that's totally understandable. I don't blame you.
You worked hard to steal those coins, or at least
you took a lot of risks to do it.
Enter Privacy Cryptos. The biggest privacy crypto
by far is Monero (XMR).
So let's just use that for our example here.
Monero is designed with the explicit goal
of correcting what they consider an inherent
flaw in Bitcoin and many other popular
cryptocurrencies - a lack of true privacy.
Monero differentiates itself from Bitcoin
in two main ways.
Number one, stealth addresses.
Basically, every Monero wallet has a public view
and public send key that are, well, public.
But you don't use that
public info to send transactions.
Instead, transactions are sent through one time stealth
addresses, which are generated for a single transaction,
and then, poof, it's gone - untraceable.
Think of Monero like a secret agent.
It has a public address, which is sort
of like an alias, a civilian who seems
to have a totally normal pedestrian life.
Maybe they drive a mini van or something, and
no one, not even their closest family or
friends, knows their real identity, which is, of
course, a highly skilled secret agent.
So that's the first change.
But there's another way Monero
differentiates itself from other cryptos.
This is through a ring signature.
And before I talk about that, I need to let you know.
Monero and hundreds of other crypto assets
are available on today's sponsor FTX.
FTX is a highly secure exchange that
allows you to buy all kinds of
digital assets for super low transaction fees.
They have two platforms an easy to use app for
beginners and a more advanced platform with more features.
You can check them out - links in the description below.
Now ring signature, basically, instead of one account
sending one transaction, which is easy to track,
a circular ring of different users sign the
transaction and send it.
This way, the person sending the transaction is
just one of many potential accounts
associated with each and every transaction.
What this means is even if you're able to
figure out the one time stealth address for a
Monero transaction, you would still need to sort through
this ring of associated users, most of whom have
nothing to do with the actual transaction.
They're all decoys.
It's almost as if you were able to send
a letter in the mail, except the return address
is every single address in your entire city.
The creators and proponents of Monero say
that they're offering what Bitcoin and other
cryptocurrencies were always designed to offer -
total privacy, total anonymity, total freedom.
They say that Monero is just the natural
evolution of crypto, that these changes are improvements
taking us one step closer to the fundamentals
that crypto was built on - Freedom.
But as you can probably guess, there's
a dark side to all of this.
Monero has become the cryptocurrency of choice for
a certain subset of users: hackers, thieves, drug
dealers, all sorts of questionable characters.
Two of the most active markets on the dark web,
ASAP and the Versus project, both
accept Monero, and it's the currency of choice
for some very dangerous movements and political causes.
Monero, after all, allows you to donate money
without ever having your name or reputation associated.
The Daily Stormer, a Neo-Nazi publication,
now explicitly requests that its users give
support via Monero rather than Bitcoin.
Various far-right activists fundraise with Monero, and
there's reason to believe that monero is
the primary means of fundraising for the
"Unite the Right" rally in Charlottesville.
Now, it's worth noting a lot of this is presumptive
due to the nature of the coin, the privacy coin.
It's impossible to track its movements, so we
can't know any of this with certainty.
But a number of extremists publicly
embrace Monero, and that's not nothing.
I mean, Jonathan and Diana Toebbe,
that US couple who allegedly tried to sell nuclear
secrets to foreign countries, asked undercover officers
to pay them in Monero.
So let's summarize this: black markets, hackers, and
double agents selling American secrets abroad all point
to Monero as be coin of choice. Yikes.
This has created a bit of backlash.
Privacy coins have unsurprisingly come under a lot
of scrutiny from governments all around the world.
Australia and South Korea have banned
exchanges from offering privacy coins.
Japan just went ahead and banned them entirely.
The FBI, no big fan of cryptocurrency
to begin with, absolutely hates Monero.
Some even argue that these criminal activities aren't just
some unfortunate side effect of privacy coins, but in
fact, are their entire reason for being.
They argue that the total anonymity of Monero was
built with the express purpose of benefiting criminals.
Another yikes.
No one, even the biggest proponents of
Monero, would deny that the coin has
become popular with the criminal element.
But their argument is that it simply proves the
coin is doing what it's designed to do.
It's untraceable, unlinkable, and that's the point.
And that these nefarious uses, as unfortunate
as they may be, they're unavoidable. And that's life.
That's the cost of progress.
It's not all dark web this, laundering that.
Prominent activists argue that the same protections that
insulate criminals from law enforcement also can serve
a very important positive purpose protecting activists and
those fighting governments, trying to capture or hurt
them, people who need to keep their identities
and financial transactions hidden for good reason.
But how do you tell the difference
between a criminal and an activist?
You can't.
The strongest proponents of Monero will generally
argue that this isn't really about any
individual application, good or bad.
It's about a principle.
It's about people trying to reclaim some degree of
privacy when it comes to their financial decisions.
And how hard that can be in
an increasingly digital, highly surveilled world.
This is the fundamental argument in favor
of Monero and other privacy coins.
People should be allowed to live their
lives without having every financial decision tracked
by an overreaching surveillance state.
Monero is a way for people,
all people, to exercise that choice.
Activists will also argue that the criminal
element that has embraced Monero is unavoidable.
An incredibly familiar story that any new
technology, especially at its inception, is just
going to be used for criminal purposes. It's inevitable.
But that doesn't mean the
technology itself is to blame.
I mean, illegal contraband has
been sold online for decades.
Does that mean the internet should just go away toward?
The open source network used to access the
dark web was originally developed by the US Naval Research Lab.
The first widespread use of Bitcoin itself was,
you guessed it, on dark web marketplaces like
the Silk Road, where you can supposedly purchase
all kinds of interesting things.
And like I said, Bitcoin's sense of confidentiality was
a huge part of its appeal to users.
But this has become strained over the years.
Government regulators and analytics firms have found
ways to surveil the public blockchain.
But anonymity was the original goal, and
privacy cryptos are simply filling that gap.
There will always be people who take a
new technology and use it for nefarious purposes.
This has been the case throughout the
history of the Internet, and then before
that, throughout the history of human civilization.
About the first time someone got killed with
a hammer, people looked at it and they
were like, that's not supposed to happen.
And here's the tough part about all this.
Both sides of the privacy crypto debate are right.
It's complex, it's messy.
And in a culture that often demands easy, simplistic
answers to problems, there really isn't one here.
As we move forward in the next decade of technology growth,
there are going to be a lot of moral gray areas.
Artificial intelligence, deepfakes, the
metaverse, the automation of everything.
So many of the advancements that are coming down
the pipe are going to pose these sort of
complex, frustrating moral questions, and there's no easy answers.
And that's why I can't really tell you
what to think about Monero or other privacy
coins, as you see in this video.
Whatever side I might personally fall on, I could make
a counterargument just as easy, and so can you.
And that's why, when it comes down to the question
of privacy cryptos, you just have to decide for yourself.
You have to do the research, look at both
sides, think critically, and come to your own conclusions.
What are your thoughts?
If you'd like a closer look at what
I'm investing in, live coaching everyday, trade signals,
and the smartest crypto community on the planet,
make sure to grab a spot in Finova.
Our private group linked down below.
Just make sure you grab a spot as
soon as possible, because now is the best
time ever to really understand this space.
Don't be that guy who five years from now is
like, I really wish I learned all that crypto stuff.
Anyways, I'm thank you so much for watching.
I'm Max Maher, and I hope you have a profitable day!