At first, the blockchain revolution began with a whisper. In 2008, Satoshi Nakamoto, blockchainʼs anonymous founder, kicked off an era of decentralization with the release of Bitcoinʼs whitepaper.
Since then, Nakamotoʼs vision has gone from being merely a form of digital cash to encapsulating an entire movement centered around the privacy, autonomy, and financial well being of people everywhere.
Today, blockchains are primed to change everything about the way we own, transmit, and share not only money but also the data and personal information that often comes with it. However, accessing blockchains and their corresponding cryptocurrency markets still entails with major hurdles. These challenges are mostly a result of legacy systems, infrastructures, and regulations finding themselves combined with the cutting edge of cryptocurrency tech.
Additionally, some malicious actors in the blockchain space use its pseudonymity to engage in criminal behaviours. Such activities not only negatively affect those who may have been stolen from, but also cast cryptocurrencies in a negative light.
Weʼll investigate the origins of those problems along with how they can be overcome through the deft interweaving of both old and new structures for efficient cryptocurrency compliance.
Blockchains Put Data Ownership Back In Your Hands
Itʼs indisputable that centralized corporations are creating next generation wealth in the current data rush. Every Google search, Facebook post, and debit card transaction you make creates a trail of data that tells companies more about you than you want them to know.
Those oddly accurate ads that pop up when youʼre surfing the web are just one example of the way the data youʼve created has been turned against you. Even if you donʼt mind companies collecting your data, you probably do mind that theyʼve monetized it for their benefit, not yours.
With data and privacy laws responding at a snailʼs pace to the hegemonic concentration of data into the hands of a few powerful entities, a solution had to come from outside of the usual framework.
Enter blockchain. Nakamotoʼs invention is a cryptographic ledger which enables people to regain sovereignty over their data. As decentralized systems, blockchains inhibit the wealth-concentration of executives at the top of the food chain since they have no hierarchy and serve the interests of many, rather than a few.
Using blockchain technology, you can store, send, and trade digital assets securely from peer to peer without falling victim to the usual intermediaries lying in wait to take both your data and fees. Additionally, you can surf the web using blockchain-powered internet browsers which allow you to monetize your data by storing it in a wallet before selling it in a decentralized data market. These are just two examples amongst a seemingly infinite amount of ways in which blockchains can be utilized.
Blockchain Poses Compliance Challenges
For all of blockchains strengths, it is posed with a few significant challenges. In the same way that it grants autonomy, privacy, and sovereignty to users, it also empowers bad actors.
The cryptocurrency industry is rife with scams, money laundering, and the financing of illicit activities using anonymous digital currencies like Monero. Cryptocurrency compliance is the bridge between the functional and time-tested compliance laws of the traditional world and the cutting edge technology granted us by blockchain developers.
By utilizing AML (Anti-Money Laundering) and KYC (Know Your Customer) laws within the blockchain space, a broader and more mainstream generation of users can begin experiencing the benefits of cryptocurrency privacy. Without effective compliance in place at cryptocurrency exchanges, amongst other digital asset onramps, criminals can continue to make use of blockchains, which only further complicates blockchain adoption.
As time goes by and the cryptocurrency industry matures, the need for proper AML/KYC compliance has become more apparent, giving the evolution of the blockchain industry new impetus.
This article was created by ComplyChain Solutions consultants: Adnan Tahir and Ryan Yanch, with contributions made by CoinZen.