Of all the draws to using a cryptocurrency, the promise of anonymity is perhaps the most persuasive. Millions of users of Bitcoin originally flocked to it for the coin’s unique use of the blockchain to give its users the feeling of privacy and anonymity in their transactions. While traditional fiat money is almost always monitored by some agency or institution, the decentralized nature of cryptocurrency lends itself to very little checks, nonexistent monitoring, and ineffective means of tracking coin movement and transaction.
However, the increased exposure of mainstream cryptocurrencies has led to increased efforts to normalize and make easier the process of obtaining and trading coin. Consequently, many of the largest cryptocurrencies have lost their competitive edge as an untraceable and anonymous form of currency.
Despite this turn of de-anonymizing events, there is still a significant user-base of cryptocurrencies that cries out for more anonymity. To satisfy this need, Satoshi markets themselves as “the first anonymous token” available within the Ethereum network. This guide will outline some of the basic tenants, arguments, and claims used to back this new and budding technology.
Three main features seem to characterize the Satoshi claim to anonymity for its users.
First, the company points to “no links between transactions” as a reason for the anonymity of their coins. It is true that, for other coins, links left behind following transactions have given certain individuals and agencies the ability to somewhat reliably track the movement of specific coins.
The second claim is that the company makes use of “advanced” cryptographic techniques. It is more than likely that the company is using the Ethereum network to create and monitor their cryptocurrency. Users should be aware that these technologies are probably largely-similar in security.
Finally, smart contracts are employed to independently verify transactions. This does avoid one central issue of anonymity, which is the possibility that a verifier of transaction could gain information on the nature of the economic transaction on the blockchain.
Potential investors should put significant research in before hailing this new technology as the way to anonymity in a centralized world.