AN ANALYSIS OF PRIVACY AND ANONYMITY IN THE CRYPTOCURRENCY FIELD
AN ANALYSIS OF PRIVACY AND ANONYMITY IN THE CRYPTOCURRENCY FIELD

Summary/Abstract: In the society we live in today, financial confidentiality and privacy has become an important topic on the agenda, due to the fact that it is a concept embracing both data security and private life data security. Crypto-currency has brought forth new concepts, some of them even innovative - unknown to this date in the currency field - that can fundamentally change the way we look at payment systems.Virtual coins are based on cryptographic protocols and proof-of-work protocols (based on hashing algorithms) as security methods. Thereby, "digital wallets" and digital currency transactions are safe, irreversible and do not contain personal information from the user. In addition to this feature, virtual money payments can be made without personal information being linked to the transaction. Thus, since the emergence of the first virtual coin – bitcoin, in 2008 - cryptocurrencies quickly developed as a popular digital payment system, largely due to these fundamental features.The present paper is intended to analyse why cryptocurrencies are becoming more and more popular due to the notions of "privacy" and "anonymity", the innovative technology used and the effects of such anonymous transactions: on one hand, the protection of personal data and fluency of financial transactions and, on the other hand, the use of this technology in illegal activities.

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