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Problems with anonymity in Web3

Author: Fig


Hey, you, yes, you're sitting behind that rose-tinted computer screen. May I have your name? Grant Nathan or Punk #4315 - if it's the latter, cute NFT, but you're gonna kill me, man!

Anonymity is baked into crypto culture. They are ubiquitous on Twitter, on forums and now at events, many using pseudonyms.

To the "John" I met at Solana Hacker House in NYC - I know that's not your real name...  

So who are these anonymous people? Why have they become so common? Why is this a problem?

Let's dig in.

The rise of anonymous identities is tied to the origins of cryptocurrencies — specifically the main asset: Bitcoin.

Bitcoin was born in 2008 in response to the global economic crisis, and Satoshi Nakamoto is hailed as the pioneer and creator of this transformative technology.

Satoshi Nakamoto is a pseudonym, and images on Google show him as Japanese.

While others debate the true identity of Satoshi — man or woman, cat or elephant, individual or group — a host of impostors have emerged.

It's just that they're not founders.

They are not responsible for the millions of dollars or the new economic system - they are just players, but rarely significant players.

People are no longer anonymous for legal reasons—they are embracing a new kind of freedom that offers them a way to escape the social pressures of real identity.

Of course, they chose this path for a reason, but it also created many issues that negatively impacted the long-term success of cryptocurrencies.

Well, now that it's over, I'm likely to have an army following me on Twitter - let's take a closer look at why.

anonymous question

Anonymity hinders wider adoption

What is the current goal of cryptocurrencies?

For me, it's about increasing adoption while focusing on security and stability. Think about where the next $1 billion will come from - many defer to institutions; this progression feels right.

But will institutions feel safe trusting an environment where NFT Twitter profiles claim to have a net worth in excess of $1,000,000? What they say may be true, but my answer is - no, they won't.

Anonymous block adoption. This leads us to think that cryptocurrencies have always been criticized:

"Opaque" "Dark" "Untraceable"

While these perceptions are uninformed, Anonymous does not help us change them.

Multibillion dollar organizations need trust and transparency - they don't care about glamor, "fun" or personal freedom - they need competitive rewards and verifiable facts.

Use anonymous identities - the truth is hard to decipher.

they lack responsibility

Why do we like to be anonymous? For me, it's uncertainty.

Behind an NFT PFP could be Leonardo DiCaprio with a surprising amount of crypto knowledge, Zhu Su's second account, or simply a teenager from Illinois.

While I fear it’s usually not the former, every DeFi participant facing anonymity can feel the fascination and mystery. Who is this guy? What is their plan?

It was scary - some people were speechless, or worried about the consequences.

Anonymity is brutal. They lack accountability - look at the Hop forums today.

Irrational attitudes are important for decision making, but let's not create a culture where they only exist as new accounts or catchy names.

Does this help?

While "Babbyy" did catch my attention, such comments rarely lead to discussion.

It could be a proposed project taking advantage of lax forum rules, or it could be enthusiastic retail investors who see an opportunity to disguise themselves as the most powerful.

they make things harder

Drop in and out of forums at will - anonymity becomes difficult in the operational aspects of DAO growth and governance.

If details jump out with NewBlueGoose - where should I find him in discord? Where do I call in Zoom?

The same goes for multisig - a core part of the DAO's identity. What would happen if they weren't around? QL-crypto — Yes, our last signature was a bit hard to find.

Also take Wonderland as an example - multisig core signer 0xSifu is a previously convicted felon who controls ⅕ of keys.

After realizing his past life, it took 2 days to replace the singer - but before that had the power and impact to change the entire trajectory of The DAO.

Ultimately, the risk of anonymity, especially in DAOs, is multidimensional. Who is this guy? Will they be there when we need them? Are they legitimate or harmful?

As DAOs and crypto organizations continue to grow, so does the importance of reliability—we must remain vigilant when evaluating the role of anonymizers.

defense of anonymity

However, they have their place.

Hasu, Flood, Zachxbt, and Fatman are a few that come to mind. They are anonymous and provide real value, and there are legitimate reasons, such as personal safety, to be anonymous.

It's powerful—can be turned on and off at will.

I recognize the value of anonymity - especially as a founder or in countries with stricter regulations on cryptocurrencies.

It's not that they're anonymous - it's the lack of accountability that makes them arrogant.

The case for real identity

People forget that we are all human. We have emotions and feelings - we have been given the responsibility to grow this ecosystem.

It's a huge responsibility - and when it works, there are huge benefits.

However, if you are anonymous, I would ask one thing. Have a doxxed account - and use it. We had to show humanity, intelligence and ability, and that made this thing special.

Only then will the next wave of adoption break out on the ever-growing Web3 platform.

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