Kirill

Blockchain enthusiast developer and writer. My telegram: ksshilov

Safety or Privacy? Now You Can Have Both

Safety and privacy are among the basic human needs. What can we do to be safer than we already are? We must control how much of our data is shared to third parties. Using a method of payment, we basically choose between safety and privacy: cash gives us more privacy but less safety because we’re carrying it in our pockets, credit cards are more secure in that regard but they require sending our payment information to many places during a purchase. It’s hard to choose, isn’t it?

This doesn’t mean that we should be afraid of using one or the other. On the contrary, we should just be aware of all nuances in order to keep our funds and data safe. Today, we have many options: cash, credit/debit cards, mobile payments, and crypto payments. Let’s see the pros and cons of each method.

Cash and credits cards are totally unsafe

Cash. Over 400,000 robberies occur each year, and approximately 90% of them occur in large urban areas with dense populations. Other robberies occur in smaller cities and less-populated areas. Walking around carrying cash in your pocket isn’t safe in many countries of the world; a person like that becomes an easy target.

By having cash, one can get robbed pretty easily — no obstacles for a robbers, after all, they can just get the paper bills and run. And it’s not only about the money — statistics show that many robberies result in the death of the victim, and the chance of this outcome is even higher when the robber meets any resistance from its victim.

A credit card makes its owner a less interesting target — to get someone’s money, a robber has to get access to the physical card, for example to take it by force, and has to know the PIN number to withdraw the money. While a robber is on their way to an ATM, the victim can contact the bank and block the card. It’s highly unlikely that the victim would come with the robber to the bank to withdraw the money, as there are many cameras near each ATM. But there is a problem with cards, as well: by receiving the additional protection for your funds, you lose your privacy.

Anyone can look at your credit history and instantly get all what they want to know about you. Also, anyone at the bank can see where and at what time you bought something; it’s written forever in your account history. There is no way to defend against this kind of tracking. And if this information leaks somewhere any fraudster could find out:

  • Your name and address. It’s usually your real address
  • How wealthy you are, your balance, and your last purchases
  • Your bank and account number

Thus, anyone having this could see how much money you have in your account and where you live. That’s probably not the type of info you’d like to share with everyone. Even if your bank’s employees have no interest in using such info, the data can be sold to someone who needs it. It’s still unknown how big of a leak occurred in Barclays in 2014, but the data regarding its 27,000 customers was later sold on the black market. We can also remember the hack of 2016, when the Turkish group Bozkurtlar breached the security of six banks and posted all that they found online, including the data of more than 1 million customers, some of which even included the account balances. And all of this can happen again — everything is hackable.

The only way to prevent such an outcome in the future is to not have a credit card or bank account, which is nearly impossible these days.

Something better — mobile payments

The more advanced option is mobile payments. It’s a broad term for any payment using any device, like a virtual smartphone wallet such as Apple Pay,, or mobile e-commerce payments, which can be also be divided into in-app and mobile web browser payments. Generally, it’s safer than other means of payment in terms of your security, but it has the same flaws as credit cards, meaning that at some point someone can still get access to your information.

If you use a digital wallet at a PoS terminal in a retail store, you never expose your bank information to anyone, because you don’t even have it on your phone. During a transaction, the wallet creates a token, containing all the necessary info, and gives it to a merchant. All you have on your phone is your digital wallet account information; even if someone manages to decrypt it they won’t get anything valuable, not even your name. Also, it’s hard to lose your phone — an average person checks it 110 times a day, so you don’t have to worry that it would get into the wrong hands.

The in-app and mobile web browser payments could be more secure for your funds, thanks to the advanced methods of encryption that we have today, like

  • Two-Factor Authentication — Your bank sends you an SMS or a push notification with a code to ensure that it is actually you who approves a transaction.
  • Payment gateways — Validators that authorize online card payments. The process is similar to PoS authorization in retail stores. The most popular are PayPal and Payment Express.

However, these tools aren’t completely safe for your privacy, as in the end, it’s gonna be stored in your bank history, just like every other card payments, and while nobody could hack it on the merchant’s side, anyone from the bank could still check it. Also, these processors sometimes have big data leaks — like the security breach of TIO Networks, when the personal data of its 1.6 million customers was stolen.

Many people still think that mobile fiat payments are unsafe — A survey by ISACA shows that among 900 cybersecurity experts, only 23% believed that these payments are secure. But is there any way to make them more secure? Of course! Just add blockchain and crypto payments to the mix.

Cryptocurrencies are the solution

Switching to cryptocurrency payments benefits those who care about safety. Cryptocurrencies don’t have the flaws that cash and credit cards have:

  • It’s a person-to-person payment without any intermediary between them
  • The only thing that is needed for payment is the public address, and anyone can create a nearly unlimited number of addresses for themselves
  • Nobody stores information that could be linked to the wallet owner
  • Nobody knows how much money a person has if he or she only uses a hot wallet loaded with a small amount of money
  • Only the wallet owner has access to their funds, because for every address there is a private key that is impossible to hack or open by bruteforce

When a transaction is made, it requires the approval of the wallet owner. This can be done without compromising the owner, for example, by using a hardware wallet like Ledger Nano S and Trezor. Hardware wallets can’t be tampered with as they have 2FA and the private keys never leave the wallet.

No third party is involved, as the miners approve all transactions on the network, receiving a reward. No more requests to banks: all crypto transactions are done by the “pushing” method: it’s you who initiates the payment to another address.

There are also private cryptocurrencies, like Monero and Zcash, that allow complete anonymity, and there are various tools that can help you keep your identity safe, even compared with other cryptocurrencies: the transactions on the chain can’t be tracked. If your initial address is known, whether you send your funds or receive it, it’s anonymous — no danger of exposing yourself and showing who you are, how much money you have, and where you live.

Safety for everyone

Many companies may benefit from switching to crypto payments and the blockchain, especially those that focus on safety. PinkTaxi is a blockchain startup whose mission is to provide women additional safety during taxi rides. They hire only women and only women can use the service.

Women become victims of taxi drivers quite often. Javier Miglino, a lawyer and the founder of NGO Defendamos Buenos Aires, said that, on average, 99% of sexual assault cases are perpetrated by taxi drivers. That’s the issue that PinkTaxi addresses and the blockchain helps, benefiting both the drivers and the passengers:

  • By accepting crypto transactions, it allows passengers to keep their privacy, so personal information doesn’t get sent to a company. On the other hand, it allows all rides to be tracked on the blockchain, allowing transparency and immutability. The routes are recorded on the blockchain and can’t be changed.
  • The platform, built on the blockchain and allowing the use of crypto, benefits not only the passengers, but also the drivers. Once the ride is over, and it was confirmed it went well, the driver automatically receives her payment via smart contract.

Less harassment, less robberies, less dangerous. That’s a real use case for crypto payments.

While these kinds of payments may still be unpopular, there’s a bright future for them. As you’ve seen the statistics, there is a growing trend of P2P payments, and millenials are likely to continue using alternative payment systems. The blockchain-based payment solutions win by eliminating high fees and by keeping it all transparent and secure simultaneously. No one will ever take your money from you unless you send it yourself. So, will crypto get its share of the payment market? The answer is: definitely!

About the author:

Kirill Shilov — Founder of Geekforge.io and Howtotoken.com. Interviewing the top 10,000 worldwide experts who reveal the biggest issues on the way to technological singularity. Join my #10kqachallenge: GeekForge Formula.

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