Ever since Bitcoin took its first leap into the financial world in 2009, the digital currency space has been on an incredible journey of growth.
This growth has ensured that the digital asset ecosystem is expanding into other markets. It incorporates everything that lives within the crypto space, including a wide range of cryptocurrency tokens, non-fungible tokens (NFTs), stablecoins, products and services, and futures.
The digital asset ecosystem (DAE) also makes traditional assets digitally available and accessible to potential investors and as a result, reduces their cost significantly. Investors in various sectors such as art, healthcare, insurance, Real Estate, gaming and gambling are seeing a new wave of development and cashing into this future.
Moreover, a decade ago, someone – or even a group of people – who called themselves Satoshi Nakamoto introduced the most revolutionary technology of our time. No one knows who Nakamoto is and, to date, people have been trying to uncover the mystery behind Satoshi’s identity.
Living up the legacy of Bitcoin’s founder(s), it has now become a trend among digital asset developers to hide their real identities from the general public. This trend, however, cast doubt on the legal status of most blockchain initiatives, leaving one to ask a series of questions like “why do DAE developers truly hide their identities?”
Purported reasons for the anonymous culture among DAE developers
1. Safety concerns
One of the most important reasons is safety. According to Coindesk, Fiatjaf, a Brazilian Bitcoin developer in the Lightning community, is concerned that revealing his true identity will put a target on his and his family’s backs.
Fiatjaf further noted that different market activities could trigger emotions and sentiment among traders, and may put him in a bad spot as a public person within the Bitcoin space. While Fiatjaf is not the only Bitcoin developer who is concerned about this, the majority are doing so to stay out of public eyes.
2. Freedom to be your true self
Some digital asset developers are of the opinion that being anonymous provides a sort of end-run around exclusion in an industry that shifts towards being dominated by a typical demographic.
In such situations, pseudonyms allow them in a way to be who they are without fear of backlash, especially in contributing to communities where a minority is underrepresented. A minority here could be economic, racial, communal, gender, etc.
3. Avoiding the attention of the authorities
Digital asset developers also use pseudonyms to avoid being targeted by the authorities especially in countries where cryptocurrency is not tolerated by the government. In 2007, a digital currency named e-Gold was accused of fostering illegal activity because it did not have enough information on its customers. It is likely that developers don’t want to be in the centre of such probes by governments so they use pseudonyms.
But how has anonymity built the digital asset ecosystem?
Perhaps, the most important thing that the anonymous culture has done for the growth of the digital asset ecosystem is to create a culture where people can be primarily involved in building something without being known, afraid or targeted.
People want more anonymous transactions and there will be more anonymous cryptocurrencies. It is anonymous in the sense that you can hold a crypto address without revealing anything about your identity in that address.
Moreover, many anonymous persons including the famous Sunny King have helped cryptocurrency grow as a software developer. Sunny King is the creator of Peercoin. King is known as the “grandfather” of the consensus algorithm proof-of-stake (PoS) because Peercoin was the first hybrid proof-of-work (PoW) and PoS system.
What’s the downside of DAE’s anonymous culture?
The biggest question is what happens to accountability? The problem with anonymity is that it can lead to a lack of accountability. When people are identifiable only by an online handle, it makes it easier for them to change direction or renege on agreements.
In 2013, the developer for Phenix – an exchange for the Phenix altcoin – went AWOL with the exchange’s code, leaving many of the coins inaccessible in the exchange. The worst part was that it became really tough for the community to track him down and hold him accountable. Two things made his vanishing possible: anonymity and concentration of power in the hands of one or two individuals, thereby nullifying the essence of true decentralisation.
However, the anonymous culture has steadily shaped the DAE which, on the other hand, has continued to witness mainstream adoption. Although there are some anonymous developers and influencers who lead conversations, not all choose to be heard in the public space.
In other cases, some grassroots altcoin founders prefer not to stay anonymous. For instance, Peter Bushnell, founder of Feathercoin goes by his real name and background. There are a few other founders who also choose to be known by their real identity, and sometimes, this may help project their project gain more trust from the public space.
Regardless, the anonymous culture will continue to be practised. However, there should be, most importantly, a balance between anonymity and accountability in the DAE.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.