Anonymous currency is fine for buying a dirty magazine and some hand lotion.

But as the amounts grow larger, the risks aren’t worth it. If Alice has financial dealings with Bob but genuinely doesn’t know and cannot discover who Bob is, then Bob will occasionally rip off Alice secure in the knowledge that nothing can be proven. As this happens more often, Alice will learn to refuse to do business anonymously. Once you’re talking about value that is worth the effort to rip off, you’re talking about a negative value proposition for ‘hard’ financial anonymity.

What Alice wants, for her own safety, is to be able to later prove that she did make a payment to Bob. If she can’t prove that, she has no legal avenues for recovery if Bob rips her off and, after a few hard knocks like investing in altcoins, she’ll learn to refuse to do the deal at all. If she can prove that, then Bob isn’t going to be able to keep his financial records private without Alice’s cooperation. So his financial privacy is ‘soft’ rather than ‘hard’.

Likewise, Bob, who did receive a payment, wants to be able to prove he delivered or performed the goods or services he offered for sale; if he can’t prove that, then he has no legal avenues for defense if Alice claims she paid him and got ripped off. If he can prove that, then Alice cannot keep the financials private without Bob’s cooperation. So her financial privacy, like Bob’s, has to be ‘soft’ rather than ‘hard’.

People buying a dirty magazine and some hand lotion want financial privacy, and that’s fine. Although the embarrassment they now suffer will fade away as the open ledger makes it clear how utterly normal such purchases really are.

But once they’re into transactions big enough that they’re afraid of getting ripped off? Then they want to be dealing in assets that the police can trace and the courts can recover. And if no cryptocurrency gives them that option, then no cryptocurrency will ever be accepted for mainstream use in purchases larger than a pizza.

What I proposed above, where Alice and Bob have to cooperate for either of them to maintain privacy, is ‘soft’ because a third party cannot discover the transactions without the cooperation of either Alice or Bob. But let’s take it further, and pretend we have a system with no financial privacy at all.

Would it really be so horrible? Let’s consider:

Imagine running a multi-million dollar business and having all of your competitors see all of your financial transactions.

If you can also see theirs, is that really so awful? It’s completely fair, anyway.

“Why did you give “x” a discount and not us?”

Why indeed? If it was good business for x, there’s bound to be a reason why, isn’t there? And if he can offer you the same good reason, don’t you benefit by offering him the same discount?

“I noticed you did lots of business with ‘x’, so we bought them out, good luck!”

But the market will force you to either do business just as efficiently as ‘x’ did, or drive you out of business. So why should I worry, if I can offer you the same deals that were money-makers for X? Even if you don’t take them, either someone else will or X wasn’t doing good business.

“Why does ‘x’ get paid a higher salary than me? Can you give me a raise?”

Either x is a more effective worker than you and deserves the higher salary, or else I’m in danger of losing you when a competitor spots exactly the same thing you’ve just spotted and offers to hire you away for the same greater salary that you’re now asking for. So thanks for pointing that out….

“Hello sir I see you’re doing business with your long time private partner, allow me to offer you the same service for a 10% discount”

“I see you’re taking bids for ‘x’ project, and now I can see the prices that have been submitted .. let me put in a discount”

and so on….

Those things – those fears – are exactly the sort of thing I’m talking about when I say that values will have to change before a global ledger is seen to be a good thing for everyone. Another way to view all of those situations is,

“Oh, your business model is based on deception and keeping others ignorant? Here, asshole, let me fix that for you.”

‘Cause, seriously. If you’re getting away with paying people less than they’re worth, specifically by trying to keep them ignorant of what they’re worth – doesn’t that make you an asshole?

If someone is getting business when you can make a profitable offer at a ten percent discount under that price – then that person doesn’t deserve the business does he? He’s running an ineffective operation.

If you’re giving X a discount for some legitimate business reasons, then doesn’t Y have a right to be upset if it can offer the same business reasons but not get the same discount? Or at the very least if Y can offer the same service, wouldn’t it be the right thing for them to be looking for someone willing to give them that discount?

If someone can see what you’re paying for something and shows up to offer you a discount, isn’t he doing you a favor? And likewise, if someone can undercut you at a profit, doesn’t that mean she’s the better businessperson (running a more efficient business) and deserves the business?

Doesn’t all of this, in fact, drive honest businesses to be ever more efficient?

So maybe all that the post-globalization perspective will see here with the open ledger is more efficient honest business. People who find that threatening are just conditioned to using less than complete honesty in order to make a profit at an inefficient business. Right?

Man, I don’t know if I’m convinced of this yet. But if the alternate is letting crooks get away with fraud, and wasting massive resources on accounting, etc, is this a perspective we can escape?