Bitcoin is not private. All transactions that are spent and received are recorded on every single public ledger on the internet that uses the Bitcoin software. Today, that’s a lot of computers! All transactions are open for everyone in the entire world to look at.
The only question is, which transactions belong to whom? This is why Bitcoin is called “pseudo-anonymous” and not anonymous. It can be tracked, and it’s not super difficult.
Very recently, there was even an article of a drug dealer captured after he tried to visit USA from his home in France. Police had been tracking his transactions in Bitcoin and cross analyzing his social media accounts with his drug dealings to link his writing style.
But this isn’t the most famous example. Bitcoin was used as the main currency of an online dark web black market called the Silk Road.
In this marketplace, people could buy drugs and all sorts of illegal items. They would pay in Bitcoin. It took years for the FBI to shut the operation down. Here’s how the payment system worked:
Do you support Wikileaks? The US Government has tried hard to prevent Wikileaks from receiving money, so Wikileaks resorted to accepting Bitcoin which the US Government could not stop. Since they began accepting Bitcoin, the value of Bitcoin skyrocketed, and it’s likely Wikileaks has stumbled upon great riches due to the circumstances.
The ethical questions of privacy and censorship center around the following questions:
Is it okay that money cannot be censored? That means governments cannot stop terrorists from being funded. That also means that terrorists cannot stop people from earning and spending money, and aren’t governments themselves sometimes the terrorists?
Learning about how Bitcoin works in the classroom will naturally draw out real stories from real people in countries that have economic crises, and will serve as a great learning tool for students.