There are actually both public and private cryptocurrencies out there. The most popular ones like Ethereum and Bitcoin are public. Anyone can see exactly what an address owns and what transactions are made. Then there are privacy coins like Monero, where Zero Knowlege Proofs means none of this information needs to be made available to ensure that money is transfered trustlessly from Person A to Person B.
Our current monetary system is kind of a mix. As an individual, you can’t see what goes on with someone else‘s money. However the IRS certainly can, and your bank, and companies like Equifax, and even the hackers who used information taken from Equifax to steal your identity. Obviously, the current system has it’s advantages and disadvantages. It’s based on power, and we trust the people in power to protect our best interest. Cryptocurrencies transcend the power heirarchy because every participant is treated equally. Every participant on the Monero network is private. Every participant on the Bitcoin network is public.
Honestly, it’s not overwhelmingly clear that moving to one system or another is best. What cryptocurrency can do is drive discussion on this topic. It’s popularity can encourage change
More Privacy Protects An Individual
Tying your identity to your public transactions may be interesting to the government for tax reasons, or for stoping illegal activity. On the other hand, it’s legitimately dangerous to push that onto people.
There is one vulnerability out there that everyone in crypto is universally suceptible to. It’s called the “Give me your cryptocurrency or I’ll shoot you” hack. If your identity can be tied to a significant amount of money, no amount of best practices will save you (except maybe a body guard).
Even if you don’t have a lot of money invested today, it’s dangerous to let people know how much cryptocurrency you have. That 5 dollars worth of Bitcoin you were bragging about 10 years ago is a lot more interesting today.
Privacy coins like Monero are also ideal for areas where the government is oppressing and survelling it’s citizens. Instead of worrying about random thugs from the street, some people actively worry about the police.
Individuals need for privacy is more important than an entities need for control. Individuals are inherently weaker than an entity and they deserve protection.
Less Privacy Increases Accountability
On the other hand, an entity has more ability to abuse it‘s power and get away with it time and time again. Transparency in money is something that helps keep the manager of the money in check. It‘s especially needed in the case of government. As a society, we‘ve always had to trust that the tax dollars taken from us is used responsibly. Imagine if anyone who was interested could see every dollar bill the government sent and recieved at any given moment.
I’m sure we’d see a lot of bribes and misused tax payer funds at the very least. It would most likely uncover more dangerous abuses of power as well (stuff like funding terrorist organizations). It makes sense that the management of tax dollars should be transparent to all tax payers. Cryptocurrency makes this technically feasible where it used to not be.
I‘m not saying that we should immediatly abandon the dollar for a blockchain based solution, but transparency would give a great deal of power back to the people to hold politicians and government officials accountable.
The discussion on privacy is never ending. There are situations where privacy is needed. There are other situations where transparecy is best. Everyone has their own idea of where to draw the line. It’s great that the technology gives us yet another option to discuss and explore