Home>ANALYSIS>Anonymous culture in crypto may be losing its relevance
ANALYSIS

Anonymous culture in crypto may be losing its relevance

01 Jun 2022
2310

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Crypto has inherited many values that were popularized in the early days of the internet. 

Many participants in the crypto space have been anonymous since the beginning of Bitcoin (BTC), since using this digital money offers a certain degree of anonymity so long as nobody knows the public address of the user. The true identity of its creator, Satoshi Nakamoto, remains unknown to this day.

The most recent wave of innovation spearheaded by decentralized finance (DeFi) and nonfungible token (NFT) projects have anonymous teams that maintain their general right to remain unknown.

The founder of DeFi analytics dashboard Defi Llama, 0xngmi, released a bug bounty on his identity. Rather than giving out this quest to find vulnerabilities in the Defi Llama code, he offered 1 Ether (ETH) to whoever could reveal his identity with a detailed explanation of how they found out. No one has managed to reveal his identity at the time of writing.

0xngmi has also been educating people that would like to become anonymous with a guide on “How to stay anon,” which is a collaborative document that allows contributors to add and edit to improve it.

Navigating through Crypto Twitter, there are plenty of pseudonymous “celebrities” that, based solely on the reputations they have built, have a digital persona with a substantial amount of followers.

Another account that remains anonymous on Twitter, The DeFi Edge, tweeted the reasons why he has decided for the account to remain anonymous. The founder of the eponymous DeFi analysis site has no intention to reveal their identity for the time being, but has dropped some minor details:

As the industry rebrands to Web3 and a wide array of talent is being lured into the ecosystem, a greater number of participants in the space have decided to take a different approach. They are in the position to later reveal different characteristics of their physical persona to become pseudonymous or reveal their true identity altogether. 

After the recent Terra collapse, the BBC reported that a man presented himself at Do Kwon’s home in Seoul only to find his wife answering the door. The 30-year-old founder of Terra has been active on Crypto Twitter, using his real identity to promote his protocol and communicate with the community in these times of crisis. Having his identity open to the public might have helped him convey trust to investors and the community, but it also exposed him to threats in real life. Situations like these are some of the reasons why many entrepreneurs in the space remain anonymous.

Related: How Terra’s collapse will impact future stablecoin regulations

In a constant struggle between the open flow of information and retaining the privacy of the individual, protecting anonymity and avoiding getting doxxed has become an important issue of the new cultural and technological revolution taking place in online society.

One of the biggest controversial identity reveals was when journalist Kate Notopoulos authored an article titled “We found the real names of Bored Ape Yacht Club’s pseudonymous founders,” in which she uncovered the identities through publicly available records associated with Yuga Labs.

Protestors in Guy Fawkes masks. In the internet age the mask has become a symbol associated with anonymity and privacy.

Revealing an identity ≠ doxxing

Usually referenced as a hostile action via the internet, doxxing is meant to insinuate the ability to find a person and reveal private information about an individual or organization. Although the term was coined by extreme groups as a way to threaten and intimidate marginalized persons online, the word doxxing currently blends into the meaning of revealing an identity without exclusive extremist connotations. 

Recently, 0xngmi gathered some findings that linked Charlotte Fang as the person behind the anonymous account Miya. The founder of the NFT art project Milady Maker allegedly used this pseudonymous online profile to spread hate speech toward minorities through social media.

After being recognized as the person behind the pseudonymous account allegedly linked to an online cult, Charlotte had to step down from the project as Milady Maker’s floor price plummeted.

Anonymous teams handling fortunes

Decentralized autonomous organizations (DAOs) have opened the door for many participants to be able to contribute to the governance of a project while remaining anonymous. Either for safety reasons or to avoid regulation, the majority of these projects have anonymous founders and contributors. This has been the norm in recent years. 

Grug, a pseudonymous account on Twitter, told Cointelegraph his reasons for remaining anonymous as CapitalGrug and the value of being judged solely on performance and ideas:

“I think the main reason that I chose to be anonymous is so that I can participate in and help maintain the same type of irreverent culture that I found so cool about crypto from the start.”

Plenty of good actors in the space have remained anonymous, bringing value to projects and communities by not having other defining characteristics influence people’s perceptions of that persona.

Being anonymous can also be the path for people that need a fresh start, but this can also have the effect of allowing malicious actors to infiltrate the space.

Back in January, the true identity of 0xSifu, founder of Defi protocol Wonderland, was unveiled as Michael Patryn, the co-founder of now-defunct crypto exchange QuadrigaCX.

The co-founder of the scandal-ridden exchange had previously been sentenced to 18 months in a United States federal prison for identity theft related to credit card fraud. Patryn is not even his real name; following the prison term and previous to founding QuadrigaCX, he reportedly changed his name from Omar Dhanani.

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The Wonderland protocol collapsed with this news and the debate of whether anonymous teams should be allowed to handle large sums of money took the center stage. Even Danielle Sesta, co-founder of Wonderland, said that he expects anonymous teams to lose relevance in favor of teams that have their full identity revealed.

Redefining anonymous identity 

Although with the transition toward transparency in crypto in recent years, anonymous culture is still very strong. One doesn’t have to remain completely anonymous in the space, as Grug shared: 

“Our fund is all anon for instance, although we have all doxxed to one another. When I go to events and people whip out their phone to follow me on Twitter they are usually anonymous.”

Identity, whether it’s public or anonymous, is a very delicate subject that we all struggle with. Finding the balance between fully anonymous and a public identity will be the key to a more rich and diverse crypto community.

Up to this point, anonymous culture in crypto has proved to bring some positive value, as it minimizes biases and allows individuals to fully express themselves. Bad actors can take advantage of this to pursue a fresh start, which can be dangerous if they keep acting maliciously. But, if they become healthy contributors to an ecosystem and provide value to the community, it could prove people deserve a second chance.