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KYC on the blockchain - KYT is rising rapidly

You should have heard about KYC - Know Your Customer. You may also know about KYT - Know Your Transaction, and you are likely to experience these two in some specific actions. operating. Recently, KYC became a standard for sales registration and transaction verification. Now that KYT is rapidly emerging, it threatens to blacklist those Bitcoins that are considered to be less clean.

How clean is your cryptocurrency?

It may seem hypocritical for cryptocurrency users to consider where their currency is from. Of course, no one will control how your bitcoin spent before your bitcoin traded to the next person. Whether you like it or not, KYT is rapidly rising. It may create a two-state Bitcoin. One category of Bitcoin is verified, while the other Bitcoin is not so lucky. It is unproven or even "black money."

In the process of rapid rise of KYT, the name of a company is synonymous with KYT. The company is Chainanalysis. The company is a controversial company whose expertise is to track the funding channels through the blockchain. On the one hand, their software helps track the transfer path of Bitcoin stolen by Mt Gox. But on the other hand, cryptographic users do not like people to record each of their transactions and associate them permanently with their real-world identities. At the same time, after the recent acquisition of $16 million, Chainalysis's detection tools will soon appear on the blockchain around you.

KYC cannot guarantee the legality of funds

Regardless of whether good or bad, Chainalysis is not the only company that promotes KYT. Now, some crowdfunding projects often ask investors about their sources of funding and confirm that they did not obtain the funds through illegal means. However, there are still some outstanding issues in the process of managing and even tainted cryptocurrencies. For example, some people may agree that the $400 million new money stolen from Coincheck can reasonably be called "dirty money." However, for those "dirty money" that have already passed deep online market transactions, even if they can already use it to buy something, are they also completely legal?

From the perspective of banks and exchanges, they must be careful about this, and they should not turn a blind eye to money laundering and other illegal activities, and KYC may not do enough in this respect. After all, it is only a static process that can prove the legitimacy of a particular person at a particular moment. However, it cannot determine whether that person later had the assets obtained through money laundering.

How clean is your legal currency?

Technology itself is neutral, it is simply created and then used by people in good faith or in malicious ways. If companies such as Chainalysis, Elliptic, Bitfury (Crystal) did not develop KYT software, others would develop it—at the same time, law enforcement officers would queue up to purchase related software from them. It is estimated that 90% of U.S. banknotes have bought cocaine, and that the U.S. dollar in your wallet may be used to finance various illegal activities. Therefore, the cryptocurrency is not necessarily more expensive than the legal currency. In fact, it may also be Cleaner. The difference between the two is that cash cannot be monitored in real time because they are passed from one person to another.

One of the biggest advantages of Bitcoin - transparency - is actually its weakness. At least for now, there are still some ways you can freely enter and exit the world of cryptocurrency without verifying your identity and funding sources. But when KYT becomes a new KYC, you may not be so "free."