What is KYC?
KYC data, or simply KYC, is an abbreviation of Know Your Customer data.
When someone opens a stock trading account, a crypto account, or a brokerage account, that person needs to provide their personal information as the brokerage, or the bank has a legal obligation to know their customer.
And, as you can probably tell, marketers quickly fell deeply in love with the concept.
However, for crypto users the opposite is happening.
KYC Marketing is fine, KYC Crypto might not be
Whoever people are entrusting their info will simply know everything about them: like their name, date of birth, home address, social security number, passport number, and other information depending on which country the user is living in.
Know your customer data arose from the fallout of the 9/11 attacks and the Patriot Act which made KYC mandatory for all US banks and brokerage accounts, something which might sound reasonable given it attempts to stop money laundering or terrorism funding.
However, even with its best intentions, KYC can also have a pernicious effect and be a dangerous policy given how fragile the data keeping systems can be.
At face value, know your customer data is there to protect users but it ends up making them more exposed and vulnerable as centralized databases start to possess increasingly amounts of info which in turn makes them increasingly attractive targets for hackers, especially since these data keepers track record isn’t really impressive to begin with.
With major cryptocurrency exchanges information showing up and being sold on the dark web, paradoxically, know your customer data can makes us all less secure as hackers can target you online and, given that they might get a hold of your home address, they can even target you in real life.
So, the onboarding process seems easy on several platforms (and not only the crypto related ones) and they sure can strike people as convenient but registering makes them immediately vulnerable or, at least, exposes themselves to potential harm.
Buying non-KYC Bitcoin, on the other hand, is still far from being a perfect and smooth process. It is much less convenient, it may even come at a slightly higher price than what one would pay on a regulated exchange, and, lastly, it may be quite difficult to purchase large amounts at once.
Two other major concerns regarding non-kyc Bitcoin are its legality where the buyer lives and tax evasion.
When dealing with centralized KYC exchanges, the government and the IRS are informed of your purchases, even if you put your BTC through a coin mixer of sorts, the information is still reported to the IRS.
Accordingly, it is imperative that one fully understands the limits of the law when dealing with non-kyc purchases.
Non-KYC Bitcoin is a way of keeping your information hidden and increasing your own personal privacy. It may be troublesome to buy, it may even cost a little more but at the end of the day it will all come down to how much you value your own privacy.