Daily Mail, Reuters, and Bloomberg are all reporting that a cache of Barclays account details was stolen from their centralized servers. Barclays is currently completing an internal investigation of the data leak, but it seems that a “gold mine” of 27,000 files containing personal and financial details of Barclays clients has been leaked. These files were then used by dealers to pressure those Barclays customers into scams. This latest data breach comes only a few months after Target revealed tens of millions of their customers had their credit card details compromised in a data breach of their own. Many regulators and Bitcoin bashers point to the fact that Bitcoin offers increased anonymity and privacy for its users as a downside of the crypto payment network, but it looks like that “negative” is more of a positive in these situations.
Centralized Personal Data at Banks
One of the core features of Bitcoin is people who want to use bitcoins as a currency don’t need to store those bitcoins with a third party, such as Barclays. They don’t need to give all their personal information to some centralized authority who then needs to be trusted to guard that information. In reality, Bitcoin’s technology decentralizes trust authorities. Banks are a centralized target for hackers and bad actors, which makes it much easier for them to access a large amount of sensitive financial data with one breach. The decentralized nature of Bitcoin allows everyone to be their own bank, which means each individual is in control of their own security. This also means there is no centralized hub of personal details, transaction history, merchant associations, and other information to be attacked. In addition to closing down a centralized target for hackers, Bitcoin also prevents a centralized third party, such as Barclays again, from selling that information to advertisers and marketers.
Exposing Your Personal Details to Merchants
Privacy is also important on the retail side. Instead of giving a merchant your name, address, zip code, credit card number, security code, and PIN, you can simply send bitcoins to their Bitcoin address. The kind of data breach that happened at Target would be impossible with Bitcoin, unless a customer decided to store their bitcoins in an online wallet, such as Blockchain or Coinbase. There’s no reason to tell an online merchant your life story when you shop online, and the frictionless Bitcoin payment network solves that issue. These data breaches show that privacy and security have importance for more than just people who are trying to buy drugs on Silk Road.