Currently, Snowden in Russia.

Headline: What is the connection between Edward Snowden and cryptocurrency?

Body:  It might feel like a lifetime ago, but, just a few years ago, Edward Snowden blew the whistle on many Federal surveillance programs.    I will not opine on whether or not I condone what he did, just that to do so, he had to know a lot about cryptography and computers.   So, it seems appropriate to consider carefully how he might feel about cryptocurrency.  He has gone on record as being against the use of cryptocurrency as an investment.     The question is, why. 

I heard that he DOES use cryptocurrency??

Yes, he does use cryptocurrency to pay for server time.  He uses bitcoin to pay for this service because he can maintain much of his anonymity.  But, he makes a serious distinction between how he uses cryptocurrency, and others want to invest in cryptocurrency.  Just recently, there was a public letter signed by many knowledgeable people decrying  cryptocurrency, but Mr. Snowden seems to think that many of the undersigned were pressured in some way.  He also opined that many of these people know enough about cryptography  to understand that there are ways to ensure fair dealing in cryptocurrency.  Still, Snowden seems concerned about the metadata that accompanies the transaction.

He also seems to be concerned that BTC price structure very much resembles what happened in March 2020.    Despite his concern about investing in Bitcoin, he also indicated that current prices could encourage him to purchase some for future use.  In point of fact, he has already been involved in cryptocurrency.   He and a few other individuals started a cryptocurrency called Zcash.  This cryptocurrency was designed to be entirely anonymous and would remain so, assuming that at least one of the original 6 developers  truthfully destroyed their key used during the development process.  Recently, an engineer developed a way to avoid the trusted set up “ceremony” that was previously required.  In his final parting words, Snowden expresses excitement for the improvements made and the implications it has in moving forward to a more free and private currency.

The Verdict

The lesson here is quite simple, I think. We should use cryptocurrency and avoid being used by it. So, unless you have a smallish amount of money that you can reasonably risk, you should probably not be making investments in it. On the other hand, unlike short selling, the losses are limited to your investment. So, consider your situation carefully.


Editor’s Note: Please note that the information contained herein is meant only for general education: This should not be construed as Tax Advice.   Personal attributes could make a material difference in the advice given, so, before taking action, please consult your tax advisor or CPA.