Posts Tagged ‘anonymity’

Internet Browsing Taken To A Personal Level

Thursday, August 12th, 2010

A company called [x+1] Inc. is making strides towards the destruction of anonymity on the Web.

  • [x+1] Inc. collects data from users and sells it to companies that use the information that then targets products to specific customers.
  • According to a survey conducted by The Wall Street Journal, [x+1] Inc.’s data is not always completely accurate, but it was able to find out quite a bit of information about the test users, including where they lived.
  • Although this is a troubling infringement of privacy on its own, there is an added threat: the more bits of information a program or company gathers on you, the easier it becomes to narrow you down to a specific person, destroying your anonymity entirely.

Facts & Figures

  • Clients pay from $30,000-$200,000 per month for [x+1] Inc.’s services.
  • According to [x+1] Inc., the company is capable of absorbing thousands of details about a user in just a fifth of a second.
  • 33 “bits” of information are required to accurately determine a person’s identity, where each piece of information is assigned a value in “bits” (your gender is worth just one bit, your ZIP code or birthdate many more). [x+1] Inc.’s analysis of one of the WSJ’s test users yielded 26.5 bits, or enough to narrow his identity down to one of 64 people in the entire world.

Best Quote

“We never don’t know anything about someone.” –John Nardone, chief executive, [x+1] Inc.

Who’s looking at your trades?

Wednesday, July 14th, 2010

This is a somewhat complicated question that depends largely on the situation you find yourself in. Much like the stock market or investment markets themselves, certain people are privy to certain types of information. But let’s say you bought a share of Microsoft (MSFT) yesterday. Who can see that you did that?

  1. On the most immediate level, you can. You can view your purchase in your account register.
  2. Your financial advisor or private banker can also see the trade because she or he has access to your account.
  3. Things start to get a bit impersonal here: theoretically, the bank or brokerage house that you are associated with can see that one more share of Microsoft was bought for one of their customers.
  4. The market will most likely not be affected with the purchase of your one share, but since it is technically the most recent sale, for a little while (we’re talking less than a second) your purchase will be the last visible sale of MSFT which is visible to anyone who is looking at MSFT at that moment.

The long and the short of it is that only you and your financial advisor/ institution can see that YOU personally bought a share of MSFT; the rest of the world can only see that one share of MSFT was bought by someone, somewhere. The identity of the purchaser is confidential information.

A Dark Pool is…

Friday, October 16th, 2009

A dark pool is a financial term that describes an alternative – but legal – venue for trading large orders of stock. What makes trading through a dark pool different from regular trading? Well, there are a few key differences, but the most important is anonymity. When a trade occurs on an exchange like the New York Stock Exchange, the prices that are negotiated between buyer and seller are immediately reflected in the market and published for anyone to see. In a dark pool, there is actual anonymity between the buyer and the seller and the trade is not shown in the market.

In a dark pool, trades occur between institutional investors that are trading large blocks of equities. For example, Institution A has 500,000 shares of Microsoft (MSFT) and wants to sell them. If that institution were to trade all of those shares on an exchange, they would have to split the transaction up into several smaller trades in smaller amounts. Not only would those trades disrupt the market (make it unsettled), but Institution A would also be showing their hand. If they show their hand, it might disrupt the market further, and other institutions would likely capitalize on that information.

So basically, a dark pool is a place where institutional investors can come and anonymously buy and sell large blocks of equities in one or a few orders. By doing this away from an exchange, they do not disrupt the market because the price is not fixed on a public market. Also, other institutions and the public do not know immediately that a large block of stock was bought or sold. Only after the trade is filed with the SEC will the public know what the institution did.

Why do people have bank accounts in Switzerland?

Wednesday, June 10th, 2009

Swiss bank accounts are world-renowned for their security, but it’s a different kind of security than what you’d see in a heist movie. The protection that applies here has nothing to do with maximum-security vaults and armed guards giving body checks; it’s about the unique privacy provided by Swiss banking law.

Most of the perks of having a Swiss bank account come from the fact that, under Swiss law, no banker can reveal anything about your account (including its existence) to anyone else without your permission. Any banker who violates this agreement is prosecuted by the state and can face fines and jail time. So once you put money in a Swiss bank account, the only people who know that money even exists are you and your banker.

Why is this anonymity so desirable? Some people just want privacy and believe that their financial situation is their own business. Others, however, try to hide their financial information from the government to avoid higher taxes. This is called tax evasion and it’s illegal. When the government tries to figure out how much money to tax you, it first needs to know how much you have. Generally, the more you have, the more taxes you pay. When the government can’t see the money you have in a Swiss bank account, they can’t include it when they calculate your taxes and you end up getting taxed for less than you’re actually worth.

Swiss banks are so popular – and so notorious – not for their physical security systems, but for the anonymity they provide to their clients. Just remember, if you live in a country like the U.S., you need to report how much money you have in a Swiss bank account to avoid getting in trouble.