Whenever I have to send some personal documents to some company (for setting up a bank account, utility services, amongst others) I always make sure to include a watermark with numerous information (such as which company I'm sending the data to, which data and why). In the event their security is weak and this data is stolen from them, probably no one will be able to open a credit line in my name due to the watermark, and if I ever see those documents floating online I'll know which company was the one responsible for the leak.

Smart move. I miss the old days where you could just show a person your ID in person, and they would sign a form to say it all checks out without having to actually keep a copy of your ID. And if they did keep a copy, it was a photocopy kept in a filing cabinet and not a digital copy leaked across the internet.

Because Trezor are a deeply unethical company:

By using a hardware wallet, you're basically trusting them with your money, while the security of "be your own bank" shouldn't rely on third-parties. I really hate this part, and even when using offline software wallets, you have to trust someone. It's impossible to verify all the software you're using, even if it's open source. "Trusting" goes against the basics of Bitcoin, but it's inevitable one way or another.

The main problem I have with KYC is that I have to trust them for doing the right thing, while many companies (and governments) have leaked private data in the past. This will happen again. At least if they don't have my data, they can't leak it. And this scenario is already undesirable even if the company doesn't do bad things with the KYC data on their own.

All the more reason to share this data as little as possible. I've closed bank accounts because they wanted more data than I want them to have.

How about a $5 wrench attack? Ledger already leaked their customer data, which is a long list of people who own a hardware wallet. Add to that the balances of each wallet, and suddenly targeted attacks become very profitable.

Here, it's officially recommended to write the purpose on copied documents, so they have to accept it. But I've seen many car rental companies worldwide easily dismiss all privacy concerns when they copy your passport.

Probably. A blue pen on a black and white copy shouldn't be that hard to remove digitally.

I always try to place the watermarks in places that the receiver still is able to read the necessary information (Numbers and names mostly), but make it so that the watermark is in an area that would make its removal very easy to spot (or even harder). I know that if someone is really interested in copying my information will eventually find a way to do it, but I find that it works great as a deterrent for most scenarios.

You can't live in this world without revealing your KYC documents. House/hotel/car rentals, you need to reveal your KYC documents to get medical help, visit a doctor, get prescribed meds (if any). You have to reveal it to start work. I mean, there are many cases where you have to reveal your KYC documents and we can say for sure that our data isn't as protected as expected but still it's inevitable to give away all of these info. So, let's assume our data has been leaked, what's the point of rejecting other services that ask for KYC? Or do you hope that while your data was leaked, there is a chance that it got removed or lost and no one holds it? Or do you hope that it will be in hands of some people and isn't public? I mean, is your aim to keep this number of your KYC holders as narrow as possible?

Of course it is Btw passports and some id cards have a lot of patterns and when you try to remove watermark from them, you can mess up with it but if one digs deep into pixels, can really do wonders.

Life gets very hard if you do so, especially if you actively travel. But probably that's the price of privacy, just wonder how long can one keep living in such a discomfort.

What makes you sure that modern hardwares aren't backdoored? Technology is developing rapidly, a lot of innovations are kept for a long time and released slowly in order to generate more profit, etc.
If you give me 2010's personal computer and 2023's personal computer, both of them offline, I would trust 2010's more than 2023's.

An attacker is going to take the path of least resistance. Are they going to spend several hours trying to edit out your watermark and end up with a result which might still be rejected by whichever service or bank they are trying to fool, or are they just going to move on and use someone else's KYC data instead? When KYC data is widely available to be bought on black markets for ten or twenty bucks for hundreds of users' worth of data, then an attacker is simply going to ignore the one user who has a difficult to remove watermark.

Although obviously neither is good, there is a difference between something like a hospital leaking your documents and something like Ledger Recover leaking your documents. In addition to the risk of identity theft which is common in both scenarios, if Ledger Recover leak your data then you make yourself an instant target for crypto thieves, attackers, and scammers, as well as losing all privacy since your wallets/addresses/coins are now publicly linked to your real identity.

The usefulness of much of your data to an attacker is time limited. You can't take out a loan with an expired passport or ID card. If somewhere is asking for a copy of a recent bill, they usually want it within the last few months. Every time you complete KYC, you reset the clock.

Yes.

I have never once completed KYC with any crypto service, nor will I ever do so, yet I would wager I spend, trade, send, and receive bitcoin more frequently than 99% of the users on this forum. Bitcoin was designed precisely to avoid centralized third parties. KYC is not the default position - quite the opposite. Rather than asking why we avoid KYC, you should be asking why so many other people are happy to sacrifice their security, their privacy, and their sovereignty, by completing KYC.

Shower thought. Is it possible that if a user has enabled the recovery feature, and has his/her data held by a third party, then it's probable that a government entity could issue a written order telling the third party to give them access to then user's coins/savings?

Because I believe the user has given up some of his/her rights upon upload of his/her own data. Don't third parties always have Terms of Agreement that users never read?

 

Yes, that's unlikely to happen for an average user but definitely possible and that's another reason why someone should avoid Ledger Recover service.
By the way, ToS is a joke. If you read ToS of companies you frequently use or if you read the list of side effects of every meds, you are not going to use them ever in your life but the problem is that you need to use that particular service or product and because of that 99% of people just agree and move on.

There was a discussion about Ledger Recover and subpoena in podcast with the CEO of Ledger.
Have a look at these moments:
https://youtu.be/M3VjQUcyZSY?t=929
https://youtu.be/M3VjQUcyZSY?t=2610

The other day I saw a movie, where confidential information was kept inside a stone, and hardly anyone would suspect that it contained that information.
Well maybe, we need to start thinking about saving the seed in a rock.