The Myth of the Privacy Coin

in cryptocurrency •  last year

The Myth of the Privacy Coin

Spend any amount of time online reading about #cryptocurrency, and eventually you are bound to read the expression privacy coin.

As it is commonly used, it refers to the notion that some cryptocurrencies focus more on privacy - namely, but not exclusively, transactional privacy - and that this characteristic sets them apart from the other crypto projects.

Right away, I see two big issues.

#1 - Privacy Coin - singular

Having worked in cybersecurity for years before retiring to the forest and proclaiming to "not do that shit anymore", while smoking the occasional pipe, I can tell you that of all the projects (there are roughly a handful) that proclaim to protect your privacy on the blockchain, all but one of them are flawed (with possibly a second one, not coincidentally, a fork of #monero - but only time will tell, it depends on how this project develops)

That such projects are even able to thrive is a testament to the irrationality and technical ignorance of the broader crypto market at this stage, for those other coins do not - indeed, can not deliver on the promises they make.

I do not aim to make this post a technical one, but as always, if enough interest is shown in the coments, I shall aim to write a post explaining why this is so to minute detail.

#2 - The Concept of 'Privacy Coin' Itself

When #bitcoin came along, many of us could feel the air lighter, the possibility of transacting instantly with anyone anywhere, and the dramatic consequences of that laid clear for anyone with basic imagination to see.

It was not perfect, but it was not Visa, MasterCard, or a Bank.

It was not PayPal.

The notion of being the custodian of our own funds, and not needing a middle-man (company) - oh, the joy! Especially when said company, more often than not, treated you not as an esteemed customer, but as a way to make money, to be discarded at the earliest sign of trouble, and placing upon you increasing burdens, to the point where a complete and total doxxing became the standard to even be able to use their services.

And if you did not use their services, or were locked out, then you were in for a surprise - as some have found out (warning: wikileaks.org link)

Of course, all of this to keep you safe. Notwithstanding the fact that Equifax was just the latest in a long tradition of losing the personal information entrusted by millions of people to such centralized monoliths.

Yes, clearly, to keep you safe. Nothing to do with total control of information for more efficient and increasingly abusive tax farming, of course.


You have nowhere to hide, peasant.
(because, of course, only those who evade taxes wish to hide assets!)

But as it turned out ..

Years later, the market is slowly - but surely - beginning to recognize that #bitcoin is not the panacea that it once was thought to be.

Change is slow - many websites, including the aforementioned wikileaks, still empathize #bitcoin as the donation method of choice of all the cryptocurrency options.

Most still think #bitcoin is private. But as many are finding out, this is an expensive mistake to make.

And you don't have to be a drug dealer - If you care about online privacy, then using something like #bitcoin is synonymous with broadcasting your entire financial history for the whole world to see.

There are companies out there now (a completely predictable move, given the transparent nature of that blockchain, by the way) which specialize in just that - analyzing all transactions, and slapping an identity to each and every one of them.

Would you go down the street with a big sign saying how much you own, where it is, and inviting every sort of unsavory character to separate you from your funds?

I should hope not. If you do not think this could be a problem, may I humbly suggest your next travel destination, where you are free to carry out this experiment.

No Such Thing As Privacy Coin

The point I am trying to make, is that sound, properly designed digital cash will by necessity be essentially anonymous and private, analogous to physical cash.

To attempt anything else is to fast-track all of modern society into an era of financial repression and totalitarianism that few can imagine even today.

We must fight the notion, wherever we encounter it, that cash is only for criminals, and that privacy is only for those who have something to hide.

For those who are up to no good.

Privacy is for everyone. We the people have conceded too much already, and it is time to put a stop to that.

Do not choose to base your digital life on something entirely transparent; this will spell doom not just for you, but for society as you know it.

These are not new forces at play, hoping to crush any and all privacy - even today, in supposedly advanced countries such as the UK, the government seriously entertains the idea of banning private encryption such that no thought-turned-to-action goes unseen by the state.

What do you think will happen when mind-reading technology arrives?

The arrogance and audacity to claim that all of your digital data must be available for the government to inspect is not too far from that.

This you must see.

We must claim back our individual sovereignty and push back.

The time will inevitably come where increased regulations and burdens are placed on the new financial technologies that can promote a freer life - away from the totalitarian, all-seeing, all-seeking control of the state.

Make the right choice - legitimize the use of privacy-preserving technologies today, so that tomorrow we can all stand together and say: not on my watch, you won't [ban this].

Use #monero.

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@karnal,

Enjoyed your informative post.

Salutations.

I am JaiChai. Very pleased to make your acquaintance.

Although I hold (and mine) monero, I am also impressed with the zk-snarks technology (used in zcash and more recently in J.P. Morgan's - Grrrr - blockchain).

Upvoted and following you now.

Namaste,

JaiChai

P.S.

You may find this interesting:

https://steemit.com/cryptocurrency/@jaichai/privacy-centric-coins-rapidly-gaining-popularity-a-better-alternative-for-zero-knowledge-untraceable-transactions

https://steemit.com/cryptocurrency/@jaichai/breaking-ijch-j-p-morgan-s-blockchain-plus-zk-snarks-and-my-cognitive-dissonance

Any coin that is not private is useless to me and I don't even do anything illegal.

As a Monero supporter, I'd love to see your post about why Monero is the only privacy coin and the other ones are flawed :)

Thanks for the article, but you didn't articulate why all of them (except Monero) are flawed. I'm particularly interested in a little-known coin called "Karbo" which is a sibling of Monero. They're both forks of Bytecoin.

Full disclosure: I'm an advisor to the Karbo project.

Good read. I think 2018 with all these regulations might be the year of the privacy coin, specially Wanchain and Bitcoin Private. What are your thoughts?

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I thought I made the point quite clearly in the article that there is no such thing as a privacy coin.

Either it's fungible and it works as currency or it's not and it doesn't.

Monero is the best choice, while in the future this could change, right now there is no other real contender.

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Well, Wanchain has Monero's technology... so not really sure what you're talking about.

I agree with many of the points made, and they are also why Monero is the only privacy coin in my portfolio. It's the only one that really takes it seriously and indeed it is not only for criminals - privacy is essential and wanted for many non-criminal deeds.