Cryptocurrency: Crypto Industry Royally Screwed Privacy, Privacy Finance

[grarpamp]

It all started when Satoshi left TLS transport
and coin privacy out of BTC.
While that may have been excusable,
the subsequent bitcoin development group
is fully aware that they missing, and have
done nothing to add TLS or any other over
the wire secure transport or any coin privacy,
not even any pluggable wallet privacy modules
to use known swap join fusion protocols etc.
They don't even really talk about privacy.
Is that not apparently guilty of perpetuating weakness
to help spyveillance and the State.
And lately the BTC fanboi crowd is claiming
Taproot and things gave more privacy to
average everyday users when they do nothing
of the sort. Guilty of propaganda.
And real privacy still isn't even on BTC's roadmap.


https://cointelegraph.com/news/the-crypto-industry-royally-screwed-up-privacy

The crypto industry royally screwed up privacy

Sadly, there are several reasons why the blockchain community has
fallen short in making privacy a tier-one priority, and that must be
changed.

Privacy is a complicated topic. Few would argue that privacy is not
important. It’s generally more interesting to talk about things that
are disputable. So, the limited arguments against privacy actually
make it somewhat boring to discuss and easy to take for granted. As
Edward Snowden famously said: “Arguing that you don't care about
privacy because you have nothing to hide is like arguing that you
don't care about free speech because you have nothing to say.”

However, what if your privacy is not a priority? What if your privacy
is not guaranteed? What if everything you do is under constant
surveillance?

You might fight back.

Unfortunately, this actually is the state of the cryptocurrency
industry, and not enough people are in the fight to defend privacy.
Transparency vs. privacy

When I first read the Bitcoin (BTC) white paper in 2011, I fell in
love with the vision for a peer-to-peer electronic cash system. Most
societies have physical cash — legal tender — so, in a digital
society, what is the physical cash equivalent? Satoshi Nakamoto seemed
to come up with an elegant answer to that question, and a
multi-trillion dollar market has emerged around it. Sadly, Satoshi’s
original idea has fallen short in at least one area, and that’s
privacy.

Legal tender is private. When someone exchanges coins or banknotes
(aka “bills” in the U.S. and Canada) for a good or service, that
transaction is only known to the two parties involved. Identification
is requested if the good or service is restricted to certain age
groups (beer runs aren't for everyone). Further, if you hand a $10
bill to the lady at the local farmer's market, she can't look up how
much you have left in your bank account.

However, transactions on the Bitcoin blockchain are radically
transparent. This means transaction amounts, frequency and balances
are all open for the entire public to see. The Bitcoin white paper
only dedicates a half-page to the topic of privacy with suggested
workarounds that don’t always work as intended, especially for second
generation account-based blockchains such as Ethereum.

There are user guides on how to achieve more privacy using Bitcoin,
but they are extremely complicated and generally recommend using tools
that can be dangerous for users. There are also a few blockchain
networks that have been designed with privacy as the default, but most
do not support more complex programmability such as smart contracts,
which enable new use cases involving business logic in decentralized
finance (DeFi).

Related: DPN vs. VPN: The dawn of decentralized web privacy
Leaving privacy behind

Why has the blockchain community fallen short in making privacy a
tier-one priority? For one, privacy has taken a back seat to three
other priorities: security, decentralization and scalability. Nobody
will argue that these three components aren’t important either. But do
they have to be mutually exclusive to privacy?

Another reason privacy has not been prioritized is that it’s very hard
to guarantee. Historically, privacy tools such as zero-knowledge
proofs have been slow and inefficient, and making them more scalable
is hard work. But, just because privacy is hard, does that mean it
should not be a priority?

The last reason is probably the most concerning. There’s a myth in the
media that crypto transactions are completely anonymous. They are not.
This means that many people have been actively using crypto under the
fallacy that their transactions are private. As blockchain network
analysis tools become more sophisticated, the lack of anonymity
increases. So, when does privacy become important enough to make it a
priority?

Related: Bitcoin can't be viewed as an untraceable 'crime coin' anymore
Privacy Finance

A friend of mine who has worked in the crypto industry full-time since
2015 recently asked me, “WTF is PriFi?” PriFi, or “Privacy Finance,”
is the crypto industry’s admission that we royally screwed up with
privacy. We screwed up so badly that, 12 years into this industry’s
evolution, we are just now getting to the point where privacy is
important enough to have its own hashtag.

So, where do we go from here to build more privacy that protects
everyday crypto users and achieves the digital privacy equivalent of
cash?

The first step is more education. As society becomes increasingly
digital, privacy is becoming harder to achieve. This starts with
educating the media on the differences between secrecy and privacy.
Secrecy is not wanting anyone to know something. Privacy is not
wanting the whole world to know something. Secrecy is a privilege.
Privacy is a right.

The next step is to make privacy simpler. Achieving privacy in crypto
should not require clunky workarounds, shady tools or a deep expertise
of complex cryptography. Blockchain networks, including smart contract
platforms, should support optional privacy that works as easily as
clicking a button.

The final step is to defend privacy. Privacy is a timely issue. The
recent U.S. infrastructure bill includes a clause to extend section
6050I of the tax code, which requires individual counterparties to
collect personal information on each other for cash transactions over
$10,000, and applies it to cryptocurrencies. Coin Center, a pro-crypto
nonprofit advocacy and research group, is preparing to challenge the
constitutionality of this change for crypto. You can too, here.

Armed with proper education, an intuitive user experience, and
motivation to make privacy a priority for crypto, we can defend our
rights without being reckless and maintain sensible privacy on our own
terms.

The views, thoughts and opinions expressed here are the author’s alone
and do not necessarily reflect or represent the views and opinions of
Cointelegraph.
Warren Paul Anderson is vice president of product at Discreet Labs,
which is developing Findora, a public blockchain with programmable
privacy. Previously, Warren led product at Ripple for 4.5 years,
working on the XRP Ledger, Interledger, & PayString protocols; the
RippleX platform; and RippleNet's On-Demand Liquidity enterprise
product. Prior to Ripple, in 2014, Warren co-founded Hedgy, one of the
first DeFi platforms for derivatives using programmable, escrowed
smart contracts on the Bitcoin blockchain.