[POLL] Privacy features in bitcoin

[alani123]

I recently saw that Edward Snowden publicly called for Bitcoin to implement privacy features.


Source: https://twitter.com/Snowden/status/1786170805728039127

In a recent thread here many senior bitcointalk members actually agreed to this sentiment.
We've all come to know bitcoin as a blockchain where inputs and outputs, all of them, are displayed on the public ledger for everyone to go through.

Transactions are pseudonymous but nevertheless traceable. While it's not necessary that a transaction has to be connected to a person, actions of governments against privacy tools and no-KYC services make it very hard to conduct bitcoin transactions without having them attached to your real life identity.

Many would view this as an attack to the freedoms bitcoin has been associated to. But it's also understandable if some bitcoin users are against such a radical change to the protocol.
So I'm making this poll thread to start a debate. Feel free to vote and respond with your thoughts.

[bittraffic]

There are 3 votes for Against but not saying a word here. That says they need privacy just for voting

Anyway,  most probably because of what happened to Monero being delisted in some exchanges which if BTC has privacy features, may just be the basis for lawmakers to also ban the coin.

[ChiBitCTy]

What in the FUCK does Snowden know about cryptography and bitcoins blockchain.  He was pro-bitcoin for a short while, then started talking a lot of shit about bitcoin years back. 

Privacy features are a delicate thing for bitcoin. Personally I would LOVE for bitcoin to be like anonymous like Monero, but it's not realistic for it's long term future.  If it were anonymous, governments would shut down the exchanges within their borders, putting a massive clamp down on it's potential and future upside.

[Zlantann]

So I'm making this poll thread to start a debate. Feel free to vote and respond with your thoughts.

I don't really know much about the technical aspect of Bitcoin from the layman's view privacy feature has both advantages and disadvantages. One of the beauties of Bitcoin transactions is that in the public domain where anybody can access them. This makes the transaction transparent and easy to trace. Making the transactions private will cause people to lose the benefit of tracing transactions. Anyone who desires extra privacy can use other tools.  However, the attack on privacy services would have assisted interested Bitcoiners to remain anonymous is making this difficult.

Having a privacy feature in Bitcoin will increase government attacks on the sector. It will increase the claim that Bitcoin is used for criminal activities. It could lead to a ban on Bitcoin in some locations like the US. Bitcoin is been integrated into the financial system of the US because the country has developed robust policies and strategies to regulate the industry. The way they are attacking privacy services is the same way they will attack BItcoin if it becomes fully anonymous.

Nevertheless, I support the implementation of privacy features in Bitcoin but I am scared that it will attract more enemies to the sector.

[serjent05]

I believe implementing privacy to Bitcoin protocol will jeopardize Bitcoin adoption and at the same time will limit its audience.  I know, those who love privacy will surely love this feature implemented but the government will more likely react negatively.  I think more people would love to see Bitcoin being acknowledged by the government than these people who push privacy on the protocol of Bitcoin.

Having a privacy feature in Bitcoin will increase government attacks on the sector. It will increase the claim that Bitcoin is used for criminal activities. It could lead to a ban on Bitcoin in some locations like the US. Bitcoin is been integrated into the financial system of the US because the country has developed robust policies and strategies to regulate the industry. The way they are attacking privacy services is the same way they will attack BItcoin if it becomes fully anonymous.

I highly agree, and when the government starts to attack the Bitcoin protocol itself, most people will get discouraged to use them for transaction.   I think it is a no brainer to know that ordinary people don't want any hustle on their transaction, so if Bitcoin implement the privacy features, it is more likely get the government attention and might possibly forbid the use of the Bitcoin network.  This will automatically kill Bitcoin's target of mass adoption

[Nwada001]

Having a privacy feature in Bitcoin will increase government attacks on the sector. It will increase the claim that Bitcoin is used for criminal activities. It could lead to a ban on Bitcoin in some locations like the US. Bitcoin is been integrated into the financial system of the US because the country has developed robust policies and strategies to regulate the industry. The way they are attacking privacy services is the same way they will attack BItcoin if it becomes fully anonymous.

I also agree with you on this, but let's think of it from the perspective of the government, seeing bitcoin as a terrorist tool. It has been long there, and they have been treating it as such, even as they are fighting against privacy tools that are preventing them from tracking down every transaction they want, with or without mixing services that believe the idea they already have about Bitcoin being used for criminal activities can't change easily.
 
If a privacy protocol can be implemented on Bitcoin, then it's a yes from me, and most people will support that. Even if countries like the US want to kick against it and ban it from being traded by their citizens, it will only be a matter of time before, with growing demand, they will still have no other option than to start accepting it again.

[Felicity_Tide]

Having a privacy feature in Bitcoin will increase government attacks on the sector. It will increase the claim that Bitcoin is used for criminal activities. It could lead to a ban on Bitcoin in some locations like the US. Bitcoin is been integrated into the financial system of the US because the country has developed robust policies and strategies to regulate the industry. The way they are attacking privacy services is the same way they will attack BItcoin if it becomes fully anonymous.

I also agree with you on this, but let's think of it from the perspective of the government, seeing bitcoin as a terrorist tool. It has been long there, and they have been treating it as such, even as they are fighting against privacy tools that are preventing them from tracking down every transaction they want, with or without mixing services that believe the idea they already have about Bitcoin being used for criminal activities can't change easily.
 
If a privacy protocol can be implemented on Bitcoin, then it's a yes from me, and most people will support that. Even if countries like the US want to kick against it and ban it from being traded by their citizens, it will only be a matter of time before, with growing demand, they will still have no other option than to start accepting it again.

I wholeheartedly support the implementation of privacy tools on Bitcoin. However, it's certain that such actions would trigger regulations that many exchanges and investors may struggle to comply with. Governments typically oppose privacy measures, as they seek visibility into transactions.

From my observations, it shows that some Bitcoin enthusiasts are prepared to endorse this idea and await the backlash action of the government. Even if implementing the privacy protocol leads to its declaration as illegal, I see no fault in using it . Illegality is not a new concept and has been practiced in almost every part of the world 

[d5000]

I miss an "optional" button in the poll, maybe even something like "off-chain"/"sidechain".

Because I would be very likely against implementing a mandatory privacy feature like Monero or Grin have, for the simple reason it would make Bitcoin less scalable, and it would also need a hard fork which would basically re-start the transaction graph. And I think that an optional privacy feature would lead to an anonymity set large enough - because it's Bitcoin and not some random altcoin.

About the tools I would like to see implemented: mainly my bet would be for better support for sidechains, because in this case sidechains can go fully private. Imagine a Monero-style sidechain with a token 2-way-pegged to Bitcoin. I think however that could bring some additional challenges, because of the need of sidechain users to monitor "unruly" coin creation. But anyway that would affect only sidechain users, not the mainchain users.

In general I would approve the Litecoin model with MWEB too, but I think extension blocks will unfortunately not make it into Bitcoin.

If it were anonymous, governments would shut down the exchanges within their borders, putting a massive clamp down on it's potential and future upside.

This would be ineffective for governments if the goal is to combat crime, because you could buy Bitcoin still via atomic swaps with Ethereum for example or any non-privacy altcoin. And atomic swaps cannot be banned nor prevented in any way - see also this thread. Yes, the ETFs would be probably gone in most countries.

Monero actually increased its usage even after it was delisted at Binance, as you can see in the last stretch of this graph (ignore the spikes, these were spam attacks probably):



Source: Bitinfocharts

It's price is also slowly recovering, compared with Bitcoin, even taking into account some more recent news (e.g. Kraken delistings in several European countries).

But see what I wrote above. I also think it's 99,9999999 unlikely that we will see "mandatory privacy" on Bitcoin. But better support of optional privacy would be cool. Taproot was already an improvement on that.

[alani123]

I miss an "optional" button in the poll, maybe even something like "off-chain"/"sidechain".

Good point. But the reason I didn't specify is because Mr. Snowden said protocol level, so layer two solutions are ruled out.
As of "optional"... Aren't privacy transactions on Monero also optional? Why would anyone use them though? Notorious markets pick monero specifically for its privacy. So if this feature was enabled on bitcoin, even optionally, all of that kind of usage would naturally be attracted to the bigger network. So if by enabling such feature on the bitcoin blockchain a sizable part of the user base starts using it, all the disadvantages it could bring will come really fast optional or not.

[mk4]

There are 3 votes for Against but not saying a word here. That says they need privacy just for voting

I'm generally pro-privacy (any that isn't is dumb), but things are more nuanced than vote no == against privacy. It's more of the fact that privacy upgrades in the base chain can be quite dangerous for Bitcoin stability wise as it would be such a huge upgrade that would put everything at risk.

What in the FUCK does Snowden know about cryptography and bitcoins blockchain.  He was pro-bitcoin for a short while, then started talking a lot of shit about bitcoin years back. 

I think we can love Bitcoin but at the same time criticize it.

[d5000]

As of "optional"... Aren't privacy transactions on Monero also optional?

I'm not a Monero expert but AFAIK on Monero you can't simply create a transaction only with your own inputs/outputs, you have always use the ring signature feature and mix it with other inputs/outputs, which would be equivalent to use only CoinJoins in Bitcoin. A thing which is optional are stealth addresses, you can use a single "primary" address if for some reasons you need someone to see e.g. the income on one address.

Notorious markets pick monero specifically for its privacy. So if this feature was enabled on bitcoin, even optionally, all of that kind of usage would naturally be attracted to the bigger network. So if by enabling such feature on the bitcoin blockchain a sizable part of the user base starts using it, all the disadvantages it could bring will come really fast optional or not.

I interpret that you are also afraid of legal/regulatory action of many governments against Bitcoin itself? IMO Lightning already provides a privacy level similar to Monero. So we can observe if there are LN-specific regulations to come, or if Litecoin is affected in any way due to its MWEB feature. Generally however I don't think it would be easy to ban Bitcoin privacy (e.g. certain kinds of transactions, like LN, CoinJoins or atomic swaps) without outright banning Bitcoin usage, and Bitcoin usage could be protected by law in many countries (basically it's signed messages, so it's free speech).

If you're more afraid of criminals, I believe most criminals operate already with BTC and not XMR, and use XMR only as a mixer.

[pinggoki]

What in the FUCK does Snowden know about cryptography and bitcoins blockchain.  He was pro-bitcoin for a short while, then started talking a lot of shit about bitcoin years back.  

If you look at his resume, you'd probably understand why he'd be talking about cryptography, he leaked the information that NSA or in extension, the US government is spying on it's people and I think that's already a valid reason to call out the dangers of not having a good privacy in bitcoin because he knows what he's talking about in terms of offensive security. Regarding the privacy feature, I think that bitcoin can probably benefit to a more robust and stronger privacy, I really don't like the idea that institutional investors and the government is already getting into the bitcoin market so I'd like to see that I'd still be safe from all of these groups that would be trying to look at what I'm doing with my bitcoin.

[btc78]

What in the FUCK does Snowden know about cryptography and bitcoins blockchain.  He was pro-bitcoin for a short while, then started talking a lot of shit about bitcoin years back. 

I do not think that recommending some advances or improvements in bitcoin is directly related to hating bitcoin. As investors we also have to make sure that we are utilizing bitcoin to the best of its abilities and if there are ways we think can be implemented to improve bitcoin then that is just simply criticism not hating.

Privacy features are a delicate thing for bitcoin. Personally I would LOVE for bitcoin to be like anonymous like Monero, but it's not realistic for it's long term future.  If it were anonymous, governments would shut down the exchanges within their borders, putting a massive clamp down on it's potential and future upside.

Exactly not to mention the sheer difficulty of balancing anonymity and scalability. Bitcoin’s blokchain was not made for that and it would be hard to rewire the entire system like that. Our best bet would be a different coin altogether.

[Darker45]

I guess Monero has sufficiently proven that it can be trusted on this. So, for me, there's really no reason why Bitcoin should be provided with the same capacity at the protocol level. After all, Bitcoin isn't designed to be a privacy coin.

And perhaps more importantly, Bitcoin might lose most, if not all, of what it has already achieved so far in terms of adoption. Integrating privacy features on Bitcoin might only make it an enemy of states which result to businesses and even individuals prohibited from using it. Everything registered or legally compliant that's linked to Bitcoin will be gone.

[MusaMohamed]

I recently saw that Edward Snowden publicly called for Bitcoin to implement privacy features.

Satoshi Nakamoto coded and designed Bitcoin to be a Peer-to-Peer electronic cash and with core idea of full control on any bitcoin owners through private keys that later were developed to mnemonic seed for HD wallets.

The important core idea of Satoshi Nakamoto is not designing a blockchain for private transactions. The Bitcoin blockchain is a public ledger, that is accessible for everyone, and every transaction is publicly for everyone to see and trace.

In Satoshi Nakamoto's emails to some Cypherpunks that were share to the court and public recent months because of Craig Wright case, the founder of Bitcoin emphasized his opinion that making Bitcoin as a private blockchain, for private transactions, contains risk for this cryptocurrency because of threats from governments and their regulations.

[pooya87]

I'm against it because Bitcoin is working fine and without any problems, we don't need to apply such a major change in the protocol that has to be implemented through a hard fork that would fundamentally change Bitcoin and comes with a lot of dangers and unknown consequences.

Any such features should be added on top of Bitcoin with side-chains, second layers, other works like the CoinJoin proposal, etc. At the end of the day Bitcoin is not an anon-coin.

[electronicash]

i wouldnt mind of there is a privacy feature for BTC. there will however have something to fud again when some changes will be done. government can make some changes to the current laws again. we are already good, its the regulations that isn't going to make things good.

and there is XMR readily available if one praises privacy.

[Plaguedeath]

Neither "for" nor "against".

I don't want to see privacy features at the protocol level because it would make Bitcoin becomes privacy coins, then the government, centralized exchanges, banks start to ban Bitcoin.

At the same time, I didn't mean to make Bitcoin to lost it's privacy because I'm also a privacy oriented person.

Bitcoin is fine now, it offer freedom to choose, you can choose CEX to hand your coins, you can choose to get rid from CEX etc.

[dzungmobile]

i wouldnt mind of there is a privacy feature for BTC. there will however have something to fud again when some changes will be done. government can make some changes to the current laws again. we are already good, its the regulations that isn't going to make things good.

If current Bitcoin protocol and technical blockchain is good for us to use, move funds, get basic privacy, it is good enough for me. With proposal to unpgrade the protocol for higher privacy, I see risk, like others see, and I am against this proposal.

This potentially can put Bitcoin protocol to bigger risk and threats that together can impact price negatively, I don't want to see it.

and there is XMR readily available if one praises privacy.

This, Monero is here and available to use.

If people dislike Monero, see it is not good enough for privacy, they can develop new cryptocurrency with higher privacy.

[ABCbits]

If certain privacy feature also manage to improve scalability (e.g. due to smaller TX size or faster time to verify the TX), i see no strong reason to against such privacy feature.

What in the FUCK does Snowden know about cryptography and bitcoins blockchain.  He was pro-bitcoin for a short while, then started talking a lot of shit about bitcoin years back.  

I'd rather see him made constructive critic Bitcoin rather than exaggerate what Bitcoin can do.