Staying private on Bitcoin requires a lot of work. It requires sourcing your bitcoin anonymously and figuring out how to store it, send it and spend it without divulging any personal information – ever. If at any point you leak identifying information, your whole history of financial transactions and all transactions going forward can be tied back to your identity. You have to start again.
There is this disconnect between privacy and secrecy. Privacy is the ability to selectively reveal yourself to the world – so people might know my face, they might know some things about me, but they know what I want them to know in a controlled way as much as possible.
One of the dangerous things that can be done – after the fact, you do not need an active adversary – is that someone can find something out about you and then go back on-chain and follow everything you have done. That means if you do not start practicing privacy best practices now, it could have massive effects for you down the line that you're not even considering.
Mixers to me are centralized custodial services where you send someone bitcoin and they send you new bitcoin. CoinJoin is a collaborative transaction: when you have multiple people sending a transaction together to help break the probability-analysis that chain-surveillance companies do. As a result, it's a native bitcoin send transaction.
n the future, ideally, you are looking at a bitcoin circular economy. People are not going to be buying bitcoin, they are going to be earning bitcoin through their jobs. They are not going to be selling bitcoin, they are going to be spending bitcoin. All of a sudden, those regulated entities that are attached to the banking system are way less crucial.
Bitcoiners should study Signal’s adoption – how they polished it as much as possible while providing good privacy guarantees.
We are going to see more and more leaks, hacks and compromises that put people at risk. As that happens, people will get burned, and when they get burned, they will seek out better alternatives.
Something like BTCPay Server that allows everyone to, in a sovereign way, accept bitcoin themselves with open source software rather than outsource it is an absolute game changer. We are seeing other open source projects like Satsale and CypherpunkPay emerge that provide this very easy to use open source stack to receive bitcoin. All of a sudden merchants around the world can accept bitcoin without KYC requirements, without banking relationships and might even be able to accept bitcoin in situations where they cannot accept fiat.
My biggest issue with KYC right now is that I do not think the trade-offs are very clear to people who are onboarding and using it. I don't think they realize that KYC is forever and that there will always be a record of how much bitcoin you purchased, when you bought it and where you sent it.
It is very much a personal issue because it puts users at risk of theft, extortion and persecution. If an authoritarian government knows you bought bitcoin, they could put you in jail or seize your coins. Or if your KYC information leaks, malicious criminals might try to rob or extort you.
The privacy world in general cares more about practical solutions today because it is a real- world situation today. It is something that we absolutely need today. I do wish that there was more priority placed on some of these pressing issues but expect more people to get burned before the need for better privacy tools is realized.