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We all know how early (2011) bitcoiners believe btc is anonymous, only to be very unhappy to find out its easily to analyze and ultra easy to get cought. IS this whats going to happen to people transacting on LN in few years? Will we have a nasty sobering moment when LN transactions get tracked and people end up in jail because they thought wrong?
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I believe your analogy is correct - people are naive now just as they were in 2011-12ish, but there is one huge difference (independent of all the hard work that might or might not get done to make LN privacy better):
LN transactions are not publically broadcast to (and then saved by) the entire world.
And even though actors will (and probably already are) trying to real time monitor and log traffic, it is very hard, or impossible, for them to do it, and it gets harder all the time.
Notice how this differs from on-chain - precisely because everyone has to be in lock step, you only need one monitoring node; on L2 the whole point is that everyone is not sharing state, so you realistically can never know what you don't know.
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The only way to avoid getting sand in your shoes is to not play in the sand pit. Be sensible and maintain OPSEC. Avoiding sketchy 5hit is also recommended…
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yea, obviously dont do crime. But given how IRS wants to see your 600usd transactions, you wil be doing crime even if you dont feel like you do crime
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LN can be private or public.
You can have a transaction routed through the public LN or directly P2P.
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LN can be as private or public as you want its to be, so can L1 if you try hard enough. You must've been on Twitter or Reddit recently. Also, privacy is irrelevant for half the real-world transactions people will make. If you order something from Amazon, you're providing a shipping address. Are you paying your insurance, rent, or utility? Those are tied to an SSN.
Blockchain forensics grossly overestimate their abilities so they can sell their software and products to businesses and governments. And if BTC layer 1 was lacking privacy in such a dramatic way, the majority of darkweb markets wouldn't accept it, the money launderers wouldn't use it, the eastern journalists wouldn't ask for donations in it, the ransomware hackers wouldn't post ransoms in it, the Chinese producers of fentanyl precursors for cartels wouldn't demand payment in it, etc. Also, go read up on the cases of people prosecuted for bitcoin-related crime. Quite complicated and difficult. And they always have the same dominant recurring theme: the criminal used a CEX.
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Onchain privacy is so sensitive, Its safer to assume even mixing doesnt hide you fully. Or if someone really wants to track you.
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Don't use a CEX. We have far better options for extreme privacy than just mixing now. And that's with a small data set and no circular economy. A large global data set and circular economy starts to leave institutions and governments as the parties being surveilled — perhaps by us.
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I didnt touch KYC CEX since 2019 :) But lets say someone were to buy/sell btc P2P via LN. Taxaman dislike "cash deals" and totality of those trades might be bg enough to grab someone for undeclared cap gains
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Not possible with a large global data set on a global network. They'll spend more money doing the grabbing than they collect in taxes. A circular economy makes it harder. We already have multiple DEX's on LN, Robosats being the one I use most often. And the LN doesn't even have Taproot channels, splicing, or a self-validating wallet standard. I don't see your concerns playing out directionally. That's the beauty of FOSS and having a base layer designed with the right incentives and principles.
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Yeah, people think Lightning is private. Back when Cashu (the ecash implementation) was coming out, people were like... "But Lightning is already private?" And of course the Lightning they are probably using is custodial, so it's doxxed to the wallet... Of course, a thing about Lightning is it needs an "active surveiller", and there is no "forever record" so I think its kind of different than the onchain data that you can get arrested 5 years later for, its somone routing/surveilling you NOW that's how they get ya on Lightning. (Which is a thing, chainanalytics company Chainanalysis DOES surveillance, and the only way to do this IS to be a participant; a router.) I will say the rise of Mutiny is a very good sign. Those guys who ended up making Mutiny (along with Evan from Zeus) put out a website/research piece called lightningprivacy.com which got the ball rolling with people thinking about this stuff. But there is some wiggle-room as Lightning CAN be more private than it currently is. So far, wallets have optimized for reliability (actually working). In the future, once we have that more under control, we can have payments take paths that optimize for privacy, which is something i heard Mutiny hopes to do.
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That's kinda like an apples to oranges comparison.
LN is overall more private, but of course still not perfect. For instance the sender is much better protected than the receiver. The receiver has to expose the public key of his node. If you want to receive privately for now you can operate with an LSP or use lnproxy for your invoices.
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We're just as naive as we We're back in the day when we bought our BTC under KYC.. should have known better, I guess
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There is undoubted misconception about bitcoin being anonymous, that is for sure for most of the bitcoin newcomers. Lightning, despite not being fully anon, it does provide more privacy.
The main point seems to be about education, IMO, if you look to Bitcoin overall looking solely for privacy, I don't think it will guarantee your objective.
It's like trying to build a house using only a hammer. You might get something, but far from the ideal.
Bitcoin-Lightning, aims to provide a broader experience for it's users. It has MORE privacy indeed, but can't aim to use BTC just because of this.
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no IP address is private, understanding that point will reveal the truth.
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To begin with
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Private or not ... for now, most ppl on LN have small % of their stack .... so, its kinda irrelevant to many
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...and most use costodial, which is the opposite of private. Even Muun, phoenix, Blixt know all about your transactions.
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unannounced channels would be very difficult to track.
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Regarding privacy, LN is definitely a big improvement in comparison to on chain transactions.
But...
Lightning network does not give any assurances. Things can still be (actively) tracked. Between on chain transactions and LN payments, the later is preferable, but don't expect it to be bullet proof.
If you need to transact privately (regardless of your reasons), perhaps Monero is a better tool for you.
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Why bother spending time with a protocol that is not immutable, and its anonymity set is bollocks? Instead of using monero, learn how to use joinmarket to improve your btc privacy. Next, set up your own node, and do not use wallets that track your data. Not to mention start off your journey by purchasing non-kyc sats
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If you think Monero's anonymity set sucks, it wouldn't then make sense to tell people to use joinmarket (a fraction of Monero's anon set).
Not even getting into coinjoin obfuscation being a weaker form of privacy (range of amounts and transaction graph are still completely visible)
non-KYC is always good advice for either one
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Read again what you wrote, I think you will be able to spot the problem(s).
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I was trying to comapre network activity between the two, let me try agian. So, you can go ahead and swim in your tiny pond (xmr) that only a few people really understand how to use in a private manner or go and swim in an ocean (btc), where a cohort of people are buying non-kyc sats or using tools like joinmarket to improve privacy for the network as a whole.
What I am getting at:
If xmr is used by less people than btc, I am pretty sure it is like wearing a sign on your back that says kick me. Especially for noobs, who sign up to binance and purchase xmr (since it is marketed as privacy coin), because they want to buy drugs online. To calrify, I am not saying you can use btc to do this. In fact, if you want to engage in "funny businness", then do not use anything that touches the internet.
Final thoughts, I just find xmr to be a slippery slope for the average person and that's why I'd recommend to get lost in an ocean, rather than swim in a tiny pond. So congrats to the folks, who are swimming in the ocean, and bought non-kyc sats. You probably will not slip down a slope and can use your sats to buy coffee or donate to fundraisers online. However, you are far safer from the 5 dollar wrench attack if you coin join on wasabiou are far safer from the 5-dollar wrench attack, especially if you coin join on wasabi, samurai or joinmarket from time to time.
https://blog.keys.casa/how-to-protect-your-bitcoin-from-5-wrench-attacks/ FYI: I am not linking this casa blog here to recommend their products, it is just that Jamson Lopp coined the term "5 dollar wrench attack" if I am not mistaken
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Your BTC pond is smaller than you otherwise suggest. Nowhere close to a majority of BTC users are your anon set.
How many BTC users park their coin on exchanges fully KYC'd? How many Bitcoiners use Join Market? How many Bitcoiners coinjoin every spend? How many users coinjoin at all? This is the tragedy of optional privacy. Most users will use defaults. XMR is also not as ubiquitously available on CEXes like BTC is. It's delisted many places.
If you are using XMR you are most likely privacy conscious in the first place. Why would users have to learn to use Monero? There isn't much to learn. You hit send. Privacy is built into Monero on the protocol level. All things equal there are by far many more ways for users to mess up "privacy" on BTC and shoot yourself in the foot. Not only must you attain "privacy" with BTC, you must maintain it going into the future!
Bitcoin can never be private. It is a public blockchain. The most you can hope for is psuedonymity and obfuscation (a weaker form of privacy vs encryption - everything is still visible).
Unlike Bitcoin, Monero's transaction graph is completely hidden. Amounts and recievers aren't even available to see on Monero's blockchain.
You can use a screwdriver as a hammer if you want, but it is not the ideal tool for the job.
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😳😳😳😳 Wait... #zapping people are wrong? 🤔 What about tipping on Live streaming it's gone a be the same right? Maybe without Tax on LN.
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  • Do you have millisats?
  • No
  • What if I find some
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It could be a lot more anonymous if there was competent and low enough latency hidden services possible somehow. Tor just is not good enough for a protocol that requires strong liveness, because it's got weak liveness.
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Yes, many probably are. Its complicated.
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I never use lightning for privacy. I simply mix some utxos a decent amount of times and only then transact.
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