Former Central Intelligence Agency (CIA) employee and famed whistleblower Edward Snowden is emphasizing that Bitcoin is falling short on privacy.
During the Ethereal Virtual Summit 2021, Snowden says Bitcoin is massively failing to provide users with anonymity amid advances in technology that make surveillance easier.
“We have no idea how the banks are used to perform sort of surveillance and link analysis of how certain financial flows occur, but then we get cryptocurrency. Now cryptocurrency, and by this, I’m just going to say Bitcoin, is really failing comprehensively, terribly on the privacy angle.”
Snowden adds he is not convinced that Bitcoin’s upcoming Taproot upgrade, which aims to improve Bitcoin’s ability to mask complex transactions on the public ledger, will be the magic bullet that solves the leading crypto asset’s privacy woes.
“Taproot does not fix Bitcoin’s privacy problem, and there are some arguments that it makes it worse by this sort of fragmented address space making a forensic sort of flow analysis easier.”
He also notes that privacy-focused cryptocurrencies like Zcash (ZEC) and Monero (XMR) exist, but these crypto assets have weaknesses.
“Zcash, I have said repeatedly, really does the best in the space with their shielded transactions. The criticism is that these transactions don’t occur by default, which is valid. In my opinion, they should happen by default. There are other cryptocurrencies like Monero, which is having a lot of trouble being listed on exchanges broadly, which has sort of privacy by default, but it’s a lower measure of privacy. You’re just playing a shell game and those shell games don’t really last forever.”
To fix the issue of privacy hounding Bitcoin and the crypto space at large, Snowden suggests that users must have the opportunity to erase the trail of transactions that connect their wallets to crypto exchanges.
“The idea of the Bitcoin protocol, the peer-to-peer, electronic hash system, is the idea that we can send these payments to anyone permissionlessly. This is true if it’s in your wallet. But how do people fill that wallet? They get it through exchanges and these guys are imposing permissioning steps that are intermediary to the transaction.
The only way to defeat that is to allow some kind of purification step where we remove all of the paint, we remove all of the identification, we remove all of the cruft being imposed at this external layer in the system, and return it to this idea that we can have direct trade. We can have direct commerce. We can have direct interaction with anyone, anywhere, anytime.
Until we recognize that and realize that and enforce that or at least provide opportunity through the protocol level, crypto hasn’t gotten to where it needs to be.“
IDon't Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/Connect world