Bitcoin isn’t as private as you think (Edward Snowden)

Bitcoin is also often confused with being anonymous, but it is true that it is only pseudonymous — and furthermore most of the transactions can be traced back to its originators using advanced algorithmic de-anonymisation methods. Recent leaks by Edward Snowden are suggesting that the NSA is tracking Bitcoin users since 2013, but still (strangely) Snowden refers to ZCASH as an example on how to circumvent being traced with cryptocurrency payments. Snowden called ZCASH the ‘Most Interesting Bitcoin Alternative’ and called Monero amateur crypto (referenced in the same article). This is strange, but it is suggested that either he is not up-to-date regarding latest cryptocurrency developments or a double agent (this is a joke, don’t quote me on it).

Why fungibility matters

Economists use the term ‘fungibility’ to refer to the interchangeability of goods. Emile Phaneuf III explains this concept very nicely on her website, by asking herself why Monero might be the most fungible currency in history. In regards to cryptocurrency, this concept is very important, as you might own so-called “tainted coins”, which are already blocked by Bitpay and chainalysis. As Bitcoins have a transaction history which is not always legal, you might even be part of a criminal investigation already. As coindesk also puts it:

Some of these techniques, such as zk-snarks and ring signatures, have been pioneered on altcoins like zcash and monero, respectively. (Loss of fungibility, Burniske and Tatar write, “is one problem that monero does not have to deal with.”) — coindesk

2018 is the year of the privacy-centered coins, so most of them will possibly rise on the markets, even if not all of them are keeping their promises. Currently we are looking at over 50 privacy coin (according to bitcoin.com). Sadly, convenience always beats privacy and security.

Further reading:

Kun Woo is based in Hongkong and currently works a research intern at the RIAT — Institute for Future Cryptoeconomics (Monero Task Force). His interest is privacy technology, open source politics and governance in code projects.

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