The battle for privacy in cryptocurrencies

The battle for privacy shows no sign of slowing down in the cryptographic and cryptocurrency community

With Litecoin’s Charlie Lee announcing that they are looking into adding new privacy features, the battle for privacy from the basis of crypto anarchy rumbles on. Privacy for many involved in cryptocurrencies and cryptography as a whole is considered a basic human right. Privacy isn’t something you earn. Whilst there are obviously people who misuse privacy for terrible acts, the argument goes that we as citizens shouldn’t be deprived of the right because of them.

Those who began the work of cryptography, the forebearers of today’s cryptocurrencies, did so for privacy.

Why has privacy become the forefront of the battle?

With Bitcoin, there is a lack of privacy due to the public blockchain. When Bitcoin was a small, unknown currency, this wasn’t an issue as governments didn’t anticipate the rate of growth the cryptocurrency would experience. The scene is remarkably different now.

Thanks to companies such as Chainalysis, the Bitcoin blockchain is able to be traced quite extensively. For many exchanges, regulatory requirements call for the use of Chainalysis so that the stringent KYC and AML measures can be enforced.

Yet for many of the original cypherpunks, this poses an issue. Ideally, for them, monetary transactions should remain largely anonymous. This is why we are seeing a new rise in efforts to incorporate new privacy features into various cryptocurrencies.

The most prominent coins that base themselves upon privacy are Monero and Zcash. However, thanks to the new cryptographic technology Mimblewimble, new cryptocurrenices such as Grin and Beam have entered the market. Bitcoin itself is hoping that the increased use of the Lightning Network will add another level of privacy as well. This is something that rattles the bones of one Craig Wright, who views Lightning as an attempt to go back to the days of Bitcoin being used for the Silk Road.

What governments can do to stop such advancements is limited. With all of the code being open source, people are able to share ideas freely, which in turn improves the development of the technology. This is precisely what is happening within the cryptocurrency space right now. Developers are looking at the code of other coins and seeing the benefits that they can add to their own coin. The battle will continue to rage between the two camps continuously into the future.

Whilst the large technology conglomerates continue to find themselves in a bind over privacy leaks and data snooping, the developers within the cryptocurrency and cryptographic community are at the forefront of attempting to protect the rights of the individuals. Not in an effort to commit more crime, but because they believe it is our right as citizens.

Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.

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