Coin Rivet received a press release yesterday that has raised some interesting questions about the privacy-based coin Zcash. The French National Assembly’s Finance Committee has suggested that all privacy-based coins should be banned. In the press release, the Electric Coin Company refutes such an assertion for some very valid reasons. However, it also claims that Zcash is AML/CFT (Anti-Money Laundering and Combating the Financing of Terrorism) compliant, which would then make the question of its actual privacy debatable.
The Electric Coin Company is the new name of what was once the Zcash Company. Little wonder then that it has rebutted the comments regarding the banning of privacy coins. There are some valid concerns raised by the Electric Coin Company. The company states “that privacy is a fundamental human right and that personal financial privacy is essential to protecting the individual freedoms that preserve an open and democratic society“.
Fear of the creeping surveillance state is one of the most important debates in recent times. Where does one citizen’s privacy end for the state to make society safer as a whole? These issues are highlighted not just in the data mining of consumers on the internet, but also in the issues surrounding anti-terrorism.
However, the Electric Coin Company goes on to say: “The Zcash protocol requires the use of payment addresses for all transactions. This allows virtual-asset service providers (VASPs), such as exchanges, to issue a unique deposit address to each customer, thus allowing Zcash transactions to be unequivocally attributed to a specific customer.”
If this is true, then how private is Zcash in reality? If the coin can be attributed to a specific customer, then does this not make the company’s claims of privacy redundant, thereby rendering the whole argument null and void?
The Electric Coin Company’s argument seems to therefore be that we believe in privacy-based cryptocurrencies, but they shouldn’t be banned because they are not actually private in the first place.
Not the strongest of rebuttals from a company who’s aim is to boost Zcash.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.