Privacy in Bitcoin is hard to grasp for many users and that is simply normal if they, like many, believe that “The Blockchain” is the innovation. “The Blockchain” is simply a tool to achieve the property of validation that Bitcoin requires to reach its purpose - to become a superior monetary system to any other that has ever existed on the surface of the earth. Tools can and should get replaced or modified whenever superior and securer alternatives appear, if it becomes clear that the objectives can get achieved in a better way and if consensus arises through the p2p network of nodes and the off-chain governance.
“The Blockchain” is known as a transparent distributed ledger organized as a chain of blocks to cryptographically verify data without trusted parties. Whether this is true of just hype is beyond the scope of this article. If “The Blockchain” is the innovation and the purpose, then the proponents could argue that privacy has nothing to do with it, as they say : our mission is a more “open world”.
The truth is that “The Blockchain” is far from being the innovation or the goal, Bitcoin is the innovation and a superior monetary system is the goal. Privacy properties are thus necessary for Bitcoin to prevail, since by studying history, we can observe that fungible systems are the ones with the most success in a free market.
Also, the ability to verify the authenticity of the network by users, no matter their country or net worth, is completely compatible with privacy, if done in the correct way. We will explore CoinJoin and its main implementations, Tumblebit, and all other techniques that don’t interfere with the ability of users to verify the authenticity of the network such as its supply limit.
Some wonder why we should value financial confidentiality, since it seems as only actors with illegal or illegitimate intentions would benefit from that feature. There is absolutely no question to whether these types of individuals would benefit from it, but the remainder of the market participants would benefit from it as well. Doesn't every individual benefit from using the appropriate tools to defend their right to privacy?
May 18, 2019