This weekend I had the distinct pleasure of appearing on Crypto Ramble with Desi-Rae Campbell for an in-depth conversation on privacy coins. We covered extensively the concept of privacy in cryptocurrency and the numerous variables associated including what exactly the user is trying to obscure (transaction destination, transaction amount, overall movements of funds on the network, etc.), as well as the potential tradeoffs. These can include extra data (and therefore cost), time, difficulty, rigid parameters, and other detractors to user experience. We also covered how the field of obfuscation and privacy is in a constant arms race against attempts to de-anonymize transactions, and how new exploits are constantly being found and later corrected.
Why Dash isn’t a privacy coin and why hyper-focused projects may not survive
The heart of the discussion was the concept of a “privacy coin,” and why Dash does not qualify since its main focus and attributes of scaling, fast transaction speed, low fees, and good user experience take a higher priority in the project’s development than simply allowing the most advanced privacy techniques in the industry, as do network security, governance, stability, and store-of-value properties as well.
Finally, we covered the prospects of mainly privacy-focused cryptocurrencies surviving long-term, particularly in stiff regulatory environments where more usable, day-to-day projects may have a significantly easier time with regulators than projects specifically purposed to elude them. We also discussed how privacy may not be an option where certain projects can be viable “privacy coins” while others may not, but rather all projects will have to deliver a certain degree of privacy, implementing into their protocols advancements pioneered by other more focused chains. We also noted how simply having superior privacy may not be good enough when advanced security threats from 51% attacks and governance issues gone foul may arise, as well as a lack of users through usability challenges.
The full interview is available above.