Loth though I am to say this, I agree with Snowden.  Privacy is Bitcoin’s Achilles’ heel.

To say that “Bitcoin goes far beyond privacy” is like saying that a tower goes far beyond its foundations.  Privacy is a fundamental characteristic, it is an economic necessity insofar as it affects fungibility, and it needs to be built-in:  It is a part of the foundation, not a roof ornament.

Mixing does not work; that is a child’s game, and it costs you money in fees to achieve an inferior form of something that should be built-in, provided out of the box.  (On another note, Monero is essentially a coin with a built-in mixer.)  I have spent a ridiculous amount of money over the years on Bitcoin privacy, so I think I am qualified to opine.  And no, LN is not an adequate solution.  I am not inclined to make an extensive technical critique here—just saying, um, no, that doesn’t do it.

None of this is any criticism of Satoshi.  Given the state of the art in 2008-era cryptography, Satoshi had two choices:  Try to build a centralized currency with transactional privacy, like Digicash—or build a decentralized system, which exposes all transaction data so that every P2P node can validate it.  Either/or.  In 2008, the technology did not yet exist for anything else.  Satoshi made some breakthroughs with Bitcoin, but he himself was obviously not a cryptographer; and it would be unfair to expect him personally to solve every major problem at once, all by himself!

In 2010, when he was still here, Satoshi was struggling with this issue:


Bitcoin gave the impetus to terrific advances in cryptographic research.  A wave of breakthroughs in zero-knowledge proofs started in 2013–2014.  Alas, by then, Satoshi was long gone.  Not that we need his permission to improve Bitcoin:  I think he would have liked to have seen that, and to have been involved in it as Satoshi.

Thus, as it stands:

• Bitcoin has less practical privacy than bank transactions.  (Your bank knows your bank transactions.  The whole world knows your Bitcoin transactions.)
• Such monstrosities as Chainalysis exist, and they invisibly spy on you much worse than you know.
• Bitcoin’s fungibility is always more or less under threat—in the large, systemically, and in the small, for each user.  Governments and spy-companies draw up blacklists of coins.  Bitcoiners fret over avoiding “taint”—a ridiculous concept which should not exist.  Even if you are irresponsibly apathetic about privacy, you need to pay attention to what this does to Bitcoin economically.
• The only major implementation of zero-knowledge proof privacy is an altcoin which, I recently discovered to my dismay, now plans to go POS.  Snowden likes that altcoin.  So do I—as long as it stays POW.  (I am proud to be a Zcasher since Sprout.)

A constructive solution:  Bring real privacy to Bitcoin!  Don’t say, “We don’t need that,” when we obviously do.  I say, “We can do it.”


Payments without privacy are—a problem.

I also agree with Snowden that competition is good.  Bitcoin doesn’t retain its dominance due to meme graphics.  It stands on being the best.  That means it needs to be the best.  The best never fear competition; and Bitcoin will only be improved by competition, if its response is “we can do it!” rather than “we don’t need it”.

I also like that Snowden tweet about gold being a non-networked form of Bitcoin.  Quotable.  He apparently has quite a high regard for Bitcoin.  If he offers some constructive criticism of it (as I do often), that is for the good of Bitcoin.