One of the major drawbacks I see in a lot of the privacy coins is actually the privacy. I have no idea how / if it could be done but we would need a way for Alice to pay Bob that is 100% private BUT at the same time provide them with a way that if needed Alice could prove to the world that she did in fact pay Bob to this address and this amount and here it is to be seen on a public block explorer. BUT and this is a big but, they both have to agree to release that info. Alice says she paid and here is her 1/2 of the info. Bob now has to put up his 1/2 to show there was no transaction if he said he was not paid. This way in event that either Alice or Bob are compromised you still can't get the information because you need the other 1/2.

If you can't do that then there will be a lot of people who are going to start popping up saying that they didn't get their money.

Which brings up the next question, which probably needs it's own thread. Do we need L1 privacy or would an integrated into the protocol but on an L2 privacy be better?

-Dave