Edward Snowden Issues Final Warning on Bitcoin Privacy Concerns

Discover why Edward Snowden, the whistleblower known for his NSA revelations, is urgently warning Bitcoin developers about privacy.

This in-depth article explores the challenges and implications for Bitcoin privacy, including the planned shutdown of coinjoin services by Wasabi Wallet.

Importance of Privacy Protection Features

Former CIA employee Edward Snowden, known for his revelations of massive personal data collection by the National Security Agency (NSA), issued a final warning to Bitcoin developers on May 3, 2024, stating that "privacy should be provided at the protocol level."

Snowden's comments were in reference to a post by the privacy-focused Bitcoin wallet, Wasabi Wallet, announcing that their "coinjoin collaboration service" will be terminated on June 1, 2024.

About the Suspension of the Coinjoin Collaboration Service

Coinjoin is a privacy protection feature that merges multiple users' transactions into a single transaction to obscure the path of funds. It is known as a technology that can anonymize Bitcoin transactions online.

The decision to discontinue the Coinjoin collaboration service is in response to legal issues such as cryptocurrency regulations. The suspension will affect users of external wallets like "TrezorSuite" and "BTCPayServer."

According to an official announcement by Wasabi Wallet, even after the service termination, private transactions can still be conducted using client-side filtering, Tor integration, and custom coin selection.

However, due to the nature of the Bitcoin blockchain, complete privacy cannot be ensured without Coinjoin.

Debate on Cryptocurrency Privacy

Initially celebrated as a highly anonymous currency usable worldwide, Bitcoin now requires identity verification (KYC) procedures at cryptocurrency exchanges, linking wallet addresses to personal information and thereby identifying the owners of the wallets.

This has made it easier to identify perpetrators in cases of tax evasion, money laundering, or criminal activities using cryptocurrencies. However, this can also lead to privacy violations of ordinary users who are not involved in any wrongdoing.

For instance, when paying with cryptocurrencies in stores, the staff could later track the person's wallet address to view their past purchase history and holdings, leading to potential privacy risks.

With many sophisticated fraudsters currently active, few people would be comfortable with their wallet contents and past transactions being publicly accessible.

There is also the risk of government agencies using cryptocurrency tracking capabilities to confiscate the assets of citizens under corrupt or fraudulent regimes.

Edward Snowden has been pointing out such issues and concerns for years, arguing that "we need to focus on more fundamental matters rather than just price movements."

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