TL; DR
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Ethereum co-founder Vitalik Buterin has co-authored a new study paper exploring ‘privacy pools’.
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Vitalik’s soul? “Privacy Pools”, where users place their ETH in a large shared account and mix it all up (clouding the origin of each token/part of a token).
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Sounds good! But good luck getting the green light from the Department of Justice, because as far as we know it’s still not verifiable.
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The moral of the story: This is great for privacy! (A little at great in the eyes of law enforcement).
Full story
Ethereum co-founder Vitalik Buterin has co-authored a new study paper exploring ‘privacy pools’.
…but what does that actually mean??
First, for those of you playing at home, all Ethereum transactions are public. If someone knows your wallet address (a.k.a. “the crypto version of your Venmo username”), they can track it everything.
Vitalik’s soul?
“Privacy Pools”, where users place their ETH in a large shared account and mix it all up (clouding the origin of each token/part of a token).
Then, when users want to withdraw their ETH, the system verifies that the funds are not being sent to (or from) a known criminal wallet address.
To which we say:
Sounds good! But good luck getting the green light from the Department of Justice, because as far as we know it’s still not verifiable.
This means that as long as you have no existing public connections to a criminal wallet, you can still use the system to hide/launder money – and there is no central authority that can force the IRS to give up your account information.
The moral of the story:
This is great for privacy! (A little at great in the eyes of law enforcement).