TL;DR
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Ethereum co-founder Vitalik Buterin has co-authored a new research paper exploring ‘privacy pools.’
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Vitalik’s soultion? ‘Privacy pools,’ where users put their ETH into a big shared account and it all gets mixed around (muddying the origins of each token/fraction of a token).
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Sounds great! But good luck getting the Department of Justice to give it the green light – because as far as we can tell, it’s still un-auditable.
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Moral of the story: This is great for privacy! (A little too great in the eyes of law enforcement).
Full Story
Ethereum co-founder Vitalik Buterin has co-authored a new research paper exploring ‘privacy pools.’
…but what does that even mean??
First, for those of you playing at home: all Ethereum transactions are public. If someone knows your wallet address (aka ‘the crypto version of your Venmo username’) they can track everything.
Vitalik’s soultion?
‘Privacy pools,’ where users put their ETH into a big shared account and it all gets mixed around (muddying the origins of each token/fraction of a token).
Then, when users want to take their ETH out – the system checks that the funds aren’t being sent to (or from) a known criminal wallet address.
To which we say:
Sounds great! But good luck getting the Department of Justice to give it the green light – because as far as we can tell, it’s still un-auditable.
Meaning, as long as you don’t have existing public connections to a criminal wallet, you could still use the system to hide/launder money – and there’s no central authority that the IRS could force into giving up your account details.
Moral of the story:
This is great for privacy! (A little too great in the eyes of law enforcement).
