Bitcoin Privacy w/ Chris Belcher

Automatic TRANSCRIPT

So before we get into it, we'll start with the basics permission list. blockchain's are necessarily public, transparent and DONNAS. That's another way of saying that anyone can look at them without any sort of approval or credentials which makes them public. You can see everything that's ever happened, which makes them transparent, and while you can track what individual identities do, you can't see who those identities tie to in real life, which makes them pseudomonas. But blockchain's are notably not anonymous. It's kind of a wonky point but one worth emphasizing anonymous in this context means there's no continuous identities. So if injuries and I were talking on a cooking forum, the let's post anonymously if we were exchanging messages on a topic and then did so from one week to the next, we wouldn't actually know that we'd spoken before. That's not how most forums work though most forums and most things on the Internet are PSEUDONOMAS and while Andres might not know he's talking to me Adam. He'd see my username my pseudonomas identity block chef, and even though he doesn't know that's my real name he'd be able to figure out that he had talked to block chef before. So in Bitcoin, the situation is much the same instead of calling myself block chef on a recipe forum in Bitcoin I'm known by my bitcoin addresses, and while I might have a lot of bitcoin addresses. A lot of these Sudan's identities. This creates opportunities where privacy can start to unwind and away that sometimes is worse than you might think. For years this has been known to be a problem known to be sort of just an intractable part of the way that cryptocurrency and transparent public blockchain's work. But there have been a lot of ideas and a lot of inventions which have sort of come out which are still many in development now, which are trying to solve this problem which brings us to today's guests. So Chris with that set up that I get anything wrong and talk to me about how you're thinking about privacy these days. No I think you've explained that very well. So a concrete example Ed says people's bitcoin addresses all the PSEUDONOMAS identities it's whether coins are on and a common problem. The people do is address reuse. That's why they use the same address again and again, and again in this analogy, that's like someone using the same pseudonomas name again and again that again, an using you address for each payments on then never again is a bit like making you pseudonomas name and then discarding it you're done with it and just easy another one. So. In that circumstance, it's not anonymous, but it's almost the same as anonymous because there's no reuse between the identities it's not anonymous, but it's pretty darn close. PSEUDONOMAS swear if used correctly, there's automous identity every time however, the identities are linked together. So on the block chain, you see bitcoins flowing from one addressed to another. So it's not like the identities completely new that linked to the loans previously. As, well, as information from the blockchain, there's also leaks based on things like the person's it address. Oh maybe they've posted this address on a public forum somewhere at other leagues that come in as well. What of scary scenario where privacy is broken and like is it for an individual? It becomes scary or is it a kind of Meta threat that's really affecting the whole network when you're talking about privacy and sort of like address re-use things like that. In worst case scenario what's the thing that happens all of the above essentially so one example is if you're a regular user and you want to use bitcoin to buy some coffee, a nightmare scenario is you go to the coffee shop and Buy Cup of coffee and the person serving you can see your whole financial history so they can see income and they can see or the other spends you make. Whether you donate to such charities or anything like that. It's also problem if you'll business because that means if you untie income and. Of Public, you'll competitors could see how much you're paying your staff, how much you pay for supplies and all that kind of thing where you allocate your resources and for the network as a whole, there is actually a related problem of fungibility, which is what I did is privacy. So that's where a fungibility is a necessary property of money. So we have properties like to visibility portability durability and fungibility is just one of those. You need this to be good money and it's the property that every unit is the same as every other unit that means a good can be used as money because. It means it can be accepted for example, banknotes if you get paid with five dollars or five euros, it's the same as five years in general this particular banknote having some special thing you need to check. So the nightmare scenario there is that every time someone accepted Bitcoin, they'd have to actually look up to some kind of database to some kind of checklists check the these particular coins receiving were not for example, banned by some institutional, some government or something, and if that what's happened because these blacklist, these kind of look up tables would be centralized it would destroy the decentralisation property of Bitcoin. But Chris just being a little bit facetious and playful here. What's the problem with that? Like they're just looking at your financial history what can anyone really do about that and if you can see everyone else's financial history to isn't that only fair? Well I. Suppose Turn Back so you could Stephanie CEO Financial History please. Of reasons why you wouldn't want to share that kind of thing and going back to the examples I said of the merchant of the business who runs a business in uses bitcoin. Their privacy is an important part of their business because they need to keep secret, for example, how much to pay US suppliers or they need to keep secret other things that they do, and that's an important for a healthy economy. There's good reasons to hide things from. The public or from your competitors yeah and I think it's important to point out too that there already is like kind of an uneven playing field as far as privacy goes. If you're willing to work for it, you can have a greater degree of financial privacy and if you don't work for it or you don't know how to or you don't think that's important then you're going to be at a disadvantage compared to people who have greater privacy. Even beyond the commercial considerations I think the even greater consideration is the fact that without privacy in your financial affairs, Hugh can be easily targeted for your political associations and your political expression, which given the fact that more than fifty five percent of the world's population live under authoritarian or corrupt regimes means that it is very, very easy to suppress the fundamental mechanisms of democracy representation, political expression, freedom of speech, freedom of Association Freedom Assembly, Etcetera, simply by violating privacy, and then imposing punitive measures as retribution for political expression

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