In a recent discussion, Claudia Diaz, a Professor at the University of Leuven, and Peter Todd, early Bitcoin Core Developer, teamed up on the sidelines of the Magical Crypto Conference 2019 to talk about Bitcoin’s crypto-anarchist image and privacy issues.
Talking about Bitcoin, which is not private and is being “sold as a crypto-anarchist tool” that seeks to facilitate privacy, the developer was asked whether it was the fundamental flaw with Bitcoin. Peter Todd responded by stating that it is a fundamental trade-off:
“When you look at Zcash and Monero, both of them had bugs with potential inflation that could have destroyed the currency because the supply wouldn’t be limited”
Bitcoin is less private and for the purpose of preserving value and keeping it safe for a long period of time, he vouched that Bitcoin was a lot safer because of its transparency.
When asked about a scenario in the future where the entire world was using Bitcoin, Diaz asserted that the most interesting aspect about the largest crypto-asset was that it had opened the possibility of having a functioning financial network that runs on this kind of a system. She also admitted that despite the fact that Bitcoin was the one that spearheaded the entire crypto-industry, whether the coin would grow to become a technology that would survive in the future remained uncertain.
The developer, however, responded that it was not possible for the entire world to be on a transparent ledger. According to him, the only way to scale this type of tech was by adding privacy protocols to it. He also said that the Lightning or the layer 2 scalability network, despite being highly vulnerable to attacks against its privacy, “by default, was relatively good privacy”.
Referring to Monero, the duo was asked whether “privacy came at a cost” and whether Monero was a “heavier chain”. To this, Todd responded,
“Privacy only comes at a cost when you use privacy techniques that comes at a cost. Monero happens to use the technique that comes at a cost, but in general, privacy comes at a benefit which is things of scale”
He also explained that in case of the Lightning Network, the marginal transaction cost was zero and it had “excellent” privacy.