I have to be honest, barely a day goes by when I'm not frustrated by the completely false narrative being broadcast by basically every public speaker on the topic of Bitcoin:

* Bitcoin is fully traceable and not fungible

* Chainalysis works on bitcoin

Triggering me today 😂 .. was the "What Bitcoin did" podcast on the interesting topic of human rights in authoritarian countries. This narrative in full force there, too.

Is it completely hopeless to get people to understand better? 1/n

The result of this misunderstanding will be more and more stuff like this:

i.e. governments believing they can trace bitcoin, prosecuting or sanctioning people who are innocent, and paying huge sums to disgracefully evil companies attacking your privacy.

Meanwhile nobody knows where these coins are; and yet the technique used (public coinjoin I could call it) is the most basic possible:

Bitcoin is not traceable for at least two simple reasons; 1/ that satoshis are not watermarked and 2/that it is completely possible today to make transfers off-chain (I mean in the most general sense; you can make transfers from A to B trustlessly without a connection between the two on the blockchain, using atomic swap variants). Since transfers can be invisible you don't really know what any specific transaction means.

Saying "oh that's only theoretical because few people use techniques" just doesn't cut it:

1/ People do use LN, more and more
2/ People do use coinjoin, not that much, but it's pretty powerful
3/ You have literally *zero* idea how many scriptless script swaps have already happened (using ecdsa-2pc)
4/ it's also mostly not possible to distinguish p2ep type coinjoin from ordinary transactions, depending on pre-existing knowledge

This mostly brings us back to the real issue: centralized control points, like exchanges. Chainalysis type firms rely on this as a crutch, and if your ID is a given there, and all you do is move between exchanges, *no* cryptographic tricks make any difference anyway. Learn to trade p2p!

The most common perspective from thoughtful people is, that well we should have better, really strong privacy baked in. Guess what, I want a pony and Roger wants a 100MB block. There are no free lunches, and completely cryptographically "blind" transactions come at a cost. Apart from novelty of crypto (which itself is serious), consider the arguments I made here:

I know that blog post is probably a bit eccentric and difficult to read, so the basic idea is just that by definition, you're reducing the security when you blind transactions, and I think (it's not so clear) that you're almost by definition worsening scalability too. Blockchains are a design specifically for public verification. Take the meaning of transactions off-chain is probably the right direction.

Meanwhile, in summary, saying "bitcoin is fully traceable" is at least as wrong as saying "bitcoin is anonymous". /finito

"Is it completely hopeless to get people to understand better?"

Pretty much.
Waaayyy too many people don't see/understand the importance of privacy ("I have nothing to hide" nonsense).
Yet there is this thing call the privacy-paradox in which ppl say privacy is important, but don't change their behavior to improve it. Most are not even willing and the ones that do, probably don't know how or do it incorrectly.

I'm comfortable with the CLI, but don't understand most of what you wrote


Right. I'm afraid on reflection people will have the wrong takeaway, namely "yeah bitcoin could be pretty private if you understand a bunch of bizarro-world tech jargon and can program your toaster in C", but that's not what i meant :) A lot of what I'm talking about is what you *can't* know, and a lot of it is also about how when other people do nonstandard stuff on the blockchain (like LN, not necessarily CLI stuff), it helps your privacy.


I do think 'normal' people can and should use privacy and fungibility enhancing techniques, just make it so that people use it without realizing or understanding it.
That LN uses Tor routing is brilliant imo.
I don't know if coinjoins is already part of going to/from L1 to L2, but it would be great if it was.

IIUC coinjoins with Schnorr makes it cheaper then normal txs. More of those things please (ie ppl have a financial motivation to do the right thing)


@patestevao on bird site has an amazing gift on making hard stuff (conceptually) understandable for 'normal' people.

My CLI remark was an attempted shorthand to indicate that I do/can understand several technical things (more then others)


Yes. And thanks for mentioning Schnorr. It was probably a mistake not to mention: Schnorr, taproot at least (and some other things) within the "you don't know what transactions mean" list of techniques; the only difference there is that they are not yet available. It may be a little while before they are.

@waxwing I always enjoy your insight into these issues.

You mentioned seeing Mario G. speak recently in another toot, I'm reminded of something he said when I saw him present not too long ago, (to paraphrase): "many people fear and want to restrict 'anonymization', so we often say 'fungibility' instead".

Of course the two are not the same, but they are heavily related. As @FreePietje mentioned, the "I have nothing to hide" crowd do more damage than they may ever realize in this regard.

@htimsxela @FreePietje

Also the people who sneer at "bitcoin is used for money laundering", retorting "that's what USD/banks are for" make my blood boil ... and these are often otherwise intelligent people.

@waxwing @htimsxela

Why does that annoy you?
Tbf, it is something that I could say.
It's not that I think bitcoin isn't/can't be used for illegal activities, but more an annoyance at the moral high ground 'the other side' is taking/claiming.

@FreePietje @htimsxela

If Bitcoin can't be used for what is commonly described as "money laundering" (set aside the philosophical debate about that term; just think of it as 'not state sanctioned value transfer' for these purposes), then it is worthless.

Now, maybe it's only *contingently* incapable of performing this function, because it's too new/small or whatever; but obviously censorship-resistant value transfer is the point.

Failure to perform that function is not a badge of honor.

@FreePietje @htimsxela

A knife being insufficiently sharp to slit someone's throat is not a feature of a knife one should crow about.

@waxwing @htimsxela

I completely agree and I suspect other people who could say that think so too.
So it's not meant as an admission of failure of an essential function of bitcoin/money, but making fun of someone's claimed moral high ground.

(I wanted to rephrase this toot, but as you already responded, I'll leave this one as is)

@FreePietje @waxwing @htimsxela my stance exactly. I am very entertained by the news stories of anti-bitcoin banks (who say bitcoin is evil because money laundering) being busted for money laundering.

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