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It hides the total value of your assets from a merchant. Imagine the privacy implication if every time you swiped your credit card, the merchant could see your

by smeej 2y ago

It hides the total value of your assets from a merchant. Imagine the privacy implication if every time you swiped your credit card, the merchant could see your entire net worth. It'd be a disaster. These blockchains are public ledgers. If people don't make any attempt to obfuscate their transactions by hiding them among transactions of the same size, anyone who wants to can see their entire balance without much effort. It's entirely legitimate not to want to broadcast your entire holdings every time you transact.

viraptor 2y ago
That's a bit of a stretch. You don't need to use a wallet with all your funds (I really hope people aren't doing it). When you transfer something to another wallet you can make some guesses, but it's not clear if someone paid your that money or you transferred it yourself. Any move through a centralised exchange will also effectively erase the trace for that purpose. I mean, you can use it for that purpose, but there are ways to do it in not completely dodgy and KYC-evading ways.
- dlubarov 2y ago
  Sure, users with some understanding of the tech can get a weak form of privacy (or at least plausible deniability) if they're careful about shuffling funds around different wallets. Why should that be the limit? Are you against stronger forms of privacy? Sounds a bit like laws prohibiting the export of encryption software with >40 bits of security. It does avoid KYC, but so does handing someone cash, and we haven't made that illegal yet.
  - viraptor 2y ago
    > It does avoid KYC, but so does handing someone cash, and we haven't made that illegal yet. Using cash doesn't get you out of the KYC requirements. It's not a law about specific tech, but what you use the funds for.
    - dlubarov 2y ago
      Using cash generally means there's no need to involve a financial institution that KYC regulations would apply to.
- smeej 2y ago
  Moving it from one wallet to another does virtually nothing if someone cares to look. And the exchange thing doesn't help much, because all you've done is change which third party knows more about you than they need, the merchant or the exchange. All anyone needs to know about you when you're the buyer in an ordinary transaction is that you have the funds to make the purchase. The rest should be yours to disclose if and only if you want to.

by smeej 2y ago

viraptor 2y ago

That's a bit of a stretch. You don't need to use a wallet with all your funds (I really hope people aren't doing it). When you transfer something to another wallet you can make some guesses, but it's not clear if someone paid your that money or you transferred it yourself. Any move through a centralised exchange will also effectively erase the trace for that purpose. I mean, you can use it for that purpose, but there are ways to do it in not completely dodgy and KYC-evading ways.

dlubarov 2y ago
Sure, users with some understanding of the tech can get a weak form of privacy (or at least plausible deniability) if they're careful about shuffling funds around different wallets. Why should that be the limit? Are you against stronger forms of privacy? Sounds a bit like laws prohibiting the export of encryption software with >40 bits of security. It does avoid KYC, but so does handing someone cash, and we haven't made that illegal yet.
- viraptor 2y ago
  > It does avoid KYC, but so does handing someone cash, and we haven't made that illegal yet. Using cash doesn't get you out of the KYC requirements. It's not a law about specific tech, but what you use the funds for.
  - dlubarov 2y ago
    Using cash generally means there's no need to involve a financial institution that KYC regulations would apply to.
smeej 2y ago
Moving it from one wallet to another does virtually nothing if someone cares to look. And the exchange thing doesn't help much, because all you've done is change which third party knows more about you than they need, the merchant or the exchange. All anyone needs to know about you when you're the buyer in an ordinary transaction is that you have the funds to make the purchase. The rest should be yours to disclose if and only if you want to.