The author of ”Mastering Bitcoin” and notable educator Andreas Antonopoulos has claimed bitcoin’s domination is under threat over the next few years due to privacy concerns.
Design and Fungibility: important things for longtime success
At the Deconomy Conference in South Korea, the crypto guru shared his opinion regarding Bitcoin’s future in light of the unaddressed privacy issues. According to Andreas, Bitcoin has two significant problems. The first one is user experience, which is too tricky and controversial for the user who is comfortable with traditional banking.
”The ease of use has not reached parity with other financial services, so there is no motivation to use cryptocurrency. Adoption remains, for the most part, limited to disaster countries where the difficulty of using cryptocurrency is less than the difficulty of not using it because of crisis. So, it finds a niche.”
Taint analysis breaks the user’s privacy and coin’s value proposition
The second problem is fungibility, which is of most importance.
”Tainted coins are very destructive. If you break fungibility and privacy, you break the currency. It is possible to attack Bitcoin in the ways we haven’t seen yet.”
Antonopoulos admits that Bitcoin’s future now depends on the speed of developers. They regulate the implementation of the new privacy protocols. They can either implement the new code to increase security level or be wiped off the stage with the achievements of other privacy coins. Per Antonopoulos:
”There is a whole series of solutions. The question is will we be able to get those introduced into the base layer without another political rift… You could see a rapid evolution of Bitcoin in a privacy direction or even replacement by other privacy cryptocurrencies.”
What is the Bitcoin fungibility problem?
Fungibility is the ability of a given token of exchange to remain within the immoral space. Obviously, due to the nature of cryptocurrencies, many of the coins may be called ”dirty” in some way or another. Big companies already developed tools of tracking transactions on different blockchains.
For example, Bitfuty Group’s ”Crystal” department presents its blockchain analysis tool to law enforcement and businesses for sale. It allows for detecting the coins that are ”dirty”, which is important when your company has lots of customers and strictly follows KYC/AML policy. Such tools often receive criticism from the notable players of the crypto space for disrupting the core characteristic of money.
What cryptocurrencies can replace Bitcoin?
In the worst case scenario, Bitcoin has few competitors: Monero, Zcash, Bitcoin Cash, Ethereum Classic and others. Monero is famous for improved privacy of transactions and plays as a means of payment on many Darknet markets.
Snowden himself recommends Zcash which can opt-in with its famous Zk-Snarks protocol. It prevents the transactions from being too easy to analyze. As for Bitcoin Cash, it has Schnorr signatures already implemented in it and stands still in waiting for the big Avalanche protocol update. As described by Bitcoin ABC lead developer Amaury Sechet, the Avalanche protocol will allow increasing BCH’s transaction capacity, anonymity and zeroconf TX double-spend resistance, all until 2020.
Last modified: March 4, 2021 2:44 PM