Speaking on the Bitcoin Rails podcast, Cake Wallet’s Seth for Privacy said people need to take more precautions to protect their identities when using the biggest cryptocurrency
Just one transaction can compromise years of discreet Bitcoin activity, Cake Wallet’s chief operating officer has warned
Speaking on the Bitcoin Rails podcast this week, activist Seth for Privacy talked about different ways of protecting one’s privacy when using Bitcoin and said that focusing on privacy was a must for the West
Bitcoin privacy is a hot topic again ever since the developers of private coin mixer Samourai Wallet went on trial last year and were subsequently imprisoned
But just this week, the U.S. Department of Treasury scrapped two long-stalled crypto surveillance proposals, handing a major win to privacy advocates and the digital asset industry
“If you ever spend your no-KYC coins with one of your KYC coins — which if you just let the wallet do its thing, it could do because it doesn’t know the difference — you immediately connect all of the non-KYC Bitcoin that you spend in that with your identity,” Seth said, referring to UTXO management, also called “coin control” by some wallets
Bitcoin wallets don’t hold a single balance but a collection of separate unspent transaction outputs — UTXOs — each one a discrete “coin” from a specific past transaction
When you send a payment larger than any one UTXO, the wallet picks several and combines them as inputs to the same transaction — an easy mistake to make, Seth highlighted
Seth added that unlike in the global South, where people have experienced more oppressive states, citizens in the West will need to “feel pain” in order to realize how important privacy is
Still, he added that attitudes were changing and people were getting more serious about protecting their privacy
“It has been shifting, in the last five or six years a lot of people — even in the West — are starting to think [privacy] really matters, we really need to think about this seriously now,” he said
Cake Wallet is a privacy-oriented, self-custody, open-source wallet. The wallet earlier this year integrated Bitcoin’s Lightning Network into its platform
Using the second layer solution is not only faster and cheaper, it also offers more privacy than Bitcoin’s main chain
While Cake Wallet supports other cryptocurrencies, including privacy coin Monero, Seth for Privacy added that he’d love it if the digital coin didn’t exist
“If Bitcoin’s privacy got good enough that you could use it and have at least almost as good privacy as Monero without massive hoops to jump through, and Monero ceased to exist, that’s fine,” he said
“I would much rather the thing that more people use has better privacy than a more niche tool that has perfect privacy, and that’s something that less people are using because it’s less well known.”
