Crypto Needs to Be Private by Default, Some Consensus 2023 Guests Say

Participants at Consensus 2023 describe the tension between the need for privacy, transparency and regulation in crypto and DeFi in an excerpt from CoinDesk’s first-ever Consensus @ Consensus Report.

AccessTimeIconJun 7, 2023 at 1:01 p.m. UTC
Updated Jun 9, 2023 at 4:52 p.m. UTC

Privacy and criminality share an uncomfortably intimate existence, not least of all in cryptocurrency.

Many consider the power to selectively reveal or hide oneself to the world a human right, but it is often abused by criminals, leading to calls for increased government surveillance, which in turn encroaches on the privacy of law-abiding citizens who make up the vast majority of crypto users.

This article is excerpted from CoinDesk’s inaugural Consensus @ Consensus Report, the product of intimate, curated group discussions that took place at Consensus 2023. Click here to download the full report.

If crypto were to truly function as anonymous digital cash, as envisioned in Satoshi Nakamoto’s white paper introducing Bitcoin, it would become anathema to the financial surveillance regime that has prevailed globally since the U.S. hastily passed the Patriot Act after 9/11.

“There is a tension between the crypto ethos and existing policies,” noted one participant in a closed-door discussion at Consensus 2023.

Nevertheless, the lack of privacy by default on-chain may be the only thing that endears law enforcement and regulators in the U.S. and other jurisdictions to crypto.

For two hours, experts from a range of disciplines – technology, business, law and governments – gathered to offer insights into how new policies, new technologies and practical risk-based approaches may balance the competing demands of privacy and transparency…

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Frederick  Munawa

Frederick Munawa was a Technology Reporter for Coindesk. He covered blockchain protocols with a specific focus on bitcoin and bitcoin-adjacent networks.

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