Privacy Coins Will Manifest Mainstream Misconception Regarding Bitcoin, Says Coinbase CEO

News / 10.04.2020

According to Coinbase’s CEO, Brian Armstrong, in an article, some of the nascent cryptocurrency assets are ready to challenge the traditional financial system with a feature that has been falsely attributed to Bitcoin.

The article for Project Syndicate discussed the potency and concerns regarding privacy coins, featuring protocols meant to make transactions untraceable.

When it comes to Bitcoin blockchain, it leaves a digital trail of transactions, as against what people think. Armstrong said that although privacy coins such as Zcash and Monero are disputable, they are promising towards the creation of a far more secure financial system capable of protecting users’ sensitive data.

Armstrong compared this shift with the movement of websites from HTTP to HTTPS as the global standard; which is to inform users that their information is protected by default. He continued that banks, regulators, and law-enforcement agencies have become startled by these innovations.

He said cryptos require privacy protections to unleash their complete potential, similar to how the early internet was in need of encryption towards the fostering of digital commerce.

The most effective means of protecting one’s sensitive financial data from anyone is to avoid having to collect it at first, said Armstrong. Likewise, he said that things will continue to change when there is more access to non-custodial crypto wallets that permits the storage of private keys to move funds, instead of depending on a third party.

Despite the emergence of privacy coins, he said that law enforcement and regulators will keep having access to more robust tools for the maintenance of financial order. According to him, governments’ ability to subpoena cryptocurrency exchanges and monitor conversions between fiat and cryptocurrency are two enforcement “choke points” that will continue to exist.

Featured image courtesy of Fortune. Source: Cryptopress.

Sudarshan M is a long time crypto-enthusiast. Pulled in by bitcoin early on, it did not take long for Sudarshan to divert all of his academic attention from business studies to blockchain by doing his Masters and eventually pursuing his PhD in the subject.