Bitcoin Privacy Feud Erupts After Edward Snowden Pans Long-Awaited Taproot Upgrade

Core devs say the Taproot software update for Bitcoin will improve privacy. Edward Snowden said it doesn’t fix Bitcoin’s bigger privacy problem. Who’s right?

In brief

Edward Snowden said Bitcoin core developers have not prioritized privacy.

Some Bitcoin developers and privacy advocates disagreed with his assessment.

Edward Snowden is a former National Security Agency contractor who exposed a secret surveillance program of American citizens.

As one of the world’s foremost privacy advocates, he thinks Bitcoin isn’t private enough—and that an upcoming software update could make it worse.His comments have created something of an uproar from fellow activists such as Alex Gladstein, the Chief Strategy Officer of the Human Rights Foundation, who thinks Snowden has misrepresented the upgrade, known as Taproot. Others have argued that the Russian exile can’t see the importance of mainstream adoption to the project, which could falter if it turns too far toward anonymity.”Cryptocurrency, and by this I’m just going to say Bitcoin, is really failing comprehensively, terribly, on the privacy angle,” Snowden told the Electronic Frontier Foundation’s Marta Belcher at the Ethereal Summit on Thursday. Taproot, he added, isn’t a good fix.

Taproot, which was first proposed in early 2018, is in the process of making its way from developers’ brains to the Bitcoin protocol itself. When it does come online, it’s supposed to improve privacy as well as scalability and security.That’s because it can take complex, multi-step transactions on the Bitcoin network and make them appear as though they’re single transactions. Thus, transactions involving multi-signature wallets or the Lightning Network, for instance, just look like any other peer-to-peer transaction. Moreover, the Taproot upgrade will likely be combined with Schnorr signatures, which combine multiple signatures into just one signature, further obscuring the mechanics at play and adding privacy.Snowden doesn’t buy it. “People are like ‘Taproot! Taproot!'” he told Belcher. “Look at what Taproot actually does. Taproot does not fix Bitcoin’s privacy problem. And there are some arguments it actually makes privacy worse by sort of fragmenting address space, making forensic sort of flow analysis easier.”

He went on to praise privacy coins Zcash and Monero and urged Bitcoin to be “private-by-design” before questioning the willingness of those who help maintain the Bitcoin blockchain to embrace such a paradigm: “It’s really frustrating, I think, for a lot of people in this space that the core development team for Bitcoin has not prioritized this, because the longer they wait, the more obstacles are going to be put in place to prevent that from being the case.”Several developers and researchers shared with Decrypt that Snowden’s comments about Taproot were incorrect. And Gladstein suggested Snowden misunderstands Taproot.”With great respect for Edward Snowden, who has sacrificed so much to reveal the surveillance state to the world, I disagree with his assessment of Bitcoin privacy and hope he can consider looking more deeply into the Taproot upgrade and existing privacy tools like CoinJoin and Lightning,” he told Decrypt, referring respectively to the tool that mixes multiple transactions into one to anonymize transactions and the second-layer application that allows transactions to happen quickly off-chain.

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