The CEO of three major Bitcoin mining pools recently voiced the concerns that Bitcoin requires robust privacy to avoid a possible regulatory clampdown. Kevin Pan (Poolin CEO) shared these concerns in an interview with Bitcoin Magazine.
Poolin has barely completed one year, and it already holds a large portion of the total Bitcoin network hash rate. CTO Tianzhao Li and COO Fa Zhu created the mining pool. Previously, they were at the Bitcoin mining giant Bitmain’s subsidiary BTC.com.
Why Does Bitcoin Need Better Privacy?
People who have not deeply researched Bitcoin consider it an anonymous online currency. The truth is that Bitcoin’s privacy features are weak. Over the years, the lack of its privacy features led to serious issues in cryptocurrency’s fungibility, which is a prime property of money. Pan shared with Bitcoin Magazine that the real issue with the Bitcoin is privacy. And, there is no problem when privacy is resolved.
The major issue now is that if law enforcement and government departments start creating transaction addresses that may make particular transactions to be packaged. He emphasized that Bitcoin will be smooth by resolving the privacy issue. Addressing this issue, he said that Bitcoin miners can block transactions going or coming from certain addresses. The money of a Bitcoin’s users can be frozen if 51% of miners make up their mind not to process transactions from those specific users. And, if the support ratio is less than 51%, then the transactions would slow down than totally blocked. Pan explained that this issue is closely associated with Bitcoin mining centralization, as such a censorship attack is attainable if the government officials can track and support 51% of the network hash rate.
A rapid progress is being noticed on this mining centralization issue. New mining protocols may further lead to the decentralization of the transaction process. Taproot is an in-development refinement for Bitcoin, which is about to enable refinements to the existing level of privacy provided to the cryptocurrency’s users. For now, cryptocurrecy wallet like Samourai and Wasabi are available for the users seeking for robust security.