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Unchained

Could This Vitalik-Backed Protocol Bring Privacy to a Regulated Crypto World? - Ep. 542

Sep 8, 2023
Jacob Illum, Chief Scientist at Chainalysis, co-authors a groundbreaking paper on privacy pools designed to enhance crypto anonymity in a regulatory landscape. He delves into how this protocol, backed by Vitalik Buterin, separates legitimate funds from illicit ones, addressing shortcomings of Tornado Cash. Illum explains zero-knowledge proofs as critical technology behind the pools and raises intriguing discussions on user privacy, the role of association set providers, and managing potential risks associated with bad addresses.
38:22

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

  • Privacy pools, a smart contract protocol, can help differentiate legitimate funds from those used in criminal activities on the blockchain.
  • Association set providers play a crucial role in privacy pools, allowing users to selectively associate their funds with specific sets.

Deep dives

Importance of Privacy for Blockchain Adoption

The podcast episode discusses the importance of privacy in blockchain adoption. The speaker believes that everyone should have the right to use blockchain in their desired way. The speaker argues that providing privacy options, such as association sets with withdrawals, can lead to greater adoption of blockchain. The recent incidents involving privacy tools like Tornado Cash and government sanctions have highlighted the need for technological solutions. The proposed solution is the concept of privacy pools, where users can selectively choose to associate or dissociate their funds with specific sets. This offers users the flexibility to disassociate from potentially controversial activities while still utilizing blockchain technology.

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