Edward Snowden, a former U.S. National Security Agency and CIA contractor-turned whistleblower, on Thursday criticized what he called bitcoin's lack of privacy protections. 

He said that the growth of cryptocurrency exchanges, financial services, and other applications mediating the crypto-economy have jeopardized bitcoin's ability to serve as a pure peer-to-peer currency. 

"You have to make the idea that cryptocurrency is private by design," he said.  

The privacy advocate, who currently lives in Russia and is wanted by the United States government for leaking classified documents and stealing government property, spoke at Decrypt's Ethereal Summit, a virtual conference for blockchain investors, technologists, and entrepreneurs. 

Snowden commended so-called "privacy coins" such as Monero and Zcash, which allow for fully anonymous transactions but have struggled to gain legitimacy. 

The longer core developers wait to address this, he added, the harder it will be, stressing that leaders in the space need to commit to privacy now, even as they benefit financially from the current system. 

"The problem with the cryptocurrency space at the largest scale today is the people who make these decisions have the biggest stake in the system, and the system has benefited from the fact that it has not been regulated out of existence," he said. 

In other words, as governments look to regulate cryptocurrencies — a fundamental red line for those who see decentralization as the whole point of alternative digital currencies — there will be an incentive among power brokers in the space, such as crypto-exchanges, to cooperate with new regulatory restrictions, even if they compromise users' privacy.  

"The idea of the bitcoin protocol — the peer-to-peer, electronic hash system — is the idea that we can send these payments to anyone permissionlessly," he said. "This is true if it's in your wallet. But how do people fill their wallets? They get it through exchanges, and these guys are imposing permissioning steps that are intermediately to your transaction."

Snowden called for a kind of "purification" that would remove identification information from the cryptocurrency economy. 

Speaking to an audience of decentralized finance developers and entrepreneurs, he added that "getting rich and doing something great are distinct goals." 

Share:
More In Business
Is U.S. Restaurants’ Breakfast Boom Contributing to High Egg Prices?
It’s a chicken-and-egg problem: Restaurants are struggling with record-high U.S. egg prices, but their omelets, scrambles and huevos rancheros may be part of the problem. Breakfast is booming at U.S. eateries. First Watch, a restaurant chain that serves breakfast, brunch and lunch, nearly quadrupled its locations over the past decade to 570. Fast-food chains like Starbucks and Wendy's added more egg-filled breakfast items. In normal times, egg producers could meet the demand. But a bird flu outbreak that has forced them to slaughter their flocks is making supplies scarcer and pushing up prices. Some restaurants like Waffle House have added a surcharge to offset their costs.
Trump Administration Shutters Consumer Protection Agency
The Trump administration has ordered the Consumer Financial Protection Bureau to stop nearly all its work, effectively shutting down the agency that was created to protect consumers after the 2008 financial crisis and subprime mortgage-lending scandal. Russell Vought is the newly installed director of the Office of Management and Budget. Vought directed the CFPB in a Saturday night email to stop work on proposed rules, to suspend the effective dates on any rules that were finalized but not yet effective, and to stop investigative work and not begin any new investigations. The agency has been a target of conservatives since President Barack Obama created it following the 2007-2008 financial crisis.
Load More