As an analyst with a background in cryptocurrencies and privacy technologies, I find the announcement of zkSNACKs discontinuing its CoinJoin coordination service a significant development that could impact Bitcoin’s ecosystem significantly. Max Hillebrand’s decision was likely driven by regulatory uncertainty in the United States, which has long been grappling with how to approach cryptocurrencies and privacy-enhancing tools.
In simple terms, the privacy feature that enhances Bitcoin transactions anonymously through zkSNACKs’ CoinJoin coordination service is set to be discontinued, affecting the Bitcoin ecosystem.
Max Hillebrand, the CEO of zkSNACKs, shared with CryptoMoon in an exclusive interview after the announcement, revealing that this decision was taken to adhere to the most recent legal and regulatory requirements in the US.
Due to the ambiguous regulatory landscape in the United States regarding cryptocurrencies and the application of privacy-enhancing technologies, I was compelled to shut down the CoinJoin service.
As a researcher studying the impact of government surveillance, I was among those expressing regret upon learning that the NSA’s controversial program had been discontinued.
As a Bitcoin analyst, I’d like to point out that the CEO of zkSNACKs expressed concerns about the inevitable loss of an essential service in the Bitcoin ecosystem. This feature allowed users to enhance their transaction privacy via coinjoin mechanics.
“Bitcoin privacy will survive, but cutting back the support from zkSNACKs for Bitcoin developers and privacy educators is a regrettable setback.”
Hillebrand additionally verified that the Bitcoin wallet, Wasabi Wallet, created by zkSNACKs with integrated CoinJoin feature, will carry on working like a standard Bitcoin wallet. Users are still able to generate private keys for receiving and transferring Bitcoin.
Coinjoins offer complete privacy
In spite of the shutdown of the CoinJoin service, Hillebrand asserted that Wasabi’s client-side filtering mechanism, Tor compatibility, and personalized coin selection continue to ensure substantial privacy for users. Nevertheless, the unrivaled confidentiality offered by CoinJoins may no longer be attainable in the future.
“Users can’t achieve total anonymity on the Bitcoin blockchain without utilizing CoinJoins, according to Hillebrand’s admission.”
The CEO of zkSNACKs expressed caution about predicting if privacy-focused technologies like those targeting protocols and CoinJoin services would face regulatory action in countries beyond the United States.
When zkSNACK shuts down its CoinJoin coordination service, it will have ripple effects on various products and services in the ecosystem. Specifically, Trezor Suite and BTCPayServer will no longer be able to provide this feature to their users starting from June 2024.
As a crypto market analyst, I’ve noticed that CryptoMoon has contacted Trezor for their perspective regarding the recent shutdown of zkSNACKs’ CoinJoin service and if they plan to integrate any alternative Bitcoin privacy solutions for their user base.
How does CoinJoin work?
In a comprehensive conversation with CryptoMoon at Bitcoin Amsterdam in 2023, Hillebrand delved deep into the intricacies of zkSNACKS’ CoinJoin service.
According to Hillebrand’s explanation, a CoinJoin operation enables the blending of various Bitcoin transactions by merging multiple inputs and outputs from different users into a solitary transaction. This process renders it challenging for external viewers to discern intricate transaction details.
In 2018, Wasabi Wallet made its debut after thorough investigation. This wallet ensures anonymity through Tor, adopts a light client model for balance inquiries while maintaining privacy, and harnesses block filters to swiftly and securely authenticate transactions without the need to acquire the entire Bitcoin blockchain.
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2024-05-06 12:38