TD₿: Your Guide for Using Bitcoin Privately by Rijndael and Mark Goodwin
TL;DR Although it requires a little technical know-how, it is possible to use Bitcoin privately today.
Hey Bitcoiners,
Big news came down this week from the Office of Foreign Assets Control (OFAC) when they announced sanctions on a piece of open-source code for the first time in history.
Tornado.cash is a smart contract tool that is designed to allow individuals to mix ETH transactions in order to obfuscate the origin of any given transaction. On Monday, OFAC added Tornado.cash transactions to the U.S. sanctions list, effectively blocking $437 million worth of funds instantly, without warning.
U.S. officials justified this action by stating that the mixer was used for nefarious activities, including being used by North Korean hacking groups. However, in truth, the software was used by many everyday Americans simply trying to protect their privacy online.
Furthermore, this is the first time OFAC has ever sanctioned not a country, group, or individual, but a piece of code. This sets a scary precedent.
This was an attack on digital privacy and an attack on free speech. In the landmark case Bernstein vs. DOJ, code was established as a form of speech and thus protected by the First Amendment. This action by OFAC is arguably a violation of the First Amendment.
In addition, many questions remain as to how OFAC will even enforce this ruling. According to this action, any person or entity who engages or transacts with Tornado.cash will be subject to fines and even criminal prosecution. But how does one stop someone from sending you some Tornado.cash mixed ETH?
This was on full display when an anonymous Twitter account made a mockery of this action when they began to send Tornado.cash ETH to famous celebrities and industry leaders including Jimmy Fallon, Brian Armstrong, and Shaq.
Technically, all of these individuals are now violating U.S. sanctions laws. This is why sanctioning a neutral open-source tool is a hopeless, silly endeavor.
This event sheds light on a battle that has been going on for decades…the battle for privacy and liberty in the digital age. It forces Bitcoiners to look in the mirror and think about how we can improve Bitcoin’s privacy as these State-sponsored attacks are likely to become even more prominent in the future.
The good news is that Bitcoin can already be used privately today. Rijndael and Mark Goodwin wrote this guide to help users learn how to use Bitcoin more privately when sending or receiving transactions. (07/20/2022)
The fight for online privacy is a battle that transcends party lines. This attack on Tornado.cash is an attack on the rights of every individual and should serve as a wake-up call for anyone who believes in freedom of speech on the Internet.
Tick tock next block,
Cory Klippsten
PS - You can read more about the specifics of OFAC actions against Tornado.cash by looking through this thread.
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