Buterin calls for increased cryptocurrency privacy amid AI and government risks
In light of advancing AI and surveillance technology, Vitalik Buterin, co-founder of Ethereum, champions the need for stronger privacy measures to preserve decentralization.
The world is evolving at an astonishing rate. Artificial intelligence is progressing quicker than most of us can comprehend, altering nearly every aspect of our daily lives. Alongside this AI revolution comes a rising concern: privacy.
When it comes to cryptocurrency, the topic of privacy has always been incredibly complex. It’s been a subject of endless debate — often heated — without a clear resolution.
In a recent blog entry, Vitalik Buterin expressed his belief that privacy is more crucial now than ever, suggesting that the key issue lies in preventing power from falling into the wrong hands.
Buterin remarked that technology has advanced to the point where society could soon face the reality of AI potentially “reading” people’s thoughts, raising significant implications. He warns that we could end up in a future where our most intimate data — our thoughts — might be scrutinized and weaponized against us.
“AI is greatly increasing capabilities for centralized data collection and analysis while greatly expanding the scope of data that we share voluntarily. In the future, newer technologies like brain-computer interfaces bring further challenges: we may be literally talking about AI reading our minds.”
Vitalik Buterin
‘Defining challenges of our time’
Buterin emphasizes that the concerns extend beyond technology itself. He highlights the dangers posed by global politics and power dynamics. He noted that from payment processors to telecommunications firms, numerous entities hold onto your personal information.
“In general, policing all of these entities at a sufficient level of rigor that ensures that they truly have a high level of care for user data is so effort intensive on both the watcher and the watched that it is likely incompatible with maintaining a competitive free market.”
Vitalik Buterin
To complicate matters further, not all governments can be relied upon. The Ethereum founder warns that a regime that is currently stable and values privacy may not always remain that way.
In a discussion with crypto.news, Ari Redbord, TRM’s global head of policy and former federal prosecutor, acknowledged that the delicate balance between privacy and security in cryptocurrency has become “one of the defining challenges of our time.”
“After 9/11, that debate played out in airports and public spaces — today, it’s happening on blockchains. The goal is to protect the rights of lawful users to transact privately while preventing rogue regimes, scammers, and cartels from exploiting pseudonymity to move illicit funds.”
Ari Redbord
‘Not a choice between security and privacy’
Despite the challenges, Buterin asserts that solutions are already in development. One such solution is zero-knowledge proof of personhood, which verifies an individual’s unique identity without disclosing personal details. Another is Privacy Pools, allowing users to demonstrate the legitimacy of their funds without revealing private information. With these pools, users can prove their coins haven’t originated from known hacks or illicit activities. Technologies like Railgun, which implements Privacy Pools, are already operational, Buterin noted.
Furthermore, the Canadian computer scientist introduces the concept of on-device anti-fraud scanning, which evaluates incoming messages for scams or disinformation while maintaining user privacy.
When questioned about the potential misuse of privacy-centric technology by cybercriminals, Redbord emphasized that the focus should not be on an either-or scenario between privacy and security, but rather on “building with both in mind.”
“With tools like blockchain intelligence, zero-knowledge proofs, digital ID, privacy protocols, and smart contracts, we can thread that needle and build a financial system that is both open and safe. In fact, it is not a choice between security and privacy when it comes to blockchains; the technology uniquely allows us to have both.”
Ari Redbord
Addressing proof of provenance for physical goods, Buterin proposes that employing blockchain and zero-knowledge proofs could enable customers to trace a product’s manufacturing history and its environmental effects without exposing its entire supply chain, thus allowing for the pricing of environmental externalities without disclosing the supply chain specifics.
In the grand scheme, Buterin warns that the “most pressing risk of near-future technology is that privacy will reach all-time lows, especially in an unequal manner where the most powerful individuals and nations acquire extensive data on everyone, while the majority will have access to almost nothing.” To combat this, he argues, supporting privacy for all and ensuring that essential tools are open source, universal, reliable, and safe “is one of the important challenges of our time.”