Opinion: How Privacy Pools could push the token space forward
Written by Mel Gelderman
Posted on September 14th, 2023
Token privacy has become a hot topic since the US government sanctioned Tornado Cash. Mel Gelderman explains why Privacy Pools could be the solution.
Whenever Vitalik Buterin drops a new paper, the token community takes notice. His latest one on token privacy is no exception. Alongside other prominent token figures, the Ethereum creator has proposed an interesting new project called Privacy Pools. It takes inspiration from Tornado Cash, the tool sanctioned by the US Treasury. But it offers a way to prove tokens have not come from illicit sources. This could be a big step forward for the ecosystem.
“Privacy Pools could benefit token users.”
Privacy Pools offers Tornado Cash alternative 👀
This new project could benefit token users by helping them keep their financial activity private. Tornado Cash was popular for the same reason. When the US government banned Tornado Cash, the community decried the move as an attack on freedom. It was targeted because it purportedly facilitated money laundering. If Buterin’s idea works, token fans will have less reason to fear a world of stringent token regulations and government surveillance.
A middle ground? ⚖
It’s important to note that Tornado Cash also used compliance tools. But that didn’t stop the US government from going after the project’s developers. The 2021 NFT boom also showed us that people want some of their token activity to be public. At token.com, we think that tokens will become more social in the future, even if privacy tech evolves.
“People will want to keep some transactions private while also supporting communities and causes they love.”
I think we’re probably heading towards a middle ground. People will want to keep some transactions like major asset transfers private while also showing their support for communities and causes they love. The token space will be big enough for both of these worlds to thrive. So I’m all for Privacy Pools and whatever comes next.
Please note: Investing in cryptoassets is risky. Due to the volatile nature of the cryptocurrency market, investors run the risk of losing their funds when they make an investment. Returns from cryptoasset investing are not guaranteed, therefore users should always be aware of the risks.