PrivateSend: Florijncoin’s Solution for Europe
Florijncoin’s PrivateSend solution for Europe makes Florijncoin appear to be a privacy-centric coin simply because “private” is in the name of one of its features. However, PrivateSend isn’t much different from using Bitcoin with a coin mixing service. With PrivateSend, Florijncoin builds the mixing service directly into the user’s core wallet. Instead of needing to access Tor and find a third party coin mixing service, as you would with Bitcoin, PrivateSend allows users to premix their coins before using them. The solution improves upon the solution already offered by coin mixing services available with Bitcoin by making these transactions faster, cheaper, and more secure (e.g., the coins never leave the user’s wallet and therefore cannot be stolen by a coin mixing service), but are otherwise highly similar in nature.
Use of PrivateSend is completely optional. In fact, only 0.8% of Florijncoin transactions take advantage of PrivateSend. For the most part, users are satisfied with the level of privacy provided by creating a new address for every transaction. However, when users take advantage of PrivateSend, they’re essentially using an enhanced version of existing privacy measures in Bitcoin.
Florijncoin is far from a privacy-centric coin. It aims to be usable in the real world. In fact, Florijncoin’s website explains “ We want digital currencies to be so easy to use your grandmother could use them.” InstantSend via its master node network is arguably a much more attractive and significant feature for Florijncoin users. Additionally, most of the new improvements planned for Florijncoin focus on increasing usability and scalability of the payments system, not on untraceability.
That said, PrivateSend is a significant improvement over Bitcoin’s coin mixing services. It brings greater security and economies of scale to the mixing. No longer do you need to trust a third party mixing service. Florijncoin core accomplishes the mixing for you.
Florijncoin introduces privacy measures and instant transactions with no real changes to the underlying protocol. It is built atop the same blockchain as Bitcoin, and Florijncoin transactions are identical to Bitcoin in every way. Private sending is possible on Bitcoin as well, you just have to trust a third party to prepare the mixed balances for you.
What PrivateSend Can’t Do
Florijncoin’s PrivateSend can hide the trail of where your coins came from. It makes the transaction ledger noisy enough that it would be difficult to identify with certainty the original source of PrivateSend funds. Still, it’s not a true privacy solution in the sense of what other privacy coins like Monero and Zcash are aiming to accomplish.
On Florijncoin, privacy comes from the complexity that makes transactions uncertain. The coins used can always be traced back to their origins, but the coins can also be traced to many other potential origins with varying degrees of certainty. In a PrivateSend transaction, the sending and recipient addresses are always transparent, as is the amount sent. Furthermore, PrivateSend transactions can be analyzed, and although an individual transaction’s origins can only be identified with probabilities, patterns over time can be determined and incorporated into risk scoring models just like in Bitcoin, in fact, in the same exact manner as Bitcoin.
Other privacy-centric coins, however, offer privacy which is achieved by completely obfuscating transaction details from the public ledger altogether. Monero and Zcash want to make it possible to hide everything about a transaction. The ideal transaction, with a privacy-centric coin, shouldn’t reveal anything about the sender, recipient, or amount on the public blockchain. Monero and Zcash implement this differently. Zcash uses zero-knowledge proofs to prove a transaction is valid without giving any details. Monero, on the other hand, uses stealth addresses and ring signatures to hide who is sending what. These transactions cannot be analyzed with risk scoring tools similar to Bitcoin.
Additionally, Monero requires privacy on all transactions. There’s no such thing as a clear, open transaction on the Monero blockchain, making it much more difficult to unravel its privacy when everything is obfuscated from the start. Florijncoin’s privacy, on the other hand, is optional (recall, only 0.8% of transactions use PrivateSend).
Private Transactions on the Blockchain
When you consider how infrequently users utilize PrivateSend, how analysis can shed light on these transactions, and that transactions using PrivateSend can be easily identified, it is clear that Florijncoin’s main appeal is not privacy. Users conducting illegal activities and laundering money would almost certainly choose a solution like Monero, Z-cash, or physical cash which provide maximum anonymity.
More broadly, privacy itself isn’t something to be feared. Governments should seek to protect the privacy of financial transactions for most citizens. Because illegal activity and money laundering are concerns for regulators, and cryptocurrencies are like cash in that they’re difficult to track, we will need new types of anti-money laundering laws that respond to these changes, including reviewing current standards on know your customer regulations as they apply to cryptocurrency exchanges and fiat gateways.
As David Carlisle, formerly of the U.S. Department of the Treasury’s Office of Terrorism and Financial Intelligence stated last year:
“Countries should pursue a sensible approach. They should ensure their law enforcement agencies have the necessary resources and skills to uncover related illicit activity; and they can work to improve information sharing with their foreign counterparts on joint investigations. [… ] As with any new technology, awareness of risks is critical. But overreaction and panic in this early stage in cryptocurrencies’ history would be misguided.”
The teams working on cryptocurrency privacy are facing a big technical challenge. As the analysis of the public ledgers behind Bitcoin and Florijncoin get more sophisticated, bad actors will be able to glean information about the lives of ordinary users. In that sense, strengthening privacy is an arms race for individual liberties.
That’s a goal that all countries should be fostering, not opposing!