Economist and noted Bitcoin advocate Saifedean Ammous has reignited the debate over the role of privacy in digital currencies, questioning the demand for privacy-focused coins like Zcash compared to Bitcoin’s hard money principles.
Ammous questions privacy priority
In an interview with Cointelegraph, Ammous contrasted the demand for money that resists debasement with the demand for private transactions, stating:
“This is the question. How much demand is there for money that does not get debased versus how much demand is there for money that allows you to maintain your privacy?”
Ammous, author of The Bitcoin Standard, criticized Zcash’s 2016 trusted setup and expressed skepticism about its verifiability.
He highlighted concerns about the trade-off between anonymity and auditability:
“As I understand, the anonymity benefits come at the expense of the auditability benefits.”
Community reactions and debate
Key industry figures responded on social media.
Helius co-founder Mert Mumtaz argued that the privacy-versus-hard-money debate is a “false dichotomy,” suggesting both could and should coexist.
Barry Silbert, founder of Digital Currency Group, remarked:
“I’m old enough to remember when all hardcore Bitcoiners cared about privacy. Fortunately, many still do.”
Zcash co-founder Zooko Wilcox pointed out that Bitcoin’s transparent blockchain enabled authorities to track fundraiser transactions, raising questions about the limits of onchain privacy.
Evolving bitcoin privacy features
Ammous acknowledged that privacy on blockchains is evolving.
For Bitcoin, he suggested some privacy can be achieved through layer-2 protocols rather than onchain, stating:
“On the issue of privacy, it’s interesting how it’ll evolve. One unpopular opinion I have is that onchain privacy is very difficult and continues to get more difficult… people can get the privacy they want on second layers and I don’t think it compromises it.”
Hard money takes precedence
Ammous emphasized his belief that monetary soundness should come before privacy, reflecting his academic background:
“I think people would rather have hard money that is not private, over easy money that is private. The narrative that people want privacy in their money, I think is massively overblown in order to produce marketing for shitcoins.”
He concluded that resistance to debasement is the primary feature most valued in money, especially in the context of Bitcoin’s fixed supply.
