Ethereum's Vitalik Buterin Argues for Blockchain 'Privacy Pools' to Weed Out Criminals

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By BitcoinWiki News

Key Takeaways:

  • Ethereum’s Vitalik Buterin advocates for the use of blockchain “privacy pools” to filter out criminals linked to BTC and Bitcoin.
  • Privacy pools would allow individuals to pool their transactions together, making it harder for outside observers to determine the sender and recipient.
  • By creating a pool, users can collectively obfuscate the origin and destination of their BTC or Bitcoin, reducing the risk of criminal activities.
  • Buterin argues that privacy pools can help tackle the negative association of criminal activities with cryptocurrencies that rely on public blockchains.
  • The Ethereum co-founder suggests that privacy pools should follow a democratic governance model to maintain user trust.
  • These privacy-enhancing techniques would make it more challenging for authorities to track illegal activities or attribute them to specific individuals.
  • Although Buterin acknowledges the desire for transparency in some instances, he believes privacy pools can strike a balance between individual privacy and regulatory requirements.
  • Furthermore, privacy pools could help foster mainstream acceptance of cryptocurrencies like BTC and Bitcoin by addressing concerns about traceability and illicit usage.

Ethereum’s Vitalik Buterin Argues for Blockchain ‘Privacy Pools’ to Weed Out Criminals


Ethereum co-founder Vitalik Buterin has proposed a solution to the issue of privacy on public blockchains by introducing ‘privacy pools’. He argues that these privacy pools would significantly reduce the ability of criminals to exploit blockchain technology for illicit activities.

The Problem of Privacy on Public Blockchains

Public blockchains, such as Ethereum, are known for their transparency and immutability. While this provides several benefits, including accountability and trust, it also poses challenges when it comes to preserving user privacy. Every transaction on a public blockchain is visible to anyone, making it difficult for users to keep their financial and personal information private.

The Concept of Privacy Pools

Privacy pools, as proposed by Vitalik Buterin, are designed to provide a layer of privacy within public blockchains. These pools would group together multiple encrypted transactions, obscuring their contents and making it harder for observers to track individual transactions.

How Privacy Pools Work

Privacy pools would utilize cryptographic techniques, such as zero-knowledge proofs and ring signatures, to aggregate numerous transactions into a single pool. Once in the pool, the transactions would become indistinguishable from one another, making it nearly impossible to trace individual transactions back to their senders or recipients.

However, the privacy pools would still retain the immutability and transparency of the underlying blockchain. This means that external observers can still verify that the transactions within a privacy pool are valid and that no double-spending or other fraudulent activities are taking place.

Benefits and Trade-Offs

Implementing privacy pools on public blockchains would provide several benefits. Firstly, it would protect users’ financial and personal information from being publicly available on the blockchain. This could encourage broader adoption of blockchain technology, as individuals and businesses would have more confidence in the privacy of their transactions.

Secondly, privacy pools could help mitigate the use of public blockchains for illicit activities. By obscuring transaction details, it would become significantly more challenging for criminals to use the blockchain for money laundering, ransomware attacks, or other nefarious purposes.

However, there are also trade-offs associated with implementing privacy pools. One concern is the potential increase in transaction fees and computational overhead. Privacy-enhancing cryptographic techniques require more computational resources, which could result in slower transaction processing times and higher costs.

Challenges and Considerations

Implementing privacy pools on public blockchains would require careful consideration of certain challenges. Firstly, there is a fine balance between privacy and transparency. While privacy pools would enhance privacy, they must not compromise the underlying transparency and trust that public blockchains provide.

Another challenge is ensuring the integrity of privacy pools. Since transactions within a privacy pool are obscured, fraudulent or malicious activities within the pool could go undetected. Mechanisms for auditing and ensuring the validity of transactions within privacy pools would need to be established.


Vitalik Buterin’s proposal for privacy pools on public blockchains offers a potential solution to the issue of privacy while maintaining the transparency and trust that blockchains provide. By obscuring transaction details, privacy pools could significantly reduce the ability of criminals to exploit blockchain technology for illicit activities. However, implementing privacy pools would require careful consideration of trade-offs, challenges, and safeguards to ensure the continued integrity of public blockchains.

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