Snowden's 5 views on Bitcoin and cryptocurrencies: Bitcoin holders are being spied on

Edward Snowden, who became a whistleblower in 2013 for exposing the NSA ’s massive surveillance program, has a bittersweet relationship with blockchain. Snowden worked as a computer intelligence analyst in the Global Communications Division at the CIA headquarters in Langley, Virginia. Since he exposed the CIA’s explosive insider information, he has been hunted by the US government, and then he was granted political asylum in Russia and his life gradually stabilized. Hollywood also made his legendary history into a movie.

Snowden has a huge following, participates in public debates by appearing in the news, and through his social media handles, he expresses his thoughts on a variety of different issues.

His recent comments on the Biden administration’s $6 trillion stimulus plan, saying it’s “good for Bitcoin,” have generated a lot of interest among cryptocurrency enthusiasts. Of course, this is just one of many examples of Snowden talking about Bitcoin.

"If you are a scammer and you are using anything that will help you achieve your goals to deceive the ignorant masses, cryptocurrency will be the best."

Let’s analyze Snowden’s views on Bitcoin and cryptocurrencies in general over the years:

Bitcoin holders, you are being watched!

According to Edward Snowden, a fierce critic of government surveillance, governments around the world are using highly sophisticated surveillance and monitoring systems to collate massive public ledgers.

For these governments, Bitcoin’s public ledger is tantamount to a jackpot, which is why they often go to great lengths to use state-of-the-art surveillance technology to keep a close eye on it.

In response to this invasion of privacy, the most logical next innovation is the development of private blockchain cryptocurrencies like zcash, which provide privacy by default.

"So basically, if private blockchains like this aren't the norm in a few years, it won't be due to a lack of innovation or technological incompetence; rather, it will be due to over-regulation and a heavy-handed oversight system by governments."

Cryptocurrencies are here to stay, but Bitcoin won’t

Snowden believes that there are serious flaws in Bitcoin's design, such as its transparency, security, transaction rate, and speculative tendencies. But as Snowden pointed out, Bitcoin's biggest structural weakness is its public ledger, and if this problem is not solved, it will lead to the gradual disappearance of Bitcoin in the long run.

That’s because Snowden made privacy a priority. The public ledger is a record of every bitcoin transaction available to everyone at any time.

The existing mechanism of the Bitcoin blockchain is compromised by the need to balance the record of every transaction and simultaneously scale its capacity to process those transactions. This balancing act is incompatible with the idea of ​​having a long-lasting and sustainable ecosystem, as the blockchain can show everyone’s purchases throughout their lifetime, making mass adoption of Bitcoin unfeasible.

What is the value of Bitcoin?

Bitcoin's inherent design allows for mining to occur at a predetermined and naturally accelerating rate. In addition, there is a cap of 21 million Bitcoins. More than half have already been mined, prompting us to think that Bitcoin will soon become a fixed supply currency with very little room for further growth or expansion. In an interview, Snowden pointed out that there are minor differences between fiat currencies and cryptocurrencies, aside from the fact that fiat currencies are backed by states.

In contrast, Bitcoin’s value is determined by its limited supply of 21 million and its global acceptance. It is therefore safe to infer that Bitcoin has little fundamental and intrinsic value, but a highly variable speculative value based on true scarcity.

Bitcoin is slow

Bitcoin’s throughput is severely limited by factors such as block size and on-chain scaling. Snowden claims that Bitcoin’s transaction channels can only process about seven transactions per second. In contrast, payment gateways such as Visa and MasterCard typically process tens of thousands of transactions per second.

According to Snowden, this is a major flaw and limitation in the Bitcoin network. Therefore, in order to be effective for daily transactions and reduce the costs associated with the Bitcoin blockchain, there is an urgent need to fix the glitch with Bitcoin’s Lightning Network (LN) and increase its throughput to higher levels.

For Bitcoin to survive in the long term, there is an urgent need to address these critical issues and ensure that users do not have to wait hours for their transactions to be completed and spend around $20 in transaction fees so that transactions do not become congested.

Bitcoin does not meet fundamental privacy interests

Snowden's complaints about Bitcoin mainly revolve around the fact that transactions conducted through Bitcoin are not private because the ledger is easily accessible to everyone. He strongly believes that it should be designed to be private. He believes that a public ledger is extremely harmful and fundamentally negates the idea and concept of private money that can be freely used.

Public ledgers force a company’s ledger to be open to everyone, including its competitors, which could ultimately lead to a loss of leverage.
Combined with the issue of digital surveillance and the rise of authoritarian regimes around the world, Bitcoin appears to have failed across the board in terms of privacy, as it is highly vulnerable to attacks that can reveal a wide range of personal details of users. In extreme cases, it can reveal identities when user history is accessed through highly sophisticated surveillance systems.

Furthermore, he called on the CIA to develop a tool that would make Bitcoin mixing operations obsolete by performing extensive analysis of public ledgers, which effectively highlighted the fact that individual Bitcoins could have a “dirty” history attached to them, making them less fungible.

Summarize

• All in all, he boils it down to when cryptocurrencies like Bitcoin design competing systems and mechanisms to counter the threats to privacy posed by powerful institutions, governments, and authoritarian regimes with powerful surveillance technologies.

• It’s only a matter of time before governments, powerful entities, corrupt and resourceful individuals encroach upon these emerging technologies and outlaw them.

• The only sustainable way out is to design a competing system that addresses all of the shortcomings of the current system while appealing to a global consumer base. Until then, the only form of money that trumps all in terms of privacy is cash.