Full recording, 1h 18m. Plays from youtube-nocookie.com. Watch on YouTube
Jump to a chapter (20 chapters)
- Why read “The Eternal Value of Privacy”
- The $100 carpet that leaked 1 BTC
- Is privacy a basic human right?
- 1984 vs Kafka’s The Trial
- Did Satoshi make Bitcoin transparent on purpose?
- Why the base layer must be auditable
- The cypherpunk manifestos
- What is privacy? Three definitions
- Mass data collection and laws that change
- Fun fact: 2016 blocks is 6102 backwards
- Private payments on a public chain
- Is Lightning more secure? Liveness and watchtowers
- Invoices reveal your node: Tor, ecash, guard nodes
- Live demo: tracing a Lightning payment
- LN Proxy and 1ML
- Hardware wallet or dedicated laptop?
- The Intel Management Engine
- Who are we protecting our bitcoin from?
- How much trouble are you willing to go through?
- Private messengers: White Noise and Keychat
TL;DR
- “Nothing to hide” is the wrong question. Privacy is about power.
- Bitcoin is public on purpose. Privacy is added in layers on top.
- Custodial wallets can hand your payment history to anyone who asks.
- Pick your defences with a simple threat model, not fear.
Highlights
A $100 carpet that leaked 1 BTC. A community member bought a carpet for bitcoin on Facebook Marketplace and looked the on-chain payment up on a block explorer. It showed the seller’s wallet held a full bitcoin. Now a stranger knew what the seller looked like, where they lived and how much they had. That is what a privacy leak looks like in real life.
A live Lightning privacy test. We passed sats between four wallets on the call, then traced what each company could hand over if a government came knocking.
Live demo
We passed sats through 4 Lightning wallets
If a government asks, each company can hand over:
- the account behind each payment (email, phone)
- amounts, times and the node it went to next
- possibly your IP address
Do better: a self-custodial wallet like Phoenix, your own node behind Tor, and no email sign-up.
Key takeaways
1. “Nothing to hide” is the wrong question. Privacy is about the balance of power between you and whoever holds your data. Laws change, but data stays: Executive Order 6102 made owning gold illegal in the US overnight. Think of Kafka’s The Trial: the danger is them knowing everything about you while you know nothing about what they hold.
“Arguing that you don’t care about the right to privacy because you have nothing to hide is no different than saying you don’t care about free speech because you have nothing to say.”
Edward Snowden, quoted on the call
2. Bitcoin’s base layer is transparent on purpose. Anyone can verify the 21 million supply. Privacy is added in layers on top.
The big picture
Bitcoin privacy comes in layers
Hide in the crowd: the mint can’t tell which member paid which.
Fedimint · FediOff-chain and hard to trace for outsiders, but invoices reveal your node.
Own node · Tor · LN Proxy · self-custodial walletsPublic on purpose, so anyone can verify the 21 million supply.
Coin control · PayJoin · Silent Payments · CoinJoin3. Be productively paranoid, but practical. You can’t defend against everyone. Answer four questions, then pick your tools:
Your threat model
Resources shared
Reading
- The Eternal Value of Privacy, Bruce Schneier (2006)
- ‘I’ve Got Nothing to Hide’ and Other Misunderstandings of Privacy, Daniel J. Solove (2007)
- Why Privacy Matters, Privacy Guides
- A Cypherpunk’s Manifesto, Eric Hughes (1993)
- The Crypto Anarchist Manifesto, Timothy C. May (1988)
- Bitcoin: A Peer-to-Peer Electronic Cash System, Satoshi Nakamoto (2008)
- 1984 and The Trial, George Orwell, Franz Kafka: the two metaphors for surveillance (self-censorship) and data collection (power imbalance)
- Executive Order 6102, 1933: fun fact from the call is that Bitcoin’s difficulty adjusts every 2016 blocks, which is 6102 backwards
- Intel Management Engine: why a general-purpose laptop is a hard place to keep keys
Tools
- mempool.space: block explorer used in the carpet story
- 1ML: Lightning node explorer
- LN Proxy: wraps a Lightning invoice so payers don’t see your node
- RoboSats: private peer-to-peer exchange over Lightning, uses LN Proxy
- Fedimint: federated ecash mint protocol
- Fedi: app for Fedimint federations
- White Noise: private group chat built on Nostr
- Keychat: Nostr messenger with ecash and Lightning built in
Wallets
- Phoenix: self-custodial Lightning wallet
- Blink: custodial Lightning wallet used in the demo
- Primal: Nostr client with a built-in wallet, used in the demo
- Wallet of Satoshi: custodial Lightning wallet used in the demo
- BlueWallet: on-chain wallet that can freeze UTXOs
- Sparrow: desktop wallet with coin control
Code Orange
- Privacy Developer Track: every 1st and 3rd Tuesday, covering PayJoin, Silent Payments, Lightning and ecash
Ideas for future sessions: a White Noise vs Keychat comparison, and a Fedimint deep dive.
These notes are also on GitHub: code-orange-dev/session-notes. Free to share and reuse (CC0).