Privacy should be default and not an optional property - even when using stealth addresses or confidential transactions, your bitcoin balance and transactions in the wallet are transparent to anyone. All of these are awful characteristics for a currency.

We all live in post Snowden era of full spectrum surveillance, and ridiculous anti-cash propaganda. Cash is government’s legal tender and is protected by law. But the implacable war against cash payments waged by big government and banks worldwide is gaining new momentum. The excuse or reason given by our rulers for suppressing cash is to keep society safe from terrorists, tax evaders, money launderers, and other villains, real or fictional. But their main and real intention is to limit or even prohibit cash, in order to force the public at large to make payments through their financial system in order to enforce their unstable fractional-reserve banks and, more importantly, to expand the ability of governments to monitor on and keep track of their citizens’ private financial transactions.

Fungibility is an essential property of money that makes every unit of this currency interchangeable. One can pay the service or a product with a coin or a paper note, and the receiver does not care where it came from, as long as this banknote or coin isn’t counterfeited, he will accept it and exchange products or services for that banknote. This is how physical cash works. Creating Bitcoin fungibility is not a trivial task, as far as I understand. There is high probability that anyone who interacts with you knows exact amount of bitcoins in your wallet. Tor can not keep private your wallet linkage to other wallets. Real question is -- How we can enforce fungibility on a transparent blockchain where every transaction is visible?

  • I would like to see someone explain how they can know the exact amount of bitcoins in my wallet. Transaction linkage does not define borders between wallets, and it is only feasible to know which transactions re-use the same address to presume linkage within a single wallet. At best you get a single point partial wallet state once the utxo's are spent. No-one knows what other utxo's are mine.
    – Willtech
    Commented Mar 18, 2018 at 6:08

3 Answers 3


Pieter Wuille posted an answer earlier today that covers some of what is already being explored in the pipeline for additional privacy.

... but improvements are continuously being worked on (search for things like MAST, TumbleBit, Layer-2 payments, Taproot, signature aggregation, scriptless scripts, confidential transactions, ...)

In addition, further ideas like change obfuscation have recently been seen on the [bitcoin-dev] mailing list.

There will no doubt be even further suggestions in time.

  • Bitcoin Fungibility does not exist. One can not say "I don't know where my bitcoins are coming from."
    – jjpcondor
    Commented Mar 18, 2018 at 6:24
  • 2
    @jjpcondor Neither can one say "I don't know where my cash is coming from." any more than that. Even if it arrives in an anonymous envelop we presume it is not a donation and some customer instructions are attached. Yes, you can see with Bitcoin how a utxo was created but, it is not infinitely possible to link utxo's to individuals, not even currently. To link utxo's to individuals there must be mechanism's of disclosure.
    – Willtech
    Commented Mar 18, 2018 at 6:31

yeah, a lot of requirements, where comparison to reality doesn't match. But at first: the question is probably not the right one for this forum - mostly opinion based... IMHO it would find a better home in a discussion board, where it can be discussed back and forth. Bitcointalk.org would be a good candidate. But I can't resist, it's too fascinating! Btw: in your enumeration you forgot pornography :-)

But their main and real intention ...

This is a suspicion, and hardly to be proved. But I am with you: war on money has started, because in rich countries there is a tremendous dependency on the taxes of less and less employees (usually in the working class). These jobs are now in eastern Asia... As this is reducing income for the government, they print enormous amounts of money - out of thin air. Along with the private banks - out of thin air. And looking at the laws for taxes, they have been changed to the advantage of the rich class in the last 35 years. In the US you are already a tax slave of your country! Even working in a foreign country, you still pay taxes "home" - I think this is what is called land of liberty and freedom. Anyhow: along with the tax issues there is also a value issue. The major currencies have all lost value over the years, roughly doubling the prices every 15-20 years (inflation). Along with extreme debts (China is holding majority of US debts), a new dependency came into the game in the last 20 years. Pressure to get an understanding of money flow is enormous, so not only individuals (slaves of the governments) feel the pressure, also the international relationships gets burdened... Pessimistic approach would be to see the end of this capitalistic system, having burnt all its fuel, and now starting to implode.

Fungibility is an essential property of money

yes. But was Bitcoin designed to be what you state? I don't think so. It was a way to improve money transfer over the internet circumventing banking systems and intermediaries. This goal has been achieved, along with a minimal set of privacy, by not re-using addresses. And certainly not buying with bitcoin over the internet :-) Now again the reality is this stupid "HODL" idea (based on scarcity of a value), and if at the end everyone holds their coins, it has no value cause it is out of circulation. But then it is secure:-)

What you are touching is maybe Monero or Zcash and similiar, and the ideas are already exchanged in the bitcoin world. Elements Alpha sidechains is a playground for hardcore bitcoin devs, to evaluate new features, Schnorr and CT are already there. I am confident, that we'll see more coming, as requirements increase.

Security might not be the number one goal for everyone: Looking at the way how many people used Windows over all the years, knowing it would be vulnerable, patching it all the time, and still postulating to be secure is a joke. Now all these people go into mobile, and provide their data for nothing - no need to spy on the phones anymore (hence less viruses). The vast majority of people want to have things easy and working, and not complicated to be managed. And when it comes to security, it gets tough...

Why high level bitcoin security with fungibility is not yet here (my speculation now)? Too many people just want to make "quick money". And I don't mean it negative (I might even be one of them). Too many people are not even interested in privacy. Looking at the posts in reddit, and to a certain extent here, more and more questions are exchange specific for 18year old graduates, and not technological (wow, what a complaint!). The necessity for bitcoin to provide privacy seems to decay, people don't care if bitcoin is a vehicle to transport value over the internet, cause it is more profitable to speculate with crypto currency's values.

O tempora o mores!

How we can enforce fungibility on a transparent blockchain where every transaction is visible?

You can't - when you enforce s.th. on bitcoin, then you loose the censorship free system. No. Please. Really!


I can tell you how people's privacy is revealed, so that scammers can be traced often. By considering all points you maximize your privacy while using bitcoin:

  1. connect your wallet to your own Bitcoin node, not to unknown nodes
  2. never re-use addresses
  3. Stay in the Bitcoin world, so never use central exchanges to buy or sell bitcoin
  4. Use mixers which are open source and dezentral
  5. Never co-spend mixed coins with other coins from you otherwise the mixing was a waste of time. The same applies if you exchange bitcoin into Monero forth and back.
  6. Make sure the wallet you're using is trusted
  7. If using software wallets (risky) make sure that you can control the priv key and never use it if another person opened it for you and handed over with the security advice to change the password (he knows the seed and will empty your wallet or knows the addresses)
  8. If you send Bitcoin to third parties address use the same address type if possible (e.g. send BTC from a 1.... address to a 1... address and from a 3... to a 3... address and from a bc1... to a bc1... address.
  9. Use payjoin transactions if possible
  10. The more output addresses your transactions have the more difficult is it to reveal te privacy.
  11. Hide your wallets IP address behind TOR
  12. Find a safe way to protect your private keys and seeds.
  • In point 8, even if you are spending from a different type of address, using change address type same as other outputs in the transaction helps.
    – user103136
    Commented Jun 24, 2021 at 21:27
  • 1
    You're right. Especially if there are more than two outputs it's getting difficult to find out the change address.
    – tempo
    Commented Jun 25, 2021 at 19:49

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