The Breakdown Why Privacy Coins Aren’t Enough | The Breakdown
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Feb 3, 2026 Andrew M. Bailey, philosophy professor and Senior Fellow at the Bitcoin Policy Institute, discusses privacy in crypto and why on-chain privacy has limits. He contrasts protocol freedom with app-layer KYC choke points. He explores running nodes, mining as KYC-free onboarding, Monero vs Bitcoin tradeoffs, and ideas to make privacy economically attractive.
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On-Chain Privacy Is Only Part Of The Problem
- On-chain privacy alone is insufficient because users leak identity at onboarding and app layers.
- David Canellis argues acquisition and app-layer leaks often defeat ledger-level privacy.
Apps Create Soft Permission Barriers
- Accessing permissionless chains is often mediated by app-layer choke points that collect data.
- David explains wallets, RPCs and UIs create 'soft permission' even on permissionless protocols.
Run Your Own Node To Reduce Trust
- If you want to minimize dependence on third parties, run your own node or avoid hosted RPCs and UIs.
- David warns this is technically costly and often requires tradeoffs with privacy and convenience.