Let's skip the "shitcoins" debate. Would it be better if Bitcoin was "completely confidential" ™️?
Assuming it was like that from the beginning and that we had certainty of no inflation bugs being possible. Lots of hypotheticals, but to center the debate around full confidentiality vs. the state.
The idea comes from #1571256. The thought behind it is whether "privacy" coins are a bad idea because they become a clear target for the state or actually the opposite because they "force" people to opt-out. Maybe there are many other considerations.
The question is, if you had a magic wand and could make Bitcoin have been completely confidential from the beginning without bugs, would you?
Yes50.0%
No45.0%
Other (comment)5.0%
20 votes \ poll ended
I think that's the biggest problem right? You cannot prove that an inflation bug isn't being exploited. With Liquid it was obvious because of the size.
IMO keeping it pseudonymous on the base layer and privacy enhancing on upper layers is best.
Even under the assumption that an inflation bug is strictly impossible, my answer is still no — but not because I'm worried about state attacks, as the post suggests. Honestly, I don't think the state's preferences matter at all here. If their preferences determined what gets chosen as the next money, we would never have returned to gold after each of the hundreds or thousands of credit-money collapses throughout history. They hated it, but they couldn't stop it. Because value is created by citizens, not by governments — and if a government wants to keep its citizens working for it after they've rejected its money, it has to give them what they demand. So what governments actually do is not impose what they want, but confiscate real money step by step through various tricks. In fact, if Bitcoin were something a government could attack and break, there would have been no reason for it to have value in the first place.
The reason I still say no is scaling. For everyday payments se need a layer 2, and if the base layer is fully opaque, building one becomes very hard. I got here by thinking about Monero: too much was sacrificed in the pursuit of privacy. Huge transaction sizes, key images that can never be pruned, and most critically a UTXO set that can never shrink. That's fatal for scale — if it were ever actually used for everyday payments, it would push small nodes out fast. Ordinary people would give up running a node and delegate to specialists, which ironically violates the original goal head-on. And in Monero, that same philosophy is exactly what makes a layer 2 hard to build.
Of course, this is only as far as I know. If those problems were solved, I'm a yes — because I don't believe a government attack can stop real money from being repriced.
Under the hypothetical assumption of no inflation bug, yes, that would be the literal perfect digital cash. You don’t know how much is in my physical wallet and neither do I know what’s in yours.
However I’m told that can’t prove there’s no inflation bug without an open blockchain so I’m inclined to believe that it’s better to delegate privacy into a L2 instead.
Regardless of any inflation bugs, there is a trade-off between confidentiality and market cap, because governments don't like the former and will stop large players from getting involved.
For drug purchases there is XMR. We don't need Bitcoin to fill that use case.
Just look at Monero and Liquid for the answer
Without that hypothetical the answer is a clear "no" to me. But I'm curious about what people think independently of that.
No, transparency is a feature, Bitcoin is the nuclear inspection treaty for money
A completely confidential base layer would compromise Bitcoin's core value proposition: transparent, trustless mathematical auditability of the 21 million supply limit. In systems with encrypted balances, undetected inflation bugs remain a catastrophic existential threat. The cypherpunk solution is separating concerns: preserve rigid transparency on Layer 1 for universal supply verification, while achieving transactional unlinkability through collaborative protocols at the wallet layer. Using non-custodial WabiSabi implementations—such as Wasabi with custom coordinators or Ginger Wallet with its out-of-the-box coordinator —provides practical privacy without sacrificing on-chain verifiability or inviting targeted regulatory delisting.
I’d probably choose full confidentiality if we could guarantee the same monetary properties and no inflation bugs. Privacy by default changes the whole relationship between users, businesses, and the state, while still leaving room for people to voluntarily prove whatever they need to prove. The interesting question is whether making privacy the default would actually reduce pressure on Bitcoin, or simply make it a bigger target.