Privacy

The freedom to selectively reveal one’s self

Privacy on L1

Blockchain is public!

• L1 is pseudonymous, not anonymous
• Linking of addresses to identities (KYC)
• Tracking movement of identified coins
• IP tracking (less relevant)

Improve your L1 privacy

• Limit linkage of your identity to your coins
• Try obfuscating already identified coins
• Don't link 'anonymous' coins with already identified coins
• DON'T REUSE ADDRESSES
• Don't leak your IP

Privacy on LN

• Payments are (pretty) private
• Your identity (public key) never changes
• Announced channels are tied to your public key
• Probing is real
• Unannounced channels are (pretty) private

Welcome to the real world

• Privacy is hard
• Privacy is costly
• Privacy is not what your average user values!
• ... Let's look at the real world

Privacy at ACME: L1

• Address balances -> ACME's block explorer
• User leaks IP for his addresses
• User leaks identity on Fiat exchange
• No obfuscation techniques are being used

Privacy at ACME: LN

• User opens channels with ACME only
• User leaks on-chain addresses
• User leaks LN balance
• User leaks how much he sends
• Does not leak where he sends