Mercury Wallet is pitching itself as Bitcoin’s answer to scalability, privacy

Software engineer and privacy advocate Nicholas Gregory recently sat down with CryptoSlate to discuss Bitcoin privacy and developments at privacy-focused Mercury Wallet.

The talk was particularly pertinent considering recent events at Tornado Cash, which have fueled debate on Bitcoin’s superiority, at least from a censorship resistance standpoint.

With the Merge fast approaching, censorship risk remains an unresolved issue for Ethereum investors. Particularly as the switch to Proof-of-Stake potentially further exposes the protocol to sanction compliance, but this time via staking validators.

While Bitcoin is not 100% immune from censorship risk, for example, risk exposure via CoinJoin or the Lightning Network, the general sentiment is that Proof-of-Work mechanisms remain more robust when it comes to operating trustlessly.

Tornado Cash fallout reiterates importance of privacy

The U.S. Treasury added Tornado Cash to its Office of Foreign Assets Control (OFAC) list on August 8. Officials alleged that the crypto mixer was responsible for laundering over $7 billion in illicit tokens since 2019.

The fallout saw Tornado Cash’s USDC wallets blacklisted, the devs booted off Github, and the website was taken down. Adding insult to injury, addresses interacting with the blacklisted wallets were also flagged. Tron founder Justin Sun tweeted that Aave had blocked his account after a malicious prankster sent him 0.1 ETH from a Tornado Cash address.

This sledgehammer approach was intended to isolate Tornado Cash and penalize every entity that had used the protocol. However, as the non-profit organization Coin Center pointed out, the sanctions were a gross overreach of legal authority that potentially infringed on human rights and free speech. More so, as the protocol, being a neutral tool does not fit the definition of a sanctionable person.

“This action potentially violates constitutional rights to due process and free speech, and that OFAC has not adequately acted to mitigate the foreseeable impact its action would have on innocent Americans.”

Critics further argued that the OFAC actions also assumed every Tornado Cash user had criminal intent. Yet, Ethereum co-founder Vitalik Buterin said he used the protocol in an innocent way when donating to the Ukrainian fundraising campaign.

Statechain technology for privacy

With that, protecting personal privacy in the face of governmental overreach becomes all the more important, and Gregory thinks he may have the solution in…