ethereum founder Vitalik Buterin made headlines on Monday after his latest on-chain move. Buterin’s transfer of $1 million worth of eth to privacy protocol Railgun caught the community’s attention and reignited the debate over the use of privacy tools.
Vitalik transfers 400 eth to Privacy Protocol
On Monday, online reports revealed that Vitalik Buterin again transferred over $1 million to Railgun. The project is an ethereum Virtual Machine (EVM) privacy protocol that uses zero-knowledge (ZK) cryptography to enable private use of DeFi and smart contracts.
According to on-chain analytics firm SpotOnChain, Buterin sent 400 eth, worth approximately $1.054 billion, to the privacy protocol earlier today. Prior to the transaction, he made a test transfer of 0.0998 eth, worth $2,629.
His latest transfer to Railgun was one of several times he used the privacy tool. According to the report, Buterin has sent 662 eth, or $1.91 million, to the protocol over the past 10 months.
Vitalik Buterin's transfers to Railgun. Source: x.com/spotonchain/status/1825398787155939832" target="_blank" rel="noopener nofollow">SpotOnChain on x
Earlier this year, Buterin made a transfer of 100 eth to Railgun that sparked an online debate. Some community members questioned the reasons behind the transfer and criticized his desire to have a private address.
However, many users supported Buterin's use of privacy tools, as his every move on-chain is subject to scrutiny and speculation. At the time, he addressed the criticism by stating that “privacy is normal” and explained that Railgun is an effective tool for safeguarding users' privacy.
He also highlighted that the project uses the Privacy Pools protocol, which he has researched over the years, which “makes it much more difficult for malicious actors to join the pool without compromising users’ privacy.”
Railgun solves misconceptions
Buterin’s latest transfer reignited the privacy debate, with some wondering why Railgun is “okay” while Tornado Cash is “bad.” To address this issue, Bill, a Railgun contributor and CEO of MetaMask’s seed phrase recovery team, clarified some misconceptions about the privacy protocol.
As explained in x, Railgun shouldn't be called a mixer, as it isn't. Instead, it is “an address system that provides privacy” and works like other wallets where a private key controls the tokens.
Bill x.com/metamaskhe1p/status/1825438173977350637″ target=”_blank” rel=”noopener nofollow”>explained Railgun's privacy comes from using the private address instead of token mixing:
Privacy comes from the use of this address, not from mixing or moving tokens around. Here, Vitalik simply sends tokens from his public address to his private address. He doesn't need to mine tokens to get privacy, he can leave them in his private address forever or do other things on-chain, like trades with them. We, as avid wallet watchers, wouldn't notice.
As a result, he believes it would be more accurate to refer to the protocol as a “privacy system.” Another community member questioned the purpose of a privacy system and argued that “the whole point of cryptocurrencies” is to see them “live on the blockchain when they are published.”
Bill x.com/metamaskhe1p/status/1825453403142766825″ target=”_blank” rel=”noopener nofollow”>addressed This is explained by explaining that all Railgun transactions are valid ethereum transactions according to the network rules. The difference is that these have hidden identifiable information.
He called the process “public DeFi but private wallet,” emphasizing that when people use a smart contract with Railgun, “they can still see what’s happening in the contract,” but their actions are private.
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