Privacy: Who Can See Your Money?

Part two of a five-part series on crypto privacy: privacy wallets, privacy tokens, why they matter for payments, and what Nervos Network could do in this space. Disclosure: I hold CKB, the native token of Nervos Network. This series presents information, not recommendations. Nothing in it is investment or legal advice. Previously: Part 1 showed that most crypto is pseudonymous, not anonymous. One linked address can expose a complete financial history. And privacy is a team sport: your protection depends on the size of the crowd you hide in. There are dozens of privacy coins, privacy wallets, and privacy protocols, and their marketing makes them sound wildly different. Underneath, there are only three basic ways to make a crypto transaction private. Learn the three and you can place any product in seconds, and know where it's likely to break. Method The idea Everyday analogy 1. Hide in a crowd Mix your transaction with others so nobody can tell which one is yours A busy train station: you're hard to pick out 2. Encrypt it Put the transaction on-chain sealed, with a mathematical proof it's valid A sealed envelope: everyone sees it, nobody sees inside 3. Take it off-chain Only the two parties see the payment; the chain never records it A private conversation: nobody saw the envelope pass Figure A — Every privacy product is built from one or more of these three methods, and each has a different weak spot. Method 1: Hide in a crowd Bitcoin CoinJoin The simplest version works on Bitcoin itself. In a CoinJoin , many people combine their payments into one large transaction: say, 50 inputs and 50 outputs of the same size. An outside observer can see that coins went in and coins came out, but can't tell which input paid which output. Wallets such as Wasabi and tools such as JoinMarket and Ashigaru automate this. Ashigaru is a community continuation of the Samourai Wallet tools, whose founders were prosecuted (Part 3). Where it breaks: CoinJoin hides the link between coins,…