Bitcoin and privacy
Personal views about how to use Bitcoin and keep a level of privacy
Dedicated to John Smith
Disclaimer for those with weak heart & mind:
In this article I use strong words.
This article for some could be considered “dangerous for our democracy”.
“Privacy advocates” will hate me same way govs will hate me.
The views presented are REAL, no bullshit lies or stupid facts.
Truth hurts, I know, so if you don’t like truth to be told right in your face, don’t read this article.
NPCs please, don’t read this, will give you a heart attack.
I am hearing all the time this question about “how Bitcoin and in special Lightning Network offers privacy to the Bitcoin user?”.
But... What is privacy? I think most of the people use this word without knowing its meaning and when should be used. Such a beautiful word, isn’t it?
Why? Because most of the people still don't know the difference between PRIVATE and PUBLIC.
The definition of the word PRIVACY (noun):
The quality or condition of being secluded from the presence or view of others.
The state of being free from public attention or unsanctioned intrusion.
A state of being private, or in retirement from the company or from the knowledge or observation of others; seclusion.
In other words, if you want to be "private" or having "privacy", don't go in public with all your details. Why not use TWO IDENTITIES? One that is private and one that is public. Do all your "private" things with the "private identity" and all "public things" with the "public identity". And keep "your shit" private.
I suggest you to start reading this very good blog explaining these two aspects of your life: private and public.
Another aspect to be clear:
Bitcoin is money. Is not currency, is not "investment", is not any damn "taxable event".
Taxation is theft. Period. No debate.
Whatever any gov would say, Bitcoin is simply money.
So for all those "tax lovers" coming to say "but, gov will tax my BTC..." I would say: get your shit together, money are NOT taxed.
If you really want to use it in a commercial contractual fashion, for your own peace of mind, in your accounting ledgers, declare it as "cash income". Done. Is not their damn business (taxman or whatever gov bullshit) of asking what type of "cash" you got.
Now comes Bitcoin and how we are going to achieve this?
I would start by saying: USE THE THREE LEVELS STASHING.
Split your Bitcoin stash into 3 main parts:
HODL = most of your bitcoins, like your central bank vault, almost never touch it, mostly onchain cold wallets.
CACHE = your commercial bank, where you "organize your liquidity" and split your income into these 3 sections, coin control, coinjoin, nodes etc
SPEDNL = small amounts, your pocket change for daily spending, distributed in various LN wallets. Is useless to have them in onchain wallets, if you really need to spend using onchain, you can use the CACHE wallets.
In this way, you keep your private stash into HODL, and public stash into SPEDNL. Nobody will know your private shit and you achieve that good level of "privacy".
Don't be so paranoia with "but is a LN custodial wallet" and shit like that. I am sure you are still having a bank account or a plastic card but you never say about that is custodial... you just go on with it.
As I said, use many different LN wallets, as I wrote in this comparison guide. Each one for a specific situation. You can easily and safely use any custodial wallet, for small amounts and play around with tips, donations, paying coffees etc. No need to be paranoia with "oh but this it doesn't offer privacy"... let's be serious for 1 min, you are paying a damn tip or coffee, not buying a tank or a shit load of drugs.
Also ask yourself: why not living a normal quiet life and don't do stupid things in public places? Nobody will give a damn shit that you bought your groceries with sats. Being paranoia with "oh boy, let me activate Tor on my mobile, to open my node over VPN, to pay you with a nym this damn coffee, because I don't want the gov to know I am buying this damn coffee... and onchain with Samourai, because LN is not “private”, is centralized and custodial" - that is just stupid paranoia. You over complicated things when is not necessary.
Also many of these custodial LN services are not KYC so use whatever damn fake identity, who cares in the end?
You have a LN node also? Good then you can add some level of “privacy” by using it as a bridge. As I explained in this guide about using 3 nodes. Use your imagination and knowledge about how to use these things. As I said, each type of LN wallet for its use.
More practical solutions using LN to lose trace of your possible "escapes" revealing your "private identity" I wrote these 2 guides:
The most important thing to keep private: YOUR DAMN WALLET SEED (KEYS).
Yes, for that use whatever method you want and you are comfortable to use, to hide them, to secure them, to split them, make it almost impossible to obtain them.
Because if nobody can have them, they can't touch you. And govs know this, that's why they try fooling noobs into fully custodial bank wallets and shit like that.
Is so damn simple:
avoid the KYC creeps, so many non-KYC methods to get some BTC
self custody your bitcoins in your own wallets
withdraw from exchanges immediately to your own wallets
If you bought from KYC, no problem, limit that usage and make coin control, coinjoin in your CACHE level. I have a simple method for this:
Create 3-4 onchain wallets with Sparrow Wallet.
Take 20-30 addresses from each and past them into an excel file.
put for each a random amount.
paste the list of destination addresses into Sparrow and construct a nice "mixing service" to yourself.
select "privacy" method for the transaction and Sparrow will do its thing.
repeat the process few times if you want a deep “coinjoin”.
move some coins into LN channels. Fact: through only 1 damn LN channel of 5M sats, you can move (coinjoin) hundreds of BTC. If you still don't understand this aspect, then you have much to learn about Bitcoin.
swap those coins into onchain (as I explained in the guide about submarine swaps)
use sats from those LN channels for your regular spending (keep in mind, LN is using onion routing, that means is almost impossible for a middleman to trace a LN payment)
move the bigger part to your HODL taproot wallets. You will ask, why taproot. Well, to be prepared for the future, those coins are not meant to be spent in the next years and Bitcoin development will advance. You still keep your coins in a legacy address wallet (starts with 1…)? You are such a loser… :)
THE CONCEPT OF "PRIVACY"
In today world, you can't have 100% privacy. Maybe if you go and live deep into the mountains isolated from digital online world. So saying "nah I don't use "that X" because is not private" is plain stupid.
NOTHING IS PRIVATE IN A DIGITAL WORLD, so stop being a crying child.
The important thing is how you DEFEND your private life and private stuff.
We always challenge or question the govs laws, but never the govs authority and jurisdiction. And THIS IS WRONG and useless.
Rebut the gov authority and jurisdiction with a simple question or affidavit. Then your freedoms and privacy are restored.
Gov "laws", regulations, statutes are just for "public" companies, commercial relations.
Individual, living wo/men do not enter under this jurisdiction, only in the moment are entering in a commercial contract with them.
If you consider yourself a "citizen", then automatically you are part of their CORPORATION.
If you consider yourself as a sovereign individual, then their authority and jurisdiction do not apply to you. Please watch this amazing documentary about "Slavery by consent" to understand more about this aspect.
Then some will come to say "but govs, still can see my BTC txs and do x and y...".
The answer is no, they won't do shit, if you inform them your position (citizen or private individual).
Prepare your affidavit of status as a living wo/man.
And every time you are challenged, you present that to them.
If they dare to challenge that affidavit, they are just putting themselves in a bigger problem: they've just recognize SLAVERY, because there's no other way another man can have more rights and authority over another man, his property, body and wealth then having him as a slave...
All this sounds crazy to you? Sure it does, because you were trained NOT to think like that, but just obeying orders from your "lovely" government. You never question WHO is the government and WHY have authority over your money, work, body, house etc.
A gov is a PUBLIC entity to SERVE YOU not the way around. So in other words: is not their damn business what you are doing with your own money(Bitcoin), how you spend them, with who you are trading.
Yes, if you use THEIR money (fiat) is another story, you must obey their rules, because once you accept to use their fiat money, you accept to be in contract with them. Having a contract with a gov means you must accept and respect their laws, rules and regulations.
Opt out of fiat world, using as much as you can Bitcoin, in private trades and commerce and be free. This is how you obtain your PRIVACY, stepping out from the slavery cage.
And when a gov agent ask you about x and y transaction, your answer must be: "Sir, is not your damn business what I do in my private life. Please show me the proof, the document where I signed and consent that YOU a public corporation, have authority and any jurisdiction over my damn own money, labor and property."
They will NEVER be able to come up with such document, because it doesn't exist.
Another aspect to keep in mind: If you use many techniques of hiding your traces all the time, looking all the time over your shoulder and hide, but NEVER challenge the gov authority, that means you ACCEPT their contract, you are just avoiding it. And that is bad, not only morally bad (you are not respecting a contract) but also useless (you will be always on the run and NEVER free).
EVERYTHING IN THIS WORLD IS A CONTRACT. And a contract have specific rules, universal accepted in the whole world: UCC (Uniform Commercial Code).
Be the lion that stop and confront the threat not the scared shit rabbit that run and hide into the woods.
Yes, I am not saying NOT to use any of privacy tools out there. Use them all, but don't relay only on those to protect your privacy. Those are just tools, not the concept.
You will get your privacy when you are truly FREE and do not relay on govs "laws" to "guarantee" your fake freedom. Govs are not giving you any freedom, you are born free, gov are giving you only privileges in exchange for your consent to be their slave.
Read more about Bitcoin and Natural Law in this article.
I am in Bitcoinlandia from 2012, I never lost any satoshi, never got any seized wallet, lost wallet, hacked wallet, in all these years.
Yes, I tested and used many wallets and apps, nodes etc. I also used many "privacy tools", I used coinjoin pools, apps etc. I always applied a good coin control on my BTC income.
I always used two identities (public and private), I even have two types of LN nodes: private, linked to a public identity (but necessarily the real identity) and a private one (that is never linked to any identity, for private stuff). A private LN node could be easily a mobile LN node wallet as Blixt.
Message to "monero coiners"
To all those saying "muh no bitcoin, use monero, is a privacy coin", you can just stick your useless "privacy coin" into your ass. Sell that shit to all those scared, running wild and not having any curiosity to read something about Bitcoin. I don't give a shit about monero: HFSP.
Message to "onchainers only"
To all those saying "muh no LN, use only onchain coinjoin, nyms, samourai etc" I would answer with:
onchain is your central bank, is not meant to be a payment system.
LN is your commercial bank, your cash, your fast spending, meant to be a payment system.
Your stubbornness to not using LN and learning more will cost you a lot of sats in the future. If you are not prepared, soon all your coinjoins will be so expensive that you can't imagine. Soon onchain txs will be mostly for opening and closing LN channels.
Learn to use LN and you will understand that is a "living coinjoin" system, on the fly.
If you still don't want, I don't care... HFSP.
Message to "LN node balancers"
To all LN users, node operators, all those obsessed with "rebalancing" their channels and using high fees on their peers, but not moving a damn sat from "max HTLC".
Your balances in channels are public anyway, it is useless to "hide" behind high fees.
Like ZeroFeeRouting said in a tweet here and I am totally agree with him. You can take any node in the network go to amboss.space page and see its total liquidity. Then check each channel and see how is doing with fees (using that dumb policy adjusting fees based on channel balance). Also a good indicator where is the balance is which channel have disabled. Yes many node operators are disabling channels when are depleted on one side. Another nonsense and counter-productive.
We need a better algorithm for LN that could select the path based on channels with enough liquidity and node operators announcing that balance.
We don't have to hide behind the finger and saying that we "use privacy"... is useless.
And seriously, I don't give a shit if any gov will trace my LN transactions. But I doubt it they will ever do it. Why? Because are incompetent and ignorant, the bureaucracy will never let them to have any authority to do such thing.
I live a simple normal life, respecting Natural Law, UCC, common sense and nothing else. Being a good man, helping noobs and not intervene in others lives in any way (is not my damn business what happen in other place of the world, if is not affecting me in a direct way).
If you, the reader of this article have another opinion, so be it, I don't give a damn shit. If you still want to be a slave, obeying your lovely government, it is your damn business, not mine. I am a private individual, with private rights, that respect others rights, but never claim any "privilege" from a damn government.
Because, privilege = consent to slavery.
I simply do not consent, whatever any gov would say.
I know that many will disagree with this post, some will hate me, some will try to "explain" me that is not like that, some will just realize that my position is the right one. Yes, there's more to discuss, debate, explain etc but I don't want to make this post too long (is already too long).
For all those that will call me crazy, idiot or whatever you want... I don't fucking care!
MAY THE ₿ITCOIN BE WITH YOU!
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