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Comment by flagrant_taco | Hacker News Reader

This sure reads like a press release announcing a project that hasn't been designed or built yet.

Promising complete privacy and fully offline transactions both sound dubious.

What mechanisms would be in place to allow me to transfer money from my KYC bank account to an anonymous wallet without it being tracked?

If the max is €3000 but it's entirely private, how could they possibly know I don't have a higher balance or multiple wallets?

What tech is even being used to allow fully private, offline transactions in the first place? How does the receiver verify that the digital cash is legit? And how does the network ensure that the money wasn't double spent while offline?

So many questions here, and I can't help but have a hunch that the gaps in description would be blocked by fundamental technical limitations.

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> What mechanisms would be in place to allow me to transfer money from my KYC bank account to an anonymous wallet without it being tracked?

I really doubt that they intend do use it, but zero-knowledge cryptography indeed can accomplish this, so there is no technical limitation afaik.

> If the max is €3000 but it's entirely private, how could they possibly know I don't have a higher balance or multiple wallets?

This gets trickier. Let's say we limit to 3000 per account (and use whatever else to limit accounts/person). This would be possible, but would also reveal the amount on the account: try to send decreasing amounts, first one that succeeds reveals previous balance. There's probably an entity that can simulate sending too.

> What tech is even being used to allow fully private, offline transactions in the first place? How does the receiver verify that the digital cash is legit? And how does the network ensure that the money wasn't double spent while offline?

Yeah, this one is impossible.

> I really doubt that they intend do use it, but zero-knowledge cryptography indeed can accomplish this, so there is no technical limitation afaik.

It's really hard to say without details of how the proposed system would actually work, but I don't think they can get away from KYC laws.

They'd still have the on ramp / off ramp problem of existing cryptocurrencies, my bank would know how much I transferred and some unique identifier of either my wallet or the transaction. Assuming that offline transactions aren't possible, the network would also know every transaction made and could link that back to my original bank deposit.

I doubt there will be any privacy at all. Perhaps some rules over who can access the data but they conveniently exempt the government.

Still, the EU banks already have SEPA instant payments so the infrastructure for this is not hard to imagine.

And despite those drawbacks, it's still better than the VISA/MC duopoly on online payments

> And despite those drawbacks, it's still better than the VISA/MC duopoly on online payments

I'm always torn on this one. I really dislike monopolies (or duopolies in this case) and functionally the government has enough power today to compel Visa/MC to do whatever they want. Though as long as they are technically not part of the government we have a chance to rip apart that government power and remove their control of the financial institutions.

I have no real hope that those in charge would actually let it happen, but that small chance is gone if the government is running things directly.

Regarding offline payments perhaps what they mean here is that you as the wallet holder don't need network connectivity but the merchant does?

Usually, in the context of these privacy-preserving payment systems, online vs offline refers to whether the merchant has to be online to check if the 'coin' they received is valid (authentic and not doubly spent). The user usually has no reason to be online at all, since they withdrew the coin already in the past.

By that definition neither the wallet holder nor the merchant would have to be online for a real 'offline' system.

GNU Taler e.g. is an online system on the other hand, where the merchant has to be online for pragmatic reasons. It's kind of sad to see them being categorically excluded by this requirement. Their the best we currently have afaik.

(Check out my answer below for sources https://news.ycombinator.com/item?id=36520725)

That could very well be what they mean, though that isn't offline at all and is no different than my offline credit card being run through an online card reader

If they want to compare it to cash, I'd have to be able to give you the money directly without any network verification. Just the step of a receiver having to ask the network to validate means there is no guarantee of privacy.

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