A real commotion started on Twitter on Thursday when news surfaced that Trezor, a popular manufacturer of Bitcoin hardware wallets, had integrated the Address Ownership Proof Protocol (AOPP) to streamline the address verification process for users withdrawing the bitcoin from regulated exchanges, a requirement in some jurisdictions, CoinDesk first reported.
Trezor released a statement on Twitter shortly after the Bitcoin community began raising questions about the initiative.
“Failing to support AOPP will lead to helping the government close the trades, and our motivation for adding direct support was precisely to prevent the government from doing that,” Trezor said. noted.
Despite some logic, Trezor’s action actually undermines the very set of principles it’s trying to create. The purpose of having self-custodial bitcoin wallets is to empower the individual, and by affixing a name, social security number, and home address to unspent bitcoin output, the network’s pseudonym is lost because the knowledge of the property is raised from a hypothesis to a certainty. The best course of action is to fight against such rules, as shown by the Netherlands.
In November 2020, the Dutch Central Bank (DNB) required cryptocurrency exchanges and service providers in the country to require proof from users that the address they were requesting bitcoin withdrawal from was indeed theirs. The measure was enforced by asking users to provide a screenshot of their wallet or sign a message. The country’s oldest cryptocurrency exchange, Bitonic, filed a lawsuit soon after challenging and opposing the DNB’s resolution, claiming the demands were illegal and should never have been made. . In May 2021, the DNB officially acknowledged Bitonic’s complaints and revoked the wallet verification requirements.
The DNB would probably never have stopped rethinking its demands if Bitonic had not been in court. The fact that the cryptocurrency exchange challenged the country’s central bank resolutions and fought in court raised awareness of the issues with the requirements, triggering a review process and ultimately dismantling the whole thing altogether. requirements. If Bitonic had not questioned the Dutch Central Bank, it would not have questioned itself.
A similar dynamic is at play when it comes to AOPP. The protocol is not inherently bad as it simply aims to facilitate the enforcement of wallet verification measures in Switzerland by providing wallet developers with an interoperable standard to implement. But while AOPP is not inherently negative, it legitimizes the practice of verifying address ownership, and its implementation sets a precedent for the government to influence developments in the open bitcoin wallet space. source. Monitoring and control mechanisms always start small, and there is little way to see ahead and find out the real direction such demands might take.
Therefore, not implementing this standard is an act of sovereignty and responsibility as it protects users from future — and maybe worse — monitoring mechanisms implemented at the request of regulatory bodies. In addition to representing an insurance policy, the non-enforcement of AOPP on major Bitcoin wallets also serves as a basis for combating wallet verification measures, measures that represent a destruction of the privacy of individuals and the possible normalization of increased surveillance of individuals’ financial transactions.
As the use of cash slowly fades, Bitcoin may soon be the only remaining tool for conducting private transactions, and it is the duty of the Bitcoin community to protect and secure this future by raising awareness and speaking out against the policies and mechanisms that could risk it. , including vouching against buying bitcoin KYC in the first place.
BlueWallet and Sparrow said they will remove built-in support for AOPP in their next release after the Bitcoin community raised concerns about the initiative.