weev on Nostr: but there's additional hazards with this kind of opt-in privacy, in that the side ...

but there's additional hazards with this kind of opt-in privacy, in that the side chain can end up like Tornado Cash, where you are legally engaging in an overt act of money laundering by moving Bitcoin in or out of it. If fungibility is the basic property of the currency then privacy is not an overt act of laundering, privacy is a side effect of fungibility that you happen to benefit from. This also leads to situations like ZCash where they get listed on an exchange but then when you actually use the shielded addresses to have privacy, their AML controls require them to ban you from the exchange because it looks like money laundering. Reasonable fungibility only occurs when it is universal and not opt-in. The Bitcoin on the “fungible side chain” would then have a different price than the normal Bitcoin, paradoxically reducing Bitcoin’s fungibility.