Vitalik Buterin Reignites the Privacy Debate After Transferring $1M to Railgun Protocol

Ethereum's founder, Vitalik Buterin, made the headlines on Monday after his latest on-chain move. Buterin's $1 million in ETH transfer to privacy protocol Railgun caught the community's attention and reignited the debate about using privacy tools.

Ethereum’s co-founder, Vitalik Buterin, made headlines on Monday with his latest on-chain move. Buterin’s $1 million transfer to Railgun, a privacy protocol, has sparked discussion within the community regarding the use of privacy tools.

According to on-chain analytics firm SpotOnChain, Buterin sent 400 ETH, currently valued at around $1.054 million, to the privacy protocol. Prior to this transaction, he performed a test transfer of 0.0998 ETH, valued at $2,629.

Buterin’s latest transfer to Railgun marks one of several instances where he has utilized the privacy tool. As per the report, Buterin has now sent 662 ETH, or $1.91 million, to the protocol over the last 10 months.

Earlier this year, Buterin’s 100 ETH transfer to Railgun prompted a discussion among community members, with some questioning the purpose of the transfer and criticizing Buterin for wanting a private address.

However, many users voiced their support for Buterin’s use of privacy tools, given that his every on-chain move is subject to scrutiny and speculation. At the time, Buterin addressed the criticism by stating, “Privacy is normal,” and explaining that Railgun is an effective tool for protecting users’ privacy.

Furthermore, he highlighted that the project utilizes the Privacy Pools protocol, which he has worked on for years, and that “makes it much harder for bad actors to join the pool without compromising users’ privacy.”

Buterin’s recent transfer has reignited the privacy debate, with some questioning how Railgun “is ok” while Tornado Cash “is bad.” In response to this, a contributor to Railgun and the CEO of MetaMask’s seed phrase recovery team, Bill, clarified some misconceptions about the privacy protocol.

As per Bill’s explanation on X, Railgun should not be referred to as a mixer, as it is not one. Rather, it is “an address system that provides privacy” and functions similarly to other wallets, where a private key controls the tokens.

Bill elaborated that Railgun’s privacy stems from using the private address rather than mixing the tokens:

Privacy comes from using this address, not from mixing or moving the tokens. Here, Vitalik is simply sending tokens from his public address to his private address. He doesn't need to pull tokens out to get privacy, he can leave them in his private address forever or do other on-chain stuff like swaps with them, we, as avid wallet watchers would be none the wiser.

Hence, he believes that it would be more accurate to refer to the protocol as a “privacy system.” Another community member questioned the purpose of a privacy system, arguing that the “whole point of crypto” is to see it “live on the blockchain when it posts.”

Bill addressed this by stating that all Railgun transactions are valid Ethereum transactions according to the network's rules, and the only difference is that these transactions have identifiable information concealed.

He described the process as “public DeFi but private wallet,” emphasizing that when people interact with a smart contract using Railgun, they “can still see what's going on in the contract” while their actions remain private.

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