Nocturne, the privacy protocol in which Ethereum founder Vitalik Buterin invested, has decided to phase out its operations after retiring the privacy protocol established last year. This development raises questions about the future of technological innovation for privacy-focused cryptocurrency transactions. While the exact reason behind Nocturne’s closure is unknown, increased regulatory pressure and technological challenges are among the possible reasons. Ethereum co-founder Vitalik Buterin remains a strong advocate of privacy-based transactions and argues that Ethereum should offer default transaction privacy. Here are the details…
Nocturne, backed by Ethereum founder, is shutting down
Nocturne, a privacy protocol invested in by Vitalik Buterin, announced that it will phase out its operations after retiring the privacy protocol established last year. In its announcement, Nocturne privacy protocol stated that it would gradually cease its activities. This decision comes after the privacy protocol they developed last year was shut down. The company announced that the frontend at app.nocturne.xyz will remain open for withdrawals until the end of the month. The withdrawal process will then be converted into a self-serve system via the GitHub repository with detailed instructions on how to withdraw funds using the CLI tool.
The Nocturne team said, “Thank you to everyone who has supported the product and mission over the past year and a half. Thank you for your support, feedback and energy. We wish everyone success in the future.” said. Interestingly, this development came just six months after Nocturne received $6 million in funding from Bain Capital Crypto and Polychain Capital. They were mainly working on technological developments such as bringing private accounts to public blockchain platforms by combining zero-knowledge with blockchain technologies, account abstractions and hidden addresses.
Impact of regulatory pressure
Although Nocturne did not specify the exact reason behind its closure, increasing regulatory pressure against privacy protocols may be one of the reasons. On the other hand, Ethereum co-founder Vitalik Buterin has been a strong advocate of privacy-based transactions. In the crypto community, discussions about privacy on the Ethereum blockchain have taken a new turn. The central debate centers on whether Ethereum, the underlying layer of blockchain technology, inherently offers transaction privacy.
Vitalik Buterin’s perspective on default transaction privacy draws an analogy with the Transmission Control Protocol (TCP). He likens the Ethereum protocol to the way TCP works in cleartext, leaving encryption tasks to higher layers. Buterin suggests that Ethereum could follow a similar path, maintaining a solid underlying layer while entrusting encryption tasks to upper layers.
Nocturne’s closure raises questions about the future of technological innovation for privacy-focused cryptocurrency transactions. How Ethereum will handle privacy and the approach of regulatory authorities towards cryptocurrency privacy are among the developments that the cryptocurrency market will follow closely in the coming days.
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