When spinning up a few hundred data-gathering Bitcoin nodes prevented some breadwallet users from transmitting bitcoin transaction, a minor panic quickly erupted about the Bitcoin compliance startup Chainalysis and their supposed sybil attack on the Bitcoin network.

Chainalysis CEO Michael Gronager joined us for a discussion of what happened and what role transaction monitoring will play in the future. We dove deep into the tension between the desires for user privacy and the requirements to achieve integration into existing financial services.

Topics covered in this episode:

How Chainalysis’ nodes caused problems for breadwallet

What damage a large scale sybil attack could really do to Bitcoin

The role transaction monitoring will play to achieve Bitcoin integration in existing systems

Why transaction-related blockchain analysis does not threaten Bitcoin’s fungibility

The best way users can protect their anonymity

Episode links:

CoinDesk: Chainalysis CEO Denies Launching Sybil Attack

Bitcoin Talk Discussion

Reddit: A Bitcoin Compliance Startup is Sybil Attacking the Network

Reddit: Chainalysis versus Mycelium Story

Inside Bitcoin Article

This episode is hosted by Brian Fabian Crain and Sébastien Couture. Show notes and listening options: epicenter.tv/070