Ark Alternative Bitcoin Scaling with Privacy Focus.

This is an opinion piece written by Kudzai Kutukwa, a financial inclusion advocate and Mandela Washington fellow. The piece discusses the importance of preserving financial privacy, as individuals are often targeted by law enforcement for safeguarding their financial privacy, as seen in the case of Roman Sterlingov. In response to the growing hostility towards financial privacy for Bitcoin transactions, a new protocol called the Ark Protocol was introduced at the Bitcoin 2023 conference. This Layer 2 scaling solution enables cheap, anonymous and off-chain Bitcoin transactions while further protecting user privacy and keeping transaction costs low. The protocol was created by developer Burak, who named it after Noah’s Ark, and is designed to act as a lifeboat that provides refuge from predatory blockchain surveillance firms and custodians. The article also discusses the issues with the Lightning Network and how the Ark Protocol provides an alternative solution with a frictionless experience for the end user, while enabling users to retain control of their funds and their financial privacy.

Ark enables seamless transactions with enhanced privacy by conducting every payment within a CoinJoin round, obfuscating the connection between sender and receiver. CoinJoin happens off-chain and settles payments every five seconds, reducing on-chain footprints and fortifying users’ privacy. The anonymity set is every party involved in a transaction, creating a greater degree of privacy than what’s possible on the Lightning Network. Users have a dedicated address for payments, but it’s a reusable address that doesn’t compromise their privacy.

Trade-Offs

Ark does have trade-offs, including not offering instant settlements as rapidly as Lightning and being less convenient for vendors to receive payments. Liquidity providers are required, but this challenge can be overcome in the long term as individuals are motivated to offer liquidity to earn yield in bitcoin. These challenges come with its own set of challenges.

The Road Ahead

Ark is a unique, second-layer scaling solution with unilateral exit capability that enables seamless transactions and gives users complete control over their funds. It is interoperable with Lightning, but also serves as a complement to it. Privacy-preserving tools like Ark have become essential due to the imminent danger posed by blockchain surveillance firms. Ark is an interesting concept worth keeping an eye on as development of the protocol unfolds.

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This is a guest post by Kudzai Kutukwa. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or blockchain.