Ethereum Co-Founder Buterin Warns of Privacy Risks in zk-Wrapped Digital ID Systems

Ethereum co-founder Vitalik Buterin has raised significant concerns about the long-term security of zk-wrapped digital ID systems. In a post on X, he highlighted the potential risks associated with the increasing use of zero-knowledge proofs in digital identity verification. These risks include coercion, pseudonymity, and system errors, which could compromise the privacy and security of users.

Buterin's warnings come at a time when major digital ID systems utilizing this technology are expanding rapidly. These systems, which include government-backed and crypto-led initiatives, are designed to allow users to verify their identity without revealing personal details, such as proof of age or citizenship. However, Buterin pointed out that the primary issues with these systems are not related to data leaks but rather to the one-person-one-ID rule that many zk-systems enforce. This rule eliminates the option for users to maintain multiple identities for different platforms, which is a common practice for safety and anonymity.

Under zk-ID systems, users may face difficulties in maintaining multiple online accounts, increasing the risk if they are ever forced to reveal their entire identity. Buterin also cautioned that governments or employers might require users to disclose their identities across platforms, thereby undermining the purpose of privacy technology. While stronger protections can be added through complex systems like multi-party computing, Buterin noted that such tools are more challenging to build and rely on app cooperation.

In a separate comment, Buterin discussed the dual governance model in blockchain systems. He acknowledged that while this model is not perfect, it adds a layer of safety by giving both token holders and a second group the opportunity to determine system outcomes. This setup involves protocol users or delegates having a voice in decisions, which can help prevent harmful moves and ensure users stay involved in network development. Buterin praised the growing adoption of such frameworks across the Ethereum community, stating that it strengthens the defense against possible system misuse by splitting power. This introduces additional checks and balances into the governance process, although it may not resolve every issue.