December 5, 2022

What Is AOPP? And, Why Is The Bitcoin Community Up In Arms About It?

4 min read

The Address Ownership Proof Protocol or AOPP might’ve been the most advanced attack on Bitcoin up until now. With a fairly benign procedure that just affected individuals in Switzerland, the powers that be infected a few of the most respected wallets in the space. Just people who bought Bitcoin at Swiss centralized exchanges and were currently fully KYC ‘d had to prove ownership of their wallet’s address, so it didn’t seem that bad. However it was.

Associated Reading|Jack Dorsey Praises Open Source, Buys Trezor Bitcoin Hardware Wallet

On the AOPP official website, they specify their product as:

“In Switzerland a Virtual Asset Service Provider (VASP)– any monetary intermediary handling crypto properties such as Bitcoin– is lawfully obliged to need proof of ownership of a client’s wallet address prior to withdrawals and deposits can be made. AOPP is an easy and automated service for offering evidence of ownership of an external wallet’s address.”

Although several wallets implemented the protocol, it was Trezor who captured the majority of the flak.

What Did Trezor Say About AOPP?

Early in the morning, on January 27th, a Coindesk short article revealing Trezor adopted AOPP delicately struck the timeline. The company even attempted to utilize it for advertising:

“We’re happy to see more people taking custody of their crypto properties,” Marek Palatinus, CEO of SatoshiLabs, the maker of the Trezor hardware wallet, stated in a statement. “AOPP makes it simpler and faster for users to withdraw to the best location for their coins: their Trezor.”

The Bitcoin community didn’t like it. Why? Because hardware wallets are supposed to be sovereign. And if you provide an inch, they’ll take a mile. By the afternoon, Trezor had to make their position clear by means of Twitter. They said:

“Not supporting AOPP will lead to helping the federal government to fence individuals on exchanges, and our motivation to include direct assistance was precisely to keep the government from doing so.
The message for finalizing is made up of information already offered to the exchange. The address must be sent to the exchange to receive the coins.”

Swan Bitcoin’s Guy Swann immediately reacted, “That makes no sense, how does it do that exactly? This sounds to me as dumb as stating “you will get your freedom back” if you simply adhere to all the dictates that toss your flexibility in the garbage.”

It didn’t help that the demo that the business that developed AOPP put out appeared to reveal an unreasonable amount of info on each transaction. Starting by the name and living address of individuals doing the transaction: