You can definitely eat the skin on peanuts! In fact, I think this is the best way to eat them. Skin-on peanuts are the type traditionally used in this Vietnamese recipe and it’s so much easier and faster to leave them on. The loosest peanut skins will fall off the peanuts on their own during the soaking process. But if you really don’t want to eat the remaining skins, you can remove them by hand. I just don’t think it’s worth the hassle.