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1. It would be prohibitively expensive for the government to track down every blockchain transaction IRL to find the identity behind the wallet (if even possibl

1. It would be prohibitively expensive for the government to track down every blockchain transaction IRL to find the identity behind the wallet (if even possible). This cost rises with adoption. 2. Different crypto currencies have different roles. If you want to avoid traceability altogether, use zCash.

3np 6y ago
Some countries have explicitly put restrictions on dealing with privacy-preserving currencies like Monero and ZCash. Japanese exchanges and service providers, for example, are not allowed to touch them.
- solosoyokaze 6y ago
  This is why the DeFi work on Ethereum is exciting, so you can have exchanges and other financial services not tied to restrictive legislation.
the_local_host 6y ago
1) Why would it be prohibitively expensive? In the face of severe enough penalties, most people would simply report their transactions as required, and report who they transacted with. The number of transactions that needed to be investigated would be a small percentage of the total, and possibly traceable through means other than cracking keys. 2) Regardless of whatever zCash is, my point is that Bitcoin's immutable and complete ledger lends itself to complete surveillance. The math may be uncrackable, but the users are not, and privacy would go out the window if they're forced to transact with registered IDs.
- solosoyokaze 6y ago
  > forced to transact with registered IDs. It's prohibitively expensive precisely because being forced to transact with registered IDs is going to be less and less of a requirement moving forward. With DeFi exchanges, we'll see more transactions that stay out of state surveillance. You're correct that BTC isn't ideal for privacy though. That's why zCash and Monero will also be important currencies.
PragmaticPulp 6y ago
You don't need to track down every transaction. You just need to flag the fraudulent/stolen/illegal coins on the blockchain and require exchanges to confiscate those coins as they come through the system. Blockchain is a public ledger of every Bitcoin transaction ever. It's trivial to track these things. It's trivial to identify downstream coins from upstream illegal activity. Far easier than with traditional currency. The exchanges will play ball because they want to continue exchanging (making money). The Bitcoin hodlers will play ball because it makes their investment more legitimate and reduces the supply of coins, increasing the value of their stash.
- solosoyokaze 6y ago
  The exchanges are becoming decentralized. Not just exchanges but other financial services, including the ability to earn interest. There are also other coins that are less traceable than BTC. It's only going to get more difficult for governments to track crypto, not less.
  - PragmaticPulp 6y ago
    If all you care about is crypto and you're happy to use exchanges that don't care about regulations, that works. But if you want to get money back out of the system or spend that money on anything, it has to go through an exchange located in your jurisdiction. Also, watch out for the services that claim to deliver abnormally high interest on crypto investments. There's no free lunch.

3np 6y ago

Some countries have explicitly put restrictions on dealing with privacy-preserving currencies like Monero and ZCash. Japanese exchanges and service providers, for example, are not allowed to touch them.

solosoyokaze 6y ago
This is why the DeFi work on Ethereum is exciting, so you can have exchanges and other financial services not tied to restrictive legislation.

the_local_host 6y ago

1) Why would it be prohibitively expensive? In the face of severe enough penalties, most people would simply report their transactions as required, and report who they transacted with. The number of transactions that needed to be investigated would be a small percentage of the total, and possibly traceable through means other than cracking keys. 2) Regardless of whatever zCash is, my point is that Bitcoin's immutable and complete ledger lends itself to complete surveillance. The math may be uncrackable, but the users are not, and privacy would go out the window if they're forced to transact with registered IDs.

solosoyokaze 6y ago
> forced to transact with registered IDs. It's prohibitively expensive precisely because being forced to transact with registered IDs is going to be less and less of a requirement moving forward. With DeFi exchanges, we'll see more transactions that stay out of state surveillance. You're correct that BTC isn't ideal for privacy though. That's why zCash and Monero will also be important currencies.

PragmaticPulp 6y ago

You don't need to track down every transaction. You just need to flag the fraudulent/stolen/illegal coins on the blockchain and require exchanges to confiscate those coins as they come through the system. Blockchain is a public ledger of every Bitcoin transaction ever. It's trivial to track these things. It's trivial to identify downstream coins from upstream illegal activity. Far easier than with traditional currency. The exchanges will play ball because they want to continue exchanging (making money). The Bitcoin hodlers will play ball because it makes their investment more legitimate and reduces the supply of coins, increasing the value of their stash.

solosoyokaze 6y ago
The exchanges are becoming decentralized. Not just exchanges but other financial services, including the ability to earn interest. There are also other coins that are less traceable than BTC. It's only going to get more difficult for governments to track crypto, not less.
- PragmaticPulp 6y ago
  If all you care about is crypto and you're happy to use exchanges that don't care about regulations, that works. But if you want to get money back out of the system or spend that money on anything, it has to go through an exchange located in your jurisdiction. Also, watch out for the services that claim to deliver abnormally high interest on crypto investments. There's no free lunch.