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This is why I don't believe in BTC for the long term. It's not anywhere near anonymous. Those saying BTC has no inherent value (as opposed to gold, for example

This is why I don't believe in BTC for the long term. It's not anywhere near anonymous. Those saying BTC has no inherent value (as opposed to gold, for example) are completely overlooking the fact that BTC is the only kind of exchange that can be used for illicit activities in a relatively untraceable manner (good luck buying stuff on SR using gold). Unfortunately, BTC is traceable if governments decide to spend the resources monitoring transactions, and I suspect this would be the primary motivator in the demise of BTC and a replacement with a more anonymous currency - the other motivator being that there's a huge financial upside for being an inventor or early adopter of a successful cryptocurrency, as BTC shown us.

tazzy531 13y ago
Isn't BTC's public ledger public? (https://blockchain.info/ https://blockchain.info/) While it's possible to generate a new wallet to mask who the user is, the transaction flow can be traceable. This seems easier to trace than the flow of money through our banking system.
- mordae 13y ago
  Yes, the BTC can be traced, but they cannot be associated with physical people until they identify themselves. Your anonymity is limited by trustworthiness of the person selling you the coins and the person you are buying physical goods from.
mtgx 13y ago
There is this proposed extension for anonymity, but I don't think it's very likely it will be implemented: http://zerocoin.org/ http://zerocoin.org/
necubi 13y ago
People claiming BTC has no inherent value aren't talking about the general concept or code—they're referring to this particular blockchain.
LekkoscPiwa 13y ago
However, BTC is just a great example that might find followers who will make it hmmmm... more anonymous. Money has just two functions: (1) It has to maintain its value over time (2) People must accept it as means of setting payments BTC seems to meet both. It's not anonymous "enough", but I guess this could be fixed with another iteration. (another electronic currency). It would be great for the world to have more currencies than the monopolistic currencies enforced by the modern states (fiat currencies). Just to own something that doesn't have its monetary base doubled in 4 years, would be awesome! (USD base rose two times from 2008 to 2012).
- hvidgaard 13y ago
  Full anonymity can be had with the addition zero-coin. Currently the bitcoin team doesn't feel that it has a place in the main protocol, but that may change in the future.
sillysaurus 13y ago
If the government steps in to "de-anonymize" bitcoin, then people will simply begin using tumbling services. People don't use those services right now because there's no impetus to. But as soon as the trust inherent to the public ledger is violated by creating a large-scale effort to track the flow of bitcoin, then people will counter that action with tumblers.
- mbreese 13y ago
  Yes, because tumbling services aren't designed to launder money or anything... Just using Bitcoin for transactions doesn't eliminate legal obligations. I imagine that if they ever got popular, tumbling services would be the first things that would be regulated (or shutdown by the gov't).
  - stickfigure 13y ago
    ...except that anyone can set up a tumbling service in any political jurisdiction. It is not practically possible for the US to shut them down; the best they could do is try to police domestic users of tumbling services, which is a much harder problem.
  - jeffasinger 13y ago
    It is also difficult to tell the difference between a tumlbler service, and some other various more legitimate uses. The level of regulation it would take to actually trace lots of tiny transactions between pseudonymous parties is next to impossible. How is me paying a friend back for half the pizza we shared to a new address of his going to be handled?
- ics 13y ago
  If everyone launders their money in a deliberate attempt to circumvent government regulation, they'll simply impose broader and harsher regulations. If crypto currencies are going to take over the future, then Bitcoin is a huge win for governments because of this. Your anonymity depends on your actions as in the real world, except the paper trail is significantly improved. Central banks may be perturbed by all this but the IRS certainly won't be. The only way to get past this in the long run is either to A) be on the other side of the law or B) use an implementation that forces anonymity, in which case there is still the threat of it becoming illegal once it's considered to be a large enough target.
betterunix 13y ago
"Those saying BTC has no inherent value (as opposed to gold, for example) are completely overlooking the fact that BTC is the only kind of exchange that can be used for illicit activities in a relatively untraceable manner" Really? When last I checked the overwhelming majority of criminals were using paper money. This is probably because the overwhelming majority of people in general use paper money and because criminals have to pay rent like anyone else.
- nwzpaperman 13y ago
  Who did you check with? Jack Bauer? LOL The biggest criminal enterprise is "outside money" vs. "inside money" and the scale is orders of magnitude larger than the folks peddling narcotics or paying for hookers.
  - theklub 13y ago
    Biggest criminal enterprise? You mean like Bernie Madoff and friends right?
lmm 13y ago
>Those saying BTC has no inherent value (as opposed to gold, for example) are completely overlooking the fact that BTC is the only kind of exchange that can be used for illicit activities in a relatively untraceable manner (good luck buying stuff on SR using gold). Alternative equivalents like litecoin work equally well. That's why I think bitcoin is bound to collapse. There's no a priori reason to use one root over another, and given the choice, why would you pick the one where "satoshi" has already assigned himself 25% of the wealth?
- weavejester 13y ago
  Because that's the one everyone else is using. The current blockchain has significant momentum, so any alternative would be working uphill.
- gst 13y ago
  Do you have any reason to believe that the wealth distribution of other coins (forked from Bitcoin) looks much different? With an deflationary currency you will always have early adopters that own a large percentage of the wealth.
  - lmm 13y ago
    I believe once a less deflationary alternative arises (which will surely happen sooner or later, there's no inherent reason behind bitcoin's "half every year" mechanism - I'm surprised if all the current alternatives just blindly copy that) it will win out over bitcoin.

tazzy531 13y ago

Isn't BTC's public ledger public? (https://blockchain.info/ https://blockchain.info/) While it's possible to generate a new wallet to mask who the user is, the transaction flow can be traceable. This seems easier to trace than the flow of money through our banking system.

mordae 13y ago
Yes, the BTC can be traced, but they cannot be associated with physical people until they identify themselves. Your anonymity is limited by trustworthiness of the person selling you the coins and the person you are buying physical goods from.

mtgx 13y ago

There is this proposed extension for anonymity, but I don't think it's very likely it will be implemented: http://zerocoin.org/ http://zerocoin.org/

necubi 13y ago

People claiming BTC has no inherent value aren't talking about the general concept or code—they're referring to this particular blockchain.

LekkoscPiwa 13y ago

However, BTC is just a great example that might find followers who will make it hmmmm... more anonymous. Money has just two functions: (1) It has to maintain its value over time (2) People must accept it as means of setting payments BTC seems to meet both. It's not anonymous "enough", but I guess this could be fixed with another iteration. (another electronic currency). It would be great for the world to have more currencies than the monopolistic currencies enforced by the modern states (fiat currencies). Just to own something that doesn't have its monetary base doubled in 4 years, would be awesome! (USD base rose two times from 2008 to 2012).

hvidgaard 13y ago
Full anonymity can be had with the addition zero-coin. Currently the bitcoin team doesn't feel that it has a place in the main protocol, but that may change in the future.

sillysaurus 13y ago

If the government steps in to "de-anonymize" bitcoin, then people will simply begin using tumbling services. People don't use those services right now because there's no impetus to. But as soon as the trust inherent to the public ledger is violated by creating a large-scale effort to track the flow of bitcoin, then people will counter that action with tumblers.

mbreese 13y ago
Yes, because tumbling services aren't designed to launder money or anything... Just using Bitcoin for transactions doesn't eliminate legal obligations. I imagine that if they ever got popular, tumbling services would be the first things that would be regulated (or shutdown by the gov't).
- stickfigure 13y ago
  ...except that anyone can set up a tumbling service in any political jurisdiction. It is not practically possible for the US to shut them down; the best they could do is try to police domestic users of tumbling services, which is a much harder problem.
- jeffasinger 13y ago
  It is also difficult to tell the difference between a tumlbler service, and some other various more legitimate uses. The level of regulation it would take to actually trace lots of tiny transactions between pseudonymous parties is next to impossible. How is me paying a friend back for half the pizza we shared to a new address of his going to be handled?
ics 13y ago
If everyone launders their money in a deliberate attempt to circumvent government regulation, they'll simply impose broader and harsher regulations. If crypto currencies are going to take over the future, then Bitcoin is a huge win for governments because of this. Your anonymity depends on your actions as in the real world, except the paper trail is significantly improved. Central banks may be perturbed by all this but the IRS certainly won't be. The only way to get past this in the long run is either to A) be on the other side of the law or B) use an implementation that forces anonymity, in which case there is still the threat of it becoming illegal once it's considered to be a large enough target.

betterunix 13y ago

"Those saying BTC has no inherent value (as opposed to gold, for example) are completely overlooking the fact that BTC is the only kind of exchange that can be used for illicit activities in a relatively untraceable manner" Really? When last I checked the overwhelming majority of criminals were using paper money. This is probably because the overwhelming majority of people in general use paper money and because criminals have to pay rent like anyone else.

nwzpaperman 13y ago
Who did you check with? Jack Bauer? LOL The biggest criminal enterprise is "outside money" vs. "inside money" and the scale is orders of magnitude larger than the folks peddling narcotics or paying for hookers.
- theklub 13y ago
  Biggest criminal enterprise? You mean like Bernie Madoff and friends right?

lmm 13y ago

>Those saying BTC has no inherent value (as opposed to gold, for example) are completely overlooking the fact that BTC is the only kind of exchange that can be used for illicit activities in a relatively untraceable manner (good luck buying stuff on SR using gold). Alternative equivalents like litecoin work equally well. That's why I think bitcoin is bound to collapse. There's no a priori reason to use one root over another, and given the choice, why would you pick the one where "satoshi" has already assigned himself 25% of the wealth?

weavejester 13y ago
Because that's the one everyone else is using. The current blockchain has significant momentum, so any alternative would be working uphill.
gst 13y ago
Do you have any reason to believe that the wealth distribution of other coins (forked from Bitcoin) looks much different? With an deflationary currency you will always have early adopters that own a large percentage of the wealth.
- lmm 13y ago
  I believe once a less deflationary alternative arises (which will surely happen sooner or later, there's no inherent reason behind bitcoin's "half every year" mechanism - I'm surprised if all the current alternatives just blindly copy that) it will win out over bitcoin.