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Pardon my ignorance, but I thought bitcoin was supposed to be an anonymous cryptocurrency. I've read recently that there was a large bitcoin transfer (which ha

Pardon my ignorance, but I thought bitcoin was supposed to be an anonymous cryptocurrency. I've read recently that there was a large bitcoin transfer (which had to happen in public due to the nature of the currency), and now all the sites are requiring highly sensitive IDs to function (eg passport scans). I'm honestly confused. This all seems more restrictive and less anonymous and groundbreaking than cash would be if it were introduced today.

geuis 13y ago
Don't confuse exchanges with bitcoin. If you were to buy a loaf of bread from me with btc, I give it to you after you transfer a small amount to me. Converting one currency to another is entirely different. Exchanges are only nodes where currencies meet. Leave btc aside for a moment. Lots and lots of fraud goes on in these nodes among regular money. Say you run a drug cartel and you need to transfer money to your Swiss accounts. One way to launder it would be to trade it through a series of other currencies via currency exchanges. Muddies the trail and "cleans" the money. So what we have right now are exchanges being setup for bitcoin. Mostly they've been done by none-banking people. A few years have gone by, and in efforts to be legitimate the professional ones are conforming to existing banking laws to facilitate the ease of converting between currencies and bitcoin. The true success of btc will be seen when it is used entirely to facilitate economic transactions, rather than as a financial speculative instrument.