So if bitcoins are not considered cash due to its transparency and can be tracked easily, does that mean that fiat is the best candidate for money laundering due to its anonymity? Idk why Taintchain wants to do something about taint analysis when in fact it's already readily available if people really want to follow the trail. Also, what if the unknowing, innocent people received the tainted coins? Would they be a subject for interrogation if ever? This will just show that the majority of the coins in circulation is actually dirty and people might even avoid using bitcoin for their own safety.
Good point. Cash itself is anonymous and can be used for criminal activity at a higher level than Bitcoin. On the other hand, Bitcoin is completely transparent and open to anyone who wishes to analyze or explore the blockchain. I believe that this is more of a feature, than a flaw itself. This is because, a transparent Bitcoin will add more legitimacy to it than other cryptocurrencies that are fully private. No drug dealer or money launderer would ever want to use Bitcoin because of this (which is a good thing).
That's why, most criminal activity has taken part mostly with cash than cryptocurrencies. While this "Taintchain" algorithm is impressive, it doesn't reveal anything new. Bitcoin has always been a pseudonymous cryptocurrency, despite being marketed by many as completely anonymous. For people who want to track their balances anytime, and invest into a good store of value, there's Bitcoin. But those who prefer anonymity or privacy to do other things, will choose Monero or Zcash on top of BTC.
Nonetheless, it's good to know about this, since it will add better legitimacy to Bitcoin as a cryptocurrency for the mainstream world. Just my opinion
