Bitcoin should never become fully anonymous- don't fool yourself

[Naida_BR]

One thing I often hear is how bitcoin should become a fully anonymous cryptocurrency.  No, it shouldn't.  If people want bitcoin to truly become mainstream then making bitcoin fully anonymous would destroy that goal.  I believe in these types of currencies, such as with Monero whom I support fully.

Here's why- the governments wont allow it.  Right now the U.S. government is working on bitcoin/cryptocurrency legislation that Steve Mnuchin (Secretary of the US Treasury) is putting together and recently said should release soon. I'm fearful of what's to come and bitcoin isn't even anonymous at the moment.  Governments can kill the exchanges.  Sure there's always over the counter, but that's not going to bring this to the heights we all hope it's headed.

Think of it this way.  How many countries still don't allow for women to vote or even show their face in public, how many countries don't allow for freedom of speech, how many countries still don't allow freedom of press...and you think they'l be okay with a massive global currency they can't control what so ever?  Not a chance.

I hope LN is something that stays on another layer and is used for anonymous transaction or something else is created so that bitcoin has both options..but making it fully anonymous wont work out well.  As a financial advisor this is something seemingly obvious to me after spending over a decade in finance and seeing how this kind of stuff is received by governments. 

Would love to be wrong or hear how it could still work. 

Governments will always want to have control especially in the economic environment.
They will never allow an anonymous system to be established and let people transfer anonymously money to each other. This is not going to be transparent in their eyes.

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[maydna]

It's interesting.

I don't mind if the government want to control or regulated bitcoin or altcoin by using KYC for every exchange. But don't forget, we have a thousand ways to protect ourselves from the government.

The scenario would be, we can use the mixer to send the bitcoin from the exchanges to another wallet, whether it's an online wallet or offline wallet, or we can transform it into an altcoin. After that, we can send it to the exchanges which don't use KYC, change again into bitcoin, and send it into another wallet. The process will be so many ways, but that is what we should do if we don't want the government to find out about ourselves.

The government needs to know people who use bitcoin or altcoin so they can get the data on how popular bitcoin among their citizen so they can regulate something related to the tax (maybe) or another thing.

For me, bitcoin still anonymous. As long as we can keep a huge amount in a secret wallet and not tell other people about the wallet, we can be safe. We can only use some amount which is not too big at the exchanges, so if the government investigate or tracking our income, they will found that we don't use so much money.

There will be your way to figure out the problem if you still want to become anonymous, and with the internet, I am sure we can get one or more ways to keep anonymous.

[AniviaBtc]

And ten years after, Bitcoin is at the heel of government, they are now enforcing exchanges for KYC and anything that can identify us.

The network itself is still quite good for privacy to some extent. It is impossible to expect the government would allow any asset or any exchange to accept users without any KYC, they're doing some business and need to hold some responsibility. The AML thing and so on is almost guaranteed to be mandatory when you use a centralized service. So, the solution would be don't use them. It's your call.

People should be anonymous if they are engaging or if they are doing transactions using cryptocurrency. Being anonymous doesn't mean that you're not supporting the use of cryptocurrency in your country, it is just for a privacy purposes that's why you need to hide your identity. The government are somehow benefiting the use of cryptocurrency and help the economy to grow and become stable.

Keeping your privacy is really necessary if there are platform that involves money. Although people are anonymously accessing it, we can still help promote the use of bitcoin in many platforms, like social media. There are a lot of ways that we can improve the mass adoption of cryptocurrency even if we are hiding ourselves because the true factor that will make people become interested in using bitcoin is its benefits in the market and economy.

[Bttzed03]

Maybe not completely anonymous but would you agree that bitcoin transactions should be more private? Developments like Schnorr and Taproot to improve scalability and privacy is underway and may go live this year. Then there's another called Coinswap which was proposed recently as posted by @dkbit98 - Bitcoin Privacy Improvement with new CoinSwap

One thing I often hear is how bitcoin should become a fully anonymous cryptocurrency.  No, it shouldn't.  If people want bitcoin to truly become mainstream then making bitcoin fully anonymous would destroy that goal.

It could potentially destroy mixing/coinjoin services too.

[suzanne5223]

I believe the reason why Satoshi didn't make bitcoin a total anonymous is because he wants bitcoin to be used in a diverse way and that's the reading why we have to conjoin supported wallets and bitcoin tumbler site for the purpose of those that want to make anonymous payments.

One thing I often hear is how bitcoin should become a fully anonymous cryptocurrency.  No, it shouldn't.  If people want bitcoin to truly become mainstream then making bitcoin fully anonymous would destroy that goal.  I believe in these types of currencies, such as with Monero whom I support fully.

I guess some people never understand that one of the reasons the institutions and governments were unable to stop bitcoin while some law firms supported it is because of benefit and it is not anonymous or else we won't have seen any of them legalizing bitcoin.

[DooMAD]

Think of it this way.  How many countries still don't allow for women to vote or even show their face in public, how many countries don't allow for freedom of speech, how many countries still don't allow freedom of press...and you think they'l be okay with a massive global currency they can't control what so ever?  Not a chance.

So you think the appropriate response is to bow to the pressure and allow the tyrants to have it all their own way?  Maybe my outlook is just generally more subversive than average, but I'd never think that way.  All the things you mentioned are concepts that need to be challenged and anything that helps put power back in the hands of normal people is another step towards those in authority realising they aren't as "in control" as they thought.

//EDIT:  And while it's a post responding to a completely different thread, I feel like this response applies aptly here as well:

Some government also don't like the fact that Bitcoin allows user have full control over their money, should we remove that as well?

We can't walk on eggshells here. 

Let me quote the man himself:

When you send to a bitcoin address, you don't connect to the recipient.  You send the transaction to the network the same way you relay transactions.  There's no distinction between a transaction you originated and one you received from another node that you're relaying in a broadcast.  With a very small network though, someone might still figure it out by process of elimination.  It'll be better when the network is larger.

If you send by IP, the recipient sees you because you connect to their IP.  You could use TOR to mask that.

You could use TOR if you don't want anyone to know you're even using Bitcoin.

Bitcoin is still very new and has not been independently analysed.  If you're serious about privacy, TOR is an advisable precaution.

And ten years after, Bitcoin is at the heel of government, they are now enforcing exchanges for KYC and anything that can identify us.

I still believe exchanges in their present, fundamentally misused, format are on borrowed time.  I hope there will come a point where we simply won't do that sort of thing anymore, because it definitely wasn't part of the design concept to have these entities holding the keys to vast tranches of BTC.  The very concept of a centralised exchange is inherently weak and vulnerable to pressure from authorities.  It's no coincidence that  regulators so easily identified the choke point they could squeeze.  We're bound to come up with something better at some point.  I'm just hoping the rate of technological development will continue to outpace the legal framework designed to contain it.

[nicecrypto]

I agree with you, Bitcoin cannot be fully anonymous, because many hot wallets and exchanges require ID verification (KYC). So I think anonymous is only for Bitcoin transactions on the blockchain.

And I don't even know why people crave anonymity so bad when other aspect of their everyday life is not anonymous! People go to hospitals, schools and other social gatherings with their identification, they don't seem to have problem with this, but they want a digital currency to be fully anonymous and the government should be okey with this, I always wonder how that idea will be generally accepted.

[posi]

Here's why- the governments wont allow it.  Right now the U.S. government is working on bitcoin/cryptocurrency legislation that Steve Mnuchin (Secretary of the US Treasury) is putting together and recently said should release soon. I'm fearful of what's to come and bitcoin isn't even anonymous at the moment. 

I heard the US government are working on cryptocurrency but it not deliberately stop bitcoin and others cryptocurrencies but to create their own national cryptocurrency.
Meanwhile, there's no reason to be scared of bitcoin anonymity level cause it will only make the government to move their focus on privacy coins.

Governments can kill the exchanges.  Sure there's always over the counter, but that's not going to bring this to the heights we all hope it's headed.

The government wont kill exchange sites and the only worse things they can do is implementing Vat,KYC and AML and very exchange site that applied those features will fully operate.

[buwaytress]

Think of it this way.  How many countries still don't allow for women to vote or even show their face in public, how many countries don't allow for freedom of speech, how many countries still don't allow freedom of press...and you think they'l be okay with a massive global currency they can't control what so ever?  Not a chance.

They're welcome to try and control/ban/censor Bitcoin -- Bitcoin not being fully anonymous has never stopped states from trying to control/ban/censor it. Hasn't worked out for them. Most wisen up and lift their bans eventually.

I hope LN is something that stays on another layer and is used for anonymous transaction or something else is created so that bitcoin has both options..but making it fully anonymous wont work out well.

In the end, it's how people use money that will determine how private their transactions are. You could actually use fiat systems much better to stay anonymous (and this is why it's still the favourite laundering currency of crime). And you can always use certain methods and additional tec to existing Bitcoin tech to make your transactions more private -- CoinJoin comes to mind.

[hv_]

Right

We see it any day what crappy our actual internet works.

There is only crime wanting anonymous money... average Joe doesn't care, but reguator s duty is to protect him

[Haunebu]

I understand your opinion, but I don't agree with it. You are basically asking BTC to give up the very feature it has been famous for all these years. Just doesn't make any sense.

Do you really believe that the governments will embrace and help BTC go mainstream if we get rid of the anonymity aspect? In that case, they would simply point out how there are far more superior alternatives in comparison.

It's a fact that BTC transactions are not 100% anonymous and can be traced depending on how the user executes them. However, as long as the user is careful (Mixers etc), no one will be able to trace the transactions.

Crypto is basically a strategy to rebel against the current world order. The anonymity aspect is basically the light-saber of BTC. Can a Jedi or Sith fight without their light-sabers?

[fullhdpixel]

Bitcoin is already good as it is, I don't think we still need any more anonymity, it's just good as it is and it provides anonymity but to a certain level. The op is right about what he said here, the government will be against Bitcoin if it's 100% anonymous. And apart from that, I have my own reasons why I wouldn't want Bitcoin to be hundred percent anonymous. If it does, there will be people who would want to make use of that advantage in the wrong way.

Even with this little level of anonymity, people are still people to commit some crime using Bitcoin and escape with it. But that kind of people are not new to this society as they are into such activities for years. So, bitcoin is being pseudo-anonymous is always having its own advantages and governments also must be liking it.

[fiulpro]

Blockchain is not actually something that will hide your identity, plus Bitcoins is based on this very amazing idea .One can easily verify it because all the data is uploaded and at the same time due to* Consensus * , you do have the opportunity to actually find out stuff about people.

This is why many people do believe that it would battle corruption in the government very effectively.

The thing is , until and unless you are not all set on changing your addresses, using tons of things to make sure your identity stays hidden , Bitcoins is more like a transparent currency  , the thing is ,it is giving people Independence but at the same time it is giving us the opportunity to track how it's being used .

I also do happen to Belive that , It is perfect the way it is .Plus it's applications in the general government is actually disregarded , it can serve as a great tool against the situations we are facing right now .

Only 10% of Bitcoins is being used for inappropriate purposes , Mandatory KYC in most exchanges have even enabled government to track the addresses and pin it down faster .

It is way more transparent than Fiat I would say .

[Mahanton]

Bitcoin is already good as it is, I don't think we still need any more anonymity, it's just good as it is and it provides anonymity but to a certain level. The op is right about what he said here, the government will be against Bitcoin if it's 100% anonymous. And apart from that, I have my own reasons why I wouldn't want Bitcoin to be hundred percent anonymous. If it does, there will be people who would want to make use of that advantage in the wrong way.

Even with this little level of anonymity, people are still people to commit some crime using Bitcoin and escape with it. But that kind of people are not new to this society as they are into such activities for years. So, bitcoin is being pseudo-anonymous is always having its own advantages and governments also must be liking it.

We dont know if its intentional to be created that way on where its pseudo-anonymous or just totally being cracked on that it isnt really that fully anonymous at all? I agree that this kind of feature will
surely kill out the main purpose of full adoption since we do know that government would always be on the top of the chain which means if things is out of their control then they will surely
make a step to oppose it. Just like what happened on Monero where its being delisted on some exchange and we know that these platforms are following legal protocols which is already
signifying that they do consider out XRM anonymity and they do like to get rid of it.

[DarkDays]

I don't know about never.

Basically what you're saying is that it shouldn't be anonymous to prevent it from being banned or attacked by governments.

However, if (or when) Bitcoin achieves dominance over fiat currencies, it won't be possible for governments to simply take it down, since the economy would be built around Bitcoin.

Once that happens, it would be completely fine for it to switch on an anonymity update, since by that point it's not going anywhere anyway.

That said, I don't see the need when BTC is easily interchangeable with Monero, and preventing address reuse and using a proxy is enough to prevent most tracking anyway.

[coinfinger]

Apart from the over the counter that you have mentioned, you're forgetting that there are decentralized exchanges (DEX), and I do not think the government anywhere has access to any of those websites. They can only regulate Centralized exchanges such as Coinbase, and maybe Binance, and others that are similar to them, but they can't do that to exchanges that are decentralized.

As for being anonymous, that's not something that I worry about. I just make use of Bitcoin because I like the fact that I am able to quickly send and receive money to anyone around the world and also at a cheaper rate (fees). I do not really bother myself whether it is anonymous or not. I have not seen the need to; probably I might make some considerable amount of bitcoin saving. I guess bitcoin whales are the actual people who care about the anonymity the most right now.

[ChiBitCTy]

Who is trying to make Bitcoin fully anonymous?Can you mention a few BTC developers,that are currently working on this?
Is there an upcoming Bitcoin hardfork,that is aiming at more anonymity? I don't know about such hardfork.
Basically you are a discussing a possibility that might never happen.
I don't see any logic in the "if bitcoin becomes more anonymous,governments will destroy it" hypothesis.
Monero is more anonymous than Bitcoin,but no government had destroyed Monero so far.It's still alive.
The governments might try to destroy Bitcoin not because it's more or less anonymous,but because it is an alternative to the fiat financial system.

I'm not saying any of the Devs are, I'm speaking more towards those pushing for it, which is a WIDE range of users in the community. 

How about L.N....can anyone say with any certainly if this is truly anonymous or not?  If it is, or is much more so than BTC, and it is used on the main layer ( vs a secondary layer which is probably more likely from what I've read ) then that makes BTC anonymous? ( not an expert here, throwing out a hypothetical ).

Privacy coins have had some issues - https://cointelegraph.com/news/privacy-focused-cryptos-hunted-down-by-forensics-and-exchanges

Likely will have more- https://invezz.com/news/2020/04/10/john-mcafee-claims-governments-will-ban-privacy-coins/

[ChiBitCTy]

Don't worry, there's no thing such as fully anonymous . While there are many ideas to increase anonymity of Bitcoin, but most of them abandoned or rejected due to trade-off such as bigger transaction size.

But if government says they only Bitcoin if Bitcoin is fully controlled by government, would you agree with that?

What about Monero? I sure hope my Signal app is too     Quantum would agree with your statement though, however we are a ways off.

Would I agree w/that? Of course not.  I am all about privacy especially from the governments prying eyes.  I just know OTC  / Decentralized exchanges and say maybe .onion exchanges ( not sure if these even exist yet or are possible ) will not bring bitcoin to mainstream use. 

[verita1]

I have searched and found no recent news about Treasury Secretary Mnuchin talking about Bitcoin.
Only two articles in dates of 02/13/2020 and 03/02/2020.

https://news.bitcoin.com/mnuchin-cryptocurrency/

https://home.treasury.gov/news/press-releases/sm926

In both articles he highlights the duty of the treasury department to prevent the misuse of virtual currencies including Bitcoin and stablecoins.

"The US welcomes responsible innovation, including new technologies that may improve the efficiency of the financial system," said Secretary Steven T. Mnuchin. "We must ensure that we balance innovation with the need to protect our national security and maintain the integrity of our financial system. "

But I think that once Bitcoin is legal in the countries. Governments will levy a tax for those who make use of it and they would have to pay these taxes. We are already seeing it in some countries that are doing it and therefore Bitcoin would not become full anonymous.

[ChiBitCTy]

I have searched and found no recent news about Treasury Secretary Mnuchin talking about Bitcoin.
Only two articles in dates of 02/13/2020 and 03/02/2020.

https://news.bitcoin.com/mnuchin-cryptocurrency/

https://home.treasury.gov/news/press-releases/sm926

In both articles he highlights the duty of the treasury department to prevent the misuse of virtual currencies including Bitcoin and stablecoins.

"The US welcomes responsible innovation, including new technologies that may improve the efficiency of the financial system," said Secretary Steven T. Mnuchin. "We must ensure that we balance innovation with the need to protect our national security and maintain the integrity of our financial system. "

But I think that once Bitcoin is legal in the countries. Governments will levy a tax for those who make use of it and they would have to pay these taxes. We are already seeing it in some countries that are doing it and therefore Bitcoin would not become full anonymous.

This Forbes headline is as click bait bullshit as they come, but this is what I was referring to.  This was right before the coronavirus pandemic and it might be on the back burner, but it’s still something that’s with out question coming, how strict or open they’ll be , remains a mystery. Knowing this scumbag, my hopes are not up - https://www.google.com/amp/s/www.forbes.com/sites/billybambrough/2020/02/16/blow-to-bitcoin-as-significant-us-crackdown-suddenly-revealed/amp/