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

[Getmon]

It is not that Bitcoin "should never" become fully anonymous, it is that Bitcoin is not fully anonymous.

It is not all about Bitcoin not going to become what it is supposed to become as designed and planned, it is about Bitcoin being what it is. Bitcoin is not straying intentionally away from its grand design because of the constraints brought by the governments and the banks and all the systems. Bitcoin is just being true to itself, which is not fully anonymous.

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[kryptqnick]

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. 

I think that Bitcoin is meant to provide some privacy, but also transparency as no non-cryptos offer. Those who want to make sure nobody ever learns about their transactions and identity can use coins like Monero, but that's not what Bitcoin is about.
As for exchanges, I believe it raises the question of KYC. Again, there are ways to exchange without revealing identity. But I think it's fair to impose KYC when big sums of money are moving because fighting money laundering is important. Then again, the same limits should be introduced to cash payments in this case.

[RapTarX]

I hope LN is something that stays on another layer and is used for anonymous transaction 

LN is not that much of anonymous as it is expected. Afaik, LN payments can be traced although it will be hell lot of works. Either way, if BTC becomes anonymous, it will barely survive in the market.
Like you said, most countries don't have freedom of speech etc. In case of financial activity privacy, all countries are more strict and in such case, BTC would never be legalized.

[Becky666]

We shouldn't listen much about the government mates, the governments know that they can't ban bitcoin and can't stop it spread either. Bitcoin was created for anonymous transaction and making it non anonymous will defeat it purpose and goal of creation. Listening to what the government has to say shouldn't be an issue, let them try it ban and watch the next move from Bitcoin. For creating another layer and making Bitcoin non anonymous can equally harm Bitcoin reputation and adoption.

[gentlemand]

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

In a world where there was no need to use fiat or deal with a centralised entity Bitcoin would do exactly what it was intended to do. And indeed it does. It's the hangover from ye olde system that's introducing all of the problems people moan about.

It was never going to magically create its own economy. It has to transition from the old one and that's still a possible outcome.

As for OP's original question, if one day we woke up and Bitcoin had converted into another Monero authorities everywhere would start pumping out kittens. It would be straight back into the shadows in most places.

Bitcoin's subtle progress around the edges is one of its greatest assets. I don't know enough about LNs or any other second layer but it's possible you will be able to opt in to proper privacy using a layer on top while the base layer remains snoopable.

[Slow death]

I ask myself the following:

Some people want anonymous coins (which I also think is good if the person does not use to commit crimes), but exchanges (which have owners) will always have to ask for KYC, even though at that moment there are exchanges that do not ask for KYC in the future all exchanges will be forced to ask their customers to do KYC. Which government will allow anonymous currencies? So do we have to fight governments until they accept anonymous coins? man who is the madman who thinks he can fight the government? It is already a very good thing that governments accept bitcoin, asking for more than that is the same as fighting in a fight where there is only a 0.1% chance of winning

[gentlemand]

Which government will allow anonymous currencies?

Not just governments, banks too. Coinbase lost their UK banking relationship with Barclays. Their new provider made dropping Zcash a condition of doing business with them.

The future of proper anon coins is likely to be non existent on approved exchanges. No doubt they'll do fine elsewhere as they provide a genuine use case.

[hv_]

Which government will allow anonymous currencies?

Not just governments, banks too. Coinbase lost their UK banking relationship with Barclays. Their new provider made dropping Zcash a condition of doing business with them.

The future of proper anon coins is likely to be non existent on approved exchanges. No doubt they'll do fine elsewhere as they provide a genuine use case.

What is genuine for fully ano paying? You ll never be able proof real ownership... so what u receive is always confiscatable. Exchange of goods / services for money is always a legal relevant contract. Not possible ano

[Little Mouse]

Which government will allow anonymous currencies?

We have seen exchanges to delist pribacy coins. Houbi and Okex Korea has done it couple of months ago. At some point, every centralized services like exchange, or other legal service providor will not allow privacy coin anymore because of the regulations govt will put to stop money laundering and illegal activities.
But as above said, this coins will still be existed because they have the usage. Privacy coin like Monero will be used for untraceable transaction and govt can not stop it at all.

[Rafael_Carrero]

Bitcoin shouldn't be fully anonymous because the anonymity wasn't in its white paper. If Satoshi had wanted to make Bitcoin 100% untraceable, it would be private now. But the lack of anonymity won't help with Bitcoin mass adoption. 

[20kevin20]

If the FBI, CIA & NSA could've never traced a Bitcoin tx since they heard of it, I bet it would've been banned long ago. Bitcoin serves us as the financial freedom we need in a semi authority-compliant way and that's enough - for anonymity, as others said before me too, there are other coins out there that you can use.

But as we can see, anonymity is one step closer to extinction every day. If even prepaid cards are going to require an ID in all of the EU, then I don't know how someone could expect privacy coins not to have a bit of trouble sooner or later. On the other hand though, they do serve an amazing purpose and OTC trading will still be a thing if you're a privacy seeker.

The top pro when it comes to cryptocurrencies is that you have a choice. I mean, you have way more choices than you should've had but you do have reliable coins to cover +90% of your purposes with.

[pooya87]

If the FBI, CIA & NSA could've never traced a Bitcoin tx since they heard of it, I bet it would've been banned long ago.

i disagree. it may be a tiny part of the reason but the main reason is because bitcoin is decentralized and can not be banned. not to mention that bitcoin's main usage has never been for anything illegal. if it were any other way then truly anonymous coins such as Monero would have been banned already, which is obviously not happening.

[MCobian]

I agree that bitcoin is not completely anonymous, because we can still track bitcoin transactions. Therefore many bitcoin mixer products
to help anonymous bitcoin transactions, if you really want to use crypto full anonymous, you can use privacy coins. Like monero, dash,
zcoin, bytecoin and others as its. Since it was created bitcoin was not designed as a privacy coin, So it is natural that bitcoin cannot be
completely anonymous.

[DooMAD]

So do we have to fight governments until they accept anonymous coins? man who is the madman who thinks he can fight the government? It is already a very good thing that governments accept bitcoin, asking for more than that is the same as fighting in a fight where there is only a 0.1% chance of winning

Conversely, I could ask who are the madmen in government who think they can fight a branch of mathematics?  How do you practically and viably ban numbers?  That's all we're using here.  Large, nigh-impossible-to-calculate numbers.

Also, the game theory doesn't work out well on their end.  Many people have commented in the past that if they make crypto illegal, that would likely only drive it underground.  So they need to play nice and employ their usual "nudge theory tactics" (be on the lookout for those), or they risk crypto users choosing to play hardball and becoming more militant about what we do.  At the moment, I think it's safe to say most of us would describe ourselves as "enthusiasts" or "hobbyists", but if someone told me I couldn't do this stuff anymore, I'll be giving 'em the ol' middle finger and finding ways to flout whatever legislation they opt to put in place.

[hv_]

If the FBI, CIA & NSA could've never traced a Bitcoin tx since they heard of it, I bet it would've been banned long ago.

i disagree. it may be a tiny part of the reason but the main reason is because bitcoin is decentralized and can not be banned. not to mention that bitcoin's main usage has never been for anything illegal. if it were any other way then truly anonymous coins such as Monero would have been banned already, which is obviously not happening.

I disagree. It could be banned.

[DooMAD]

I disagree. It could be banned.

A "ban" could be put in place, but it's unlikely to be an effective ban.  Unless you're getting your coins mixed up again, maybe?  Usage of BSV would be comparatively easier to restrict by a government than usage of BTC.  BSV has fewer nodes, limited infrastructure, weak decentralisation, etc.  Not to mention the so-called leadership's stance on regulatory compliance.  You'll put your hands up and surrender when you're told to. 

[serjent05]

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.

I agree, privacy and anonymity are broken when people convert Bitcoin to cash.  It is true that the network itself is quite good with privacy with the help of TOR. Whether it is a centralized or decentralized exchange, once the transaction goes out of the Bitcoin Network (Bitcoin to Cash) this privacy thing is nullified.  Though they say there are ways to Cash out Bitcoin anonymously through Local Bitcoins, Withdraw using Cash or buy it gift cards.  But the question is, are they really 100% true?  ATM have surveillance camera,  users need to register to Local Bitcoin and I read KYC is needed for that exchange now, and Coinbase? Lol, that is one of the reasons why a torrent site owner was arrested. Stated in this article Coinbase Helps FBI Shut Down KickAssTorrents

An interesting part of the story, which may concern Bitcoin supporters, is the fact that the San Francisco-based exchange Coinbase helped federal agents. In 2012, KAT started accepting Bitcoin donations, and U.S. officials say records received from Coinbase revealed the Bitcoin donation address was maintained by the exchanges services. The Coinbase account was registered to Artem Vaulin located in Kharkiv, Ukraine. The affidavit reports that $72,767 USD in bitcoin had entered the owner’s donation wallet.

And Bitcoin is never been fully anonymous, whoever believes that Bitcoin is, I think he needs to go back to basic knowledge about BTC.

I disagree. It could be banned.

A "ban" could be put in place, but it's unlikely to be an effective ban.  Unless you're getting your coins mixed up again, maybe?  Usage of BSV would be comparatively easier to restrict by a government than usage of BTC.  BSV has fewer nodes, limited infrastructure, weak decentralisation, etc.  Not to mention the so-called leadership's stance on regulatory compliance.  You'll put your hands up and surrender when you're told to.  

Exchanges can be ban but the Bitcoin network can't be banned.  Just like torrent sites.

[Yatsan]

It is not that Bitcoin "should never" become fully anonymous, it is that Bitcoin is not fully anonymous.

I guess there were some trouble understanding between anonymous and pseudonymous. Based on these terms, bitcoin will actually fall under the pseudonym since our names are being assumed as the addresses that we have. It is just like our pen name on the blockchain. Being anonymous is a complete blank entity, you know nothing about it but the appearance of it plus the transactions are being published publicly so how can that be an anonymous.

It is not all about Bitcoin not going to become what it is supposed to become as designed and planned, it is about Bitcoin being what it is. Bitcoin is not straying intentionally away from its grand design because of the constraints brought by the governments and the banks and all the systems. Bitcoin is just being true to itself, which is not fully anonymous.

If bitcoin has to offer us complete anonymity on the internet, then government will shut it down coz that it'd be the most movement under their radar.

[coolcoinz]

You say it is not anonymous but in a way it is, as long as you've never submitted KYC.
If I were to do a p2p transaction to get cash with BTC that I've acquired in 2014, that would pretty much be an anonymous transaction.
Say I wanted to take my BTC to a store that accepts such payments and bought a new computer. That would be an anonymous transaction.
I have anonymously exchanged Bitcoin for cash in the past. It's not very easy but it's possible.

Monero is being harder and harder to exchange every year. What if it becomes delisted from 90% of exchanges one day?

[gentlemand]

Monero is being harder and harder to exchange every year. What if it becomes delisted from 90% of exchanges one day?

I think that's totally inevitability myself. Anyone not planning for it is a bit of a silly sausage. The day is coming.

But that doesn't mean the death of it by any means. There'll always be exchanges on the fringes happy to deal with it and at some point there'll be robust and decent decentralised options with some volume.