Privacy Coins and The Shadow Economy

[Abiky]

In these times of crisis, it's evident that people recur to illegal ways to get access to goods and services. The privacy coins will allow anyone to achieve true freedom and financial sovereignty that was never thought possible before. With truly anonymous cryptocurrencies like Monero, Grin, and Beam, the shadow economy could grow towards unprecedented rates. I think that governments will start to "hunt" for privacy coins now more than ever because of this.

Do you think that privacy coins will be largely adopted in the shadow economy? Or will Fiat continue to dominate? If we put aside price volatility of privacy coins, and focus on their utility, the shadow economy could work as intended without the need to rely on banks (Fiat) ever. Only then, the shadow economy will become truly unstoppable.

What are your thoughts?

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[jackg]

Paper money was hard to trace, but you could at least use sniffer dogs in airports - now many countries have moved to plastic and how are you going to sniff that out (you can was them to remove a lot of traces afaik).

Tbh the migration to where everything can be tracked is one that occurred recently, you couldn't do it well until the 60s-80s I think it's a natural sideways evolution... There are ways to track privacy coins (especially if you send odd amounts).

Privacy in general also means the normals and the majority go without being tracked. Your bank doesn't advertise to you an affiliated casino because you haven't gambled this month (for example) - or they don't try to sell your data on to other people while giving you nothing for it and no knowledge it's happening. In the information age where big data is ruling what everyone could do perhaps adding anonymity is a welcomed taint.

Tracking what someone visits on the Internet for law enforcement is like buying the first book to a trilogy and realising it's awful (you're going to buy/borrow the second one just out of curiosity if you don't have the right restraint)...

[Aveatrex]

There are ways to track privacy coins (especially if you send odd amounts).

Sorry but you have no idea what you're talking about. You are confusing privacy coins with mixers. There is NO way you can trace a monero transaction for example; stealth addresses are used so people can't discover the funds you hold with your public address. Also monero has a built in mixer, the mixing takes place every time funds are sent, it's called ring signatures.

The only *possible* problem you can face with most privacy coins is that an entity can scan your traffic and know that you are using monero for example, but they can't know what you actions/transactions you have done in the network and if you use tor/vpn you are already immunized against this anyways..

[davis196]

In these times of crisis, it's evident that people recur to illegal ways to get access to goods and services. The privacy coins will allow anyone to achieve true freedom and financial sovereignty that was never thought possible before. With truly anonymous cryptocurrencies like Monero, Grin, and Beam, the shadow economy could grow towards unprecedented rates. I think that governments will start to "hunt" for privacy coins now more than ever because of this.

Do you think that privacy coins will be largely adopted in the shadow economy? Or will Fiat continue to dominate? If we put aside price volatility of privacy coins, and focus on their utility, the shadow economy could work as intended without the need to rely on banks (Fiat) ever. Only then, the shadow economy will become truly unstoppable.

What are your thoughts?

What do you mean by "shadow economy"?Only the darkweb or the entire criminal economy?
If you are talking about the entire criminal economy(conducted offline on the streets),fiat money will dominate forever.
If you are talking about the darkweb,Bitcoin is still the cryptocurrency that is widely adopted by those .onion darknet marketplaces.Monero is the second most adopted cryptocurrency,but it might become number 1.
The goverments will try to ban privacy coins for sure,but that won't damage their usability,since they are mostly used for buying and selling illegal stuff anyway.The price of monero might go down to a few dollars,but criminals would still use it,because they aren't crypto traders,so they don't care about price volatility and profits from crypto trading.

[Coyster]

The underground economy is populated by people who work only to meet their daily needs, evading tax and government regulations as they do so, you'd not expect a sex worker for example who works at night to collect payments in monero or in any cryptocurrency, cash (fiat) is what's more convenient for people who work through many jobs unnoticed by the government.

Maybe more prominent parts of the illegal economy, like those into drug/human trafficking who make a lot of money from this illegal industry may use cryptocurrency, they are more of rich people, so may not need to move their coins out all the time to meet any need. They can prolly then use the blockchain as their bank, instead of the traditional banks. But imo many of them would still use bitcoin instead of monero, the same way online scammers do.

[batang_bitcoin]

Fiat is still going to dominate this race against shadow economy and privacy coins. You just give cash and you have no trace unless the money that was used paying you is a marked money which can be used to sue you for illegal thing that you do. But for those cashless transactions, they will rely to privacy coins so that they will be undetectable with the use of monero and other proven privacy coins.

[Wind_FURY]

In these times of crisis, it's evident that people recur to illegal ways to get access to goods and services. The privacy coins will allow anyone to achieve true freedom and financial sovereignty that was never thought possible before. With truly anonymous cryptocurrencies like Monero, Grin, and Beam, the shadow economy could grow towards unprecedented rates. I think that governments will start to "hunt" for privacy coins now more than ever because of this.

Do you think that privacy coins will be largely adopted in the shadow economy? Or will Fiat continue to dominate? If we put aside price volatility of privacy coins, and focus on their utility, the shadow economy could work as intended without the need to rely on banks (Fiat) ever. Only then, the shadow economy will become truly unstoppable.

What are your thoughts?

What do you mean by "shadow economy"?Only the darkweb or the entire criminal economy?
If you are talking about the entire criminal economy(conducted offline on the streets),fiat money will dominate forever.
If you are talking about the darkweb,Bitcoin is still the cryptocurrency that is widely adopted by those .onion darknet marketplaces.Monero is the second most adopted cryptocurrency,but it might become number 1.
The goverments will try to ban privacy coins for sure,but that won't damage their usability,since they are mostly used for buying and selling illegal stuff anyway.The price of monero might go down to a few dollars,but criminals would still use it,because they aren't crypto traders,so they don't care about price volatility and profits from crypto trading.

Don't underestimate Bitcoin's network effects. Plus I believe with Monero's larger block sizes, and larger consumption of bandwidth, higher cost to run a full node, then Bitcoin will win the war of attrition.

[Kakmakr]

The thing about these privacy coins is the trust. How many people truly trust the anonymity of these tokens or even know about it. Let's take Bitcoin ( Pseudo anonymous ).... if you make one mistake where your addresses can be linked together... your anonymity is busted.

The technology is still new and not a lot of people know about these coins and when they get into it, they make mistakes that would reveal their true identity in the future. (Even pro's makes mistakes ...example : Ross - Silkroad) 

[dothebeats]

As they say, "Cash is King."

Cash remains to be one of the hardest assets to trace. If passed within banking institutions to another, perhaps there is that possibility to trace the taints, but if it is delivered physically then there's no way in hell that people can track the whereabouts of those. While privacy coins offer 'complete privacy' on transactions, I still don't think that it will mean that much to shadow economies since most of them are just dealing with cash and/or bitcoin, since those are proven and effective payment methods that keep the economy alive. Why the change in ways if what's being done is as efficient and as effective as it can be?

[Paycoinzzz]

In these times of crisis, it's evident that people recur to illegal ways to get access to goods and services. The privacy coins will allow anyone to achieve true freedom and financial sovereignty that was never thought possible before. With truly anonymous cryptocurrencies like Monero, Grin, and Beam, the shadow economy could grow towards unprecedented rates. I think that governments will start to "hunt" for privacy coins now more than ever because of this.

Do you think that privacy coins will be largely adopted in the shadow economy? Or will Fiat continue to dominate? If we put aside price volatility of privacy coins, and focus on their utility, the shadow economy could work as intended without the need to rely on banks (Fiat) ever. Only then, the shadow economy will become truly unstoppable.

What are your thoughts?

I don't think things that work well in the dark work well in light. You know, there are many whales that use privacy coins to launder money and that's its main function and it's only really useful when it works in the dark like this. Our fiat money is still functioning normally and it should be clear to the government to keep it under control, which is why it always exists and no coins can replace it. I am not too negative about crypto but fiat and crypto money should be used in 2 different environments, it will promote the best.

[Sanitough]

Do you think that privacy coins will be largely adopted in the shadow economy?

No, the demand of privacy coins will not be as big as fiat or as big as bitcoin.
Government are now regulating crypto or they'll ban it, so we have to choose the better one, and obviously we would rather choose to get the market regulated and we have no choice but to comply with the law even if it will result to losing our privacy.

Or will Fiat continue to dominate? If we put aside price volatility of privacy coins, and focus on their utility, the shadow economy could work as intended without the need to rely on banks (Fiat) ever. Only then, the shadow economy will become truly unstoppable.

What are your thoughts?

Fiat will always dominate, even if I believe that crypto particularly bitcoin will gain massive adoption in the future, but it will not come close to fiat's adoption.

[Febo]

What are your thoughts?

My thought is that you totally misunderstood why opaque ledger cryptocurrencies exist. They exist to give people privacy when using money. We all need privacy. If we would not need privacy, then toilets would not have doors and walls in our houses would be built out of glass. The privacy with money we need so the merchant that sell you apples can not see how much more coins you have and where they come from. This is the case with transparent ledger cryptocurrencies.

Illegal economy, shadow economy my ass!!!

[stompix]

Do you think that privacy coins will be largely adopted in the shadow economy? Or will Fiat continue to dominate? If we put aside price volatility of privacy coins, and focus on their utility, the shadow economy could work as intended without the need to rely on banks (Fiat) ever. Only then, the shadow economy will become truly unstoppable.

Sometimes I have a feeling I'm listening to some kids planning on building a fort from cardboard boxes.

This so-called shadow economy or informal economy expansion will not bring anything good for the ones involved in it.
Expansion of the black market for workers means more people with no health coverage, no pension fund (in countries where this is mandatory), sending them to a life of misery exactly when they are old and powerless.

Unstoppable?
If the government would really want to stop the informal economy it could do so pretty fast, but stopping it would come with a lot of problems and some sectors would really be affected so they are choosing to keep it under control and allow it to thrive as much as it does not become a problem.
You have a factory, you pay your workers anonymously and when you get raided by the authorities...you...what u do? 

The only *possible* problem you can face with most privacy coins is that an entity can scan your traffic and know that you are using monero for example, but they can't know what you actions/transactions you have done in the network and if you use tor/vpn you are already immunized against this anyways..

This will not help at all a merchant when inspection comes he has delivered 20 orders but he has no receipts and no proof of getting the funds from the customers, right?
All privacy coins lose their privacy when they are mixed with real-life goods and persons, the economy is not just about sending money to different persons, it's also about receiving and sending goods, and those nowadays can be so easily tracked you could use your own banknotes with your genome sequences imprinted or a privacy coin it won't be a difference.
 

[exstasie]

With truly anonymous cryptocurrencies like Monero, Grin, and Beam, the shadow economy could grow towards unprecedented rates. I think that governments will start to "hunt" for privacy coins now more than ever because of this.

I'm not sure about the prospects for overall growth but the IRS is obviously concerned about privacy coins and Bitcoin's Layer 2:

IRS-CI Cyber Crimes Unit challenged its “industry partners” to explain where the crypto tracing community stands on privacy coins, Layer 2 protocols, sidechains and the Schnorr signature algorithm in a June 30 Request for Information (RFI), as first reported by The Block.

The IRS singled out the monero, zcash, dash, grin, komodo, verge and horizen privacy coins, sidechains Plasma and OmiseGo, and Layer 2 protocol networks Lightning, Raiden and Celer.

https://www.coindesk.com/the-irs-wants-to-know-more-about-privacy-enhancing-crypto-coins-tools

Do you think that privacy coins will be largely adopted in the shadow economy? Or will Fiat continue to dominate?

Liquidity is the biggest determining factor since darknet users need to buy in and out of the crypto economy. Altcoin liquidity continues to disappoint, so it's no surprise BTC continues to comprise the lion's share of illicit usage.

This so-called shadow economy or informal economy expansion will not bring anything good for the ones involved in it.
Expansion of the black market for workers means more people with no health coverage, no pension fund (in countries where this is mandatory), sending them to a life of misery exactly when they are old and powerless.

In all fairness, that's the trajectory of the traditional economy. For the last 20 years in the US, wages have completely stagnated at the same time pensions have basically disappeared from the private sector. Over the same period, full time employment with benefits (like health care coverage and employer contributions to retirement accounts) is being phased out. In the 90s, gig work barely existed outside of musicians and temp jobs. Now it's 34% of the workforce, expected to become 43% this year. Not only do gig workers earn 50-60% less than the traditionally employed but they get zero benefits, in a world where the cost of living has risen 40-50% since 2000. They are destined for a life with little or no health coverage and no savings. This is the future being built for our children and grandchildren.

The private sector is a dead end for so much of the population now. If someone can make more money in the informal and black markets, I say go for it. At least they can avoid taxes that way.

[serjent05]

The thing here is the belief of not being traced.  People use Bitcoin in its earlier stage for that but then it has been proven that the transaction is not that anonymous, so they tend to move to privacy coins as it seems untraceable for now. And yes, I believe people that tend to shelter on the Shadow economy will use privacy coins to cover their transactions and at least escape the financial regulations.  Whether it can be traced or not depends on the capability of the government and how careless the person is in exposing his identity at the end line of the transaction.

[posi]

The privacy coins will allow anyone to achieve true freedom and financial sovereignty that was never thought possible before.

No doubt that through privacy coin true financial freedom can be achieved but it can also be achieve through decentralized coin either.

I think that governments will start to "hunt" for privacy coins now more than ever because of this.

They have posted a threat statement about privacy coins which affected the price of all privacy coin in the market and sooner or later they may or not hunt privacy coin. Letsjust keep our fingers crossed.

Do you think that privacy coins will be largely adopted in the shadow economy? Or will Fiat continue to dominate?

Privacy coin are the major currency used in online shadow economy.

If we put aside price volatility of privacy coins, and focus on their utility, the shadow economy could work as intended without the need to rely on banks (Fiat) ever. Only then, the shadow economy will become truly unstoppable.

Agreed.

[The Sceptical Chymist]

The privacy coins will allow anyone to achieve true freedom and financial sovereignty that was never thought possible before.

In theory they could do this, but my guess is that in practice there are very few people around the world using privacy coins for much.  If people own a coin like PIVX it's probably just to earn through PoS or to run a masternode or whatever, not to bypass any laws.  I'm not even sure you can buy anything on the dark web with privacy coins, where you'd think they'd have the most utility.  Last I heard, bitcoin was the primary crypto accepted for illegal crap.

But who knows?  Things might be kinda bleh for privacy coins now, but that could change if more people start getting into not just bitcoin but cryptocurrency in general.  There's certainly a use for them that's not being taken advantage of at present.

Sometimes I have a feeling I'm listening to some kids planning on building a fort from cardboard boxes.

LOL.  I get the same vibe sometimes.

[Hydrogen]

I guess the real question is whether true privacy coins can exist. In a world where backdoors and logging is built into nearly everything. Believing an anonymous and private cryptocoin can exist. Its like logging onto an anonymous blogger platform through TOR and assuming no one can figure out your identify.

Silkroad, alphabay, silkroad 2.0 and other deep web markets were 1st attempts at developing a true shadow economy. Before that we had warez sites like piratebay, megaupload and carder groups peddling free software and stolen credit card data. These trends go back decades and centuries. AFAIK it predates Isaac Newton drawing and quartering those who debased england's currency by scratching gold and silver off of nationally issued coins. There is a broad historical precedent to this topic. And as some are fond of mentioning, perhaps history does have a tendency to repeat itself.

[bitgolden]

I do trust the anonymity of most of these privacy coins yet there are two things that I do not really like them for. One of them is the fact that I do not need them, I do not hide anything from anybody, I am not spending my money on anything illegal or even a bit shady, I just trade or earn and sell, that's it and those are all very well documented stuff which are totally legal so I have no use for them.

Another is the fact that maybe bad people use it? I mean how would I know if those privacy coins are used by people who just have a distain towards governments and want to be hidden from government because of that? Maybe they do have something much larger and much bigger? I wouldn't really know which is why I think it is quite important to know that anything that can be used by drug dealers, killers, rapists, pedos and so forth is not really welcomed for me.

[fiulpro]

In these times of crisis, it's evident that people recur to illegal ways to get access to goods and services. The privacy coins will allow anyone to achieve true freedom and financial sovereignty that was never thought possible before. With truly anonymous cryptocurrencies like Monero, Grin, and Beam, the shadow economy could grow towards unprecedented rates. I think that governments will start to "hunt" for privacy coins now more than ever because of this.

Do you think that privacy coins will be largely adopted in the shadow economy? Or will Fiat continue to dominate? If we put aside price volatility of privacy coins, and focus on their utility, the shadow economy could work as intended without the need to rely on banks (Fiat) ever. Only then, the shadow economy will become truly unstoppable.

What are your thoughts?

See I do think that we should understand that most of the people around the world does not have the need to do something illegal to obtain something since most of them are in working class , working 9-5 jobs, earning , without much knowledge about cryptocurrencies.
In my family personally only 1-2% people know about Bitcoins , rest thinks I do something weird on the internet . Therefore these privacy coins are being used by very less people, maybe the people who do want to stay away from the eyes of the government because of some issue, some want to hide their financial situation and get out of paying taxes .
Right now I don't think that the government will out up a hunt for coins like that since right now they have much bigger issue right in front of them , after all this they will try and regulate those coins for sure . They might introduce KYC , employee people to take care of the online issues and that is much needed since we cannot always trust that people will make good decisions.

[exstasie]

I guess the real question is whether true privacy coins can exist. In a world where backdoors and logging is built into nearly everything. Believing an anonymous and private cryptocoin can exist. Its like logging onto an anonymous blogger platform through TOR and assuming no one can figure out your identify.

Open source code greatly reduces the likelihood of an actual backdoor. The real problem for me is a privacy coin could be secure for years, and then a breakthrough could come along that compromises past blockchain activity. Encryption methods have a finite shelf life, so relying on them in the context of permanent public logs can be quite dangerous, depending what you're involved in.

[TheUltraElite]

Well to be honest, even bitcoin is not that useful is hiding tracks. But is that of concern to the people who are dealing with it in a legally approved fashion? No, the ones who are going to be spooked are the money launderers and straight up criminals who are using bitcoin and/or privacy coins for for wrongdoings.

Whether every and every privacy coin is useful or not is a different question. XVG and PIVX are shitcoins in my view, you all might think different. XMR is still useful but I always prefer bitcoin over anything else because even if it is pseduo-anonymous, I have nothing to hide.

Moreover not every government is going to spend their resources to track down users. They have other work at hand but chances are there if in future bitcoin gains a bigger share of the economy then changes might be seen.

[hugeblack]

Governments are beginning to feel the dangers of privacy currencies, so more research is being done to develop programs to track these currencies^[1].
Bitcoin was used for privacy, but over time it became difficult to use it.
Countries will impose restrictions on remittances and mining operations, and thus the prices of those currencies will decrease. The lower prices will make them worthless even if they are of high privacy.

Imagine that the price of Monero is less than 1 dollar and the price is constantly increasing.


[1] https://bitcointalk.org/index.php?topic=5259690.msg54725595#msg54725595

[Botnake]

Governments are beginning to feel the dangers of privacy currencies, so more research is being done to develop programs to track these currencies^[1].
Bitcoin was used for privacy, but over time it became difficult to use it.
Countries will impose restrictions on remittances and mining operations, and thus the prices of those currencies will decrease. The lower prices will make them worthless even if they are of high privacy.

Imagine that the price of Monero is less than 1 dollar and the price is constantly increasing.


[1] https://bitcointalk.org/index.php?topic=5259690.msg54725595#msg54725595

This is the risk I'm thinking of holding a privacy coin, the government are slowly entering the crypto market with their regulation and there's no way they would spare a coin that will be exempted from regulated, everything will be treated equally, so it's possible that privacy coins would become illegal in the future and we know how big the influence of the government is, and that would result to its price dumping because people are moving to other coins.

Privacy is our right, but under the government and their regulation, we can't ask that if we want to be compliant at the same time.

[slapper]

People have already used shadow coin for many years ( Bitcoin has been used in the deepweb since 2009 and people bought drugs, weapons, and illegal information there ) and still no sight that this system will be shut down in the near future. However, many people tend to live in normal life in which they don't have any conflict with the government or the people with authority.

Therefore, they choose to give away their privacy and information instead of using some sort of shadow coin. There are others who understand the fact of those coins but they only want to benefit themselves by making more money with them. I guess it is hard for these coins to rise. It may take several years for people to fully understand the important part of their own privacy

[alexforneus]

Cash is still more popular for shadow economy but i guess that popularity of privacy coins will slowly grow

[Abiky]

Sorry but you have no idea what you're talking about. You are confusing privacy coins with mixers. There is NO way you can trace a monero transaction for example; stealth addresses are used so people can't discover the funds you hold with your public address. Also monero has a built in mixer, the mixing takes place every time funds are sent, it's called ring signatures.

The only *possible* problem you can face with most privacy coins is that an entity can scan your traffic and know that you are using monero for example, but they can't know what you actions/transactions you have done in the network and if you use tor/vpn you are already immunized against this anyways..

Exactly. It's extremely difficult to be able to track & trace Monero transactions on-chain. The complexity of RingCT + Confidential Transactions makes government's efforts useless. The more mixing inputs there are for an XMR transaction, the more difficult it'll be for anyone to obtain the origin of funds. It's this feature which makes Monero extremely useful for the Shadow Economy. Even ordinary people like you and me, will find Monero to be an indispensable tool for preserving privacy against "prying eyes". So far, Monero is the strongest and most decentralized privacy coin available on the market. It could experience a "boom" in price if darknet markets and everyday people use it more thoroughly. I think it's better than Bitcoin in many ways.

While privacy coins like Monero bring strong anonymity, the ability to be traced relies solely on yourself. As long as you take the necessary precautions to hide your identity, no one will be able to link transactions to you. But acting irresponsibly could expose yourself to the public even if you use the strongest privacy coin in the world. I think that as Fiat becomes debased by governments worldwide, more people will be using privacy coins both in the Shadow Economy and the traditional economy.

What do you mean by "shadow economy"? Only the darkweb or the entire criminal economy?
If you are talking about the entire criminal economy(conducted offline on the streets),fiat money will dominate forever.
If you are talking about the darkweb,Bitcoin is still the cryptocurrency that is widely adopted by those .onion darknet marketplaces.Monero is the second most adopted cryptocurrency,but it might become number 1.
The goverments will try to ban privacy coins for sure,but that won't damage their usability,since they are mostly used for buying and selling illegal stuff anyway.The price of monero might go down to a few dollars,but criminals would still use it,because they aren't crypto traders,so they don't care about price volatility and profits from crypto trading.

I'm referring to the "illegal economy" both in the real world and in the dark web. I know that most people use privacy coins for good things, but governments don't see it that way. It's no secret that the Shadow Economy relies more on Fiat than crypto itself. Even with many darknet markets accepting privacy coins like Monero and Zcash, Fiat continues to be dominant. I think that's largely because Fiat is stable in price, while crypto is not. Privacy coins can provide the best features in the world, but if they're unstable in price, a very small minority of people will be using it to conduct "illegal transactions". For the sake of the entire crypto industry, it's best for it to be this way in order to bring some level of legitimacy to privacy coins. Only then, governments will allow the widespread use of privacy coins in the mainstream world.

Imagine if privacy coins were only used in the "illegal economy". They would certainly face a ban from many governments worldwide. Even now, these entities are claiming that privacy coins are used for tax evasion and money laundering. It's evident that the government doesn't want you to use something they can't control or keep track of. It'll be an never-ending war as privacy coins try to find their way to "fit" in the mainstream world. Just my opinion

[sandra_x]

Privacy coins are like the golden child of the crypto ecosystem because they give real liberty from tyranny of some Government and corporations. The advent of government controlled centralized exchanges have wiped-off the initial anonymity earlier provided by crypto in general. Privacy coins should be protected for the very fact that they offer protection to users against undue restrictions.

[mersal]

In these times of crisis, it's evident that people recur to illegal ways to get access to goods and services. The privacy coins will allow anyone to achieve true freedom and financial sovereignty that was never thought possible before. With truly anonymous cryptocurrencies like Monero, Grin, and Beam, the shadow economy could grow towards unprecedented rates. I think that governments will start to "hunt" for privacy coins now more than ever because of this.

Do you think that privacy coins will be largely adopted in the shadow economy? Or will Fiat continue to dominate? If we put aside price volatility of privacy coins, and focus on their utility, the shadow economy could work as intended without the need to rely on banks (Fiat) ever. Only then, the shadow economy will become truly unstoppable.

What are your thoughts?

Fiat still dominates at every illegal activity related transactions because most people don't know about crypto currencies yet so eventually the one who is involving in illegal activity also uses fiat more compared to cryptos.When it comes to privacy coins, government always wanted to stop them but it is really possible? No if someone using privacy coins then there is no way to stop them all they can do is to stop the trading platforms but people from darkweb always have a path when government make it as illegal in any places.

[meto012]

Privacy coins are like the golden child of the crypto ecosystem because they give real liberty from tyranny of some Government and corporations. The advent of government controlled centralized exchanges have wiped-off the initial anonymity earlier provided by crypto in general. Privacy coins should be protected for the very fact that they offer protection to users against undue restrictions.

but op says that if crypto is going to replace current fiat banking system - privacy coins are going to adopt all shadow economy of fiat so they're going to seem "dirtier" than they are now
I don't see how crypto can prevent such actions, perhaps it is build upon a basement of total trust to people

[Abiky]

Privacy coins are like the golden child of the crypto ecosystem because they give real liberty from tyranny of some Government and corporations. The advent of government controlled centralized exchanges have wiped-off the initial anonymity earlier provided by crypto in general. Privacy coins should be protected for the very fact that they offer protection to users against undue restrictions.

Privacy coins may be good and all for everyday people. But if they're heavily used in the "Shadow Economy", they could face constant opposition from governments worldwide. This would lead to a full ban on privacy-oriented coins like Monero, Grin, Beam, Zcash and the likes. While Fiat is commonly used for illegal activities (instead of crypto), we cannot discard the possibility of privacy coins being used massively in the "Shadow Economy" sometime in the future. For that to happen, crypto prices must be stable on the market. Otherwise, there will be no use for a crypto-oriented "Shadow Economy".

As long as privacy coins are used legally, the government won't crackdown on it anytime soon. One would expect governments to declare privacy coins "illegal" if they were used at a large magnitude by drug dealers, money launderers, and other criminals. Even now where privacy coins are barely used for illegal activities, governments are being skeptical about them. We all know that the government wants to have power over one's capital. Considering that some privacy coins are completely fungible, it makes government's efforts to spy on you totally worthless. This will be a never-ending battle, as privacy coins try to find their way in the mainstream world. Of course, there are people like you and me which uses privacy coins legally for preserving privacy against prying eyes. But the government doesn't care as long as it gets what it wants (which is the ability to track & trace transactions for taxation and other purposes). The "Shadow Economy" will continue to use Fiat (physical cash) as it's stable while being anonymous at the same time. Just my thoughts

[MCobian]

I am among those who believe that privacy coins are used for illegal activities, especially in a crisis situation like now that there are
certain people who want to make money illegally. Shadow economy will further develop, because I believe transactions use privacy coins
can't be traced yet. Or maybe the government does not intend to pursue the use of privacy coins for illegal activities, because I believe
Many corrupt government people use privacy coins for money laundering.

[XZERO1]

Do you think that privacy coins will be largely adopted in the shadow economy? Or will Fiat continue to dominate? If we put aside price volatility of privacy coins, and focus on their utility, the shadow economy could work as intended without the need to rely on banks (Fiat) ever. Only then, the shadow economy will become truly unstoppable.

I would say yes, privacy coins have more chance of being adopted worldwide in the shadow economy comparing to the Fiat and the traditional way of transferring value, the reason for that is how much easier it is to use privacy coins instead of Fiat and paper currency without the use of banking system at all, add to that the better security and total privacy that it will provide you with, and about the volatility of privacy coins I must say that once the adoption goes really worldwide because of higher liquidity and volume volatility would be a bit less and I don't suppose any business that is working under shadow economy cares that much about 5-10% less or more.

[beerlover]

I never really understood why it was so important for people who didn't do shady stuff as well. However if that is a thing that people really want and who am I to judge them, if that is their thing they should do it. But there is no way this could get better and one day become something huge.

I mean we are talking about something that could keep the pedophiles of the world hidden thanks to being such a privacy focused thing, now don't get me wrong I am not saying every user has to be shady, some of the mare quite smart people who just doesn't want others to be in their finances and that is a very good reason, but just because you are using it for the right reasons doesn't mean that everyone else does it as well. So in the end privacy coins could face some troubles in KYC form.

[LeGaulois]

@beerlover

I call this a fake problem. Despite all the AML regulations we have, it doesn't stop the pedos. Currently, banknotes are perhaps the best way to stay under the radar, governments will never ban to use banknotes. (That's also perhaps one of the reasons governments are looking into CBDCs).
It's impossible, for many reasons (unbanked/debunked people, seniors, and so on)

What could they do with privacy-centric cryptocurrencies? At best they could force exchange platforms to not list any coins, the same for marketplaces, anything run by a company that abides by the laws. Other than that? They won't be able to stop people to download a wallet and trade with someone P2P.

[Hydrogen]

Open source code greatly reduces the likelihood of an actual backdoor. The real problem for me is a privacy coin could be secure for years, and then a breakthrough could come along that compromises past blockchain activity. Encryption methods have a finite shelf life, so relying on them in the context of permanent public logs can be quite dangerous, depending what you're involved in.

Open source software has the same problem as scientific peer review.

No one is paid full time to scrutinize work and determine whether its legitimate.

Some open source applications contain millions of lines of code. No one will read it all to check for backdoors and exploits. They'll utilize an automated scanner to check every line of code and identify the most obvious flaws. But it will be far from a comprehensive approach. There are many methods of concealing backdoors in plain sight. Intelligence agencies like the NSA and CIA work around the clock to persuade developers to include backdoors and exploits in software and encryption products. There are historical examples of this being an industry standard for decades.

That's a good point on encryption standards having shelf lives. I think as much as 80% of theft in finance and banking industries are inside jobs. (Its vague but I'm fairly certain the percentage is a high number.)  It may be fair to say if a security breach occurs, its not a fault of technology. Rather a failure in the human trust aspect that is built into the system.

[Abiky]

I am among those who believe that privacy coins are used for illegal activities, especially in a crisis situation like now that there are
certain people who want to make money illegally. Shadow economy will further develop, because I believe transactions use privacy coins
can't be traced yet. Or maybe the government does not intend to pursue the use of privacy coins for illegal activities, because I believe
Many corrupt government people use privacy coins for money laundering.

That's certainly true, mate. Since the US imposed sanctions on several countries around the world, government officials from those countries have started using privacy coins for their own benefit. Even some people in the mainstream world have been using them illegally for tax evasion and money laundering. While Fiat is still "King" when it comes to illicit activities, privacy coins could follow suit as the "Shadow Economy" grows in these unprecedented times. Once there are many people using privacy coins for illegal transactions, you can expect governments worldwide to start cracking down on the entire ecosystem as we know it. While privacy coins can still be used regardless of a ban (due to their decentralized nature), they won't be traded at mainstream exchanges (which will negatively impact their price over the long term).

Let's hope that privacy coins are used more legitimately in the mainstream world than anything else. As long as Fiat remains dominant in the "Shadow Economy", governments will give the "green light" for the growth of privacy coins worldwide. With stablecoins, and De-Fi on the rise, the crypto industry will see increased regulation bringing legitimacy to the entire Blockchain ecosystem. Just my opinion

[rodskee]

Or maybe the government does not intend to pursue the use of privacy coins for illegal activities, because I believe
Many corrupt government people use privacy coins for money laundering.

Very possible that it's really happening, there are corrupt politicians who understand
the used of this privacy coins
They've take the advantage to transfer their money without any noticed, this knowledge
from this system gives them advantages.
The capabilities to work in the shadow and make things easy transferring wealth without any
thinking of possible tracked.


Money that untraceable gives additional power to this illegal doers, they are not visible as
they can transact any time without worries.

[Abiky]

Very possible that it's really happening, there are corrupt politicians who understand
the used of this privacy coins
They've take the advantage to transfer their money without any noticed, this knowledge
from this system gives them advantages.
The capabilities to work in the shadow and make things easy transferring wealth without any
thinking of possible tracked.


Money that untraceable gives additional power to this illegal doers, they are not visible as
they can transact any time without worries.

That's certainly true, mate. Privacy coins can serve as a safe-haven for wrongdoers in the mainstream world. The Shadow Economy could adopt them to a full extent in the future, after the introduction of CBDCs by governments and central banks worldwide. Since physical cash will no longer exist (or at least, it'll be phased out from circulation), people doing illegal activities will need to rely on an alternative that focuses on privacy than anything else. And we all know, that CBDCs will not be feasible for The Shadow Economy due to their high level of surveillance from governments worldwide.

While most people use privacy coins legitimately, there's nothing stopping governments from banning their use completely. Their main excuse is that privacy coins serve as tool for money laundering and tax evasion. But we all know, that's not the truth. For now, The Shadow Economy relies on Fiat currencies because of their price stability and widespread acceptance. Wait until there's a stablecoin with privacy features, and The Shadow Economy will never be the same. Due to the bad reputation surrounding privacy coins, some exchanges have begun delisting them. It seems that the future for privacy coins may not be as bright as I've once thought it would be. Just my thoughts