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.