How does Bitcoin stay popular as strict KYC/AML rules and natured ecosystem?

[SamReomo]

During this time, many casual, non-technical, or new users  were discouraged from using Bitcoin entirely.

I disagree with you, in fact now it's very easy for new users to be part of the community because they've everything ready made for them. If they want to learn about Bitcoin they can easily learn about it from this forum or by reading any popular book related to Bitcoin.

For newbies it's not hard to use Bitcoin, surely they won't be able to secure their Bitcoin if they're weak in technical things but still it's not hard to buy Bitcoin these days, and similarly it's not hard to use the bought Bitcoin for purchasing of goods.

The technical users who've been part of Bitcoin ecosystem still use it, and prefer it way over any other coin. Some even prefer it over Monero because they're true lovers of it, surely those people know how to keep their privacy while using Bitcoin.

[lionheart78]

During this time, many casual, non-technical, or new users   were discouraged from using Bitcoin entirely.

I don't see anywhere that casual and non-technical, or new users, are discouraged from using Bitcoin entirely, most of these new users are even excited about using Bitcoin for their online transactions for the first time.  And the next statement clearly contradicts the prior statement because as your next statement states that KYC and AML regulations failed to halt Bitcoin adoption, and even made the BTC ecosystem adapt with a centralized system.

However, strict KYC and AML regulations have not halted Bitcoin adoption. BTC has evolved into a dual natured @ ecosystem.

We can be thankful to centralized exchanges for promoting Bitcoin for their own interest.  With this, even with the strict implementation of KYC and AML, people still adopt and buy Bitcoin through their services.

This dichotomy reflects the inherent flexibility of Bitcoin’s design, which accommodates both regulated participation and decentralized autonomy. This dynamic continues to shape the Bitcoin ecosystem, making it a more structured yet resilient landscape.

It is not that Bitcoin is flexible but rather the system outside the decentralized Bitcoin blockchain is able to adopt Bitcoin by implementing a system that can integrate centralized services ontop of the decentralized Bitcoin.  As a matter of fact, Bitcoin is far from being flexible.  It is the system outside Bitcoin that is being flexible.

[PrivacyG]

Often going through the system is the only option for most of the retail users because privacy comes with a cost and not everyone can afford that so they are ready to risk their privacy to have a bit of bitcoin for their future.

For large purchases I tend to agree.  There are a few occasions where you pretty much do not have any choice.  But I disagree that people are 'ready to risk their Privacy'.  They simply do not care about it at all.  They are used to go through the system.

And bitcoin is never designed to be anonymous and user who preferred completely anonymity should not used bitcoin at all,

Bitcoin being Pseudonymous and Governments enforcing laws that restrict its legal usage are completely different things.  Further more, I partially disagree.  Yes there is Monero which is designed to be Anonymous.  Yes the Bitcoin Blockchain is public.  But with proper caution you can break the link between Coins and identity.

After all, Blockchain Analysis was not even a thing years ago so Bitcoin Pseudonymity was closer to Anonymity than today.  Before, people did not need Mixers and Monero because no body would make such in depth analysis and no body would ask for Know Your Customer.

Anyway.  Now that there are Atomic Swaps between Monero and Bitcoin, it is the perfect mix as you can switch between Pseudonymity and Anonymity almost at the tip of the finger.

[Findingnemo]

Often going through the system is the only option for most of the retail users because privacy comes with a cost and not everyone can afford that so they are ready to risk their privacy to have a bit of bitcoin for their future.

For large purchases I tend to agree.  There are a few occasions where you pretty much do not have any choice.  But I disagree that people are 'ready to risk their Privacy'.  They simply do not care about it at all.  They are used to go through the system.

Let's say I am someone who buys $100 worth of bitcoin every month, now what choices do I really have. Bisq is an option but for most part there is literally zero volume and finding someone in my region to buy that $100 doesn't make sense to me. So I had to use the centralized exchange to buy that but if it's not government-made it KYC strict we would still have lot of options with minimal KYC or no KYC at all.

[Ambatman]

During this time, many casual, non-technical, or new users  were discouraged from using Bitcoin entirely.

The truth is many of your supposed definition of casual welcome KYC
They believe it's safer and trust the government to protect them
You don't need to be technically oriented to understand the importance of privacy.

Well, the idea behind KYC and AML is quite reasonable but only done wrongly. So the Bitcoin Community is working on a design that still achieve the goals of kyc/AML, when necessary, without sacrificing on real privacy or without handing over your sensitive data to strangers in typically risky manner.

KYC/AML don't mix together
Is like trying to combine light and darkness
They are existing in different spectrum.

[The Cryptovator]

As KYC and AML regulations have tightened, many privacy-conscious users have not stopped using Bitcoin. Instead, they have taken additional steps to maintain financial privacy while continuing to use the BTC network.

During this time, many casual, non-technical, or new users  were discouraged from using Bitcoin entirely.

However, strict KYC and AML regulations have not halted Bitcoin adoption. BTC has evolved into a dual natured @ ecosystem.

Remember, Bitcoin is decentralised by nature. KYC or AML implemented by the platform – they would ask KYC for many reasons. Nothing related to the Bitcoin Blockchain. No one could stop it with either regulations or KYC/AML issues due to decentralised behaviour. It isn't necessary to use any KYC platform to invest in Bitcoin; there are many alternatives to purchasing Bitcoin.

We can simply ignore any KYC or AML platforms if we want. Regulations or KYC won't halt Bitcoin operations like I am using Bitcoin even though my government announced Bitcoin as an illegal virtual asset. The scenario about Bitcoin Blockchain and KYC, AML and regulation is fully different.

[suzanne5223]

Some have also explored privacy focused alternatives.
As KYC and AML regulations have tightened, many privacy-conscious users have not stopped using Bitcoin. Instead, they have taken additional steps to maintain financial privacy while continuing to use the BTC network.

Despite tightened KYC and AML regulations, with the inclusion of the travel rules implemented by some countries that has created a more straightforward separation in how Bitcoiners engage with BTC during traveling abroad, people are not privacy conscious have not stop usin Bitcoin either, and they dont need to be privacy conscious but it advisable to be due to how Bitcoiners are target of physical and online attackers.

During this time, many casual, non-technical, or new users  were discouraged from using Bitcoin entirely.

I don't see KYC and AML regulations as something that is worth discouraging from using Bitcoin, not to say entirely, because there's always a platform to use for BTC activities without going through KYC.

[SeriouslyGiveaway]

Despite tightened KYC and AML regulations, with the inclusion of the travel rules implemented by some countries that has created a more straightforward separation in how Bitcoiners engage with BTC during traveling abroad, people are not privacy conscious have not stop usin Bitcoin either, and they dont need to be privacy conscious but it advisable to be due to how Bitcoiners are target of physical and online attackers.

People who care about privacy will look for available things for their better privacy and they will also be more careful when they travel abroad especially when they are going to checkpoints with customs.

A previous discussion on it with some ideas and solutions.
What would be the best way to get through customs at an airport with your Btc?

[ColdLava40]

And bitcoin is never designed to be anonymous and user who preferred completely anonymity should not used bitcoin at all, it's just we were enjoying the earliest days when no one cared what is bitcoin but now it is too big and many eyes on the system but bitcoin is still the most decentralized crypto which is why people trust over the anonymous coins.

Definitely. Satoshi must have considered the fact that the government might restrict the use of bitcoin if it was completely anonymous and then made his plan towards that as well.

Looking at it from the angle of monero, it was at first specifically designed to keep users privacy of grid.
 
A coin designed for full privacy. Even though it's creators had good intentions, the system was explored for other negative things and then made the government restrict the use. It's still being used but no longer listed on major exchanges..

Improving bitcoin privacy might be a bit too expensive for many investors using privacy tools, so I guess they just ignore the idea and use it even with enforced kyc and regulations from exchanges where purchased..

[Zaguru12]

Improving bitcoin privacy might be a bit too expensive for many investors using privacy tools, so I guess they just ignore the idea and use it even with enforced kyc and regulations from exchanges where purchased..

You’re right, though what I think is that Satoshi was actually building something which gives users total freedom so why should he be actually restricting it to one directional use and as such he opted for it to be pseudonymous rather than fully been anonymous although technically your transactions are not actually private because they are on a public ledger available to anyone just that it’s not linked directly to you which means you’re anonymous.

I will actually disagree that you need a lot to stay anonymous on this space because personally I don’t see why you anyone needs a lot to do that, best is to actually avoid KYC platforms and be aware of address reuse and that’s all it takes

[CryptoYar]

Although these blocks have cut wallet making by 15 percent among normal users, expert users have moved up to self run wallets such as Wasabi Wallet and hiding payments over Tor network to keep their secrets. This split has led to Formal BTC for big companies and Strong BTC for one on one buying, which is currently safer than ever before with Taproot making hard private picks look like normal payments.

I believe that Bitcoin has already been through its rule making pressure test, and it can both be safe item that regular buyers can use and unstoppable secret tool. Look at 2026 No-KYC Wallet Guide for ways to work safely in owning your own money.