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Comment by JKCalhoun | Hacker News Reader

Questions arise all the time when reading about crypto. I sadly don't have a list.

Just reading the thread here though reminded me of one: is crypto traceable by the feds or not? I've seen people very confidently declare both.

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It depends on the specific protocol (aka blockchain or token) you're using. For instance, bitcoin is very simply publicly visible, each transaction is broadcast in the clear and you can trace inputs and outputs online [0]

Other protocols, such as zcash, specifically obfuscate the inputs and outputs using cryptography, in ways that I'm not specifically sure how to explain, but are supposed to work.

In some ways to me this is unsurprising in a way different from the ponzi nature of crypto. I can't explain Ed25519 either, and I'd also get bogged down reading a paper explaining it. I can get my head around the basics of btc and pre-proof-of-stake ethereum though, this[1] 3Blue1Brown video went a long way.

Definitely not going to disagree that lots of tokens are ponzis, and lots of the tech and promises are imaginary vaporware. But there are some real pieces of tech in the mix too.

[0] https://blockstream.info/block/00000000000000000003590ca79f7...

[1] https://www.youtube.com/watch?v=bBC-nXj3Ng4&vl=en

In general the ledger of all transactions is public. But it’s like all of the transactions are tied to a random id. So to unmask a person you have to find at least one transaction that identifies the person tied to the id. So you can remain anonymous if you try really hard, but make one mistake and your whole history can be unraveled and known.

In general it is considerably easier to unmask people using crypto than other methods because perfect security is hard (criminals are dumb).

You can follow transactions on the blockchain, but the question is if you can tie that wallet to an identity. If the last wallet belongs to a CEX then it's likely they know the identity of the owner due to KYC regulations.

Tornado Cash previously broke that trail using asset pools, but that has been sanctioned now.

the ledger is public, so every transaction is traceable. maybe you create a wallet/entity thats not clearly linked to a person. you could probably claim its not traceable with a wallet address alone, you can see its transactions but have no idea who it is. at some point in the future or past you interact with the real world, like say sell crypto and withdraw USD, or start by buying crypto with USD. at that point they link that entity with a person(exchanges generally have to follow Know Your Customer rules), and can trace the transactions to the person through the public ledger.

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