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Comment by dsugarman | Hacker News Reader

I don't really understand how any crypto is "unregulated money" and it's intrinsically the most tracable money store

[Edited for some horrible mobile autocorrect attrocities]

There are fully anonymous transactions in some of the cryptocurrencies, like in Zcash I believe. I thought such innovations would overtake and make the original bitcoin obsolete, but I've been very wrong, because bitcoin is still popular.

I think this fact points out the disparity between people using crypto for ideological reasons and them using it for investment reasons. Most people don't care about the whitepaper, just that "stonks only go up" and buy accordingly. So small, good projects aren't as reliable an investment vehicle as a larger, more established coin that is almost guaranteed to be sellable if needed.

I’m not aware yet that any cryptocurrency has been proven fully impossible to deanonymize, especially if there’s any off ramps anywhere.

For example: https://crypto.stanford.edu/timings/paper.pdf is for zcash and monero

It’s possible that someone comes up with a robust mechanism but if you interact with any other coin (crypto or fiat) it can expose additional side channels that are impossible to close.

Zcash is flawed lie. They are not fully anonymous or anything. There were several reports how to trace them.

Could you elaborate on that? I wasn't able to confirm that, but I'm massively out of the loop too.

Can you link to one of them? All I can recall is "shielded isn't default" and "if you transact too quickly it's risky" from recent memory.

It is. But you need to connect these addresses to people and events. That might be feasible if you are the USA and can pressure poeple/companies. But most other countries/jurisdiction don’t even have the technical capacity to do such a thing.

Obviously there are different points of view on this point, but I view transparency and regularity as orthogonal features.

Crypto is easy to make both transparent and regular.

Traceable via otherwise anonymous addresses. It’s the de-anonymization that’s hard.

> the de-anonymization that’s hard

In the few cases I’ve seen someone expend effort on it, it was trivial. Most people have terrible opsec. Even if you do, if you transact with someone who doesn’t (or who will deanonymise you for shockingly-trivial compensation), you’re partly compromised.

I think most people using crypto for illegal purposes will mainly be transacting with people that don't know their identity, so that is not a deanonymising risk.

It's true that people sometimes get caught via chainalysis/etc., but I think there is a lot of sampling bias here. Someone who isn't an idiot and washes their funds through dodgy asian exchanges/privacy coins is probably quite safe, even compared to using cash.

> think most people using crypto for illegal purposes will mainly be transacting with people that don't know their identity, so that is not a deanonymising risk

Demonstrably untrue. Also, many people using crypto are unknowingly commiting crimes. They're not the smartest bunch. Between taxes and reporting requirements, you can usually nail a crypto user with less than $1k PI time.

If it's demonstrably untrue then demonstrate that it isn't true

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