A lot of us are investing with the expectation true anonymous transactions eventually happen, because when they do Bitcoin will become even more valuable.
That's... pretty stupid.
Calling it "privacy scaremongering" would be reasonable if it were simply wrong. But if it's completely correct, and the only reason you disagree is because you're pretty sure it'll eventually be solved, that's crazy.
Something doesn't have to be private to be anonymous. So if you're happy with anonymous and public it's possible, but hard.
In the case of the article, the reason it's suspected, not even confirmed, is simply because the number of wallets coins were coming from were identified as the same source.
It's definitely more anonymous than wire transfers, or credit card transactions. The way to avoid detection would be to keep many, relatively small wallets... and disperse money from different sources fairly evently.
Not true. There are many, many schemes that can be built into the protocol or on top of it to make transactions anonymous. Rather than hastily choosing one, it's probably better to wait for a really good scheme to surface.
Until then, it's opt-in, a hassle, with a small pool of anonymity. But "impossible" isn't the word I'd use to describe the scenario.
So as it stands truly anonymous transactions are impossible. The possibility to make that not true doesn't negate the fact that today bitcoin is in no way a private way of transferring money.
Call it what it is, money laundering.
The same logic applies to encryption. People have a right to privacy.
The flippant and universalizing way several of the commenters here are referring to money laundering as "concealing where the money came from" cast far too wide a net.
The definition you're using here would include concealing where $500 came from that was donated by anonymous friends to give to another friend in need. Suddenly, by your metric, if any of the friends suspected of donating the cash to help someone don't fess up to the source of the cash, they're laundering money.
Yeah, that's ridiculous. But it fits your description. Money laundering requires the currency be earnings from criminal activity.
Pretty much the only way to do so 'properly' would require you to make the coins anonymous to the public, but ID all of your customers and keep records on who actually gets which coins in the end.
If you're right and I'm wrong, it'll be a lucrative business and you'll probably quickly dominate the mixer industry, as it'd be very easy for you to get press and build name recognition. You could do it as a very part-time job.
If I'm right and you're wrong, you'll be in prison.
People don't have an absolute right of privacy - the laws can and do restrict that.
There are very few legitimate reasons to be concealing where you money came from or is going from the IRS, and they well aware of the intent behind the actions.
Come up with a way for the IRS to investigate (not just get it handed to them on a platter, but something that mathematically requires a level of effort to prevent fishing expeditions by IRS employees) while simultaneously keeping all transactions private from everyone else and then we'll have a solution.
Nice circular reasoning. Because everything that the IRS would disapprove of is illegitimate? When did the IRS get ultimate moral authority?
Spending on sex toys is not special, unless the national security apparatus (or more likely your competitor in the private sector) already has a reason to try to discredit you. Which is a valid concern for activists, but not most people.
Investigations and enforcement actions by the IRS have nothing to do with the morality of your checking account statement and everything to do with tax evasion.
The largest threat to your financial privacy is private enterprise. Underwriters, prospective employers, and others with a financial stake in your "good behavior" are the most interested in judging the moral acceptability/health/prudence of your financial choices.
Amazing.
Translation: "Rights are essential for small group of people, because everyone else is not exercising them anyway. So lets just take the rights away".
2) I'm a person. I have to pay taxes. Top500 corps - not so much, in practice. What do you say about that?
3) Where the fuck did you get that I'm a tax evader? I was addressing your point about people's rights and your evaluation of their need of having those rights.
That's irrelevant. I don't need a reason for concealing where my money comes from.
Oh sure, the IRS may disagree, but I have a really hard time giving a shit about what the IRS thinks.
To quote Wikipedia:
It is defined as knowingly engaging in a financial transaction with the proceeds of a crime for the purpose of concealing or disguising the illicit origin of the property from governments.[1]
More specifically, money laundering is defined in Article 6.1.a.i and 6.1.a.ii of the United Nations Convention against Transnational Organized Crime[2]. The PDF won't let me copy & paste the text, but it uses the language "proceeds of crime" in both subsections.
Some jurisdictions may have monetary reporting laws which are broken during transferring BTCs, but it isn't money laundering (under international law anyway).
[1] http://en.wikipedia.org/wiki/Money_laundering#Criminalizing_...
[2] http://www.unodc.org/documents/treaties/UNTOC/Publications/T...
I do think in the mid to long term Zerocoin or something similar should be added to Bitcoin to at least allow people the option to be anonymous if they want to be.
However, I'm also unsure if this should be done right now as governments are trying to decide what to do with Bitcoin. Perhaps it would be better to wait a couple more years, get Bitcoin more established into the mainstream, and adopted by banks and more companies, and then enable something like Zerocoin in the protocol, when it would be too late to stop Bitcoin. Although I'm not sure what the government's reaction towards Zerocoin would be then.
On the other hand, Bitcoin may be even harder to kill than file-sharing/torrenting, in which case maybe it won't matter if it's done now, as the government's action against it could be irrelevant.
You might well get rich from speculating in bitcoin, but if if doesn't pan out then your assets could end up having no value whatsoever - you won't even be able to burn them to keep warm during the zombie apocalypse ;)
I'm not trying to comment on the viability of BTC here, just pointing out that it not the same as many other asset classes.
It's trivial to work against them - simply forbid any legal business offering goods, services or bitcoin-currency transactions to accept such coins. In essence, the same way that they're fighting right now against laundered cash - you can do it, but not on large scale, and it's not accepted for most of assets you want to buy.