> It has been a totem of the cryptocurrency community that the numeric addresses of Bitcoin and other wallets will protect the identity of those using them to buy and sell.
A new paper, released this week by researchers at Baylor College of Medicine and Rice University, has shattered that presumed anonymity.
Which is it? Is it Bitcoin's or some alt's public address wallets? No one who has read the white paper, which is fewer and fewer people including researchers, would make such an ignorant claim because as you said it's designed as a pseudonymous system.
Furthermore, since the advent of centralized exchanges that require KYC and AML (everything after MTGOX that wasn't BTC-e) and blockchain forensics would know that its not hard to track IDs that way. Its why the notion of red-flaging and tainting was so prevalent with these exchanges: they just went back 2-4 transactions and associated with things like DNMs or online gambling and refused to process the tx and froze accounts entirely as was the case with CONbase.
The truth is that this is a feature of mainchain since we have not made full use of Taproot and other OPSEC/Security features because of delays (Segwit/USAF caused so many delays), and even LE has made it clear that BTC main-chain is perhaps the dumbest way to commit any crime because of it's relative easily traceability [0].
Privacy and security are concerns and should be addressed, but Bitcoin moves incredibly slow for a reason, and the only one's stupid enough to use it to commit crimes when other alts (monero, zcash etc...) exist at their MO deserve to get pinched. I'm sure we will have default mixing at some point with batching but until then it will always be an additional cost and legwork if you have some link to a KYC/AML exchange in your tx history.
0: https://www.forbes.com/sites/jasonbloomberg/2017/12/28/using...
If the people who had their wallets seized kept them off exchange, or sent their coins to an off-exchange wallet, could this not have happened?
This is a classic problem of many a swiss bank account, "I have illicit money there and want to spend it here but the state detects transfers across the border". The border may be between countries, between legal entities, between currencies, or the border between a saleable asset and legal tender.
As long as you don't transfer the money/asset to the place where you want to spend it, the state may not detect what you have, but you get no benefit from your money either. So you get to choose which problem you have: Will you lack money because it's inaccessible to you, or because the state confiscates it?
I don't see the privacy guarantees Bitcoin is claiming to offer, unless it has achieved its utopian intention to dismantle and replace the whole financial system with everyone only using Bitcoin to transact with. Given that it hasn't, you can trace everything up to the exchanges and you'll be gladly met with KYC to associate your custodial wallets with the addresses you interacted with, for everyone to see.
Now, can the same researchers blow up the claims of the top privacy coins that actually guarantee anonymity and privacy with both the sender's and receiver's transactions and wallet info being hidden?
I'll wait.
[0] https://web.archive.org/web/20201028121818/https://cryptonot...
So what new things is this paper doing?
