First, following a chain is not as hard as you’re making out and there are existing companies which provide that service, which they’d pay just like they do credit reporting agencies - made easier by the fact that they’d be providing most of your income so it’d be starting with a known point. Mixers can be defeated but simply using one is a red flag.

Second, ordinary people are not going to perfectly follow a complicated setup – it’s not just that they make mistakes, although that’s a certainty, but also that they already aren’t interested in Bitcoin’s higher costs and slower transaction speeds so making those characteristics worse will not increase adoption. “Harder to use, costs more, still less secure than cash!” is not a compelling ad.

> Businesses can, if they choose, cryptographically prove that they have the funds they say they have. Think of the value of that

You mean they can make the same statements which businesses have been making since ancient times? The problem with all of these systems, as FTX customers can attest, is that the hard part isn’t counting what’s in your ledger but dealing with the real world outside – even if you can see all of my Bitcoin, you can’t know whether I have unrevealed debts or am about to be sued, etc. Since businesses run on credit, that means you still need auditors and courts to deal with the parts of the problem which aren’t simplistic enough for a blockchain.