Btw, crypto (like bitcoin) is only an alternative because of convention.
The complete history of bitcoins is globally trackable, and people could all decide that they'll pay more for bitcoins that came from Satoshi's initial hoard, or that they'll refuse to accept bitcoins that were ever seized by the FBI.
(Yes, there are mixers. But you'd just refuse to accept any bitcoin that took part in the mixer transaction, if any FBI coins were in there.)
https://en.econostrum.info/europe-restricts-cash-paymentss-n...
https://www.europe-consommateurs.eu/en/shopping-internet/cas...
That cap is about as enforceable as a cap on bitcoin transactions. Ie only enforceable on law-abiding citizens.
Intentional mixers aren't even the half of it. You have large exchange operators that use a single wallet. They file KYC paperwork with governments, but that's not in the blockchain. From the perspective of the blockchain their whole exchange is one big mixer. A billion dollars goes in, a hundred was tainted, a billion dollars comes back out. The only information to trace which $100 that went in is the $100 that came back out isn't in the blockchain, it's in the exchange's private accounting database.
But if you propose to taint every coin that has ever passed through a major exchange, that's pretty much all of them.
All new ones. You can buy 'fresh coins' from miners directly.
You could also exempt some 'honourable' miners (ie a whitelist) from the taint.
All kinds of conventions are possible, depending on what people want to value.
The convention that all bitcoins are equally valuable is just that: a convention. And it's not even strictly adhered to, because some bitcoins are already more valuable than others.
Putting aside that there are a finite number of Bitcoins that will ever be mined, what good is that? You'd have "untainted" coins that you could hardly even spend without immediately tainting them because six degrees of Kevin Bacon means that everybody else's wallet has already interacted with the unclean.
> And it's not even strictly adhered to, because some bitcoins are already more valuable than others.
Is it the tainted ones that are the more valuable ones because you can still exchange them for the same number of dollars but they also have additional value for trolling people by sending trivial amounts of them to their untainted wallets without their permission?
I'd like to introduce you to Monero, which isn't globally trackable and also properly fungible so you can't refuse mixed transactions (since all transactions are protected).
Apparently it powered online drug marketplaces before Bitcoin existed.
Try doing that with crypto. Who are you going to arrest?
With crypto you don't hand over your coins to a third-party for safe keeping, you instead send coins directly to one another, just like with cash.
Hence my restriction to crypto that is 'like bitcoin'. Yes, you can use some tricks like zero knowledge proofs to make untrackable crypto-currencies. But as far as I can tell, they aren't all that popular. For currencies that offer both stealthy and 'regular' transactions (I think like zcash), the vast majority of transactions are of the latter kind.
