Topic: Are We Witnessing the Death of Privacy in Crypto? 🚨 (Read 407 times)

If you are talking about day-laborers and so on, I agree that is very common (it's the only reason I still have physical paper cash anymore).

That said, physical cash--and even Bitcoin--is theoretically traceable unless you do a lot of things that are a pain in the ass--and none of the people I've ever dealt with have indicated doing any such thing.

But here's the thing: in the US at least, they don't tend to create some kind of massive IRS investigation to go after some laborer so they can recover a whole $2300 in back taxes or whatever. It's just not done. They go after people who evade hundreds of thousands or millions because anything else is a waste of their time. That's why this practice is done, not because these people had Monero.

I know people that only recently stopped using PayPal for payments only because it automatically takes out taxes--but they just moved to some other app. "Theoretically" they could be made to pay back taxes, but only if the IRS specifically targeted them which is unlikely.

Physical cash is theoretically traceable and yet this is how this kind business has been done in the USA for years and it works just fine. You don't need to use the same payment method that Bin Laden uses in order to evade a few thousand a year in taxes.

Of course even if people like this could only use a secure crypto like Monero for some reason, that market would be very small. You're talking about a fraction of the wages of a fraction of the population--and the lowest paid part of the population as well.

IMO the worst thing that can happen to you is the government locking you out, or worse doing something that authoritarian countries are known for, which is blocked Internet, cash limits, limited transfers of money abroad... If that's happening to you, leave while you can. There are still places you can be free and life is too short to live it in shitholes where the government thinks of you like you're expendable work force.


No, because you still have choices. Many countries don't develop CBDC and even some of those that are will not force people to use it, just present it as an alternative. Most likely some of these projects will not be used until they decide to go with the next step, which is cash ban. At that point people will have to decide if they still want to live in these countries.

I'm not sure where you live, but in my country, a significant portion, if not the majority, of self-employed workers evade taxes. And it's not just a few transactions; more than half of their income might go unreported. I wouldn't be exaggerating if I said that most of these people would prioritize the second kind of privacy you mentioned, if they were forced to choose.

And, from my experience with this world, I find it hard to believe that, in other parts of the world, only a small minority of people would attempt to evade taxes. The reality is that people need both kinds of privacy.

Every discussion about "privacy" needs to distinguish between two very different kinds of privacy:

#1: Privacy from non-government actors, such as criminals, marketers, friends, family, colleagues, and the public at large.

#2: Privacy from official government inquiries targeted at specific breaches of the law, usually at specific individuals.

Privacy for #1 can be had from reputable companies that make it their business to protect your privacy, such as most VPN companies.

Privacy for #2 can really only be accomplished with something like Monero (and pointedly not Bitcoin), and even then, you need to take care not to use any mechanism to spend your coin in a way that can be traced back to you.

But to be clear, privacy in the #2 sense is the only reason the blockchain architecture exists because that is it's only unique feature (everything else blockchain does can be handle faster/cheaper/better/safer using other architectures).

Most people do not want or need the "privacy" of #2.

Yes, there are a tiny few people who live under oppressive governments, or are, well, plain old criminals or terrorists, but most people don't need to--or want to--go up against their government. And this is 100% the case for any public company.

Since most people use some kind of KYC-enabled means of buying and selling their digital currency, it is definitely true that the privacy of #2 is mostly... dead. But almost nobody cares about that.

As for CBDCs, they will not "destroy freedom" anymore than any government-protected monopoly "destroys freedom": i.e. by displacing products in the private sector. Governments like El Salvador have tried to use the power of their government to forcibly shove a certain product down the throats of their citizens ("Bitcoin" I believe it's called), but this has failed. The free market will figure this out, and it's wrong--and impractical--to ask the government to try to intervene.

I personally don't think we're going to see too many (or any) prominent CBDCs for the simply reason that the private sector will handle this need just fine.

The biggest threat to cryptocurrency as I see it has always been just one and that’s no other than the government. They are the only ones with something to lose in all these and what would they be loosing, a great deal of control over its citizenry. Let’s not forget how money is the great controlling tool for the government and how they could print more money for just any reason and limit it to archive certain purposes in a country. Fiat money is their greatest asset and with cryptocurrency attaining mainstream, it would in a lot of ways shine a light on what is done in the shadows with fiat.

Don’t know how CBDC is breaking into this and if we really should have to consider it, then we should as much be talking about fiat. CBDC isn’t any different from fiat, just in the digital forms and operating in the wallets. It’s fiat and nothing more.

Yeah, I think it's all about profit, basically. They want to take advantage of every opportunity to increase their income. If I'm not mistaken, they used to disagree and not support Bitcoin or cryptocurrency, but eventually they gave in when seeing great potential, and wanted to get in and take advantage of the opportunity. I wonder why it's upside down.

I don't think there ever was truly privacy in crypto.  There was only the illusion of privacy.  Those who invested in privacy coins underperformed greatly.  Same with those who invested in crypto that was meant to provide a free internet.  We can only hope that Bitcoin acts as a Trojan Horse and once it has been fully integrated with people's daily lives it is updated to provide the privacy abilities that we all know was meant to come someday.  For now, we support and watch with hope.

As far as I understood, crypto was never about privacy but it was there to solve the problem that was existing with P2P payment (i.e. to get rid of 3rd parties in payment and so on, what's written in whitepaper). Some cryptocurrencies are still decentralized but it's definitely weakening and that's logical.

Monero is too much privacy-focused. When it's impossible to track transactions and the origin of coins, governments prefer to have such a currency under constant pressure and that's logical too (but this doesn't mean I like it).

I think that privacy coins like Monero will survive because it has a high marketcap and is more adopted/supported, it's also one of the best currency for privacy. Another reason why I think that privacy tools and coins will survive is that it's impossible to ban anything, especially a crypto. If the government manages to successfully ban coins like Monero, believe me, another new coin will pop up that will be much more powerful than Monero and much harder to catch, that's the nature of evolution.

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CBDCs are a completely different subject. They are very dangerous, they'll totally destroy the financial freedom in the world and it should be worrisome for everyone. I don't know why any governments like the idea of CBDC because they aren't guaranteed to be in the government forever and when another party will take over their place, they'll be in a huge trouble too because CBDCs kill the freedom of people, of absolutely everyone except those who are in governments for that time.

I simply hope that there will not come a time when CBDCs take the place of cash.

Cbdc's are pro-surveillance tools and they make the governments job of monitoring people's finances a lot easier, however, cbdc are not cryptocurrencies, it is just fiat in digital form. As for the attack on privacy, it is not new, the government do not like privacy and decentralization, and the truth is that a lot of people who use crypto do not even care about their privacy or anything related to that, they just want profit, but there are enough privacy tools to use if you want to achieve privacy.

It is not that the government wants to intervene in the Bitcoin protocol. That's why they didn't support Bitcoin years ago and also said negative things about it to scare people off, but when they see that there's nothing they can do about it, they decide to join it. It is not because they want to implement tax policy because the decentralization of BTC didn't prevent them.
Having said that, if Satoshi's real identity is known to the public they (the government)will try to interfere in the Bitcoin protocol to achieve a centralized protocol .

Bitcoin isn't how it used to be and how privacy were been protected has change from the way it were back then. I mean, every new person coming to crypto could buy a small amount of Bitcoin and they get introduced about self custody, about decentralization and how to avoid middle men but I think now that Bitcoin is so expensive, most new people like the retailers eyes are on altcoins and the first place they go is centralized exchanges where you have to do KYC before you are allow to buy and sell anything.

Another challenge is institutional adoption, there is no way you are going to make Bitcoin pass through government without government making controls. We need adoption and without government there is no adoption, this is why many institution even Binance that is the largest centralized exchange has to accept kyc and funny thing is despite that, they are been sue for $4B just because they didn't follow due processes and how the government want things to be done. Some people that value privacy will continue to value theirs but the ratio will be very low.

Are We Witnessing the Death of Privacy in Crypto? 🚨

I don't think we’re seeing the death of privacy just yet. Sure, it’s certainly harder nowadays to buy or sell Bitcoin without jumping through some hoops. Not only are exchanges demanding KYC, but thanks to the Travel Rule, UK and EU exchanges now require you to detail the beneficiary of any withdrawal you make. Even Bitcoin ATMs and shops (at least in Spain) are banned from buying and selling without KYC as of December 30, 2024.

Leaving aside the fact that this new EU regulation has rendered these ATMs and shop franchises uncompetitive (we’re talking fees that are 50x higher than what a CeFi exchange charges) and essentially useless—they probably deserve some compensation for this—it’s just another attack on our privacy. It’s yet another example of a draconian Financial Big Brother at work. And it’s not just about debanking, Operation Chokepoint 2.0, or the Canadian truckers incident—it goes much further.

Take Spain, for instance. They’ve implemented new regulations forcing hotels and Airbnbs to collect 42 data points at check-in. Yes, 42. That includes everything from your phone number and payment type to the names of everyone staying in the room and their relationship to you. And where is all this data going? Into a centralized database that, let’s face it, probably isn’t anonymized or encrypted—and by law, it’s to be stored for three years.

But enough rambling about failed socialist states. Back to Bitcoin. We just need to adapt. Use P2P marketplaces, whether online through Tor or offline at Bitcoin meetups. Ideally, trade small amounts that have gone through mixing services or have been swapped into Monero and back to BTC. Don’t be shocked if, at some point, undercover cops start showing up at meetups to slap you with a fine—or a shiny set of handcuffs—for not disclosing your transaction. So, manage your addresses wisely.

One tool I’ve always wanted to try is the OpenDime—a nifty little “credit stick” that generates and stores private keys without ever releasing them, unless you pierce the motherboard at a specific spot. It essentially allows for an off-chain transaction. Cool, right? The problem is, I’ve never come across one, and honestly, I’d probably be wary of accepting it as a buyer. I suspect the person on the other side of the trade would feel the same way.

But let’s keep things in perspective. The big bad governments of the world have pledged to eradicate poverty, hunger, alcohol, drugs, prostitution, gambling, tax evasion, money laundering, mean posts on X (thanks, UK—and maybe China?), inflation, and corruption. And how’s that going for them? In every case, they’ve failed miserably, often making the problem worse.

Speaking of privacy, let’s talk about the pricing of non-KYC Bitcoin. In most developed countries, the premium for non-KYC Bitcoin can range anywhere from spot price up to 5–10%, depending on demand and availability. Considering the limited supply of truly non-KYC Bitcoin, some would argue that even a 10% premium is worth it for the peace of mind and anonymity. Others have floated the idea of “Bitcoin Tourism” as a workaround—hop on a cheap flight to a country that values privacy and freedom, buy or sell Bitcoin there, and then head back home to your own bureaucratic nightmare. It’s not exactly convenient, but it beats giving up all your data just to make a simple trade.

Stay humble, mint plebs, and stack sats.

Precisely now we are better off because until now what we had was an imminent launch of CBDCs and the path for KYC to every crypto transaction around the world. With the incoming US president, the country with the largest GDP in the world will not have CBDCs and in principle should be more respectful of privacy than socialist regimes, which remains to be seen, but now we are less bad than we were, that's for sure.

Before, having CBDCs and KYC everywhere was going to be the norm whereas if the rest of the world goes down that road and the USA does not, the USA will continue to be seen even more as the land of the free and the rest of the world will be subjected to authoritarian regimes no matter how much they allow you to vote once every four years.

I agree there's a clear trend toward governmental oversight, especially when it comes to deanonymization. KYC has become a widespread practice, and cooperation of crypto exchanges with financial regulators is very common.
Private cryptos are restricted in some countries, but overall remain legal. I think it's more that there isn't enough demand for such privacy than that there's so much governmental pressure.
As for CBDCs, they are explored by many governments, but I don't think they are becoming widespread so far. I don't think CBDCs are a major threat because I don't believe we'll see mass adoption of them, and even if we do, that's more of a fiat replacement than crypto replacement.
Privacy is still a choice people can make, but many (perhaps the majority) don't make that choice.

That's true. The real killer of privacy is the replacement of physical cash with CBDCs. Government regulations of crypto can be ignored by using privacy coins and there is little that governments can do about transactions that are using XMR or other privacy coins. However the real problem is that in the end one needs to buy physical goods and services and in order to do that he needs to use fiat and when fiat is in the form of bank money (credit/debit cards) and CBDCs without any physical cash, at that point there is no privacy.

Even if privacy tools remain, the benefits from them will be quite limited because sooner of later one needs to convert crypto to CBDCs in order to buy services and goods.

It's quite the opposite. Privacy technologies in the crypto space are continuously evolving, with bitcoin coinjoin and XMR. A more relevant question might be: how much pressure are authorities exerting on people who use these privacy technologies? I'd argue that this pressure is likely to go up as time goes by.

We are witnessing the battle between the pressure and influence of the government to centralize cryptocurrency and the avid supporters of freedom of transactions.  Government may pressure companies and its citizen but there will always be groups that will go against this tide of centralization. But surely we are not witnessing the Death of Privacy in Crypto.

Government may be powerful but their power is not enough to shut down decentralization and privacy.  We can see the torrenting file as an example.  They had been trying to shutdown this kind of service but since it is decentralized sharing of file, government cannot totally shutdown this kind of stuff.

Same goes with cryptocurrency and privacy coins.  Government can suppress and implement regulations against privacy in cryptocurrency but freedom-loving people will find ways to circumvent these restrictions.

If we look for it if it's not normal in my opinion. Usually the prifation is for a few groups and not everyone knows and understands what and its functions. Today there are quite a lot of coins or Taken who say that we have that feature guard but in fact only writing on their whitepaper if we check further.

There will be two sides, and centralized coins and projects will always be there.
The luxury is to have a choice and an alternative - and it's still there for everybody.

Yeah, I also agree and don't want Satoshi to show up, because there will be many risks factor happened to if Satoshi appeared. However, I don't think that government not only want to avoid the money laundering but also want to track every crypto user, or maybe even want to interfere too, and it could be to take advantage of tax opportunities from every crypto user so that in the end every user is required to do KYC, and I think all this is my speculation, and hope that government policy is for the good.