> In particular, if all businesses dealing with bitcoins are required to KYC and large transfers are tracked and prosecuted where possible, then there probably would not be a huge amount of anonymous transfer.
Or, more likely, a huge number of bitcoin businesses will go where these laws don't exist and interact with other services to get in.
I've managed to avoid any exchange that follows KYC practices with no issue so far.
> I've managed to avoid any exchange that follows KYC practices with no issue so far.
That's because no-one has made a serious effort to regulate this so far. I'm not arguing that there wouldn't be grey market bitcoin exchanges operating on a pirate-bay like basis, just that a serious attempt at regulating would have a serious effect on how bitcoin is used.
This is even leaving aside ideas where a government could declare particular bitcoins to have been involved in illegal trading and claim the right to confiscate them from anyone under their jurisdiction.
I imagine that this would take the same form as money laundering regulation, which while not perfect still has a massive effect on how easy it is to launder money.
> That's because no-one has made a serious effort to regulate this so far.
Some places certainly have, it's just that you'd basically need a global effort between many countries to do so to have any real effect. Until then most of these regulations are just a joke.
While there is a bit of truth to that bitcoin will inevitably need to interact with the real world, so it needs to be convertible into other currencies. This will in the end require interaction with regulated institutions. If this were to be implemented at the bank level it would become difficult (not impossible) to get around. The way the US went after poker sites will probably be the model. While it was not impossible for US citizens to play online poker there were enough barriers that most opted not to.
Or, more likely, a huge number of bitcoin businesses will go where these laws don't exist and interact with other services to get in.
I've managed to avoid any exchange that follows KYC practices with no issue so far.