I don't about other block chains but that's a problem that Monero has (partially?) solved by tying transactions to two other wallets each transaction so that it is hard to follow your steps. Of course it doesn't solve all other blockchains problems but I would be curious to see it discussed more. The main criticism I have seen about it is that it allows criminality to move funds under the govts radar, which is not a criticism I'd brush off lightly but I don't how do you combine privacy and protection from govts.
Reading monero's site I got the impression that it would be impossible to know who Bob and Alice are looking at the block chain alone. However, if you had Bob's secret keys you'd know all the money he received and, if you have the sender's private keys, you'd be able to know them too.
That's certainly better than bitcoin, but it's still worse than using cash or gold. In which case you may have no traces of transactions left behind.
If I was living under an oppressive regime, I'd be weary of using crypto instead of cash. However, the advantage that crypto has is to reduce control that democratic governments have over the economy. But it could actually be an asset in combating tax evasion. You'd be able to get a lot more with subpoenas and warrants.
> I don't about other block chains but that's a problem that Monero has (partially?) solved by tying transactions to two other wallets each transaction so that it is hard to follow your steps.
I would be very hesitant to recommend that to anyone who lives under an authoritarian regime rather than casually giving you plausible deniability for buying weird porn. Large scale analysis of the entire network will see through noise and I would especially question that being at all effective in an environment where clients are frequently compromised. If you have to worry about serious consequences cash is a lot less risky if for no reason other than that there’s no possible way to retroactively trace an old transaction.
A range of things we’ve seen in authoritarian regimes: sophisticated attacks like NSO, but also things like mandatory TLS CAs or government monitoring apps, police analyzing phones seized from dissidents or crossing borders, etc. or the very low-tech strategy of offering the guy you just nabbed a lenient sentence if he flips on his partners or having police informants pretending to be part of the underground economy (are you sure the local exchange isn't secretly compromised? That the app you're using doesn't have some intentional flaw?).
There are some people who’ll say their personal opsec is so good they’ll never fall prey to that but even if that was true it’s also everyone you transact with. If you’re living in a repressive regime, you have to worry about everyone you interact with as well, and that’s deadly for a currency network. It’s especially so for one nobody needs to use — if the police stop you and you have the equivalent of Venmo/PayPal on your phone, that’s not risky because millions of people use it and they follow local laws but if some cryptocurrency did successfully allow you to avoid government oversight simply having a wallet app installed would attract attention you don’t want. People who aren't trying to hide their activities won't want to risk that, which means that there'll be less volume in which to hide your transactions.
