No, it's something called "privacy", which can be used towards good ends or bad ends... I don't want to live in a world where anyone who values privacy is immediately viewed as suspicious, where we say that "anyone who tries to maintain privacy must be a criminal"
Well, unfortunately you do live in one of those worlds, at least as far as the flow of money goes.
As we see with the adoption of credit and debit cards, mobile billing, and things like ApplePay, most people don't mind having their transactions recorded. Indeed, for a lot of people it's a benefit; I avoid paying with cash so that I can easily use things like Mint to have a better understanding of my spending.
Criminals, on the other hand, strongly value secrecy over convenience, and tracking money is one of the best ways to keep crime in check. So unless you find some way to eliminate crime, being secretive about money flows will always put you in company with criminals.
IMHO, lack of anti-crime controls was one of Bitcoin's biggest early mistakes. It was much worse for, say, buying a book online. But it was much better for crime, including digital extortion and fraud. It quickly picked up a taint that it's never really been able to shake. Let that be a lesson to startup founders everywhere: your early adopters can easily define your company.
Not necessarily true in the USA. See https://en.wikipedia.org/wiki/Bank_Secrecy_Act#Affected_tran... for example. I can only imagine how suspiciously any normal bank would generally treat a customer that walks in and tries to withdraw, say $50,000 in cash, for example.
For small amounts of cash, it's not a problem. But any cash transaction over $10k must be reported. [1] (Structuring your transactions so as to sneak under the limit is illegal.) The same goes for traveling across a US border with over $10k in cash or cash equivalent.
Even under that level, though, some level of suspicion attaches to large wads of cash. I've had vendors ask for cash payment for things in the $1-5k range, and it was pretty clear to me that they had tax evasion in mind.
> ...being secretive about money flows will always put you in company with criminals.
It matters what is being kept secret from whom. I don't tell the general public about my finances. I do accurately tell the tax authorities what I am required to disclose, and I can back that up by accounting for all (material) transactions that I have made. This is what distinguishes me from money launderers.
It's perfectly reasonable to attempt to hide in a public blockchain while simultaneously maintaining private records and making the appropriate declarations to the authorities.
As you're not an authority, you will never see the legal side of it. But that doesn't put anyone in the company of criminals any more than the fact that you don't publish your finances online puts you in the company of criminals.
> It was much worse for, say, buying a book online. But it was much better for crime, including digital extortion and fraud. It quickly picked up a taint that it's never really been able to shake.
I would argue that it is the most useful cryptocurrency that attracts legitimate and criminal users alike. It's not a "taint" caused by a consequence of some criminal-friendly design. Any higher level of criminality is a direct consequence of being the most used cryptocurrency. If something else takes over, then the criminals will switch too.
I agree that some people have reasons for keeping blockchain transactions private. But criminals have much stronger reasons to keep them private.
The most useful cryptocurrency is not as broadly useful as other means of moving money around. So if it has advantages for criminals, criminals will use it disproportionately. Ransomware generally doesn't take Visa and Mastercard. The Silk Road was Bitcoin's most prominent early adopter. And the early Bitcoin market was also rife with scams, fraud, Ponzi schemes, and all manner of other criminal idiocy: https://www.amazon.com/Attack-50-Foot-Blockchain-Contracts-e...
If you can work strong anti-crime controls into a digital currency while still maintaining privacy, I encourage you to do so. Otherwise, anything allowing secret movements of large sums of money will be hugely appealing to criminals, exactly as we saw with Bitcoin.
You must be a joy at parties. Although your last sentence is profound and intuitive advice for startups as a general rule, you must be pretty insufferable in person.
No. They would have to prove the source is from "unlawful activity". But knowing the creativity of the DOJ, I am sure they could come up with something.
"Whoever, knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity, conducts or attempts to conduct such a financial transaction which in fact involves the proceeds of specified unlawful activity—"
It achieves a weaker level of privacy than cash's. Hiding transactions from the public at large is necessary, but not sufficient, to hide transactions from the government.
Wikipedia's article on money laundering states that in some countries obfuscating the sources of money is considered money laundering. This means that at least in some countries this fits precisely the definition of money laundering.
Isn't that the definition of laundering?