Future of Bitcoin and anonymity

[friko27]

Hey all,

Everybody is talking about the bright future of bitcoin and its phenom. I agree that it's an awesome technology, but I can't really see Bitcoin as a worldwide payment mechanism and wealth storage, because of one reason - the anonymity is weak.

The public address disclousure is very fragile, if at least on of your Bitcoin addresses gets identified, the whole chain of your transactions gets identified. It's been talked about SilkRoad and how the owner of those Bitcoins couldn't cash out the wealth, because he would get identified. But it's not only about crime.

Imagine companies doing business with other companies or governments. I think that anonymity in here is crucial because companies do not want e.g. to disclose who is it working with, when preparing a new product. One don't want to show to all over the world your cash flows because competition might interfere from that lot's of information.

Also for individuals, you don't want to show your wealth because of kidnappers etc.

So right now regular banks are offering better privacy than bitcoin.

Of course there are bitcoin mixers, but it's not an ideal solution because they could be compromised, or governments can put pressure on them to reveal information. As time goes on, and Bitcoin becomes let's say an crucial player in payments, governments will illegally put pressure on bitcoin mixers ( NSA surveillance as an example of trying to illegally control society ).

Maybe I don't understand something or maybe annonimity isn't a big enough issue ?
Or maybe people just don't care like with facebook, where people are posting publicly everything an anything, including where and when they are going, with whom, etc. and somehow our society accepted that way of living. I am curious if the same could happen with our finances, where anyone knows( or could possibly know with analysing the blockchain) about anyones transactions and wealth.

For me more promising cryptocurrencies would be those, which implement anonymity natively(cryptographicaly), like monero, zcash or zcoin.

What do you think guys ? Could someone elaborate on that ?

[CryptoBlackHat]

Anonymity is always going to be difficult or impossible against large, state-sponsored attackers. They simply have too much insight into the entire network and devices that you're using, so they can often correlate transaction activity with your real identity, even if the underlying communication protocol is theoretically "secure".

However, there's certainly a long way we can go towards protecting against non-state entities. Bitcoin, for example, provides pseudonymous transactions, but there's still a public record easy to track for anyone who has enough time to analyse the blockchain.

Other technologies such as Monero are a step in the right direction, but I think this technology needs to be battle-tested for several more years before we can rely on the anonymous and untraceable nature of transactions - no matter how good it seems in theory. There's the popular wisdom that you should never invent your own crypto. It's impossible to rely on the security and privacy of the system without a great deal of testing and auditing (and real-world usage) first. There's no shortcut.