Bitcoin offers no special protection against this. Your problems would arrive in the real world with guns. See shutdown of exchanges in China.
Black market trading
If your opsec is perfect, maybe. See Ross Ulbricht.
intense privacy invasion by governments
Bitcoin keeps a public record of every transaction, forever. That is trivial to tie to your real world activity, in retrospect. It has not been important enough to do yet, but the data is there and data is already collected on other selectors linked to all online activity.
widespread privacy loss through corporations (Equifax, Verizon)
Bitcoin solves this how? Companies checking credit record will require your real world identity and past records. Why would they want to participate in your crypto-anarchist future?
Pseudo-anonymity is not anonymity, and most of the features you have listed as desirable, people simply don’t want, even if bitcoin could deliver them in a meaningful way for non technical people. For better or worse, they are revolutionary ideas which require a change of laws and government, not a change of tech.
The bar is so much lower than many think. Ulbricht posted the first advertisements of Silk Road with accounts publicly linked to his personal email address.
>Bitcoin keeps a public record of every transaction, forever. That is trivial to tie to your real world activity, in retrospect. It has not been important enough to do yet, but the data is there and data is already collected on other selectors linked to all online activity.
Privacy isn't automatic in bitcoin, but it's easy enough in practice to break the public link in the blockchain. Depositing into an exchange account or other bitcoin service and then withdrawing a few days later is usually enough. If you want privacy from the exchange too, then exchanging bitcoin for a cryptocurrency with anonymity built-in (ie. monero or zcash), and then exchange that back to bitcoin at an exchange that doesn't require user identification. (Alternatively, convince your intended recipients to accept monero/zcash directly and don't even bother with bitcoin.) (It's possible that in the future, the Lightning Network functionality for Bitcoin will add some anonymity as a byproduct to transactions using it.)
If you're willing to live outside the law, bitcoin could help you do so (with difficulty). If you want to live normally, it can't help you. So I guess I'm trying to say - change the law, not the tech.
You have a job, so you get wages. These wages are sent to a bitcoin address. Now your employer can track every transaction you make. There's no reason why this would not also have to be reported for tax reasons, so your government can also track every transaction you make. You buy something, now that company can have a decent chance of tracking your spending too!
There are ways around these issues, but nothing _straightforward_ or scalable. Not everyone can or will use a tumbler for all their wages.
Bitcoin does not offer a compelling solution for privacy concerns.
Intrinsically, the blockchain is antithetical to this: it stores a record of every transaction. It was not designed to achieve privacy, full stop (unlike, say, Zcash).
Extrinsically, you can use things like tumblers or anonymous wallets, but in practice this relies on trusted third parties (just not orthodox ones) and the reliability of your own personal opsec in the face of centralized parties "bolted on" to the blockchain to hide your activity. Moreover, the easiest way to buy and sell Bitcoin is through companies with extensive KYC requirements, essentially all of whom can and will participate with law enforcement.
Finally, there are already companies crawling the blockchain continuously to develop creditworthiness models they can sell to financial institutions. They are extremely good at uniquely fingerprinting wallets, or wallet activity, to social media profiles elsewhere.
I mean, I agree with you entirely: that is BitCoin’s unique value proposition. It’s just good to see it out on the table.
Cryptocurrencies create a minimum coverage of ability to conduct financial operations, they are assets that a third party can not freeze, they are assets that a third party can not invalidate. Of course the first use cases will be illegal ones.
Bitcoins can be divided, the smallest fraction is called a "Satoshi" and is a millionith of a Bitcoin (So a cent is 500 Satoshis). The blockchain is a peer-to-peer, which while technically 3rd party, is not something that "you have coin on". The blockchain is basically a cryptographically signed ledger that says a certain public key has this much bitcoins. If you have the matching private key, you have the coins. Exchanges are mostly used to exchange between Bitcoin and some other currency, like US Dollars or another crypto currency.
How would cryptocurrencies prevent the police from seizing your private keys? They can already throw you in jail if you refuse to provide passwords, or the keys themselves.
Crypto: Government is incapable of taking your money and must prosecute in order to coerce you to turn it over. And you could still refuse and accept your jail time.
Edit: People replying to me are missing the point. This is about the case where the government is wrongfully taking your money. Under the current system your money can be seized without your knowledge and you have to prove it was taken wrongfully after the fact. With crypto the burden is shifted to the government who has to prove they have the right to seize it in the first place.
In case of crypto, the storage media containing the private keys could be seized. Failing that, the government can always obtain an injunction to blacklist your addresses to exchanges, nodes and miners as long as those operate within their jurisdiction.
You could use a brain wallet to mitigate these risks to some extent, but I doubt it is possible to put all your assets in one place and you expose yourself to the risk of cryptanalysis by torture.
I really like XMR but converting your money to XMR would still leave a paper trail.
In most jurisdictions (including the US) the sanction for contempt of court is potentially unlimited: the convicted individual may find that they are only freed when they comply with the court’s requirements.
IOW, good luck with that.
This also forces other issues: e.g. offline wallets are a standard answer to security concerns but those are more vulnerable to physical compromise. This scenario needs a lot more discussion of threat models.
Most knowledgeable cryto enthusiasts I know already know that fiat currencies work well enough for many people.
Folks like McKenzie will see no value in Bitcoin and other cryptos because their money needs are already satisfied. Good for them, but their narrow perspective excludes many valid use cases.
Consider these problems, for which Bitcoin offers a unique solution (and which folks like McKenzie may not even acknowledge as problems):
- civil asset forfeiture;
- capital controls;
- black market trading (remember, what's illegal to a foreign government might be a fundamental human right to you);
- intense privacy invasion by governments;
- widespread privacy loss through corporations (Equifax, Verizon).
Bitcoin doesn't need to ape the services offered by the likes of Visa, PayPal, and Chase. It needs to address those unmet needs that can't be addressed by the incumbents.
That's going to be a niche audience, at least initially. But that's how all marketplace disruptions begin.