> Seriously I think these kinds of questions need un-asking rather than answering.

That’s equivalent to conceding that the concept cannot work and giving up. No matter your personal views on a particular issue, this is really just asking how to comply with legal obligations: governments don’t care if your system is broken by design and makes compliance hard, and that’ll deter most legitimate users.

By pretty much the same argument strong encryption cannot work because governments would prefer it not to exist; terrorists and rogue states can use encryption, and it is not technically possible to build encryption that "only works for the good guys".

In reality there is an ongoing battle over encryption where various governments try to ban it, people fight back, etc. I suspect that we will see the same thing play out over cryptocurrency.

In any case I don't see anyone on hacker news asking how we can design an encryption algorithm that prevents all and only the bad uses of encryption. It is generally understood to be a dumb question because good and bad are complicated enough that we cannot hope to formalize them right now, and ad-hoc attempts to make a technology only work for the good guys have been repeatedly shown to help the bad guys (e.g. backdoors etc)

Encryption isn’t quite the right comparison because it’s not a running network. Anyone doing merchant/banking activities with a cryptocurrency isn’t just using the same software but also risking being involved in a transaction chain involving someone trying to launder money. Imagine how the crypto wars would have gone if GPG users had to take active measures to prevent forwarding messages from untrusted strangers.

Tor is a better comparison, especially with the reason why most people consider it highly risky to run an exit node.

I don't think this is an important distinction.

In both cases there mere existence of the technology helps both good and bad parties to achieve their aims, that is all that matters.

You should think about it from a legal perspective: if you use GPG, will the FBI show up at your house just because the local drug dealer also does even though they never send you a message?

Now, suppose that there’s a transaction chain which involves you – say said local dealer buying from one of the few other people using it — and how you’d prove that you weren’t a knowing participant in some sort of laundering scheme or deal. This is why tumblers aren’t likely to be used by most people and why running a Tor exit node is so risky: you have to worry about being charged with the worst thing done over the network and proving that you aren’t just trying to look like a naive user.

> This is why tumblers aren’t likely to be used by most people

I think that the ZK (ZCash, AZTEC, etc) technology will solve this problem and we will be back to the case where the government wants to make the technology itself go away.

These are problems that aren't fixed in traditional money either. Money still gets to terrorists and still gets laundered through our biggest banks.

Yes, but note that there are laws and policies around it rather than people saying the question should be unasked.

I willingly concede that legacy/fiat money is better at stopping bad people/criminals/terrorists etc from having access to money.

It is hard to make a definitive statement either way. For example:

> Analysts estimate that underground economic transactions account for one-third (33%!) of the total economy in developing countries and slightly more than 10% of the total economy in developed countries. [0]

On the Bitcoin blockchain it may be around 19% (approximately USD $380bn in yearly transactions on Bitcoin [1], $72bn of which may be illegal [2])

So it's hard to say which "monetary system" is doing better in that regard. Of course, I would argue that cryptocurrencies are still in the experimental phase, trying to figure out where they are going and how.

[0] https://www.investopedia.com/articles/markets-economy/062216... [1] https://www.blockchain.com/charts/estimated-transaction-volu... [2] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3102645

Once you eliminate the fake transactions, wash trading, tape painting, manipulation, etc, I'd wager you're left with a much much larger proportion of crypto transactions being illicit. Probably close to 100% if you exclude speculation too, since only about 2 or 3 big merchants accept crypto at all.

For now, but remember that crypto essentially doesn't work at the moment because of scaling problems

The one's freedom fighter is somebody else's terrorist, so it's not an answer.

That was exactly the point