yes, the physical currency does. but as soon as its in a bank, thats lost.

moreover we are assuming that cash is ID at entry and exit, which its not, unless someone suspects something.

Isn't that the exact same way crypto works? It has a unique identifier, but as soon as you own it indirectly, on an exchange or something, then that clear link no longer exists. I'm wondering why it wouldn't be a parallel?

Cash is rarely verified. Sure they might do spot checks to see if its a fake. but its rarely tied directly to a deposit.

So when a cash machine gives you money, the ID of the currency not be tied to your account. When you spend that money in a shop, those notes will not be attached as having come from you as a customer.

With bitcoin, that all comes for free, we know when money left your wallet, what addresses it passed through to get to someone's else's. the whole selling point of bitcoin is that you can trace the provenance of each transaction right back to when that coin was originally mined.

For example, if I was to use bitcoin as a bank account replacement, everyone would know my employer, they would know how much money I give to my spouse each month. They would know who I invest with. They would know when I do my shopping at the super market. They would know when I'm having work done at the house. They would know if I got a bonus, and how much.

Some of those things I'm ok with, but a lot of things, I'm not