Maybe you are lucky to live in a country where you agree with your government's definition of what a crime, but in certain parts of the world they call "crime" what you would call "democracy".

To add to this, I think it might be better if the protocol was private by default but allow the sender to choose the level of disclosure and the recipient to publish (as part of the address?) what levels are required (so a sender can’t submit a payment whose disclosure level doesn’t match the policy set by the recipient - the transaction just wouldn’t happen as the miners would enforce this and reject the TX).

That would allow the protocol to be flexible to accommodate different use-cases depending on the jurisdiction the payment falls under and allow recipients to be compliant (as the protocol implicitly rejects transactions that don’t match the recipient’s chosen policy). The same protocol can thus be used across many different jurisdictions and anti-money-laundering regulations.

The distinction between functioning democracies and dictatorships/autocracies is that in one you might need anonymous financial transactions to have dissent.

In the other, being able to hide transactions from authorities will quickly erode the democracy you have.

Whether complete financial anonymity is a net positive or negative is likely context dependent.

Which is why I think having transparency as a non-negotiable feature of the protocol is bad and calling it "privacy" is very misleading.

I edited my comment above to suggest a configurable level of disclosure which the sender & recipient can enforce, so that way the same protocol can support both traceable and anonymous payments depending on the desired use-case and local laws.

So this would be a system for the civilized world, for democracies, where the government's definition of what a crime is at least coarsely coincides with my definition? More authoritarian or non-democractic governments will just not approve it and have their citizens use surveillance-based mechanisms that allow their secret services to track everything their citizens do, even as private customers. Mechanisms, like, for example Visa, Mastercard, or Paypal.

I don't think many people consider tax evasion "democracy"

The protocol is private by default (with a few regulated entities that issue coins).

The “taxable and disclosure” part is mostly ensuring that all the money earned by a merchant goes back to a real bank account. Where tax authorities should already have checks and balances in place for taxation purposes.

Yeah, you have a point. I'm actually unlucky enough to live in a country where the authorities have made growing and purchasing even the mildest recreative drugs illegal roughly half a century ago, and haven't yet fixed this error. So I buy them illegally, using crypto.

money laundering is a crime everywhere.

Why, yes, of course. I wonder if it's possible to run a children's defense organization, or a women rights one, or maybe an agriculture union, and get labeled as terrorist. That would qualify all money transfers to and from your entity as money laundering.

I wish I was making this up... https://www.haaretz.com/israel-news/inside-israel-s-decision...

I don't think that's what money laundering means. Surely it would be “financing terrorism” or something, rather than money laundering (which is about faking / hiding a paper trail)?

Privacy does strongly imply the potential to effectively evade taxation (if one chooses), however, although it does not of course imply freedom from tax obligations under a defined legal code.

It's sort of how the right to keep and bear arms does imply freedom from government overreach. Privacy rights are similar. They can be used to do things contrary to the desires of the state, if the end user wishes, but having transactional privacy no more means one will be evading taxes than having a rifle means one will be murdering government employees as a revolutionary, though in both cases the option is there.

But just like I don’t approve with my neighbors right to own a handgun I’ll also never support their right to take their financial transactions and hide them from me. Because my freedom to live on a street where zero people have guns is a lot more important than his right to keep one, and my (and the majority’a) choice to live in a country where authorities can strongly enforce taxes trumps his right to even have a theoretical possibility to avoid them.

> Because my freedom to live on a street where zero people have guns

You have no such freedom, and indeed no such is possible, unless you have correctly classified police as non-people.

The state always has guns, and the state is comprised of people. There is no world where "zero people have guns", ever, and it is intellectually dishonest to claim such. It takes people with guns to enforce a ban on private gun ownership.

Ultimately the debate is solely around which people have guns. Four legs bad.

Yes, obviously my statement excludes the state. I’m glad you understood that but I’m not sure it needs clarifying…

> Privacy does strongly imply the potential to effectively evade taxation

Except gas fees, of course.

Privacy doesn't imply tax evasion or crime.