Anyway, let's say I want to withdraw that cash... you need to give your phone away so they will know the origin of your BTC and potentially be able to tell how much you got, where it came from etc, and potentially you are setting yourself to be taxed in the future, if they discover you are holding 5 BTC, or 100, whatever. They got your phone, they got the transaction, and they can easily look on the blockchain to inspect where it all came from. You know what I mean? That is just crazy. How can I avoid this shit?
Use an HD wallet. Your BTC will sit in a bunch of addresses that can't be linked to one another. If you currently have all your BTC in a single address, and you want to sell just some, transfer it to an exchange, then withdraw it into different addresses (of the same HD wallet), at different times, and it will be impossible to determine how much you started with.
I have thought about Localbitcoins, meeting with an actual person and getting the cash, but that is annoying as hell, I want to be able to withdraw money from an ATM instantly, without depending on some random person being available that may or not rob you.
I agree it can be inconvenient, but it feels good to walk into a public place of your choosing, check the buyer out, and release your coins when you see the cash, without even your name disclosed.
I still dont get whats the point of having a transparent blockchain. Why the fuck people has to be able to trace the history of my Bitcoins and know my total amount of BTC?
Because having hidden transactions on the blockchain make it much more complex. I understand how the blockchain works, but I don't know how you could modify it to make hidden transactions verifiable.