It seems reasonable, and afair TPTB have cracked down on exchanges for game currencies because they do realize this threat.
Is Monero ready to resist such crackdowns? Does it have decentralized exchanges? Can the authorities not track down IP addresses and make examples to discourage others from subverting a ban?
Might work.
My idea is an area that is more targeted to the market of those who need anonymity and thus might be more willing to fight. Not sure if game players want to pick an unnecessary fight with the government.
I like your posts but IPs is one of the least worries for privacy in a coin, the "worst" they could ascertain is that you made a transaction to... somewhere, a Monero crackdown would only
Straisant effect it, they can't even block torrents, how would a ban take place? They can't ban it everywhere in the world at same time.
I may have forgotten the specific details of the unlinkability (been away from that for some months) but afair the IP address can be associated with a total payment amount and the output addresses. The unlinkability only creates a new address for each payee for each payment, but doesn't hide this new address. Thus on the next spend of the change, the input to the ring it likely known. It is these sort of combinatorial attacks (other variations) that I think might breakdown Monero's anonymity. Smooth please do correct me if my recollection has failed me.
It does hide every new address (in the sense that it is just a random number), and the change is blinded just like any other payee. You can't tell by monitoring at the network level which outputs are change and which are not. You also can't tell by monitoring at the network level which outputs are being spent, so you can't ever be sure that change is being spent.
Wallets do have to be careful how they select coins to avoid skewing probabilities. The best is probably to spend a change output by itself without combining with other outputs (this could be spent back to yourself, but at that point it no longer can be identified as change). It's probably still okay to spend it with other outputs of yours that don't share a near ancestor.
Even so, the worst case is a probabilistic correlation that is still denyable, and which erodes away after multiple transactions. At the IP level it is definitely true that monitoring Monero traffic reveals far, far less useful information than monitoring Bitcoin traffic.
I have no idea what Odalv is talking about, he makes these claims about simultaneous equations but he seems not to understand the math at all. He previously claimed you could steal coins that way, but I guess he's given up on that nonsense now and moved on to some other likely nonsense.