Post
Topic
Board Altcoin Discussion
Re: [Announce] Project Quixote - BitShares, BitNames and 'BitMessage'
by
AnonyMint
on 29/08/2013, 21:48:46 UTC
Don't forget the loss of fungibility argument for anonymity:

Would it be wise to implement "stronger" anonymity in bitcoin ?
This has been asked before— and I think it's an important question. We shouldn't just assume that any feature is good.

After extensive consideration, I think I can answer this with an emphatic "Yes".  Without good anonymity the fungibility of Bitcoin can be substantially degraded.  The road to fungibility loss is paved with good intentions, but the end result makes Bitcoin less useful as money.   "We're really sure that _this_ bitcoin was stolen" ... "We're quite confident that this person is bad" ...  but if Bitcoin is to be trustworthy you must never have reason to feel that you'll wake up on the wrong side of a kafkaesq heuristic, or that you'll have to fight for what is rightfully yours even if there is due process, having to defend yourself means you already lost.

I believe that the ultimate social good that comes out of weaker anonymity for Bitcoin like activity is fairly limited: Bad-guys will generally figure out good ways around the lack of transaction anonymity, but still get caught based on their other activities even when transactions are strongly private. The harms from not having good anonymity— the losses of privacy, the danger to fungibility— hurt everyone.

Then there is the question of should it be in the system or outside of it.  If we ignore the implementation cost, I think here again the answer is emphatically that it should be inside the system:  Putting it outside greatly reduces its effectiveness.   But right now implementation costs are non-trivial and so I don't think there is much of a question of including it in the system—  and, if people build it outside of the system: we can't stop them even if we were to agree that it were a bad thing.