Quote from: tigereye on November 08, 2013, 04:29:25 PM

Financial privacy is compromised due to the traceability of the blockchain.

While you can't immediately tell which address belongs to which person/entity, transactions that you participate in allow you to review details of someone else's financial history.

For example, if you receive your salary in Bitcoin then send me that $20 you owe me, I can follow the funds used in that transaction to find your salary.

Another example, if I give you $50 for something, I can then see where you send that coin. If I recognize the addresses (or can look them up elsewhere) I know exactly what you're buying.

So Bitcoin is hurting our financial privacy.

There are methods to mitigate this somewhat (use more addresses, split up large transactions into multiple smaller ones) but they require special effort. Most people just send/receive.

Why do people always talk about dollars when we discuss bitcoin?
Why on earth would you convert back and forth to fiat? To be excluded from the blockchain?