This needs to exist for regulators to approve of use of Bitcoin in the U.S., says Waters. We dont want to be the sheriff of the Bitcoin community. We just want to create an ecosystem of clean addresses.
In the short term, they talk about a limited database that keeps track only of registered identities and their activities with participating companies, but its obvious that their ambitions are grander and that a longer term prospect is to take advantage of the transparency of the Bitcoin system to keep track of which Bitcoin is tainted by associations with black markets. Waters says that the development of that aspect will depend on community feedback.
can we stop this?
It was inevitable that organizations would try to build databases of names & coin addresses.
For every one that is announced publicly there will be 10 that are done secretly.
The only way to ensure anonymity is the development of technical solutions. Many people won't bother using them, yet some people will consider anonymizing tools essential. It will be a personal choice, similar to the choice facing users of the WWW.
We can stop this by making sure that its not viable, by tweaking our practices and the ecosystem to be an environment that things like this just can't work in. This means: Anonymous mining, Discouraging address reuse,
coinjoin, etc. Importantly, people need to step up and fund the development of privacy tools. Today there is no business model for decenteralized privacy tools that people can use casually and thus pervasively.
Fully agree.