Its a subtle point but there should ideally be two layers. 

A. Coin layer, the coin is anonymous and fungible (like zerocoin if they can get the CPU & storage efficiency and another issue fixed). 

B. User layer: the users send each other encrypted transactions for commercial sensitivity and user privacy, within the encryption the users identify to the degree they choose, if any.   If the recipient is a regulated, it asks for AML/KYC level identification.

Bitcoin is not so far able to meet this normal ecash design.

Bitcoin is cutting edge, the blockchain design is an elegant all-new design to handle double-spend protection for distributed ecash.   But it lost some crypto ecash features of fungibility via cryptographic blinding (Chaum) because they are harder to do in a distributed system.  As close as we have so far is the ZeroCoin proposal of Matthew Green & Ian Miers which improves on a 1999 paper by Sanders & Ta-Shma.

It is very complex to improve bitcoin features, to do it with practical efficiently, and to get them implemented securely, tested as rigorously as a jumbo jet autopilot, and deployed.  There are hard cryptography problems.  People are working on it as hard and as fast as they can, most of them volunteers but enthralled by the new possibilities bitcoin enables for society, with smart-contracts, user self-determination etc.


I think you have been reading too much David Brin    While corruption is bad, as Assange says, there should be transparency for the powerful, and privacy for the weak.  Current financial systems have the reverse.

In fact a further future, smart-contracts (that bitcoin includes an early version of) should allow rules to be apriori enforced.  This is because smart-contracts act like a scrupulously honest virtual AI that always follows the rules and cant be influenced.  Technically its just that all recipients of proceeds of contracts, and he network itself validate the transactions before they rely on the money.  But its a very powerful effect.  Mike Hearn made a presentation on smart contracts www.youtube.com/watch?v=mD4L7xDNCmA

I do think in principle we could build a future with less systemic risk, less scope for fraud with more sophisticated smart-contracts apriori enforcing rules.  It is better to prevent a crime than occasionally catch these people, and mostly they are smart-enough and connected-enough to avoid sanctions anyway.


Or strong legal protections and government funded support for whistle-blowers.  Whistle-blowers of corporate and government crimes should be lauded as heroes.  Take Snowden: should be nominated for Nobel prize, not grounded in Russia.


I think investigation should work as at present.  Subpoena people and businesses the criminal interacted with to track down.


Typically the user can keep receipts and present them afterwards in event of dispute or to prove what happened.

Adam