At some point I'd really like you to properly explain the anon tech to me. I think something we could really do with to stir up noise is a nice youtube video explaining it, which I could probably help with except that even having read the whitepaper I don't get it. I had figured that you used the staked coins as a pool for mixing but you make no mention of doing this. it seems like all your system does is bypass the blockchain, but to maintain the integrity of the blockchain you can't have coins simply disappear or come into existence, so even with no direct link between the two addresses, I'm not sure how you are going to avoid tracing through basic auditing methods. e.g. you don't know the destination address but you know the amount and the time sent, and can then find a new address on the blockchain which has that exact amount, created at that time.

I'm pretty sure I know how to avoid this, by like I say, using the staked funds to fill the new address and exchanging some address and signature information via a TOR routed, encrypted P2P tunnel but you don't mention anything like this.

Another option would be to bundle transactions onto the blockchain, so BitKey waits for 20 people to send transactions, collects all that money up into a single address, and then sends out the correct amounts to multiple different addresses and broadcasts that list of all those addresses to everyone receiving funds. At the same time bitkey then transmits the private key for each address to the correct recipient, possible proxying it through the sender, the end result being that each receiver tries to open every wallet and only has the priv key for the correct one.

If either of these approaches are used, or something similar or something completely different I'd really like to know.

I have concerns about a few things. (i.e. if all bitkey really does if effectively maintain a second set of books, then it could potentially be exploited)

I'm pretty sure I know how I would build this system, the fact that the blockchain is public and distributed to everyone can actually be advantageous since it's the perfect medium for for exchanging PGP-style information, that is a very powerful tool.