Chainalysis CTO said blockchain is easier to trace than paper money

You’re expanding way beyond what’s necessary to track significant amount of cash transactions; also, not claiming 100% of transactions are able to be tracked, just that significant percentage of cash transactions are not anonymous and average person assumes they are.

My assumptions include:

- Knowing how cash is flowing is extremely valuable to governments for a number of reasons; economic, investigations, counterfeits, etc.

- Cash management businesses scan 100% of their cash received or distributed, voluntarily provide that data and meta data to governments, and majority of cash transactions are non recirculated, but withdrawn, used, deposited.

- Governments have a wide-spectrum of resources to trace cash on a bill by bill basis; likely key methods include face scans, serial numbers, and location data via apps/cell.

- Assumption that if you combined all the prior assumptions and fact that many governments have millions to research topic, often leverage their authority, etc — and it is not a stretch to believe governments are able to identify significant percentage cash transactions if prior assumptions are true.

> From each participant's perspective they cost far less, both in terms of implementation and ongoing maintenance, than attempting to build and run a centralized database oneself

This comparison isn’t valid: you’re using a shared blockchain service with high transaction costs but then saying the comparison can’t use a shared service.

> 2. They do the precise opposite of adding reliability problems; they're in fact notoriously difficult to bring down given the sheer degree of data replication.

So you’re saying I can process blockchain transactions without a reliable, high-speed network connection? I never have to worry about fee increases or high volume impacting my clearance time?

> The comment to which you replied describes at length how they add considerable degrees of trust.

It describes a number of distractions from the core problem but doesn’t solve any of the hard ones. The fundamental misunderstanding you and the poster are operating under is that this kind of system is based on anonymity. Since the real world is not, you don’t need anything which PKI doesn’t give you far more efficiently.

> > If my inspector is being paid off, he'll do the same thing for the blockchain record that he was doing with paper.

> Which would then be public and uncensorable evidence against that inspector.

Just like it is currently, except with hefty transaction fees. The problem here is that you need someone to figure out where things are being faked in-person. A blockchain can't solve that because the problem happens in the real world and if you setup an oracle to inject that information you're just renaming that existing trust relationship, not removing it.

> > If things are being tampered with in shipping, the same people will do the same things and you'll have the same dodgy goods arriving at their destination except they'd now have valid but inaccurate blockchain records.

> And that inaccuracy would - upon detection - become public and uncensorable evidence against those tamperers.

Just like it is currently, except with hefty transaction fees. Again, “public” isn't relevant — all of the parties already know each other and if it goes to court they're going to produce records — and “uncensorable” is just meaningless blockchain marketing fluff because that's not a relevant problem or one which a blockchain effectively prevent.

In all of the cases I outlined, the problem requires real world checks to find who is faking the records. Whether those records are paper, actions tracked on a website, PKI signed documents, or transactions recorded on a blockchain is a rounding error on the difficulty of setting up the real world legal system and monitoring which actually prevent cheating. If I have a problem with counterfeit goods showing up, everyone involved is going to say that their records were accurate and the problem must have been somewhere else – all a blockchain tells you is that you paid more to store the receipt, not that it was accurate.

I don't think that's the case. Look at some of the serious projects: - https://samouraiwallet.com/ - https://keys.casa/

It's pretty much focused on heavily tech-savvy people.

Proof of work was invented from the start, as an anti-spam measure. The user sends data to a server and alongside of that, sends some proof of work data. This simple system has a downside though, that is ASICS. A specialized ASICS hub of servers, can create as much spam as they wish, because proof of work for the specialized system is trivial to compute. One solution to that problem, is for ASICS hubs, to create the proof of work, and sell it to users. Add on top of that a public database of what ASICS proof of work was sold to who, and you've got Bitcoin. It is really that simple. Instead of fighting the ASICS hubs, you work with them.

This technique, is so simple it should not be even be considered a technology, it is just a technique. A myriad of technologies can use this technique to add some additional properties, to an already existing technology. For example, in the IOT world, an oven connected to the internet, could be used only by a particular key in the blockchain, thus proving ownership to control the oven. One microtransaction can turn on the oven, or turn it off.

The most important aspect of bitcoin, is of course spam prevention. Gmail servers just block any unknown mail provider, just in case they are spammers. When spam was limited to email messages, that was a viable solution for the internet. This however is gonna change.

Synthetic data, i.e. deepfakes, are really gonna take off right now. Synthetic faces of people can be uploaded by the tens of millions to facebook each day. Synthetic photographs of places can be uploaded to Insta. Synthetic conversations can can be uploaded to twitter by the billions. Synthetic songs can be uploaded to bandcamp, terabytes of them every day. Synthetic videos can be uploaded to youtube, or tik-tok, petabytes every day.

The advertisement based free model of posting information on the internet, will go down in flames in less than 4 years.

A new technique is going to emerge, in which we send value to the hosting providers, for our information they are willing to host for us. That value, trillions and quadrillions of microtransactions, less than a cent each per day, it is difficult to track, but it can be done, the question which arises is, what can someone gain doing that?

Care to expand on the burner phone part?