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I have the same question

Thanks for bringing this up

Let's see what experts say

I'd like to think and hope that the approach you describe, which I'm contemplating as well, should give us what is called a "forward looking privacy"

In other words, exchanges where you bought a KYC Bitcoin, will still know when and how much you bought

And they can tell it to the tax authorities for example, to chase you for capital gains tax

Or to the dystopian government that wants to confiscate Bitcoin

However, they cannot, I hope, trace the very utxos anymore

They cannot say "I know this utxo in this address is yours"

So I think it gives a plausible deniability

You can refer to the last transaction they see on a Blockchain, the one you moved sats to lightning or liquid, and say, yes, it was me, I sold this Bitcoin

Or , yes, it was me, I moved to my lightning wallet and then I lost my phone in a boating accident

Well, at least that's my thinking

I'm not sure if I'm correct

And I hope the dystopian scenario will never happen and I hope I will find a jurisdiction with no tax on Bitcoin sale, or find a way to never sell, but borrow against Bitcoin

I want to be legal

Ok, let's see what others think

ede3d957... 1y ago 💬 1

It will happen, before life gets better and society gets the chance to learn from its mistakes.

That's why we moved on to Monero. Bitcoin started it. But it's not enough in tomorrow's world to protect you and your loved ones.

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Discussion

YODA travels 1y ago 💬 1

We might disagree on this here but that's ok.

While XMR has some upsides in privacy, it has some downsides to BTC as well... my belief is that bitcoin scaling will include privacy options that will make monero obsolete... we'll see.

Saberhagen The Nameless 1y ago 💬 1

Most of Monero downsides can be side-stepped by simply using Bitcoin as savings, Monero as spending

Bitcoins only real contender to Moneros privacy so far are Ecash/Fedimints. But these are both custodial and mints can arbitrarily print unbacked tokens. You gain strong privacy but give away both foundational pillars of Bitcoin in the process (freedom from seigniorage and censorship/confiscation)

You can keep both and still have strong privacy with Monero

YODA travels 1y ago 💬 1

That works as long as on chain fees in bitcoin are reasonable, which they won't be forever. If we get a swap from LN or LQ btc to monero and back we might be talking... but I do have serious doubts to to financial regulations that a lot of companies will accept monero unfortunately... that was always the problem I had with designated priv coins in general. IMO we'd be better of to "trojan horse" them by first getting them to accept btc and afterwards adding privacy features they can't stop...

Saberhagen The Nameless 1y ago 💬 1

You don't swap every time you want to spend

You swap a chunk into Monero that will last you X amount of time i.e. several weeks/months, and spend that Monero directly. Savings vs checkings model. If you're mainly a hodler I guess this doesn't help you though.

What is stopping you from using Bisq, Robosats, or Agoradesk to buy Bitcoin p2p and no-KYC?

You can also just buy Monero first (even from a CEX like Kraken if you must) and then swap into Bitcoin on a DEX or instant swapper. Link to your identity is actually broken this way if you do the random timing, amount split, IP mask thing we talked about earlier.

If regulators don't like Moneros strong effective privacy - they aren't going to allow strong effective privacy layers like Ecash

Feels like Tradfi is reverse trojan horsing BTC lately tbh

YODA travels 1y ago

That still won't work with the 2Mb blocks we have rn... for now it does and it's a viable option.

The question isn't what's stopping me, the question is: what's stopping most people... and that's laziness. Hence the need for implemented privacy improvements to btc.