How does moving in and out of xmr diminish privacy?
Discussion
You create a trail of transactions. The bigger the trail, the easier it is to be traced.
OK but what if cake wallet implements an any pay any recieve feature? Using xmr as plumbing for all transactions, sent or recieved in either btc or xmr, your choice?
So monero operates like a tunnel, if you're in the tunnel you're hidden but they can see when you enter or leave the tunnel.
Monero can't protect you from stupidity, that's why best way is to avoid KYC, and immediately liquidating.
Practice good opsec, and you'll be fine..
Don't ask for $18 million in Monero for ransomware then automatically swap it into BTC, and sell it to a KYC exchange.
Maybe ask for $18 million in monero, swap like a $1,000 of it, try a kyc free exchange but if need be use a kyc exchange but make your transaction less suspicious.
If you're moving in and out of BTC, you're making footprints on chain tied to balances you're spending. Swap to $50 of XMR from BTC, on chain tx, buy $50 of drugs with XMR, winner where that came from. Closely matches amount here on chain. With ever decreasing volume of activity, XMR becomes even less private. Best to just stay pseudonymous in btc
How can you see who bought $50 worth of drugs with xmr? I thought amounts aren't publicly visible
Beaver explains it okay. You can't see who or how much XMR but feds can see that drugs were sold and funds moved on BTC chain nearly equivalent in value. If you're not careful, leaking your IP and this giving reason to start monitoring you. You could just stay pseudonomous in BTC and use tor, Satoshi.
A $50 transaction is highly unlikely to get you arrested.
The reason people got arrested "using XMR" is because they steal $450,000 of medical records, and then make poor decisions that cause them to get caught.
The Breaking Monero explains where Monero's privacy weaknesses are.
The Monero Blockchain at large cannot be cracked, broken, or traced, however with multiple factors individual transactions could increase probabilistic guesses.
These factors are malicious nodes (also an issue in Tor), poisoned outputs where you reduce the anonymity set (thus reducing the probability), and EAE/EABE attacks where the end points of a transaction could be hypothetically tied (however this is counteracted by avoiding KYC generally).
There's a few other attacks I'm less familiar with but those are the most commonly discussed ones.
https://youtube.com/playlist?list=PLsSYUeVwrHBnAUre2G_LYDsdo-tD0ov-y
nobody can
but if you swap $50 of BTC and immediately do the deal, you're vulnerable to timing analysis.
and you were doing so well
until "with ever decreasing volume of activity"
which you just made up.
