Thought of the week:
KYC is the illicit activity. Not giving up KYC info and not giving up custody are hills worth dying on.
KYC is an attack on bitcoin's fungibility. If you can get censored/confiscated at on/off ramps due to the history of your utxo, is bitcoin effective as peer to peer digital cash?
If your suggestion is only transact peer to peer, i think this is a logical solution. However, if you buy/sell p2p and you or your peer is at risk of having those funds censored or confiscated at on/off ramps due to the history of your utxo, is this effective as peer to peer digital cash?
How do we shield ourselves and our peer from the history of the utxos that are completely irrelevant to us or them?
This is a consistent concern of mine and not sure how to rectify this obvious issue. I am sure there are a handful of different ways to obfuscate via LN or multiple hops spaced out before going onto an exchange. But it should not be such a massive hurdle.
Feel free to tell me I'm wrong or paranoid or a doomer in the comments.