This is true of bank deposits, when data from large banks like JPM and NYM leaks, criminals all around the world know who has a lot of fiat and where they live.
So this is not a negative specific to bitcoin, no?
The fiat system provides no additional protection to violent attacks or extortion or confiscation than available to the bitcoin network. In my opinion, the fiat system provides provides less protection than many security models natively available in bitcoin.
Yes, I agree it does not change the fact that tainted coins is a problem, but I understood your argument to be that this was a specific problem to bitcoin, or one that is at least worse.
Further, in bitcoin solutions do exist to some extent, are possible in the future and are being built. There is no solution to this issue in fiat.
When I look at your arguments holistically, you seem to be arguing that bitcoin has not solved all the issue completely right away and therefore it is worse than other stores of value and is not going to end well. While I get the points you are making, I think the core of you point is fundamentally flawed.
On the kyc issue, it is true kyc is part of a system of control and an abomination and its constant leaking is an ever present and growing threat to everyone everywhere.
Leaving aside it is possible to acquire non-kyc bitcoin, important to recognise this issue applies even more so to all other stores of value reasonably available, certainly fiat. So I am not sure I understand your point of how bitcoin makes this worse?
On the tainted coins issue, again while this is a serious issue, it also applies to fiat and other mediums of exchange. With bitcoin they can't stop you receiving transfers without permission, while with fiat it is increasingly necessary to prove the exact source of funds, down to invoices, contracts and communications, etc before banks permit you to receive them - data which is far more dangerous when inevitably leaked It is also unclear to me how you think bitcoin makes this deteriorating situation worse?
Genuine questions.
“It was the Law of the Sea, they said. Civilization ends at the waterline. Beyond that, we all enter the food chain, and not always right at the top.”
Hunter S. Thompson