[telomero22]

Ok, but you have the same thing with gold or any other "fungible" asset that will be traced to you if you don't take measures to obfuscate the trace.

Gold has a real world trace that can be found out by simply asking intermediaries and numerous other means, Bitcoin has a digital trace, it's not that different.

It's very difficult to make sure that the history of where that gold you got came from and to whom you sold it to is 100% erased.

[ricardobeat]

It’s completely different. If no exchange will let you withdraw or accept coins from a mixer, how do you “take measures to obfuscate the trace”?

Gold is literally untraceable. Nobody can stop you from smelting and selling it as you like.

[telomero22]

There are numerous other ways to sell your bitcoin, p2p exchanges, pay online via bitcoin, OTC and 20 other ways.

Gold is very traceable, because it leaves a trail of people behind. It's very heard to disconnect your identity from your gold sale, because you have to make that sale in person, so there are always witnesses, cameras, paper trails.

If you want to put in a middle man, you also need to know him to trust him not to run away with the gold and he becomes a liability, because he knows your identity.

That's why this is the maximum fungability you get, be it with bitcoin or gold, none of the two have the upper hand here.

[ricardobeat]

Doesn’t matter if there are other ways if all the mainstream exchanges won’t take the coin. That’s exactly what being “tainted” means. Those coins are forever less desirable.

And no, I don’t see how you can compare gold being “traceable” through detective work, to a ledger that literally stores every transaction in history, publicly.

[everfree]

In practice, there will always be at least one exchange that lets people trade coins that are tainted by some measure, because that particular exchange's idea of taint does not implicate the history of their coins.

Once a person trades coins at that exchange (perhaps even into a different cryptocurrency for additional obfuscation), then in the eyes of the other exchanges those coins will become disconnected from the activity they are trying to hide.

[ricardobeat]

Other exchanges will simply stop accepting coins that have been through this particular exchange X. It is the case already, as seen in the article.

Once that happens, why would exchange X take your BTC, or any other people exchange other crypto for BTC there, if they can’t circulate it?

[everfree]

I don't believe that it's feasible for all other exchanges globally to agree to coordinate to block coins that have ever touched exchange X in their ownership history. It's too much of a global coordination problem.