Having private transactions using a public blockchain ledger.
It's the same as asking "why do people need E2E encrypted chat," because they want to and there's nothing wrong with them not wanting you to read their chats, that's why.
100% this. I use ETH, USDC, etc to pay friends back for a trip, in much the same way that one would use Venmo or cash. I'd love to be able to do this without showing the recipient ALL of my other crypto transactions, and as such have seriously considered using Tornado Cash in the past (but haven't because of fears of exchanges blacklisting my address).
> Having private transactions using a public blockchain ledger.
The question was what other use the tool had. "Private transactions" are 100% isomorphic to money laundering, the only difference is the words you use to explain it.
In fact, "private transactions" are, in fact illegal. You're not allowed to do that in the industrialized world. It's true that small-value cash transactions are de facto private, in the sense that the government decides to look the other way and focus its laundering enforcement on larger players.
But no, that ship sailed decades ago. You're not allowed to have private transactions, because if you have them then the criminals will, and we as a society have made a bargain to give them up to reduce crime and corruption.
And exactly as I said, the words you use to explain it may differ, but the action does not. You can't have "private transactions" in the sense you imagine. They aren't legal. They haven't been legal in the United States for a half century since the Bank Secrecy Act of 1970.
From what I can tell, the BSA does not prohibit a private individual from paying a large sum of cash to another private individual. It simply adds reporting requirements to businesses.
This is so frustrating to argue. I genuinely don't understand how you think circles like this will ever lead back to "huge private transactions are totally valid".
Where exactly do you expect to get that "large sum of cash" except from a bank? (Or conversely, what is the recipient expected to do with it except deposit it?) You're right that the enforcement of the law focuses on the entities (banks and other financial actors) who manage large transactions. If you had an "individual" doing that sort of thing regularly[1], you should absolutely expect to seem them regulated under AML statues.
What you want you can't have. You don't have it now. You won't have it in the crypto future. We've decided to make what you want illegal, and no amount of arguing on HN is going to change that.
[1] Like, for example, an operator of a money laundering tool on the ethereum network.
It seems different from end to end encryption in a key way: we need things like TLS because sending a message unavoidably requires network traffic to traverse networks outside of your control. In contrast, using cryptocurrency is a choice to use a system modeled on the wrong data structure for either privacy or efficiency. Trying to kludge privacy on top of that seems like a very expensive and highly risky alternative to acknowledging that the system is incorrectly architected for the problem.
That is a reason to launder money, it's still money laundering. It's valid to believe that this justifies money laundering and to believe that money laundering should be legal, but it is what it is.
Money laundering is the act of hiding the source of funds from *illegal activity*, all my funds that I want to privately transact with are legitimately earned.
I know this is a troll, but Tornado Cash literally provides a frontend that lets you prove where funds came from / went to auditors and law enforcement.
What use cases does E2E encryption have besides hiding criminal activities from law enforcement? Exactly the same goes here. As long as you're not doing illegal things and file your taxes, everything should be perfectly fine.
It's the same as asking "why do people need E2E encrypted chat," because they want to and there's nothing wrong with them not wanting you to read their chats, that's why.