Continuing the discussion from Best alternative VPN solutions to replace StrongVPN?:
As I understand it, Bitcoin and systems that behave similarly to Bitcoin are pseudonymous. That is, everybody knows that a set of transactions all come from the same account, but the network doesn’t know who owns that account.
So people moving money through cryptocurrency networks do not have the same kind anonymity that they would get by, for example, exchanging hard currency. When a crook (e.g., ransomware) demands payment via crypto, the entire world can see the transaction depositing the currency and where it goes until it leaves the system.
And that’s the vulnerability. Whatever service you use to buy or sell it (that is, exchange for real currency) is going to have a record of the transaction, including whatever credit/debit account used to source/sink that currency. Which means there’s an audit trail through the banking system that breaks any anonymity.
I suppose you could do everything through something like an ATM, where you provide the crypto credentials and deposit/withdraw cash, but I can’t imagine that being useful for non-trivial amounts.
In other words cryptocurrency and the blockchain technology that underlies it has a lot of advantages over more traditional baking systems, but anonymity really isn’t one of them. At least not if you’re trying to hide from government agencies with subpoena power..