Privacy and Identity
Privacy and identity are related big themes expressed by technology.
It is clear that public blockchains are PSEUDO-anonymous. Perhaps, one of the main tensions at the heart of the blockchain technology is the trade-off between scalability and privacy (as well as security and "BFT consensus").
There is a burgeoning field of the public key and related activity analysis. A paper "BlockSci" is attached.
Data and Goliath the book by Bruce Schneier
As of 2018, according to Jonathan Levin (Chainalysis, http://unchainedpodcast.co/how-chainalysis-helps-solve-crimes-jonathan-levin-tells-all-ep62), 85% of all transactions involve wallets managed by exchanges. Many of them adhere to KYC policy, though not all. Even illegal activities, such as ransomware campaigns, sometimes go through exchanges. The idea is that even if the account is shut down, it takes time, which may be sufficient to move money out. Plus not all exchanges are KYC compliant.
Eventually, all illegal activities interface with the banking system, since the finacially motivated criminals care about the tangible goods. In general, over time, information accumulates about activities of different accounts. https://www.chainalysis.com/ made its business to provide forensics associated with crypto accounts. As of June 2018 they analyze Bitcoin only, but planning to add other ledgers.
Sometimes internet Tumblers are use to clear crypto. However, even in illegal activities this is only used 10% of the time due to risks associated with such services.
ZCash and Monero provide higher degree of privacy; however, the reason they are not used more e.g. in ransomware attacks is shallow adoption. Thus often the business decision is to use traceable Bitcoin, due to the higher expected return.
Privacy Is Dead. Here’s What Comes Next ---- ‘Group privacy’ is an idea whose time has come; what if Facebook and Google were the companies to manage it? privacy is a collective property it seems
In sum, the investment firm responsible for creating the billion dollar fortunes of the tech sensations of the 21st century, from Google to Facebook, is intimately linked to the US military intelligence community; with Venables, Lee and Friedman either directly connected to the Pentagon Highlands Forum, or to senior members of the Forum.