I don't think blockchains provide any anonymity. You can try to provide as little information as possible about yourself, but there is nothing in the blockchain that facilitates anonymity.
A blockchain is like a big spreadsheet. It's not going to be anonymous if you start typing identifying information into it, but it certainly gives you the option of being anonymous if you care to do so.
In contrast, you cant make a bank transaction without linking your identity. This is what people are talking about when they say blockchains give anonymity.
It’s dangerously irresponsible to mislead people with statements which imply that blockchains provide anonymity because when someone’s identity is linked there’s a full, incontrovertible record of every transaction they’ve ever made which can never be removed from the public record.
If someone cares about anonymity, that’s a huge gamble to make that the system will never have a design or implementation flaw (in the case of things like zcash which are, unlike bitcoin, attempting to provide anonymity at all), and that everyone they ever do business with is trustworthy.
While this is correct, for that to be true a person would need to be using the same wallet address for every transaction which is contrary to default wallet behavior / best practices. I think people conflate the side effect of KYC regulation (mass identity linking) with an inherent weakness of blockchains when it's not. I can buy BTC directly from a person to a new wallet address and it is pseudonymous at that moment. My point is the blockchain doesn't provide or remove anonymity, its just a medium that does not require identity. Meanwhile, every bank transaction you make is recorded with your ID and its all sitting in a handfull of databases waiting to be hacked like equifax was. If used the way they were intended the anonymity could be miles ahead of where we are now (just ask the ransomware bitcoin hackers).
That’s only true if you posit that people actually follow those best practices at scale (is there any reason to believe that’s not false?) and that an attacker doesn’t know how to use a database. Otherwise you’re just betting that they’ll NEVER link your wallet IDs.
That last part is guaranteed to be false. Beyond the obvious capabilities of a state-level attacker, think about why Equifax has that data in the first place. People will buy things on credit and that depends on not being anonymous – churning IDs would be like only paying cash for everything, which is known not to be viable for anyone who isn’t rich. Secondly, think about how many businesses want this data for marketing purposes: you can churn wallets all you want and it won’t help when the vendors are passing that information to companies like Acxiom, Equifax, or Google.
The best practices I'm talking about are built into the client software and a user doesn't need to know about them (new address per transaction already happens in most wallets). Again, totally not claiming linking ids isn't a problem, its just being touted as an impassable blockchain problem which is the basis of this discussion. The problem exists because governments are forcing all onramps to link IDS, not because of an inherent flaw of the system. Even with that 'flaw' other proposals/experiments already exist and work really well, and will probably be integrated directly into bitcoin in the future. An equifax-like service could exist that establishes credibility based on holdings or the public history of an address you control, not necessarily an identified individual. There are some clear benefits to that, one being your identifying information is not put at risk.
Indeed - there’s no anonymity in BitCoin itself as all transactions are trackable. What anonymity there is exist because of external services like mixers/tumblers and the difficulty level of directly tying a given wallet to an individual.
Monero goes further and anonymises transactions between wallets.
