I used to think it was inadequately private, and thus fussed around with privacy shitcoins.
It took a long time to appreciate how private it actually is, and that most "privacy advocates" are spooks trying to attack it and steer people to shitcoins with smaller anonsets or a premine.
All the chainanalysis stuff, KYC choke-points, honeypots like scamourai... all of it is a desperate and failing attempt to deanonymize it. But, at the end of the day, they are a complete and total LARP.
Therefore, you may be able to trace a specific coin throughout its lifetime, but until it's deposited to a KYC'd account, a snoop can't achieve an undeniable link to ownership. It's off-chain intel that is the privacy vector, not Bitcoin... and no shitcoin can fix that.
THEN you consider Lightning, which is basically perfect privacy. Take your dirty KYC'd UTXO and dilute it into the network. Lightning is a giant coinjoin in effect.
Sovereign level size, to the tune of billions, the shit that causes national security concerns via Iran and North Korea and so on will probably still be traceable with high-confidence with orgs that have NSA-level resources, just because the size stands out...
There is no one that has ever written or discussed Bitcoin's inadequate privacy that simultaneously knew wtf they were talking about AND honest about the needs vs its capabilities.
You admit to once thinking that BTC has inadequate privacy, then you call EVERYONE who thinks this way, a spook. You're admitting you were once a spook. Jk.
I haven't found a Darknet market that accepts LN yet. It doesn't help that receiving nodes have less privacy than senders. I'm hopeful that LN will oneday be useful to Darknets.
But until then, using a privacy shitcoin with strong privacy BY DEFAULT is going to be continue to be the recommended way for most people to transact with Darknets. I say this because its a fact, not because I want people to buy shitcoins, and not because I want people to "have a lower anonymity set".
Anonymity set means nothing when you risk having no anonymity whatsoever.
Agree that Bitcoin CAN be private. But the cost to achieve privacy is high, and so are the number of mistakes that can undo that privacy later. Someone looking to buy shooms online is already struggling with how to sign a PGP message correctly, they cannot also be relied upon to make every BTC transaction private with no mistakes.
BTC has a bad reputation in Darknets for getting people locked up when they "use it wrong". Just because there isn't always "undeniable proof of ownership" doesn't mean that public onchain flows aren't incriminating in other ways. They can reveal related addresses for LE to snoop until someone inevitably makes a mistake that results in an arrest, interrogation, and plea deal where someone snitches and results in more arrests.
This article is 10 years old and the state of BTC privacy is largely unchanged since then.
I said fussed with privacy shitcoins, I never recommended them to anyone, contributed to the ecosystem, spoke at conferences, wrote an article, did a podcast or vlog.
Simply believing disinformation doesn't make one a spook, pushing that information psuedo-professionally does.
I haven't found a Darknet market that accepts LN yet. It doesn't help that receiving nodes have less privacy than senders. I'm hopeful that LN will oneday be useful to Darknets.
Using a DNM in the first place implies dick-all knowledge of privacy.
Why would someone doing something illicit use a honeypot like that? phone a CIA hotline by using Tor? Correlate a payment with a listing? Correlate a userbase?
DNM's are a terrible idea if your goal is to hide your commerce, and their not using Lightning is a great signal. The real dark markets are clearnet encrypted messengers and offline comms, using cash, favors, Bitcoin, and countless other means of exchange.
People getting locked up for using it wrong are using other things wrong too if their goal is privacy, because Bitcoin alone can't incriminate you. It's a rope long enough to hang yourself with, like any good tool.
Shitcoins doesn't fix that. They do the opposite. Per the DNM example, shitcoins makes people even more careless, because with a false sense a security they do something stupid like use a DNM.
EDIT: and on LN receiver privacy... thats bolt12 disinformation pushed by spooks working for blockstream and grant money. Privacy oriented LN shops have been using randomized scids for a few years now.
DNMs exist for reputation and escrow. It also tends to have lower prices because suppliers list there directly, whereas your private chat vendor may be a reseller.
Also, when vendors compete alongside each other's listings on the same platform it holds them accountable somewhat to providing good quality (lest they get a bad review)
If you already trust a supplier, then private chat apps are great! But if that supplier ever tries to fleece you, there is no recourse other than to stop ordering from them.
Agree that darknets are greatly flawed in many ways. They are always being raided and taken down, for starters.
However, each market that falls is a lesson in a new way NOT to build and operate a market.
People clearly want free markets and it is only a matter time before there exists an architecture that enables a DNM that cannot be taken down and protects all users, all while providing better UX than eBay.
When such a market does emerge, I just really hope they allow BTC/LN. And the fact that currently, BTC use is trending down on DNMs and none accept LN is not a good signal.
Your arguments for use of a DNM are still not an endorsement of their privacy, and so we can't conclude that their lack of BTC/LN use is an indictment of it's privacy.
Reality is the dark market is all around us, and BTC/LN is trending up.
Lightning is a giant coinjoin in effect.
Have you noticed the overlap in who spreads Lightning FUD and promote centralized Coinjoin implementations that track xpubs?
The spooks are so desperate, it'd be funny if there weren't so many people that fell for it.
ssshhhh let them break their neck. More sats for us...
Can you easily coinjoin 10 btc via LN?
People will argue over the definition of easily, but yes.