The solution for money laundering is to remove the "money", as defined by the state, from the equation.
Crypto removes the content from everyones's eyes except the two parties that communicate. That is what crypto can do. The moment one wants to convert some bits to state-money she is doomed. If you want to rely/convert at any point to the state-money you will become a money launderer/terrorist/whatever. There is simply no way around this. Paper cash is not a solution, since it is observable. Anything observable is not a solution. This is a fundamental problem - not unlike futile attempts to stop copying the content one can hear or see, or to invent foolproof watermarks. Instead, we need a new principle that will not include state-money in any form or shape. Thinking aloud ... this may be silly: Let's start from something that works - secret key message exchange, maybe enhanced with PK key exchange for the carefree. A person, by defintion, trusts itself, so currency known only to the two parties should be reasonably safe. Every pair of traders have their own currency. A disbalance (A owes B but C owes A) is resolved by creating new B-C currency. There is no anonymity, but the network is hardly connected and therefore reasonably safe. The system is hardly new but it was never done in software AFAIK. You never do business with someone whose reputation you can't instrument. But someone can start a business for reputation building. Again, hardly new. This doesn't enable global trade, but frankly I don't care. I don't gain much from it anyway. Going through a series of intermediaries to buy some fine Afghan pot is a small price to pay for getting out of the state's sight. In other words, with small transistors and digsigs there is no need for centralised money at all. No more mainframes, thank you. Big business will suffer, but somehow I don't feel sad. So, tell me, is this silly ?
