Crypto currency itself can be completely anonymous, but the difficulty is in the on-ramp and off-ramps to and from state fiat money.
For example, I want to buy ZCash that is untraceable to me. I need to exchange ownership of a hardware wallet (like a physical USB device) for a pre-determined amount of state fiat, lets say USD in this case. In order to facilitate this I need to find a trusted seller, arrange a meeting, verify the actual value of the physical wallet, and make the exchange. There are non-physical means of making it harder to trace state fiat back to you, but not impossible. The state has simply had too much influence over these places of transaction for too long for anybody to be truly un-findable given a long enough period of time.
Assuming I can find someone willing to on-ramp me like this I will need to take steps to ensure that our communications are encrypted and untraceable. This means not only do I need a decentralized encrypted messaging service, I also need to conduct this communication in a way that does not give away my geographical location and is not vulnerable to security logs (say by checking the cafe's video feed from the time I was messaging my seller). Then I need to go to the meet, exchange the physical wallet for cash, and verify the amount in it is accurate (and also preferably not stolen). I need to do this without revealing my identity to my seller and avoiding security logs once again. This is all now possible whereas before Satoshi it was impossible, but it is still difficult.
Alternatively, I could just sell some kind of digital asset in exchange for ZCash to begin with. Now I do not have to worry about an on-ramp. If I control my distribution server then I can erase or encrypt my sales logs in order to prevent any estimation of my total sales for the year.
Off-ramping is much harder. I either need to become a seller of a physical wallet which has all the same problems that plagued me before, or I need to live in an economy where off-ramping is not required. This would be a physical location where all transactions are conducted in secure, anonymize, cyrpto-currency transactions. Similar to my earlier problem, this is now possible but extremely difficult. An individual or a group of individuals is going to have to bootstrap an entire local economy.
Being localized is also an issue since there is nothing preventing the USG from simply rolling in the tanks to break up this localized tax haven.
For example, I want to buy ZCash that is untraceable to me. I need to exchange ownership of a hardware wallet (like a physical USB device) for a pre-determined amount of state fiat, lets say USD in this case. In order to facilitate this I need to find a trusted seller, arrange a meeting, verify the actual value of the physical wallet, and make the exchange. There are non-physical means of making it harder to trace state fiat back to you, but not impossible. The state has simply had too much influence over these places of transaction for too long for anybody to be truly un-findable given a long enough period of time.
Assuming I can find someone willing to on-ramp me like this I will need to take steps to ensure that our communications are encrypted and untraceable. This means not only do I need a decentralized encrypted messaging service, I also need to conduct this communication in a way that does not give away my geographical location and is not vulnerable to security logs (say by checking the cafe's video feed from the time I was messaging my seller). Then I need to go to the meet, exchange the physical wallet for cash, and verify the amount in it is accurate (and also preferably not stolen). I need to do this without revealing my identity to my seller and avoiding security logs once again. This is all now possible whereas before Satoshi it was impossible, but it is still difficult.
Alternatively, I could just sell some kind of digital asset in exchange for ZCash to begin with. Now I do not have to worry about an on-ramp. If I control my distribution server then I can erase or encrypt my sales logs in order to prevent any estimation of my total sales for the year.
Off-ramping is much harder. I either need to become a seller of a physical wallet which has all the same problems that plagued me before, or I need to live in an economy where off-ramping is not required. This would be a physical location where all transactions are conducted in secure, anonymize, cyrpto-currency transactions. Similar to my earlier problem, this is now possible but extremely difficult. An individual or a group of individuals is going to have to bootstrap an entire local economy.
Being localized is also an issue since there is nothing preventing the USG from simply rolling in the tanks to break up this localized tax haven.