There&#x27;s an interesting property of fully untraceable currency, and that&#x27;s that it&#x27;s possible to perform &#x27;perfect crimes&#x27; [1]. Often the weakness in committing, say, a kidnapping or a drug sale is handling the associated money obtained with it which can be traced back to people due to circumstances. Fully untraceable currency by definition completely avoids these circumstances.<p>The inevitable question &quot;should we want this?&quot; is moot because evidently such systems are possible (iff they provide a practical currency for such transactions) and will inevitably be used for this. Furthermore, Bitcoin already achieves something close to it in practice. It&#x27;s just worth pointing out that untraceability will have nasty consequences as well as good ones.<p>As an interesting aside, David Chaum, who has lately been infamous for advocating ways to backdoor encryption, may be considered the father of fully untraceable (but not decentralized) digital currencies. Ironically, after [1] was published others in the cryptographic community spend a number of papers on building what they called &#x27;fair&#x27; blind signatures, which constituted basically of varieties of Chaum&#x27;s basic idea but where untraceability could be lifted by an &quot;independent party posessing the right private key&quot; (i.e. a public &quot;police backdoor&quot;). They were trying to backdoor Chaum&#x27;s encryption...<p>[1]: <a href="http:&#x2F;&#x2F;citeseerx.ist.psu.edu&#x2F;viewdoc&#x2F;download?doi=10.1.1.465.9796&amp;rep=rep1&amp;type=pdf" rel="nofollow">http:&#x2F;&#x2F;citeseerx.ist.psu.edu&#x2F;viewdoc&#x2F;download?doi=10.1.1.465...</a>