Technology can be used to help anyone. It can help criminals, and it can help upstanding people, and it can even help people who want to control everyone. I recently had a reason to review Larken Rose's "The Tiny Dot," an explanation of which will soon be available on the voluntaryist website, in the newsletter, or both. The reason I cherish bitcoin despite its ability to help people who want to control everyone is that they are a tiny minority. As Larken explains, the reason they cause the problems they cause is that the rest of us have not "fixed what's between our ears."
I was one of the first people who started talking about the ability to track bitcoin. I know this because I described what has been called "taint" before it was used in reference to tracking bitcoin. I'm not talking about that episode from Weeds where the actor who looks like Harry Connick Jr. explains what "taint" is. That's a different kind of taint.
In a post on bitcointalk.org, I mentioned that the bitcoin stolen from a useful enterprise necessarily goes to an address (or a script) that can be watched on the publicly available bitcoin blockchain. If bitcoin wallet software allowed it, the user could enter that new address or script into the software and if he ever got any of the bitcoin that was stolen, the software could tell him, and also tell him how many transactions happened between the heist and his receipt of stolen bitcoin.
It was amazing to me how many people resisted and challenged what I had pointed out. No one said it was impossible, but rather they suggested it was "bad or wrong" because it would make bitcoin less fungible. A few months later, blockchain.info provided a "taint analysis" tool that did exactly what I had described. That tool is now gone, and I haven't found a good replacement for it. It is the kind of thing that Chainalysis does. If you know of a (free) replacement, please let me know. I assume such a service would not be free because it takes some computing resources to do "taint analysis." However, if the software were open source and you could run it on your own equipment, then you'd be paying that computing price.
Bitcoin is less fungible. Companies like Chainalysis exist and can (sometimes!) track down bitcoin users, and this causes some bitcoin to be less useful than other bitcoin (the essence of fungibility). If I remember correctly, some exchange or service accepted a BTC deposit and then would not let the depositor access the BTC, and offered the reason "Came from an illegal service." It is a fact that what I described was possible, and it is being used, but it is not being used effectively to stop scammers.
Scammers are all over every website that allows peer to peer trading of bitcoin. They are most likely all over other sites that don't do bitcoin, but which do other cryptocurrencies which also can be tracked. I view this as a failure of the public to cooperate (which, I understand, is very common), but I'm part of that public, and so are you. For that reason, I create a group in Telegram called "Imposter and Scammer Reporting." You have to have some funds (at least 25 Satoshis, or about a quarter of a penny) to get in, but I can provide that for you. Just ask me (@dscotese on Telegram).
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