recovery sparks debate on Bitcoin traceability

Bitcoin-BTC is public ledger with soft privacy dependent on its users not infringing each others privacy. Only hard crypto privacy can break and inoculate against the infringement weakness. Since most of its users today still use it in woefully non private and infringing fashion, they and it remain privacy weak for everyone, that is not expected to change, nor will BTC ever update to privacy anytime in the next 0-5 years or longer. The "debate" is also faux, a FUD injection, launched by legacy interests who desperately want crypto to fail so that they can remain in power and mind and money control over you. Public ledger is *not* a requirement of cryptos... all any privacy ledger/coin needs, whether strong cryptographic or bit-equivalent mix or ZK or any other method, is an *equivalent level* of formal assurance over the code and operational scenarios such that one can assert that its issuance, consensus, etc will work just as well as any public coin does. So long as the level of formality effort and expense you allot to analysing both public and private ledgers/coins does accurately estimate and target sufficient equivalency and assurance levels and safety margins between both of them, you're good to go. In fact this analysis is already done when designing public coins... privacy coins are no different. Further, the entire cryptocurrency ecosystem has and continues to use its normal market discovery mechanisms of pricing, adoption, asset allocation, trading, exit, and write-off... to account for all such risks of failure that might come from mis-estimations of equivalence. Both are the same here too. The only real difference between public and private is that the "only public can work" argument is a mind game that comes from the same legacy FUDsters that especially hate the power that privacy ledgers/coins will bring to the masses. So enhance and trust your formal analysis capabilities, not their FUD. Then launch privacy and freedom to the world.

"mixing" things between wallets is just silly -- computers can unwind all that in a millisecond

So you're saying that is the result of your survey audit of... swaps, CoinJoin, JoinMarket, CashShuffle, CashFusion plus all the rest of the deployed mix tech that is out there? And of Monero-XMR's style of obfuscation? And of all the various families of statistical "mix" based privacy systems? Then of the traditional and new crypto based privacy systems... say perhaps started with ZCash-ZEC, homomorphic zero knowledge encryption, etc? Ledger/Coin privacy are now a very active field of research. Lots of privacy enabled coins are being launched. Here's a fun one of many for you to review... Pirate_Chain-ARRR ;) https://pirate.black/

it's *easier* for the FBI to unwind your laundering via BTC than normal banks, because normal banks *have shitloads of privacy protections and subpoena requirements that BTC doesn't*.

That's nothing but rubberstamped swiss cheese, now aged to near perfection with highway robbery via civil forfeiture, national bail-ins, arbitrary cancellation, censorship, and more. Privacy in money also helps millions of impoverished people keep the meager fruits of their labor, and donations received, so they can feed themselves instead of having their thin marginal existence fee'd stolen and taxed away into the coffers of the kings and tyrannical democracy. With gold and fixed issuance cryptos testing the inhibiting of their losses due to kings inflation too. "Laundry" "Evasion"... terms hypocritically used by Luxurious Kings to continue propping themselves up via theft, taking all but the bread rations of the people for themselves, paying for the occaisional Circus Rally, and now, not free as in freedom but "Legalized" Marijuana, to keep them happy, stoned, and subservient... blissfully unaware of what banks and fiat in general are doing to them.

the only way to truly do anonymous transfers is by meeting up in person to exchange cash for a keydrive containing a wallet private key

Offline physical tx a bit extreme, but you still need a live network connection to verify the key you were physically passed still holds any value on the ledger before you leave the tx. And your face is often less anon than the network is.

really no better on the privacy/convenience spectrum than just handing someone a suitcase of gold.

Metals are elements whose weight and volume does not exactly scale effectively with the carrying capacity of your pocket. It's also not safely transmissible over distance without exorbitant security cost, and its second layer solutions such as hawala carry their own risks, and storage providers rob you with fees. Assayment situations... problematic. Hardware wallets fail unless you kept paper physible backups, which you can't if the HW prevents you from importing, exporting, duplicating the private keys. Seeds sworn by vendors are as much fail as RSA_SecurID, as risky as Casacious, and webwallet js code, and all your closedsource wallets and Windows and CPU's are. GovCorp war and telecoms and censors and banks and exchanges gratuitously shut down you and your internet tubes. Crypto gets fried by EMP dazzle and solar flares, but then you've got far far worse problems that even gold is unlikely to solve. Metals markets option skewed, papered, and derivatived same as much crypto and DeFi is. Gold, silver, crypto, chickens, fiat... all have tradeoffs. It's a race condition... which among them will both defeat the risks and yield freedom, solutions to the problem, sooner. Best diversify, and invest more time eradicating the problem. CBDC's, Fiat-DC's, GovCorp-DC's are also here now, and their oppressive power and control over you is not a joke, it is expected they will forcibly apply them soon. You must defeat them.

data is still stored permanently on the blockchain

Permanent ever growing storage on blockchains, is a waste and a massive privacy exploit risk that also needs evolved past. Consider developing distributed unspent state databases, updated by consensus mechanisms, pull forwards, checkpoints. Lots of room to explore many different new ways.

If you have a mapping of "human identity to wallet"

Any "privacy" in Bitcoin-BTC comes only with signficant critical masses of addresses you interact with out to N-degrees of freedom entirely refusing on privacy principle to record any identifiable data alongside the addresses and transactions. This second layer recordkeeping exploit is far too widespread. The mass includes all people, and merchants composed of people, and especially legacy crap like exchanges and now the massively central "De"Fi hubs... both functions you should instead be doing in your communities spreading peer-to-peer across the world. Obviously privacy coins forcibly breakdown not only the public hole, but the recordkeeping datahoarding mindset you've been programmed to wage against freedom and free human beings, including against yourself. That breakdown among your neurons is a good thing, feel the burn. Most too new to have seen all the freedom trading in IRC. Now there are more free options, meetups in every big city with miners who have bills to pay, and traders and defi that seek investment, liquidity, price discovery. Many hundreds of people now in each of the world's top 1000 cities more than willing to spend an evening out in crypto meetup groups. Find them, have fun. Better spreads, often zero just on principle between free and agreeable human beings, are available there, simply because the skim stolen in MITM attack on you by the unnecessary redundant legacy wasteful central thieves known as exchanges and banks don't exist there. But instead, you idiots keep sitting at home signing your ass up to centralized privacy killing exchanges and investment banks, injecting all their and the Govts KYC-AML FUD programming further straight into your brains, getting all your submitted data metadata id balance and tx info bought, sold, given, hacked, mainlined straight to the control state. By you not going out and establishing local meetups, free trade routes, distributed local markets, you are literally perpetuating and enslaving yourselves and everyone else to those central control structures over you. Privacy coins are powerful, but you can't get there without meeting up and talking about why, and why humanity has always and will always need privacy, and therefore why the current anti-privacy fad is a freakish unwanted dystopia in the making.

recovery

BTC is non-PQC, and uses a curve that people still debate... https://crypto.stackexchange.com/questions/68269/does-secp256k1-have-any-kno... https://safecurves.cr.yp.to/ But the Colonial "recovery" was most likely just another subpoena to an exchange, a brainwallet, exploit NIT, bad random device or wallet implementation, opsec, etc. Basic bitch shit held out as grand secrets and methods by them for FUD and political gain. You're only hurting your knowledge by refusing to do the "how" analysis across all the public and FOIA case files, by refusing to ask all the prisoners how they think they got jailed, and refusing to publish the results for the world. If you can gather and process all the info, the answer is most likely there in plain sight. Power counts on you not doing the work to find and expose it.

Wallets are often associated with many identities, e.g. in exchanges.

Lots of places oversubscribe addresses, that obviously only works because it's backed by storing the corresponding tx and balance accounting data in literally forever corporate databases that are laughably trivial to subpoena and raid. There's zero privacy advantage there. The way to evolve beyond that is for renegade cryptopreneurs to ditch the regulatory environment by deploying new anonymous exchanges on the encrypted overlay networks. And for all the existing and new surface exchanges to move to and work at privacy in whatever jurisdictions in the world still have any freedom friendly left. And to keep developing and launching new cross-coin DEX, general purpose markets, etc on or accessible to and interfacing with those overlay distributed p2p networks. And for you to also go local and peer-to-peer. The privacy "news", that most all of today's cryptos suck at privacy compared cash and gold and even banks... that colossal new and net loss therein of one of the requisite features of humanity, and even by extension money, called "privacy"... that obviously being the fully intentional outcome of the Global War On Cash to further entrench power over you... rightly just helps drive more awareness and demand for distributed privacy coins and all that tech, and to dismantle the fad ecosystem of anti-privacy-is-good proselytized and programmed into you of late by those very same powers. https://www.youtube.com/watch?v=-wntX-a3jSY TMYTYG The battle for crypto, discovering routes around oppression, seeking freedom, requires action hardly in cyberspace, but in slogging through the trench warfare of meatspace, and in freeing your own mind from its former program load. Eventually distributed crypto, privacy, real money, and freedom will win. It's just a matter of time. And you have a role to play in making it happen. So get yer boots deep up in that mud.