KYC is a legal requirement. If you want cryptocurrency to be adopted, it needs to be legal to use. Even if it becomes cost competitive, most businesses aren't going to touch something which exposes them to risk of getting involved in a money laundering case.
With fiat money, you can legally retrieve anonymous cash from an ATM if you choose so, without suspicion. Or likewise, you can reveal your identity for a transaction when appropriate. This should be the same with crypto.
Let's see it this way: surveillance is needed and those who seek privacy may indeed conceal illegal activities. But I think we can agree not everyone is a criminal and if I have a right to privacy with cash, I should have the same right with cryptocurrencies.
Paper cash is "analog" and local, crypto is digital and global. It's the equivalent of buying DVD copies off someone at a market stall vs a torrent site.
Except with crypto you have the government after you directly for tax avoidance, money laundering and the prospect of $GovIssuedCurrency being sidelined. With torrents it's the MPAA sending lawyers after you.
My feeling is if you can't do it anonymously with cash the government probably has a reason to be interested. What should happen is all businesses must be forced to accept cash transactions, I don't like then trend towards cash-free shops.
Of course. I used to like Monero (XMR) despite its shortcomings, but Lightning is now more promising. It essentially solves all the flows in Bitcoin: scalability, fungability and privacy.
