"Leaked" documents obtained by the Daily Beast reveals that the IRS has contracted Bitcoin startup Chainalysis for a software which allows them to track Bitcoin addresses and transactions.

The IRS can now track your Bitcoin transactions!

The software is called the refactor tool and can be used to track Bitcoin addresses through the blockchain and through centralized wallets like Coin Base, Kraken and possible Blockchain. Chainanalysis claims to have already analysed $15 billion worth of Bitcoin transactions.

Chainalysis is a Switzerland based company with an office in New York and their services help in tracking tax evaders, criminals money transfers and money laundering. Public records show that the IRS has been using their services since 2015 while their other customers include banks and law enforcement agencies.

However some people believe that development is not not completely bad news for privacy seekers who use cryptocurrencies, as users who want more confidentiality of their transactions would simply move to other cryptocurrencies which support more confidentiality such as ZCash and Monero.

@BlockRush disagrees! Bitcoin is the only reputable cryptocurrency with the potential to survive and increase in value over time. While alt-coins such as ZCash and Monero may provide better anonymity than Bitcoins, their future cannot be trusted.

We will explain below.

Four reason why should NOT use altcoins more private than Bitcoins!

@BlockRush would advice against that! Why? Read on for better understanding of the situation.

It will be better to store your $100k or whatever in Bitcoin and pay the IRS its taxes than to hide it in some alt coin. Do you know why?

The reason is simple: Bitcoin will gain more adoption and price growth in the future, so your funds in Bitcoins will see and increase that will outweigh whatever you pay to the IRS.

However if your play smart and store your coins in some alt coin to evade taxes, then:

1. You put your funds at risk as alt coin wallets could be hacked. Bitcoin wallet have been tested and now have the biggest companies behind them making Bitcoin wallets the safest. Alt coin wallets are developed by the small volunteer developer teams behind the coins and when they begin to gain users - hacker will also start attacking.
2. The IRS will not stop at Bitcoin. They will follow the money and if more people start using ZCash or Monero, they will soon develop software to track it, ask exchanges and wallets for user information or outlaw those coins. Do not bet on the IRS - they will do whatever they need to to get their taxes!!!
3. Alt coins will not appreciate in prices: alt coins will not appreciate in prices as fast as Bitcoin. Currently ZCash and Monero may be doing fine - but once people rush to them both the IRS and law enforcement agencies will begin crackdown on then and then their prices will drop and your funds will shrink.
4. You will miss the price boom of Bitcoins: you would be missing out on the potential gains your funds would have made if they were stored in Bitcoin. An investment of just $30.0 into Bitcoin in 2009 would be worth several millions today. And yet even now Bitcoin could hit $10,000 by the end of this year.

@BlockRush will advice you to keep your funds in Bitcoin, if the IRS charges you taxes pay them - your Bitcoin funds will explode in price and you will cover the amount paid in taxes several times over!!!

What do you think?

Read yesterday's viral report:

Operation white elephant: Five reasons why Satoshi could have deserted Bitcoins to create Bitcoin Cash @BlockRush

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