I don't know much about privacy coins. I'm more interested in smart contract and API technology. However, I keep reading news articles that provide evidence that privacy coins are going to be an absolute necessity to the blockchain going forward.

Just recently there was Russian Agents Who Hacked DNC Emails Thought Bitcoin Would Keep Them Anonymous and U.S Congressman Sounds Off On Cryptocurrency Industry Amid Democratic Hacking Scandal.

Are these articles simply FUD slams against Bitcoin and The Blockchain in general? Reviewing the comments seems to point to that:

This story doesn't make sense. It is well known that Seth Rich downloaded the DNC emails on a flash drive and gave them to Wikileaks. Mueller is playing political theater and this is pure fiction.

They will never see a jail cell.

Because they're not real! There's NO WAY the US got the leg up on Russian spies, and definitely not a GROUP of them! US has always been WELL behind Russia in the counter intelligence/spying sector. This not even to mention China, that's ripping off our intellectual technology property right under our noses. How bout catching just ONE of them!

Indeed! It appears that this is just another claim that Bitcoin funds illegal activity; a claim that has been rebuffed in multiple ways.

Seriously though, it isn't hard to buy things anonymously. If you use Bitcoin your transaction is linked to a transparent ledger. Those addresses can in turn be linked to IP addresses, and those addresses can be linked to physical locations and a paper trail. The best way to stay anonymous has always been cash or identity theft. How could hackers skilled enough to hack our democracy be stupid enough to get caught in such a novice fashion?

Also, we have to assume that the Russian government is responsible for facilitating the hacks in the first place. Doesn't the Russian government have the power to give out false identities? Do we really presume them to honor our indictment and hand over twelve of their spies? What an incredibly foolish expectation! It's all smoke and mirrors.

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Donald trump even issued an executive order involving cryptocurrency.

https://www.whitehouse.gov/presidential-actions/executive-order-regarding-establishment-task-force-market-integrity-consumer-fraud/

http://www.businessinsider.com/president-donald-trump-task-force-cryptocurrency-fraud-2018-7

It is unclear whether this will turn into an attack on the blockchain or will further legitimize it.

The Amazon blockchain patent is another strong reason to support privacy coins. The more mainstream The Blockchain becomes the more corporations are going to try to exploit it for a profit. Amazon is already in the process of removing anonymity from the blockchain. They'll sell to the highest bidder. Capitalism at its finest.

Privacy coins are absolutely necessary to fight back against this type of exploitation. It's not about facilitating illegal activity, it's about freeing ourselves from all these greedy middle men. We no longer require their tainted services.

Did you know the secret service was founded to stop financial fraud like counterfeiting? There are around 6500 agents. Protecting the president can almost be considered a secondary objective. That's why the secret service announcing their dislike of privacy coins is much more significant than most people realize. If the secret service has something to say about privacy coins then it means privacy coins are doing their job perfectly. When you take into account that most people have no idea what Monero and Dash even are this becomes even more relevant.

Expect attacks against privacy coins to becomes even more extreme in the future as crypto becomes mainstream. They undermine the establishment. They undermine USD. They undermine corporate superiority. The problem with this is that the elite is going to want to have their cake and eat it too. They'll use privacy coins for shady dealings while at the same time telling everyone else that they are not to be used.

Have you ever heard someone complain about a government service (like food-stamps) with the line, "[blah blah blah] my tax dollars pay for that!" Here's the "funny" thing about that argument: no one seems to realize that the majority of their taxes go to war, torture, and imperialism. Everyone wants to bitch about universal health care and welfare instead of military spending. The hypocrisy knows no bounds. No one wants to take credit for our role as world police.

I just looked at 50 different pie charts with 50 different percentages. Does anyone really know where the money is going?

The Middle East refers to us as the "Great Satan". They literally preach that we are the actual devil and/or his minions. Are they wrong? Just because the vast majority of citizens are blissfully unaware of our foreign policy isn't exactly an excuse. Quite the opposite, the argument that America is full of drone zombies working for the man is just another point in their favor.

Taxes

The money we "willingly" hand over to the government is used to fund these atrocities. Many libertarians make the claim, "taxation is theft". Could cryptocurrency one day render taxes an archaic relic of the past? Maybe, but for now privacy coins provide the opportunity to evade taxes on the principals of political and/or religious grounds. I would never be so bold as to try to dance with the IRS, but clearly many other people are willing to take that chance.

Should we even be taxed for participating in a worldwide economy? I feel like taxes used to make a lot more sense. You make money in America so you pay money to the American government. Simple, but not so simple anymore. The Internet has severely blurred the lines here. The greed monsters still want their cut even though we aren't even necessarily doing business in this country. We owe them because reasons. Don't question, be a good little drone!

This raises the question: how can you even prove that someone is in control of a cryptocurrency wallet? If you transfer Bitcoin from one wallet to another how can someone else find out who controls the new wallet? You can't unless the new wallet starts signing transactions and spending coins. You have to create a paper trail of activity with a wallet to get identified. Cold storage wallets with zero activity are impervious to audit; just ask Satoshi Nakamoto and his 10% ownership of genesis block Bitcoins. If you sell a cold storage wallet under the table for cash it's just as untraceable as the cash received. It's already been proven multiple times that using cash is still the way to go when it comes to illegal dealings.

Even if the government knows you're in control of a crypto wallet you could still say you lost the private key. This happens all the time. The Silk Road drug ring was only taken down because they had undercover agents infiltrate the organization. The private keys were physically stolen from Silk Road operations.

Silk Road 2.0 shut down by FBI and Europol on 6 November 2014. Silk Road 3.0 went offline in 2017 due to loss of funds.

Funny how the most recent Silk Road was shut down by hacker theft and not law enforcement. How do they keep getting away with it?

Tumblers, Mixers, and Monero

You don't need to use a privacy coin to implement privacy features on a blockchain, but it can help. If one takes contraband coins and trades them around to different blockchains it becomes much harder to trace. For instance, you might take Bitcoin and turn it into Ethereum using a service like ShapeShift where you don't even have to sign up for an account. Now authorities would have to get in touch with ShapeShift to figure out where the money went. Doing this several times with several different services makes the money very hard to track, and some people even use decentralized peer to peer tactics to hide crypto.

Recently, the Secret Service announced that they were able to “seize over $28 million in cryptocurrencies in the course of our criminal investigations, primarily in the form of bitcoin”.

How long do you think it will take criminals to realize that maybe Bitcoin isn't what they should be using?

Monero

https://www.monero.how/how-does-monero-privacy-work
This article is very much worth reading. Privacy coins are always on the cutting edge of privacy technology (duh). The fact that most people getting caught are using Bitcoin shows that criminals are dumb and privacy coins work.

Conclusion

Privacy coins aren't about breaking the law, but now that Bitcoin has proven itself to be transparent and not anonymous like most people thought, the sentiment of "cryptocurrency is used to fund crime and terrorism" will trickle down to privacy coins. Even if this were true it's totally irrelevant.

This day in age, privacy is more important than stopping crime. Prisons are filled with innocent people and the world is already being run by mobsters who are above the law. Privacy coins protect the little guy. By making transactions difficult (but not impossible) to track we ensure that the law has incentive to only investigate the biggest crimes.

Privacy coins can help those that reject the system live off the grid without an identity that can be attacked by governments or banks. They can provide political asylum to those that oppose the government and guarantee that their funds will not be frozen or stolen by the authorities. We know that privacy coins are doing their job because the secret service is worried. Don't fall into the trap of believing the entities that privacy coins threaten. The benefits of privacy far outweigh the drawbacks and I believe that this fact will only become more apparent as time goes on.