3 ms·

What would be really interesting to me is the reverse-engineering of the outbound bitcoin to trace this back to real/named individuals. Consider that every tra

What would be really interesting to me is the reverse-engineering of the outbound bitcoin to trace this back to real/named individuals. Consider that every transaction is public information - so any bitcoin spent from that wallet has to go somewhere. A friend threw out a stat for me while we were discussing this the other day that something like 80% of existing wallets are owned within places like coinbase where they are associated with named individuals. (I don't know if that is true, but for the purposes of this strategy it's the assumption I'll stick with) Anyways - assuming 80% of wallets can be traced by law enforcement to named individuals. Imagine that you set an alert to watch all outbound transactions from any of those three wallets. After each transaction, do a lookup on the owner of the receiving wallet. If it is a named individual, interview them to find out how they got this money. Who just sent them a bitcoin? If the wallet is not owned by a named individual, add it to the watch-list. Repeat for all outbound transactions from that wallet until you can trace it back. I'm interested to know how many steps it would take to arrive at the actual criminal.

matt-attack 9y ago
If bitcoin were truly that ineffective for use by extortionists, why is it so commonly used? Note: I'm truly asking a question, I know very little about the subject.
- moosingin3space 9y ago
  My guess is that BTC, while not effectively anonymous, does make it easy to use temporary accounts for receipt of extortion money.
- marcosdumay 9y ago
  Honestly, I'm repeating this question for years. I still didn't come-up with a good answer. The best that I got is that those criminals rely on living in countries with weak rule of law, and Bitcoin makes for just enough obfuscation that those countries won't investigate them, while countries wiling to investigate don't want to disclaim they have the ability. Besides, anonymity is not the only feature of Bitcoin useful for criminals. There's also the fact that transactions can not be stopped or undone. Those may be even more important.
Retr0spectrum 9y ago
Once the BTC goes through an exchange, and withdrawn in another cryptocurrency, it would be almost impossible to trace without cooperation of the exchange. I'm sure there are plenty of exchanges out there that wouldn't cooperate with law enforcement.
draw_down 9y ago
Mmm, I think they just convert the bitcoins to another cryptocurrency. Sounds like a cool movie though
chrisfosterelli 9y ago
Things like this exist: https://coinmixer.se/en/ https://coinmixer.se/en/
- alexc05 9y ago
  Interesting! So there are laundering services. Still, even if that were a 'terminal' point, you'd know at least where they were going. I'd love to read the story of 'follow the money'

matt-attack 9y ago

If bitcoin were truly that ineffective for use by extortionists, why is it so commonly used? Note: I'm truly asking a question, I know very little about the subject.

moosingin3space 9y ago
My guess is that BTC, while not effectively anonymous, does make it easy to use temporary accounts for receipt of extortion money.
marcosdumay 9y ago
Honestly, I'm repeating this question for years. I still didn't come-up with a good answer. The best that I got is that those criminals rely on living in countries with weak rule of law, and Bitcoin makes for just enough obfuscation that those countries won't investigate them, while countries wiling to investigate don't want to disclaim they have the ability. Besides, anonymity is not the only feature of Bitcoin useful for criminals. There's also the fact that transactions can not be stopped or undone. Those may be even more important.

Retr0spectrum 9y ago

Once the BTC goes through an exchange, and withdrawn in another cryptocurrency, it would be almost impossible to trace without cooperation of the exchange. I'm sure there are plenty of exchanges out there that wouldn't cooperate with law enforcement.

draw_down 9y ago

Mmm, I think they just convert the bitcoins to another cryptocurrency. Sounds like a cool movie though

chrisfosterelli 9y ago

Things like this exist: https://coinmixer.se/en/ https://coinmixer.se/en/

alexc05 9y ago
Interesting! So there are laundering services. Still, even if that were a 'terminal' point, you'd know at least where they were going. I'd love to read the story of 'follow the money'