6 ms·

Mixers actually make it impossible to trace. What typically happens is you deposit an amount. Some amount similar to that minus a fee is then sent to the addres

Mixers actually make it impossible to trace. What typically happens is you deposit an amount. Some amount similar to that minus a fee is then sent to the address or addresses of your choice in multiple small transactions over a period of time from seemingly unconnected addresses. It completely breaks the tractability of the history.

GordonS 9y ago
Yes, but I don't any mixers would touch these coins for fear of facing action by law enforcement.
- rodiger 9y ago
  A lot of mixers are automated / are designed for this exact purpose
  - GordonS 9y ago
    Yes, the operation of the mixer itself is automated, but I've wager than the owners have blacklisted addresses known to be involved with massive BTC theft - it just doesn't make sense to touch them from a risk perspective.
    - pricechild 9y ago
      Would that really be effective? Isn't it relatively cheap to create a new wallet?
      - rodiger 9y ago
        It is free afaik
      - GordonS 9y ago
        Sorry, I don't get what you mean? Do you mean the criminals could simply move the coins to a new wallet before moving them to an exchange? Transactions on the Bitcoin blockchain are public, so it's relatively easy to keep tabs on movements of known criminal proceeds (as the article demonstrates :)
        yebyen 9y ago
        > it's relatively easy to keep tabs on movements of known criminal proceeds Until they've been obfuscated by a mixer... and not every mixer is going to be interested in blacklisting every set of coin from every known criminal activity. And many criminal activities are surely unknown, including many for which the sources of coins are not going to go to any extent to report. (The senders may be committing crimes that were unrelated to Bitcoin crime, and so entirely off the radar.) I'd hazard a guess that the majority of crime committed in and around the ecosystem of Bitcoin is not even Bitcoin theft, so might never be reported. How many times does a value have to move from one address to another address, and mix with untainted coin, before it's going to be considered too far removed from the original addresses to be palpably associated with the original crime?
  - nolok 9y ago
    There is still someone behind it, getting the fee's money. That person will have to face the police.
    - Ajedi32 9y ago
      Only if they get caught.
  - IshKebab 9y ago
    Yeah I'm sure automated money laundering is perfectly fine in the eyes of the law.
    - rodiger 9y ago
      I am not saying it is legal-- just harder to prosecute
revelation 9y ago
"Mixing" is bitcoin speech for "money laundering" and it doesn't end well for whoever is doing the laundry, no matter how much technobabble you put on top of it.
- zhte415 9y ago
  This.
- dfox 9y ago
  Mixing is not laundering. Money laundering is about converting money to something that can be passed as income from legal transactions. Mixing is only about disguising where the money came from (which is something that you essentially don't have to do for physical cash)
  - revelation 9y ago
    What on earth is money laundering if not disguising the origin of lots and lots of physical cash? As always, a lot of this has its origins in drug trade. Money laundering is disguising the origin in general, which is of course the point of mixing. It's not some kind of theoretical bitcoin boner exercise, it's intended so you can maybe at a later date withdraw some bitcoins without the party providing the cash (and the feds) immediately making the connection to the crime.
    - dfox 9y ago
      Money laundering is not about simply disguisng the origin, but about disguising the origin such that it looks like some legitimate (typically taxable) endeavor. Bitcoin mixing disguises the origin only as far as the blockchain is concerned, you still end up with X BTC that you have no explanation for how you earned them.
- mjevans 9y ago
  Would it be more like using shell corps or something similar? Still obfuscating the source of funds or making it harder to trace is what both Money Laundering and Privacy are about. Sadly, politicians don't make it easy to be 'almost private' (to everyone but the government it's a secret).
unfamiliar 9y ago
> Some amount similar to that minus a fee is then sent to the address Sounds pretty easy to connect the dots to me...
- softawre 9y ago
  Not when there are hundreds of people using this service at once.
- celticninja 9y ago
  Not if you think about it properly. Hacker deposits 10 BTC to a mixer, except he sends it as 20 transactions of between 0.1 and 0.9 btc each transaction. These are all sent to unique addresses belonging to the mixer and are never reused. So now the hacker has 10BTC in the mixer, he requests to be paid out to a list of 20 addresses. These addresses are sent between 0.1 and 0.9btc until the mixer has sent out 9 BTC (taking a 10% commission for the service). None of those hacker controlled addresses have any connection with one another and they have zero connection to the original deposits made by the hacker. There are also another 10 hackers doing exactly the same thing, so now we are looking at hundreds of transactions. So it becomes very difficult to connect the dots, also if you really could connect the dots easily I imagine that the FBI et al would really like to speak to you.

GordonS 9y ago

Yes, but I don't any mixers would touch these coins for fear of facing action by law enforcement.

rodiger 9y ago
A lot of mixers are automated / are designed for this exact purpose
- GordonS 9y ago
  Yes, the operation of the mixer itself is automated, but I've wager than the owners have blacklisted addresses known to be involved with massive BTC theft - it just doesn't make sense to touch them from a risk perspective.
  - pricechild 9y ago
    Would that really be effective? Isn't it relatively cheap to create a new wallet?
    - rodiger 9y ago
      It is free afaik
    - GordonS 9y ago
      Sorry, I don't get what you mean? Do you mean the criminals could simply move the coins to a new wallet before moving them to an exchange? Transactions on the Bitcoin blockchain are public, so it's relatively easy to keep tabs on movements of known criminal proceeds (as the article demonstrates :)
      - yebyen 9y ago
        > it's relatively easy to keep tabs on movements of known criminal proceeds Until they've been obfuscated by a mixer... and not every mixer is going to be interested in blacklisting every set of coin from every known criminal activity. And many criminal activities are surely unknown, including many for which the sources of coins are not going to go to any extent to report. (The senders may be committing crimes that were unrelated to Bitcoin crime, and so entirely off the radar.) I'd hazard a guess that the majority of crime committed in and around the ecosystem of Bitcoin is not even Bitcoin theft, so might never be reported. How many times does a value have to move from one address to another address, and mix with untainted coin, before it's going to be considered too far removed from the original addresses to be palpably associated with the original crime?
- nolok 9y ago
  There is still someone behind it, getting the fee's money. That person will have to face the police.
  - Ajedi32 9y ago
    Only if they get caught.
- IshKebab 9y ago
  Yeah I'm sure automated money laundering is perfectly fine in the eyes of the law.
  - rodiger 9y ago
    I am not saying it is legal-- just harder to prosecute

revelation 9y ago

"Mixing" is bitcoin speech for "money laundering" and it doesn't end well for whoever is doing the laundry, no matter how much technobabble you put on top of it.

zhte415 9y ago
This.
dfox 9y ago
Mixing is not laundering. Money laundering is about converting money to something that can be passed as income from legal transactions. Mixing is only about disguising where the money came from (which is something that you essentially don't have to do for physical cash)
- revelation 9y ago
  What on earth is money laundering if not disguising the origin of lots and lots of physical cash? As always, a lot of this has its origins in drug trade. Money laundering is disguising the origin in general, which is of course the point of mixing. It's not some kind of theoretical bitcoin boner exercise, it's intended so you can maybe at a later date withdraw some bitcoins without the party providing the cash (and the feds) immediately making the connection to the crime.
  - dfox 9y ago
    Money laundering is not about simply disguisng the origin, but about disguising the origin such that it looks like some legitimate (typically taxable) endeavor. Bitcoin mixing disguises the origin only as far as the blockchain is concerned, you still end up with X BTC that you have no explanation for how you earned them.
mjevans 9y ago
Would it be more like using shell corps or something similar? Still obfuscating the source of funds or making it harder to trace is what both Money Laundering and Privacy are about. Sadly, politicians don't make it easy to be 'almost private' (to everyone but the government it's a secret).

unfamiliar 9y ago

> Some amount similar to that minus a fee is then sent to the address Sounds pretty easy to connect the dots to me...

softawre 9y ago
Not when there are hundreds of people using this service at once.
celticninja 9y ago
Not if you think about it properly. Hacker deposits 10 BTC to a mixer, except he sends it as 20 transactions of between 0.1 and 0.9 btc each transaction. These are all sent to unique addresses belonging to the mixer and are never reused. So now the hacker has 10BTC in the mixer, he requests to be paid out to a list of 20 addresses. These addresses are sent between 0.1 and 0.9btc until the mixer has sent out 9 BTC (taking a 10% commission for the service). None of those hacker controlled addresses have any connection with one another and they have zero connection to the original deposits made by the hacker. There are also another 10 hackers doing exactly the same thing, so now we are looking at hundreds of transactions. So it becomes very difficult to connect the dots, also if you really could connect the dots easily I imagine that the FBI et al would really like to speak to you.