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68% of total Ethereum transaction value controlled by one system
- 45h34jh53k4j 9y agoOh no! The emperor's has no clothes!
- shemnon42 9y agoIs the story that 68% of the traffic is naked laundering or that 68% of the traffic is people buying into ICO that are not already enfranchised in ethereum?
- deleted 9y ago[deleted]
- mesozoic 9y agoCould be laundering but even with that you wouldn't want all of the source currency to be illegitimate so only a fraction of it would be. So it would probably cover both cases.
- Alex3917 9y agoIt's not laundering, it's spoofing by some of the earliest Ethereum holders who are trading with themselves on the exchanges to create the appearance of volume and liquidity to drive up the value of their coins.
- cslarson 9y agoOh right.
- charlesdm 9y agoCan't be all spoofing though? That seems a lot / too much?
- mst 9y agoGenuine (but possibly stupid) question: How do I tell the difference between that and the 'exchange temp accounts' theory promulgated upthread?
- deleted 9y ago[deleted]
- herendin2 9y agoPlease provide some evidence for this potentially libellous claim. I suggest you should check the other comments first.
- KomradeKeeks 9y agoBold claim, but it seems it's just the exchanges shuffling deposit addresses, or something to that effect: https://news.ycombinator.com/item?id=15334216 https://news.ycombinator.com/item?id=15334216
- seibelj 9y agoIt's an ETH mixer, it helps you obfuscate ETH, the same exists in BTC and all other crypto currency systems without inherent privacy.
- k__ 9y agoCould you elaborate? (I'm a n00b) Are there alternatives to BTC and ETH that have inherent privacy? How do Feds not crack down on these "mixers"?
- uncoder0 9y agoThere are other coins focused on privacy Monero is my favorite privacy focused crypto at the moment.
- dijit 9y agoRE: your question about inherent privacy, there is Monero (XMR) and ZCash which implement transactional privacy in different ways. In my opinion XMR/Monero are the only implementation to do it all the way through, so it's what I prefer but as with all things, you should research what the differences are and which is better for you. ZCash has a higher value per coin right now and is probably more accepted than XMR/Monero.
- the_stc 9y agoExcept no large systems support receiving shielded zcash transactions because of the CPU and RAM involved. They recently made some improvements, but it still takes many seconds of solid CPU time. Maybe in the future it'll be fast enough to be practical and they can make it the default.
- XR0CSWV3h3kZWg 9y agozcash, monero and dash are the biggest that have inherent privacy.
- the_stc 9y ago
- Animats 9y agoThis mixing ramped up around the same time as the price did. Etherium was around $8 at the beginning of 2017, where it had been for years. By midyear it was in the $300-$400 range. Is this mixing somehow involved with a scheme to pump the price?
- Slartie 9y agoI would say the relationship is this one: First, Ethereum was found to be the perfect Ponzi scheme platform by dubious “ICO“ initiators. Then, early investors made a huge bunch of money on these ICOs. Then the price skyrocketed, as more people wanted some of that easy ICO money. This in turn made the mixing services insanely popular, as all of those ICOs had to cash out, and knowing that their business was of dubious nature, many decided to obfuscate the target addresses of their ether via mixers to protect either OTC buyers or their personal accounts on exchanges from being linked with the ICO addresses.
- NwmG 9y agoI would say it is not actually a mixer. The point you are making actually points more towards them being temp addresses for exchanges. More people entering the market on exchanges, higher volume in exchanges, higher volume in this tempwallet "mixer"
- Taniwha 9y agoDoesn't this screw up people's taxes, making them liable for realised capital gains, and also making them completely screwed if the value of the currency goes back down again
- charlesdm 9y agoYou are only liable for CGT if you sell an asset (= realised gain). So, if you buy a stock at $10 and it goes up to $100, your CGT liability is a certain percentage of $90 ($100 - $10) upon liquidation. If you buy a stock at $100 and it goes down to $10, you end up with a $90 (generally carry forward, some jurisdictions allow carry backwards) loss that can be used to offset other gains.
- dahdum 9y agoAren't these the temporary deposit addresses that exchanges give out? You deposit and then they sweep the balance to their hot/cold wallets as necessary? Also the ReplaySafeSplit and related contracts were due to the ETH/ETC split, you had to move your coins to be safe. I see no evidence of a "mixer" being the cause.
- Nition 9y agoI was wondering that too. I know at least some exchanges (maybe even all the major ones?) use temporary addresses like that. I wonder when they started doing that. There's the huge spike in "mixer" activity from March this year onward, but that's also when Ethereum gained a lot of value. Maybe it's just a lot more trading started happening on the exchanges?
- dahdum 9y agoThey have as long as I can remember, but the volume has skyrocketed over the past year along with more exchanges. I don't understand how the author could group all temporary addresses, see the top inputs/outputs as all exchanges, and then claim some nefarious mixer was responsible.
- darawk 9y agoThat was my first thought. Everything they describe sounds exactly like temporary exchange deposit addresses. And the transaction volume associated with them sounds about like what i'd expect.
- NwmG 9y agoYeah, this was my thought as well. 67% of all ETH transaction volume in a mixer seems pretty high, particularly when you consider the volume traded on each of the exchanges
- oldstrangers 9y agoThis is exactly what it is.
- homakov 9y ago
- XR0CSWV3h3kZWg 9y agoThe article doesn't seem to support the claim.
- ve55 9y agoWhy is the link at the top of this article ('cyber•Fund') to https://cyber.fund/system/Paragon https://cyber.fund/system/Paragon, a page for 'Paragon', a very shifty high-budget ICO? Given the other things Paragon has paid big bucks for (anything you can imagine, from paying Youtubers 5 figures per video to get their subscribers to 'invest' in them to paying for mass reddit vote manipulation to buying very expensive ads and sponsorship programs to lying about their company model, CEO, etc), it seems really out of place to me that this article links to them as the first link.
- the_common_man 9y agoICOs are the new nigerian banks
- hisabness 9y agocan you clarify your comment?
- fataliss 9y agoI guess that would be a reference to the scams: https://en.wikipedia.org/wiki/Advance-fee_scam https://en.wikipedia.org/wiki/Advance-fee_scam
- hisabness 9y agoThere was an article awhile back that discussed why most scams claim Nigerian origination and/or are otherwise designed only for the most gullible.
- sanxiyn 9y agoYou can read this classic here: https://www.microsoft.com/en-us/research/publication/why-do-nigerian-scammers-say-they-are-from-nigeria/ https://www.microsoft.com/en-us/research/publication/why-do-...
- 9y ago
- alexjray 9y ago“Ethereum transactions” and “quantity of ETH transacted” are two very different things. This title (and article) is deceiving. Please see Vitalik Buterin response to this before reading. https://medium.com/@VitalikButerin/i-think-this-article-really-deserves-a-bold-clarification-correction-1bed386b056b https://medium.com/@VitalikButerin/i-think-this-article-real...
- ChrisClark 9y agoGood to clarify, it's actually 68% of the value, the amount transferred. They are only about 10% of the number of transactions.
- atomical 9y agoThis is obvious if you've ever poked through a few random transactions on etherscan. The big exchanges use temporary accounts to move funds to users. It makes sense that would make up a majority of eth transactions because fiat is the only way to purchase ether.
- atomical 9y agoI would be interested in seeing the charts on etherscan modified so that these temporary accounts are removed. https://etherscan.io/chart/address https://etherscan.io/chart/address It's going to screw up a lot of analysis.
- thisisit 9y agoThis whole analysis is very confusing. The first analysis about temporary addresses makes sense. Addresses used only for one hour. But what bearing does "transaction value" has? The real metric of a mixer controlling a currency would have been number of transactions. Mixing is about spreading the transactions far and wide and across many addresses to make it difficult to trace. When you look at the graph below, the mixer accounts for barely 11% of the transaction volume. If I go further and read about the core and shell, the analysis falls apart even more. The idea proposed is that the shell accounts are the ones responsible for generating output and inputs to external accounts like the exchanges and also talk to core which consists of 90% temporary accounts. Fair enough. "In the end, it turned out that the total amount transferred into and out of the core is 4 times higher than the total that entered and left the shell and the core taken together." How is this even possible? If assume flow of 1 ETH ignoring fees. Poloneix -> Shell -> core -> Shell -> Kraken From the statement "total that entered and left the shell and the core taken together" = 1 ETH into shell + 1 ETH into core + 1 ETH out of core + 1 ETH out of shell = 4ETH Total for core is 2 ETH - 1 in and 1 out. If shell is there to interact with the core, how is core doing 4 times the amount. Unless of course the confusion is dividing the total in and out of 4 by actual transaction of 1 ETH. All exchanges need to segregate customer amounts to ensure everything works smoothly. Let's assume I have 1 ETH, then sent it to Kraken. No trades done and simply withdrew the ETH. Here's what will happen: Me -> Kraken Temp account + network fees (mostly pool accounts ~ 0.0002) -> Me + Kraken account for withdrawal fee ie 0.005 + network fees (again pool) In which case, two scenarios can occur: a. Kraken temp account is tagged - So my account and pool accounts can be considered to be the shell. The in and out total for me is 1.9946 worth of ETH (1 ETH out + 0.9946 ETH in after Kraken and network fees). On the block fees side, in and out of the shell is 0.0004 ETH. Total is 1.995 in and out of the shell. While Kraken is doing 0.005 ETH. b. The worse case scenario - Kraken temp account is unmarked. In this case the temp account becomes the shell while my personal account and pool becomes the so called core. Now this happens: Core transaction volume - 1.995 ETH Shell or Kraken temp account - 0.9998 In (after fees) + 0.9946 out (after Kraken and network fees) = 1.9944 ETH Kraken - 0.005 ETH Actual volume is 1 ETH but counting the transaction volume blows this thing up.
- TeeWEE 9y agoThese are just temporary addresses at exchanges: You pay the exchange x euro, the exchange gives you y ether to adress (temp) E, then you transfer from E to your own wallet K