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The Criminal Underworld Is Dropping Bitcoin for Monero
- tribby 9y agomonero has become popular in this space, but the average (illicit) user is still probably making operational mistakes while buying, using, and selling it. in the case of monero a lot of people like to skip the step where they download a 30GB+ blockchain over tor, and I can't blame them. when the privacy-oriented cryptocurrencies are effortlessly private, that's when they will have arrived so to speak. I'm fairly optimistic about moxie & co's recently-announced mobilecoin (https://www.mobilecoin.com/whitepaper-en.pdf https://www.mobilecoin.com/whitepaper-en.pdf) for that reason -- if it's going to get adopted by whatsapp, the user experience will necessarily be pretty darned simple.
- Geee 9y agoI'm confident that we won't need something like MobileCoin, which is based on secure hardware which you have to trust. I'm pretty sure someone will come up with some kind of combination of RaiBlocks and Monero, for example. Also, SpectreCoin might be onto something if they are able to implement stealth staking.
- StavrosK 9y agoI'm less confident. It's hard to combine those two, as one doesn't have a unified ledger and the other needs it.
- elmar 9y agoonly way to acquire 100% private crypto is to mine it yourself and then always use a full node for transactions.
- EwanToo 9y agoMobileCoin might be an amazing user experience, but the odds of Facebook choosing to implement an external blockchain as a currency is pretty much nil as far as I'm concerned. If it does work, FB will simply reimplement it with a Facebook pre-mined set of coins before launching.
- fsiefken 9y agoDAG based coins don't have a blockchain to download. Byteball offers Blackbytes for privacy right now over Tor http://freebe.byte-ball.com/ http://freebe.byte-ball.com/
- albertgoeswoof 9y agoDoes byteball require a centralized conductor for security? (like IOTA)
- catamorphismic 9y agoWhy would you need to download the blockchain over Tor? There are many people downloading the blockchain and that in itself does not incriminate you. It seems sufficient to only send out transactions using Tor.
- radicality 9y agoI'm interested too, hope the OP or someone can answer. Also, why does the transaction itself need to be sent over tor? I thought Monero's feature is that you can't tell from a transaction who the recipient is (ring transactions or something?) but maybe I don't understand the end-to-end flow and the math well. What is incriminating when you publish a transaction without tor?
- phpnode 9y agoA relatively tiny number of people will ever download the blockchain, a relatively tiny number of people use Tor, how many bits of information does a state level adversary need to deanonymize someone?
- deleted 9y ago[deleted]
- the_stc 9y agoThere is no solid guide on how to use Monero operationally in a safe manner. Everyone will yell to churn, but there is no official information on how much and how to churn. Ringsize 5 is dangerously low. Lack of proxy support in the wallet makes using Tor much harder. Bad decisions with offline signing mean it is difficult to use a separate transaction pusher. Ringsize dominates all because the blockchain is totally persistent but not all IPs will be recorded by every attacker.
- justboxing 9y ago> Some coins post fake blockchain entries to hamper surveillance I don't get this. How do you post fake entries? Wouldn't the ledger be out of balance, or unbalanced or whatever the correct term for that is? And how are fake transactions identified by the faker?
- thisisit 9y agoI guess the writer got an ELIF and hence the whole thing was simplified a lot. Here's my understanding of Monero - It has the concept of ring signatures. I guess this is what the author is referring to. When a transaction is posted to blockchain it is assigns coins to a public key (generally known as the address). Now what Monero does is that it obscures the end address and hides who the transaction went to. That said, blockchain doesn't exactly use the concept of double boook keeping. So, you don't really have things going to out of balance. I am writing an article on how cryptocurrency transactions work. It it still WIP.
- justboxing 9y agoThanks! LMK when you publish your article.
- ubernostrum 9y agoIn other fields, fuzzing data while still maintaining accuracy is a well-established practice. A simple example that fits closely to debits/credits is the "vote fuzzer" on reddit. This was important back when reddit allowed you to easily access not just the point score of a post but also the count of up and down votes. The points are calculated as (upvotes - downvotes), but spambots could take advantage of that to figure out if their votes were really being counted, or being thrown away by the spam detection systems. So suppose the score on a post is currently 20 points with 30 up, 10 down votes. Reload, and you might see 32/12. Or 37/17. The fuzzer would give back fictional always-increasing counts of up/down votes which happened to add up to the correct score. It would also add phantom votes to offset spambots it had detected, so a spambot might see 32/12, issue an upvote, and then see 33/13, where the 13th downvote was a complete fiction invented by the fuzzer, to cover up for throwing away the bot's upvote. Apple's differential-privacy implementation in iOS does something similar; it boils down the metrics it will submit into a fixed-size data structure, then randomly flips some bits before submitting. But the weighting and occurrence of the bit flips is set up so that on average for every time, say, the third bit of a given submission flips from 1 to 0, there will be another submission that flipped its third bit from 0 to 1. This preserves the overall statistics while making it impossible to know which bits of any submission were "real" versus which were flipped by the fuzzer.
- ben_mann 9y agoTldr: Monero
- phs318u 9y agoCalled it (in a rather verbose comment 11 days ago). TLDR: BTC - the mob came, the mob went - XMR https://news.ycombinator.com/item?id=15993110 https://news.ycombinator.com/item?id=15993110
- phs318u 9y agoInteresting... two downvotes, no comments. I'd love to know why. Did I come across as snarky? If so, didn't mean to. It's just the timing of this article is so close to my prior speculation on this that I thought it warranted a mention.
- acover 9y agoI didn't downvote you. Your comment provides little new information and looks like bullshit. Lots of people are predicting bitcoin's fall. For lots of reasons. People can rarely time the markets, I'd expect strong evidence otherwise. Do you track all your predictions?
- zeep 9y ago/speculation: If Bitcoin doesn't implement the lightning network or something else withing 3 months, they will die, eventually.
- greyman 9y agoIt will not. A lot of people, even very rich, use Bitcoin as a store of value, something like an electronic version of gold.
- phs318u 9y agoI wasn't making a prediction. I was thinking out loud, in retrospect of the gains and then falls, about what might have caused it. The only reason I said "called it" was because the Bloomberg article is making a similar point. In any case, I take your point and accept why people are downvoting.
- 9y ago
- thisisit 9y ago> Its main competitor, Zcash -- which isn’t known to have a significant criminal following -- can offer even better privacy protection. On zcash, there was this discussion: http://jeffq.com/blog/on-the-linkability-of-zcash-transactions/ http://jeffq.com/blog/on-the-linkability-of-zcash-transactio... which suggested that nearly 31.5% of the hidden transactions in Zcash has some transparent parts to it.
- paulmd 9y agore: only 3.5% of traffic using z-addrs: The dirty secret of crypto is that there is almost no economy that exists for any of the altcoins, and relatively little even for Bitcoin (which functions as the reserve currency due to its lions' share of the economy). Effectively, by volume most altcoins are held by either miners (who sell immediately), or daytraders who will pump and dump. A very small fraction is held by true believers (who will HODL under all circumstances), but they don't contribute to the economy either. Such people don't care about anonymity, they're not actually using the currency, they're just traders, and traders mostly don't need to be anonymous.
- gt_ 9y agoThat’s not a secret, evidenced by the relentless reminders in every HN crypto post comment section. I can’t argue with the value of these reminders, though.
- anonytrary 9y ago> traders mostly don't need to be anonymous. Not sure I follow -- you suggest exchanges should send out who placed an order in the book, in addition to the price, amount, order type, etc.? Wouldn't that be a massive breach of privacy? Or are you not talking about exchanges?
- shrimpx 9y agoI think GP is saying that many/most people just trade Monero/Zcash for profit, they don't actually care about concealing their own transactions.
- forgingahead 9y agoOff-topic but related, any way to block/disable their stupid auto-play videos?
- SparkleBunny 9y agoNoscript.
- zeep 9y agoI use uMatrix and uBlock Origin and didn't get auto-play...
- ivanche 9y agoIn Firefox, about:config and then set media.autoplay.enabled to false.
- keyboardtyper 9y agoAs an alternative, try the AutoMute plugin for Chrome.
- swiley 9y agoDon't use pulseaudio and all the loud stuff goes away. It's one of the new features in Firefox.
- Toast_25 9y agoI like using HTML5 content blocker. Works for reducing bandwidth (blocking images, objects and media) or for this type of b/s.
- deleted 9y ago[deleted]
- nickthemagicman 9y agoIt also has some cool stuff regarding block size as well. It's a variable block size where am miner can pick a block size they want to mine instead of the fixed blocksize issues of btc.
- stephen123 9y agoHow long was the criminal underworld using bitcoin before they learnt it was a public ledger.
- bfuller 9y agoAnyone who can read the white paper could figure that out
- davchana 9y agoNot every criminal "reads". :)
- lawlessone 9y agoconsidering all the coin washing/ tumbler sites they were always aware.
- westmeal 9y agoI think some criminals are actually still using Bitcoin but not any smart criminals. It always seemed weird to me...
- vadimberman 9y agoI strongly suspect an average cop is not equipped to take advantage of the bitcoin's vulnerabilities, be it US, Japan, China, or Russia. Not every criminal handles bajillions, so most won't be investigated by young cyber-savvy hotshots.
- draw_down 9y agoCriminals aren’t always as dumb as you seem to think they are.
- DaiPlusPlus 9y agoOnly accept coins that were directly mined by the originating wallet's holder, use a new receiving address for each transaction, and sell BTC for cash in real-life parking-lot transactions.
- zerostar07 9y agoGood PR for bitcoin
- JohnJamesRambo 9y agoIsn't it the opposite?
- ghostbrainalpha 9y agoBad for short term Bitcoin price speculators. Good for long term investors and enthusiasts hoping for a grown up Bitcoin to achieve mass adoption and legitimacy as the worlds most standard digital currency.
- vadimberman 9y agoA question to the experts: why don't the criminals use smart contract platforms like Ethereum? My amateurish take is that, for instance, a smart contract could work as an untraceable distributed Silk Road with escrow and everything else. Because there is no one machine where everything runs, it's impossible to shut down the server; there is nothing that links these transactions together, except for the commonly used Solidity code.
- elmar 9y agobecause of the same problem as other contracts the lack of trustworthy Oracles, you need some trusted third-party to confirm what happened on the real world.
- vadimberman 9y agoAnd how did it work with the Silk Road?
- jackpeterfletch 9y agoYou had one central oracle (Silk Road) of dealer/buyer reviews, and dealers put up a deposit. Scamming was rife, but largely mitigated by the fact that the dealer cant effect their reviews and nor can the buyer. The dealer has the choice to not sell to you based on your history, the buyer has the choice to not buy from a dealer with a bad history. Other than that, bitcoin had little to do with its security apart from providing anonymity. If it was possible to do so anonymously you could have just post them cash.
- jackpeterfletch 9y agoTo add to this. This exiting scamming shows it was never watertight.
- the_stc 9y agoAt my company (details in profile, sex-work related), this is exactly why we are centralized. Some competitors go on about smart contracts, and how people will meet for services and exchange escrow keys...it is far-fetched! For example: We want to prevent underage users and duplicates. We do that by manually screening IDs. Hard to do that on a decentralized system... Another major issue: In sex work, clients present a significant threat. An abusive client needs to be reliably banned. Having them put up a deposit is just not a substitute. E-commerce do not have this as client only receives what seller sends and poses no risk to seller. We from our central point-of-view can detect rings, ban money launderers and traffickers, investigate and appeal if needed. Decentralized system that adds such a feature is ripe for gaming. And yes: Single point to make money, campaign, run ads, provide incentives (sign-up-friend, get-$50-credit) and organize labor...this is an important aspect as well.
- bluedino 9y agoIsn't the hard part getting the <whatever coin> with real money? Let's say I was going to try to launder a million dollars in cash. How do you get that into an exchange and out of an exchange without setting off a million red flags, at least in the United States?
- 55555 9y agoDarknet vendors have the opposite problem. You can swap with them, sell cash on darknet, or swap with others on localbitcoins.
- jatsign 9y agoMonero's big problem, right now, is that the fees are high - around $3. They're working on "Bulletproofs" that will reduce the size of transactions, and hopefully fees, by 80%. Zcash has more advanced crypto, but it takes nearly a minute to generate a private transaction on a normal computer. My favorite "privacy" coin is PIVX. It uses the zerocoin protocol and is fast with low fees. Die-hard privacy advocates don't like it because it uses Masternodes, but I consider that a plus from an adoption point of view. Here's a privacy coin comparison of these & others, if anyone is interested. https://www.bitcoinbeginner.com/blog/privacy-coin-comparison https://www.bitcoinbeginner.com/blog/privacy-coin-comparison
- jameskegel 9y agoThis needs a source because it is not true at all >Zcash has more advanced crypto
- jatsign 9y agohttps://z.cash/technology/zksnarks.html https://z.cash/technology/zksnarks.html I suppose by "advanced" I meant new. It's equally fair to say "not as well validated by crypto researchers".
- ianmiers 9y agoWhats the throughput on PRIVX? Last I checked, Zerocoin transactions were 25kb and the deployed versions were limited to one anonymous TX per block.
- plopz 9y agoHow do you feel about MimbleWimble?
- the_stc 9y agoThe problem is that miners cost in USD but Monero fee is set in XMR, fixed. If fee goes down 80% but XMR/USD goes up again 5 times then the problem persists. Not an easy thing to fix! If Bulletproofs and the new CT format come in and the mandatory ringsize is increased to a level providing some privacy, the fees would be very worthwhile. But with ringsize 5 they are certainly excessive! We should hope they increase to at least 10. After ringsize, the difference between 1/2 and 2/2 txn continues to be an issue. Or at a minimum a wallet update could fix some of these things issues. Better ring member selection that does not include odd ring sizes or in/out numbers. If you are a seller and receive 2 payments from a user then you send that money to a known place (maybe exchange) you have are now near 100% traceability! This is because even with high-ring-size, the chance of both known-bad inputs happening in one tx is very low. Currently Monero is doing a great harm to users by not having a prominent warning. Monero should adopt Tor Project attitude and tell users: Making a Monero transaction does not give you full privacy. Then link to a bit more nuanced discussion about churn and traceability. Especially for people that receive multiple payments! Monero may encourage people to rely solely on Monero (without churn) for privacy, to their downfall. And even churn has a big disclaimer from MRL. They say in some <vague> conditions churn is statistically detectable. Maybe a big issue for dark net vendors that often receive payments then churn then send to their exchange... Disclaimer: I am running an extrajursidictional company and dealing with payments will become a major focus as we start to pay out dividends and need to do so in an untraceable fashion. Plus...in a few months I will need to draw salary so this is very near-and-dear to my heart!
- sametmax 9y agoThank you, bloomberg.com, for giving us news from 6 months ago. I'm glad I have serious traditional media with professionals working to provide me with fresh information and insight. Tomorrow, they will tell us the amazing discovery on about how the economy of crypto is now influenced by massive master nodes holdings. Next month: the impact of Macafee tweeting. Seriouly, how are they still doing money when bloggers give better, fresher, stuff than them ?
- corey_moncure 9y agoKnowing that the general media and public are six months behind us is, itself, priceless information.
- sametmax 9y agoIt is isn't it ? Especially with crypto currencies.
- allworknoplay 9y ago“How are you going to prove that these funds are not coming from illegal sources?” Funny, here I was thinking the burden of proof was on the state.* * at least in most countries
- syrrim 9y agoIn the US I believe any cash you hold (incl. prepaid credit cards) can be seized by the state if they even suspect it was gained through illicit means. Getting the money back would require you to prove that you gained it legitimately. This is not considered to breach due process since it is not a person being incarcerated, but rather money being incarcerated, and due process does not apply to money. This is referred to as civil forfeiture.