5 ms·

> but all Bitcoin transactions are public. Is it really that difficult to tie people to these transactions? I think it is. From my limited understanding of cry

> but all Bitcoin transactions are public. Is it really that difficult to tie people to these transactions? I think it is. From my limited understanding of cryptocurrency wallets and transaction, I believe the distributed ledger is public, so anyone (incl. Govt.) can see which wallet address has how much coins / funds in it. But you can't see which physical human or institution owns that wallet / address. That's how it's widely known that just about 1,650 wallets hold a majority of the world's bitcoins. These are wallets with > 1000 bitcoins. They are called 'Whales'. But it's almost impossible to tie a Whale account to, say, Richard Branson or Ross Ulbricht. If you take Paypal payments as example, this is similar to everyone knowing your email address for paypal, but only paypal knowing that the email address is tied to you.

EthanHeilman 9y ago
>I believe the distributed ledger is public, so anyone (incl. Govt.) can see which wallet address has how much coins / funds in it. Not only is the wallet address public you can see entire transaction history of each address. Keeping a Bitcoin address separate from your true name is exceedingly difficult. 1. When you trade Bitcoins into fiat money with an exchange you reveal your true name. 2. When you purchase something with Bitcoin you reveal the mapping between your Bitcoin address and your mailing address. 3. Unless you are using TOR when you announce a transaction on the network you reveal the mapping from IP address to Bitcoin address. 4. When someone sends you Bitcoins they can track how those Bitcoins and spent and what Bitcoin addresses they are moved to. 5. Companies have large databases of known identity to Bitcoin address mappings allowing process of elimination or guilt by association privacy attacks. "Bitcoin offers privacy—as long as you don't cash out or spend it" - PC World Disclaimer: I do Bitcoin privacy research.
- squeegee5 9y ago
  All of this holds up until you remember that Bitcoin is fungible and take these items into consideration: 1. There is no logical relationship between address A that spends to address B. 2. A could be part of the same wallet as B, or not. 3. A or B could be undisclosed addresses of merchants, or unrelated parties entirely. You may have to ask, and they may choose to tell you. Defeating your inferences is trivial. A blockchain analysis may reveal that A sent to B, who sent to C, but there is no logical relationship between A and C based on this transmission alone. Moreover, A can send to B, B' sends to C. You derive no information.
- justboxing 9y ago
  Thanks for the detailed reply. Had a follow up question on some things. > 1. When you trade Bitcoins into fiat money with an exchange you reveal your true name. I get that. But how are the hackers who stole / continue to steal from exchanges like in the Mt Gox hack -- and more recently, the CoinCheck[1] -- hack, able to get away with it? See CoinCheck link and quote below. Important takeaway is > Coincheck has identified and published 11 addresses where all 523 million of the stolen coins ended up. You can see for yourself online. Trouble is, no one knows who owns the accounts From what I understand, in both cases, hackers hacked into the Exchange, stole the Private Keys to the "Hot Wallets" holding large amounts of the coin (bitcoin, NEM etc) and then transfered the coins into their own "Wallet" which isn't tied to any exchange. So as far as bitcoin or NEM is concerned, this transfer was/is a legitimate ledger transaction as the private key from sender was used to deposit the coins into receiver (hackers' ) wallet. Not trolling, really would like to know the following 1) How are exchange hackers able to remain anonymous and not get caught. 2) How do they move the coins they stole and cash out on FIAT? Obviously (or maybe not) these hackers wouldn't be buying stuff and shipping to their home address, so #2 above is moot. 3) Is it possible (wearing my conspiracy theorist hat here) that these exchange CEOs / Founders perpetrate the hack themselves, so they can declare a loss, and then take possession of the coins and use the anonymity to cash out at a later date? [1] How to Steal $500 Million in Cryptocurrency http://fortune.com/2018/01/31/coincheck-hack-how/ http://fortune.com/2018/01/31/coincheck-hack-how/ > 2. Where did the stolen coins go? > That’s one of the stranger aspects of these heists. Because transactions for Bitcoin and the like are all public, it’s easy to see where the NEM coins are — even though they’re stolen. Coincheck has identified and published 11 addresses where all 523 million of the stolen coins ended up. You can see for yourself online. Trouble is, no one knows who owns the accounts.
  - hisabness 9y ago
    a lot of people think governments are doing these hacks. perhaps they haven't cashed out yet?
  - EthanHeilman 9y ago
    >I get that. But how are the hackers who stole / continue to steal from exchanges like in the Mt Gox hack -- and more recently, the CoinCheck[1] -- hack, able to get away with it? See CoinCheck link and quote below. Important takeaway is It is a good question and I don't have an answer as I don't know many of the details of the Mt. Gox hack. Many details on these hacks are not public. There have been arrests in Mt. Gox BTW. My favorite quote on this subject is: 1. One possible answer is that the attackers just sit on the coins and don't attempt cash them out see "Bitcoin offers privacy — as long as you don't cash out or spend it". 2. Another possibility is the thieves either live or cashed out in jurisdictions which won't cooperate with investigations. 3. Or as your article states the thieves could attempt to move the coins through privacy coins such as zCash or Monero to hide the final destinations of the coins. However that is a fairly risky proposition, if they make a mistake they are cooked and there are so many mistakes they could make. I don't believe either zCash or Monero offer network level privacy other than TOR and TOR is problematic as it was not designed for cryptocurrencies. Monero is planning I2P support [0]. Then again it could be the case that law enforcement organizations investigating some of these cases don't have the expertise to understand the highly technical evidence they have. [0]: https://github.com/monero-project/kovri https://github.com/monero-project/kovri
- hisabness 9y ago
  you could get around #1 by using localbitcoins.com, or other private exchange. Though i'm sure the feds are all over it, and I generally view such transactions as a honeypot

EthanHeilman 9y ago

>I believe the distributed ledger is public, so anyone (incl. Govt.) can see which wallet address has how much coins / funds in it. Not only is the wallet address public you can see entire transaction history of each address. Keeping a Bitcoin address separate from your true name is exceedingly difficult. 1. When you trade Bitcoins into fiat money with an exchange you reveal your true name. 2. When you purchase something with Bitcoin you reveal the mapping between your Bitcoin address and your mailing address. 3. Unless you are using TOR when you announce a transaction on the network you reveal the mapping from IP address to Bitcoin address. 4. When someone sends you Bitcoins they can track how those Bitcoins and spent and what Bitcoin addresses they are moved to. 5. Companies have large databases of known identity to Bitcoin address mappings allowing process of elimination or guilt by association privacy attacks. "Bitcoin offers privacy—as long as you don't cash out or spend it" - PC World Disclaimer: I do Bitcoin privacy research.

squeegee5 9y ago
All of this holds up until you remember that Bitcoin is fungible and take these items into consideration: 1. There is no logical relationship between address A that spends to address B. 2. A could be part of the same wallet as B, or not. 3. A or B could be undisclosed addresses of merchants, or unrelated parties entirely. You may have to ask, and they may choose to tell you. Defeating your inferences is trivial. A blockchain analysis may reveal that A sent to B, who sent to C, but there is no logical relationship between A and C based on this transmission alone. Moreover, A can send to B, B' sends to C. You derive no information.
justboxing 9y ago
Thanks for the detailed reply. Had a follow up question on some things. > 1. When you trade Bitcoins into fiat money with an exchange you reveal your true name. I get that. But how are the hackers who stole / continue to steal from exchanges like in the Mt Gox hack -- and more recently, the CoinCheck[1] -- hack, able to get away with it? See CoinCheck link and quote below. Important takeaway is > Coincheck has identified and published 11 addresses where all 523 million of the stolen coins ended up. You can see for yourself online. Trouble is, no one knows who owns the accounts From what I understand, in both cases, hackers hacked into the Exchange, stole the Private Keys to the "Hot Wallets" holding large amounts of the coin (bitcoin, NEM etc) and then transfered the coins into their own "Wallet" which isn't tied to any exchange. So as far as bitcoin or NEM is concerned, this transfer was/is a legitimate ledger transaction as the private key from sender was used to deposit the coins into receiver (hackers' ) wallet. Not trolling, really would like to know the following 1) How are exchange hackers able to remain anonymous and not get caught. 2) How do they move the coins they stole and cash out on FIAT? Obviously (or maybe not) these hackers wouldn't be buying stuff and shipping to their home address, so #2 above is moot. 3) Is it possible (wearing my conspiracy theorist hat here) that these exchange CEOs / Founders perpetrate the hack themselves, so they can declare a loss, and then take possession of the coins and use the anonymity to cash out at a later date? [1] How to Steal $500 Million in Cryptocurrency http://fortune.com/2018/01/31/coincheck-hack-how/ http://fortune.com/2018/01/31/coincheck-hack-how/ > 2. Where did the stolen coins go? > That’s one of the stranger aspects of these heists. Because transactions for Bitcoin and the like are all public, it’s easy to see where the NEM coins are — even though they’re stolen. Coincheck has identified and published 11 addresses where all 523 million of the stolen coins ended up. You can see for yourself online. Trouble is, no one knows who owns the accounts.
- hisabness 9y ago
  a lot of people think governments are doing these hacks. perhaps they haven't cashed out yet?
- EthanHeilman 9y ago
  >I get that. But how are the hackers who stole / continue to steal from exchanges like in the Mt Gox hack -- and more recently, the CoinCheck[1] -- hack, able to get away with it? See CoinCheck link and quote below. Important takeaway is It is a good question and I don't have an answer as I don't know many of the details of the Mt. Gox hack. Many details on these hacks are not public. There have been arrests in Mt. Gox BTW. My favorite quote on this subject is: 1. One possible answer is that the attackers just sit on the coins and don't attempt cash them out see "Bitcoin offers privacy — as long as you don't cash out or spend it". 2. Another possibility is the thieves either live or cashed out in jurisdictions which won't cooperate with investigations. 3. Or as your article states the thieves could attempt to move the coins through privacy coins such as zCash or Monero to hide the final destinations of the coins. However that is a fairly risky proposition, if they make a mistake they are cooked and there are so many mistakes they could make. I don't believe either zCash or Monero offer network level privacy other than TOR and TOR is problematic as it was not designed for cryptocurrencies. Monero is planning I2P support [0]. Then again it could be the case that law enforcement organizations investigating some of these cases don't have the expertise to understand the highly technical evidence they have. [0]: https://github.com/monero-project/kovri https://github.com/monero-project/kovri
hisabness 9y ago
you could get around #1 by using localbitcoins.com, or other private exchange. Though i'm sure the feds are all over it, and I generally view such transactions as a honeypot