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"a method that makes the donations nearly impossible for law enforcement to track" - This is an incredible statement, Bitcoin is a public ledger. It is the ver

by dagaci 7y ago

"a method that makes the donations nearly impossible for law enforcement to track" - This is an incredible statement, Bitcoin is a public ledger. It is the very opposite of anonymous. It is extremely easy for sophisticated governments in the USA and Israel to identify who has donated. I can imagine these authorities chuckling at the naivete of the "Terrorist"/"Palestinian authority" "secret" fundraising effort.

unityByFreedom 7y ago
> Bitcoin is a public ledger. It is the very opposite of anonymous That's rather misleading, you can see the wallet address but you don't know who controls the wallet. I assumed bitcoin advocates here would prefer not to spread misinformation.
- dagaci 7y ago
  But isn't the address is published on their website... ?
  - negamax 7y ago
    Destination is ofcourse (which can also be generated new for each donation btw) but what about the source? It could be anyone. There are services and protocol like coinjoin and tumble that will mix transactions, making it further impossible to narrow down on the right source
  - mortdeus 7y ago
    just because it is published that doesn't mean it's easy to track who the funds are coming from. In traditional finance there is usually some sort of method in place that directly associates (either concretely as in say requiring an ID or loosely as in just having video surveillance correlated with say a money order or money gram transfer) a persons identity with an account anytime they are conducting any form of financial transaction. With bitcoin, there is no way to pinpoint exactly who created an address. I can create thousands of wallets, and distribute them to all my terrorist buddies across the world for example, and it's not like traditional finance where i had to get somebody connected to the government (as the banks are) to sign off on me doing that. The only weaknesses bitcoin has that I can see is 1. that people's computers are typically less secure and easier to break into than banks who do a good job implementing security, and therefore its way easier to steal.. 2. Because its decentralized and entirely electronic based when somebody actually steals your money it is virtually impossible to reverse that without requiring a hard fork of the block chain and for some currencies you just can't do that. (for example, nobody is going to be able to hardfork btc and take over it just because somebody ripped off a $1m worth of BTC from joe shmoe who hadn't updated his Ubuntu PC in 2 months because he's too lazy to type in his password everyday) And lastly, the fact that bitcoin (and all other currency for that matter) becomes virtually worthless when nobody is willing to give you fiat in exchange for it. There is always going to be a weakness in the fact that these terrorists are going to need to convert their bitcoin into fiat eventually. Realistically, it doesn't actually make any sense why terrorist organizations would do this because of this weakness. You'd have to find a buyer for them who can give you fiat directly without raising suspicion. Which means direct cash exchanges and if you are already at that level of coming out into the open. You might as well just mail people cash using bogus identities and PO boxes.
    - joes223 7y ago
      All this is based on assumption that those "terrorists" exist and need a sophisticated a reliable banking system. A simpler theory is that "terrorists" are state actors who challenge each other to get something practical in return. State actors don't need this bitcoin stuff: they can just send golden bullions in a diplomatic airplane and this transaction will be completely untraceable.
      - luckylion 7y ago
        > All this is based on assumption that those "terrorists" exist and need a sophisticated a reliable banking system. And that they don't have one. They've used the hawala system since pretty much forever.
    - archi42 7y ago
      The second point is true for large quantities, e.g. if they want to cash in on 100MUS$. But they can still pay hosting fees, or send the coins to their friends in western countries to seed propaganda (or worse) there. //edit: The important thing then is that the coins are not "tainted" as being terrorist donations. With the system described in the article that may be possible.
- Maxion 7y ago
  You very much do. Or rather, there are several companies that do so called blockchain analysis and cluster addresses together in order to identify to whom they belong. They are quite efficient at what they do. If you're unable to identify an owner of an address, you are at least able to identify the on ramp or off ramp the individual used and use that information to identify your suspect.
  - mirimir 7y ago
    Anyone who cares about anonymity uses a Bitcoin mixer. Notwithstanding what you say about blockchain analysis, I'm not aware that anything mixed by Bitcoin Fog has been deanonymized. And that includes some major Bitcoin thefts, such as the 96000 BTC from Sheep Marketplace.
  - PunchTornado 7y ago
    I'm curious, if I use a private wallet how would they know that it is mine, John Dever, living at 109 Aston Avenue, NY?
    - mirimir 7y ago
      They know your IP address.
      - StreamBright 7y ago
        You mean the IP of your Tor exit node.
        mirimir 7y ago
        Sure, if you're aware enough to use Tor. But I wonder what percentage of "terrorist" contributors know to use Tor.
        StreamBright 7y ago
        Let me understand, they are smart enough to use bitcoin and dumb enough to not use Tor? I am not sure how big is the intersection of these two sets.
headmelted 7y ago
"It is extremely easy for sophisticated governments in the USA and Israel to identify who has donated" Not really. If someone is sending money from their Coinbase on-exchange wallet then fair enough, but if the wallet holder has not been through a KYC process then (while it's in the public ledger) it's still almost impossible to track the source of the funds - knowing the source and destination wallets tells you nothing.
- jwilliams 7y ago
  You know more than the source and destination for a transaction - you know the entire chain of custody for any flow of value. Governments are very certainly tracking this. With augmentation and pattern matching, they will know quite a bit.
- Maxion 7y ago
  You can't spend crypto directly on many things, most need fiat. Currently on ramps and off ramps are still used and can be used to identify suspects.
  - luckylion 7y ago
    That gets very hard very quickly if you're involving something like monero and are happy to pay some fees and don't require giant amounts in one transaction.
deleted 7y ago
[deleted]
wruza 7y ago
Do bitcoin mixers really work, with respect to this? Especially those who break links through fiat. If yes, then they may publish a dynamic list of mixers to use, and SoF would be non-determinable. Mixers may have more problems than usual then, but afaik they are already banned in all white business bitcoin operations, so probably not a big deal for them. Otoh, CIAs could control the pipe by powering some mixers themselves and promoting them among enemies.
- mikekchar 7y ago
  You can at least trace the money back to a mixer. Large amounts of money being sent to a terrorist organisation. The money is being mixed by a mixer. Easy to shut down the mixer. If mixers are being used and they aren't being shut down it's because it is easy to trace the money through the mixer (or, perhaps the government doesn't care, but that seems unlikely). The funny thing is that if the mixer is hard monitor because it is going through fiat currency, then you never needed BTC in the first place -- you just launder money through it. I frequently say this: if you think a news story seems strange, look at what the reporter has written previously. Newspapers are making it easy these days, which is awesome. This is Nathaniel Popper's recent work: https://www.nytimes.com/by/nathaniel-popper https://www.nytimes.com/by/nathaniel-popper He gets paid to write controversial stories about cryptocurrency (and impossible burgers :-D ).
  - mirimir 7y ago
    > Easy to shut down the mixer. A counterexample is Bitcoin Fog.
  - wruza 7y ago
    Hmm, I have a couple of questions on this. >then you never needed BTC in the first place -- you just launder money through it. I’m afraid I don’t understand this part. Their goal is not to launder money, but to receive funds from “around the world” (and blow up someone). Of course easy laundering may be profitable^ to criminals, but how are these two connected here? >Easy to shut down the mixer. Easy in which country? How a mixer in any “closed” country could be shut down? Say DPRK or strong middle east countries who oppose “west world” to be opaque enough, but not technically aware of these activities (or simply don’t care, as you mentioned). Couldn’t that basically turn “person X consciously funds hamas” into “someone in country Y funds hamas as a hidden detail of business operation”? ^ Our company tried to create a btc-based business in EU. Banks required us to provide sof for every transaction, including banning any amount from fraud/criminal lists, and mixers were all in these lists. I doubt that you can easily launder via well-known, big enough mixers. At least to my understanding, EU is very aware of grey money that comes from btc market.
StreamBright 7y ago
Yes but there is no ID required to initiate transactions. How do you translate the parties involved in the transaction to actual people behind it?
- dllthomas 7y ago
  Police work. I wouldn't bet on being able to identify any particular individual, but you're always leaking more than you think.
feanaro 7y ago
How about exchanging BTC for Monero, making a Monero transaction and exchanging Monero back into BTC?

by dagaci 7y ago

unityByFreedom 7y ago

> Bitcoin is a public ledger. It is the very opposite of anonymous That's rather misleading, you can see the wallet address but you don't know who controls the wallet. I assumed bitcoin advocates here would prefer not to spread misinformation.

dagaci 7y ago
But isn't the address is published on their website... ?
- negamax 7y ago
  Destination is ofcourse (which can also be generated new for each donation btw) but what about the source? It could be anyone. There are services and protocol like coinjoin and tumble that will mix transactions, making it further impossible to narrow down on the right source
- mortdeus 7y ago
  just because it is published that doesn't mean it's easy to track who the funds are coming from. In traditional finance there is usually some sort of method in place that directly associates (either concretely as in say requiring an ID or loosely as in just having video surveillance correlated with say a money order or money gram transfer) a persons identity with an account anytime they are conducting any form of financial transaction. With bitcoin, there is no way to pinpoint exactly who created an address. I can create thousands of wallets, and distribute them to all my terrorist buddies across the world for example, and it's not like traditional finance where i had to get somebody connected to the government (as the banks are) to sign off on me doing that. The only weaknesses bitcoin has that I can see is 1. that people's computers are typically less secure and easier to break into than banks who do a good job implementing security, and therefore its way easier to steal.. 2. Because its decentralized and entirely electronic based when somebody actually steals your money it is virtually impossible to reverse that without requiring a hard fork of the block chain and for some currencies you just can't do that. (for example, nobody is going to be able to hardfork btc and take over it just because somebody ripped off a $1m worth of BTC from joe shmoe who hadn't updated his Ubuntu PC in 2 months because he's too lazy to type in his password everyday) And lastly, the fact that bitcoin (and all other currency for that matter) becomes virtually worthless when nobody is willing to give you fiat in exchange for it. There is always going to be a weakness in the fact that these terrorists are going to need to convert their bitcoin into fiat eventually. Realistically, it doesn't actually make any sense why terrorist organizations would do this because of this weakness. You'd have to find a buyer for them who can give you fiat directly without raising suspicion. Which means direct cash exchanges and if you are already at that level of coming out into the open. You might as well just mail people cash using bogus identities and PO boxes.
  - joes223 7y ago
    All this is based on assumption that those "terrorists" exist and need a sophisticated a reliable banking system. A simpler theory is that "terrorists" are state actors who challenge each other to get something practical in return. State actors don't need this bitcoin stuff: they can just send golden bullions in a diplomatic airplane and this transaction will be completely untraceable.
    - luckylion 7y ago
      > All this is based on assumption that those "terrorists" exist and need a sophisticated a reliable banking system. And that they don't have one. They've used the hawala system since pretty much forever.
  - archi42 7y ago
    The second point is true for large quantities, e.g. if they want to cash in on 100MUS$. But they can still pay hosting fees, or send the coins to their friends in western countries to seed propaganda (or worse) there. //edit: The important thing then is that the coins are not "tainted" as being terrorist donations. With the system described in the article that may be possible.
Maxion 7y ago
You very much do. Or rather, there are several companies that do so called blockchain analysis and cluster addresses together in order to identify to whom they belong. They are quite efficient at what they do. If you're unable to identify an owner of an address, you are at least able to identify the on ramp or off ramp the individual used and use that information to identify your suspect.
- mirimir 7y ago
  Anyone who cares about anonymity uses a Bitcoin mixer. Notwithstanding what you say about blockchain analysis, I'm not aware that anything mixed by Bitcoin Fog has been deanonymized. And that includes some major Bitcoin thefts, such as the 96000 BTC from Sheep Marketplace.
- PunchTornado 7y ago
  I'm curious, if I use a private wallet how would they know that it is mine, John Dever, living at 109 Aston Avenue, NY?
  - mirimir 7y ago
    They know your IP address.
    - StreamBright 7y ago
      You mean the IP of your Tor exit node.
      - mirimir 7y ago
        Sure, if you're aware enough to use Tor. But I wonder what percentage of "terrorist" contributors know to use Tor.
        StreamBright 7y ago
        Let me understand, they are smart enough to use bitcoin and dumb enough to not use Tor? I am not sure how big is the intersection of these two sets.

headmelted 7y ago

"It is extremely easy for sophisticated governments in the USA and Israel to identify who has donated" Not really. If someone is sending money from their Coinbase on-exchange wallet then fair enough, but if the wallet holder has not been through a KYC process then (while it's in the public ledger) it's still almost impossible to track the source of the funds - knowing the source and destination wallets tells you nothing.

jwilliams 7y ago
You know more than the source and destination for a transaction - you know the entire chain of custody for any flow of value. Governments are very certainly tracking this. With augmentation and pattern matching, they will know quite a bit.
Maxion 7y ago
You can't spend crypto directly on many things, most need fiat. Currently on ramps and off ramps are still used and can be used to identify suspects.
- luckylion 7y ago
  That gets very hard very quickly if you're involving something like monero and are happy to pay some fees and don't require giant amounts in one transaction.

deleted 7y ago

[deleted]

wruza 7y ago

Do bitcoin mixers really work, with respect to this? Especially those who break links through fiat. If yes, then they may publish a dynamic list of mixers to use, and SoF would be non-determinable. Mixers may have more problems than usual then, but afaik they are already banned in all white business bitcoin operations, so probably not a big deal for them. Otoh, CIAs could control the pipe by powering some mixers themselves and promoting them among enemies.

mikekchar 7y ago
You can at least trace the money back to a mixer. Large amounts of money being sent to a terrorist organisation. The money is being mixed by a mixer. Easy to shut down the mixer. If mixers are being used and they aren't being shut down it's because it is easy to trace the money through the mixer (or, perhaps the government doesn't care, but that seems unlikely). The funny thing is that if the mixer is hard monitor because it is going through fiat currency, then you never needed BTC in the first place -- you just launder money through it. I frequently say this: if you think a news story seems strange, look at what the reporter has written previously. Newspapers are making it easy these days, which is awesome. This is Nathaniel Popper's recent work: https://www.nytimes.com/by/nathaniel-popper https://www.nytimes.com/by/nathaniel-popper He gets paid to write controversial stories about cryptocurrency (and impossible burgers :-D ).
- mirimir 7y ago
  > Easy to shut down the mixer. A counterexample is Bitcoin Fog.
- wruza 7y ago
  Hmm, I have a couple of questions on this. >then you never needed BTC in the first place -- you just launder money through it. I’m afraid I don’t understand this part. Their goal is not to launder money, but to receive funds from “around the world” (and blow up someone). Of course easy laundering may be profitable^ to criminals, but how are these two connected here? >Easy to shut down the mixer. Easy in which country? How a mixer in any “closed” country could be shut down? Say DPRK or strong middle east countries who oppose “west world” to be opaque enough, but not technically aware of these activities (or simply don’t care, as you mentioned). Couldn’t that basically turn “person X consciously funds hamas” into “someone in country Y funds hamas as a hidden detail of business operation”? ^ Our company tried to create a btc-based business in EU. Banks required us to provide sof for every transaction, including banning any amount from fraud/criminal lists, and mixers were all in these lists. I doubt that you can easily launder via well-known, big enough mixers. At least to my understanding, EU is very aware of grey money that comes from btc market.

StreamBright 7y ago

Yes but there is no ID required to initiate transactions. How do you translate the parties involved in the transaction to actual people behind it?

dllthomas 7y ago
Police work. I wouldn't bet on being able to identify any particular individual, but you're always leaking more than you think.

feanaro 7y ago

How about exchanging BTC for Monero, making a Monero transaction and exchanging Monero back into BTC?