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>Bitcoin is not supposed to be anonymous But it can be used anonymously and probably in some industries is still used anonymously. A counterparty that is willi

by Ambele 7y ago

>Bitcoin is not supposed to be anonymous But it can be used anonymously and probably in some industries is still used anonymously. A counterparty that is willing to swap anonymously acquired and sent altcoins for Bitcoin can provide a privacy conscious individual with anonymous Bitcoins. If using proxy-chains, Tor, or a real person in another country to broadcast your trade isn't your cup-of-tea because you don't trust them, there is still another less practical way. If you secretly give someone your Bitcoin private key (for example: written on a small piece of paper), you can give or trade those Bitcoins to someone without the network knowing about the transaction. >so most likely it is the same entity, or a transaction partner. Conceivably, the transaction could be broadcasted from an important individual's hacked phone or computer without a trace. This is where being innocent until proven guilty becomes important.

ColanR 7y ago
> A counterparty that is willing to swap anonymously acquired and sent altcoins for Bitcoin can provide a privacy conscious individual with anonymous Bitcoins. Not if amounts are tracked, rather than addresses. "oh look, this gal X just lost 5.3876BTC and gained 3.76549ALTCOIN, and this other dude Y just gained 5.3876BTC and lost 3.76549ALTCOIN. Geeze, I wonder if they traded." And with the proper graph theory tools, much more complex interactions could be tracked.
- nybble41 7y ago
  The first problem here is that there is no link between the identities across the two currencies. You don't know that X lost some BTC and gained some altcoin. You just know that some BTC was transferred from X to Y and some altcoins were transferred from Z to W—completely different addresses. You also don't know precisely what exchange rate was used, and a privacy-minded service would round to a small number of significant digits (5.4BTC for 3.8ALT) rather than using exact, traceable figures. A proper mixer would probably also use fixed denominations and send each piece to a different address over a randomized timespan. It's still not immune to tracing, obviously, but it's a much harder problem than just looking for symmetric transactions. The simplest system, though, is probably just to spend some BTC renting time on a mining rig. It doesn't have to be profitable, just break even. Newly mined bitcoins have no official history to show who paid for the mining.
  - ColanR 7y ago
    > It's still not immune to tracing, obviously, but it's a much harder problem than just looking for symmetric transactions. "And with the proper graph theory tools, much more complex interactions could be tracked." > The simplest system, though, is probably just to spend some BTC renting time on a mining rig. It doesn't have to be profitable, just break even. Newly mined bitcoins have no official history to show who paid for the mining. That is a good idea.
    - nybble41 7y ago
      > "And with the proper graph theory tools, much more complex interactions could be tracked." So you've said, and I already agreed that it isn't impossible. But do you have any real-world examples where someone followed reasonable OPSEC (fixed denominations, mixers, randomized timing) and still had their transactions successfully traced via these "proper graph theory tools"?
      - ColanR 7y ago
        Who would have published such an example? When we deal with opsec, we have to consider what is possible, rather than what has been done in the past. We have to do better than merely "locking the house after the thief has gone".
        nybble41 7y ago
        > Who would have published such an example? Typically that would be either the academic researcher attempting to prove that their investigation technique works, or the prosecutor looking to use the results of such an investigation as evidence in a trial. > When we deal with opsec, we have to consider what is possible... Anything is possible. Even ideal encryption algorithms—other than one-time pads—have some non-zero probability of being broken within a reasonable timeframe by a brute-force search, but that doesn't make them useless. As long as it's not cost-effective to trace the transfer, that's enough. It doesn't need to be mathematically impossible.

by Ambele 7y ago

ColanR 7y ago

> A counterparty that is willing to swap anonymously acquired and sent altcoins for Bitcoin can provide a privacy conscious individual with anonymous Bitcoins. Not if amounts are tracked, rather than addresses. "oh look, this gal X just lost 5.3876BTC and gained 3.76549ALTCOIN, and this other dude Y just gained 5.3876BTC and lost 3.76549ALTCOIN. Geeze, I wonder if they traded." And with the proper graph theory tools, much more complex interactions could be tracked.

nybble41 7y ago
The first problem here is that there is no link between the identities across the two currencies. You don't know that X lost some BTC and gained some altcoin. You just know that some BTC was transferred from X to Y and some altcoins were transferred from Z to W—completely different addresses. You also don't know precisely what exchange rate was used, and a privacy-minded service would round to a small number of significant digits (5.4BTC for 3.8ALT) rather than using exact, traceable figures. A proper mixer would probably also use fixed denominations and send each piece to a different address over a randomized timespan. It's still not immune to tracing, obviously, but it's a much harder problem than just looking for symmetric transactions. The simplest system, though, is probably just to spend some BTC renting time on a mining rig. It doesn't have to be profitable, just break even. Newly mined bitcoins have no official history to show who paid for the mining.
- ColanR 7y ago
  > It's still not immune to tracing, obviously, but it's a much harder problem than just looking for symmetric transactions. "And with the proper graph theory tools, much more complex interactions could be tracked." > The simplest system, though, is probably just to spend some BTC renting time on a mining rig. It doesn't have to be profitable, just break even. Newly mined bitcoins have no official history to show who paid for the mining. That is a good idea.
  - nybble41 7y ago
    > "And with the proper graph theory tools, much more complex interactions could be tracked." So you've said, and I already agreed that it isn't impossible. But do you have any real-world examples where someone followed reasonable OPSEC (fixed denominations, mixers, randomized timing) and still had their transactions successfully traced via these "proper graph theory tools"?
    - ColanR 7y ago
      Who would have published such an example? When we deal with opsec, we have to consider what is possible, rather than what has been done in the past. We have to do better than merely "locking the house after the thief has gone".
      - nybble41 7y ago
        > Who would have published such an example? Typically that would be either the academic researcher attempting to prove that their investigation technique works, or the prosecutor looking to use the results of such an investigation as evidence in a trial. > When we deal with opsec, we have to consider what is possible... Anything is possible. Even ideal encryption algorithms—other than one-time pads—have some non-zero probability of being broken within a reasonable timeframe by a brute-force search, but that doesn't make them useless. As long as it's not cost-effective to trace the transfer, that's enough. It doesn't need to be mathematically impossible.