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I don't think Bitcoin can be anonymous if it goes through an exchange, because you have to create an account with identifying information. I you host the endpoi

I don't think Bitcoin can be anonymous if it goes through an exchange, because you have to create an account with identifying information. I you host the endpoint yourself, it may be possible to completely mask the source, but I'm really not sure.

dmos62 7y ago
Yes, Bitcoin is anonymous only under certain circumstances. You can get Bitcoin anonymously, and you can make transactions anonymously, but it takes know-how
rtkwe 7y ago
In theory a tumbler could disconnect the identify information even on coins bought initially on an exchange with KYC compliance. Not sure if anyone's figured out how to track transactions through those yet with just public info from the blockchain. (I imagine they'd keep it pretty quiet if they had)
- mmcwilliams 7y ago
  This assumes that the operators of the tumblers are to be trusted and aren’t state actors themselves. It would be a pretty smart move for the Feds to run one or more of those operations.
  - bredren 7y ago
    Coinjoin is an ongoing attempt to remove centralization from tumblers: https://en.bitcoin.it/wiki/CoinJoin https://en.bitcoin.it/wiki/CoinJoin
    - vkou 7y ago
      It will take a stroke of a pen for the US Government to require that exchanges do not accept any coins that have gone through a known tumbler after <certain date> Imagine a money laundering operation, where every laundered physical dollar gets a physical stamp of 'THIS CAME THROUGH A MONEY LAUNDERING OPERATION'. That's the current state of BitCoin tumblers.
      - rtkwe 7y ago
        That really just starts the true cat and mouse game of trying to hide tumblers as legitimate flows. edit: To expand it's harder than tracking normal money laundering too because the "businesses" (ie wallets) can be generated by the thousands per second.
      - nybble41 7y ago
        > It will take a stroke of a pen for the US Government to require that exchanges do not accept any coins that have gone through a known tumbler after <certain date> Assuming they can actually identify it as having gone through a tumbler, sure, but it's not like tumblers advertise the addresses they use. Especially not distributed systems like CoinJoin. These are just ordinary transactions that happen to include inputs and outputs from multiple, unrelated sources. Following long-established best practices, any given address will only be used once. They could ban exchanges from accepting coins that do not come directly from another authorized, compliant exchange, but that would be tantamount to banning cryptocurrencies altogether. It wouldn't stop them of course, just drive them underground.
  - botwriter 7y ago
    This! I'm sure state actors are running exchanges or they are at least compromised.
    - rtkwe 7y ago
      Run it through multiple then, doubt they're all talking to each other.
- RcouF1uZ4gsC 7y ago
  And how many tumblers are actually being run by law enforcement/intelligence agencies?
- duskwuff 7y ago
  Many of the larger exchanges will track funds moving into or out of their customers' accounts, and will close accounts which appear to be transferring a lot of funds to/from tumblers.
- jandrese 7y ago
  Tracking coins going through a tumbler is a probabilistic exercise. You need to either be willing to wait a long time or find a tumbler with a lot of activity to effectively hide from someone searching the blockchain. Basically to build up enough noise floor for you to hide yourself. But it may be moot if the exchanges simply mark any bitcoin that has gone through a tumbler as tainted and refuse to convert it into anything else.
  - m-p-3 7y ago
    Are each bitcoin uniquely trackable to the lowest unit (a satoshi), or is it just a monetary value that is traded according to your balance?
SI_Rob 7y ago
I like to think of exchanges as an unacknowledged patch to the Bitcoin protocol as it stands in 2019. Or even as it stood in 2012 or 2011. No, they're not in the source code itself, but without them the project would still be sputtering along in almost total obscurity, if not abandoned altogether by now.
jandrese 7y ago
Without the exchange it is difficult to convert the Bitcoins into goods and services. That's where the governments are getting people: when they try to spend their ill-gotten gains.
ALittleLight 7y ago
Couldn't you steal an identity first, then have that identity register on the exchange and buy Bitcoin? Cash out to bank accounts controlled by an anonymous corporation.

dmos62 7y ago

Yes, Bitcoin is anonymous only under certain circumstances. You can get Bitcoin anonymously, and you can make transactions anonymously, but it takes know-how

rtkwe 7y ago

In theory a tumbler could disconnect the identify information even on coins bought initially on an exchange with KYC compliance. Not sure if anyone's figured out how to track transactions through those yet with just public info from the blockchain. (I imagine they'd keep it pretty quiet if they had)

mmcwilliams 7y ago
This assumes that the operators of the tumblers are to be trusted and aren’t state actors themselves. It would be a pretty smart move for the Feds to run one or more of those operations.
- bredren 7y ago
  Coinjoin is an ongoing attempt to remove centralization from tumblers: https://en.bitcoin.it/wiki/CoinJoin https://en.bitcoin.it/wiki/CoinJoin
  - vkou 7y ago
    It will take a stroke of a pen for the US Government to require that exchanges do not accept any coins that have gone through a known tumbler after <certain date> Imagine a money laundering operation, where every laundered physical dollar gets a physical stamp of 'THIS CAME THROUGH A MONEY LAUNDERING OPERATION'. That's the current state of BitCoin tumblers.
    - rtkwe 7y ago
      That really just starts the true cat and mouse game of trying to hide tumblers as legitimate flows. edit: To expand it's harder than tracking normal money laundering too because the "businesses" (ie wallets) can be generated by the thousands per second.
    - nybble41 7y ago
      > It will take a stroke of a pen for the US Government to require that exchanges do not accept any coins that have gone through a known tumbler after <certain date> Assuming they can actually identify it as having gone through a tumbler, sure, but it's not like tumblers advertise the addresses they use. Especially not distributed systems like CoinJoin. These are just ordinary transactions that happen to include inputs and outputs from multiple, unrelated sources. Following long-established best practices, any given address will only be used once. They could ban exchanges from accepting coins that do not come directly from another authorized, compliant exchange, but that would be tantamount to banning cryptocurrencies altogether. It wouldn't stop them of course, just drive them underground.
- botwriter 7y ago
  This! I'm sure state actors are running exchanges or they are at least compromised.
  - rtkwe 7y ago
    Run it through multiple then, doubt they're all talking to each other.
RcouF1uZ4gsC 7y ago
And how many tumblers are actually being run by law enforcement/intelligence agencies?
duskwuff 7y ago
Many of the larger exchanges will track funds moving into or out of their customers' accounts, and will close accounts which appear to be transferring a lot of funds to/from tumblers.
jandrese 7y ago
Tracking coins going through a tumbler is a probabilistic exercise. You need to either be willing to wait a long time or find a tumbler with a lot of activity to effectively hide from someone searching the blockchain. Basically to build up enough noise floor for you to hide yourself. But it may be moot if the exchanges simply mark any bitcoin that has gone through a tumbler as tainted and refuse to convert it into anything else.
- m-p-3 7y ago
  Are each bitcoin uniquely trackable to the lowest unit (a satoshi), or is it just a monetary value that is traded according to your balance?

SI_Rob 7y ago

I like to think of exchanges as an unacknowledged patch to the Bitcoin protocol as it stands in 2019. Or even as it stood in 2012 or 2011. No, they're not in the source code itself, but without them the project would still be sputtering along in almost total obscurity, if not abandoned altogether by now.

jandrese 7y ago

Without the exchange it is difficult to convert the Bitcoins into goods and services. That's where the governments are getting people: when they try to spend their ill-gotten gains.

ALittleLight 7y ago

Couldn't you steal an identity first, then have that identity register on the exchange and buy Bitcoin? Cash out to bank accounts controlled by an anonymous corporation.