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> You can use Bitcoin anonymously, but it's like using the web anonymously i.e. it takes a lot of effort and a single mistake screws it up. I don't really get

> You can use Bitcoin anonymously, but it's like using the web anonymously i.e. it takes a lot of effort and a single mistake screws it up. I don't really get it, but you have a "money out" problem like any fraud. Even if you buy bitcoin in untraceable in cash, you transfer it to wallets, you have two eventual issues. You'll either buy something and ship it to yourself, or you'll need to get real cash out. The former leaves a vendor ready to give you up, and the latter only works with exchanges that have your ID. Am I missing something?

CydeWeys 7y ago
You can sell Bitcoin in person for cash.
- kjeetgill 7y ago
  Is there a big enough cash market for it to be worth "criminal enterprise" level money?
  - Karunamon 7y ago
    I'm not sure what you're defining as "big enough" here, but localbitcoins.com shows verified, well-reviewed people in my smallish city that would be willing to do up to $30KUSD in one transaction.
- w1nst0nsm1th 7y ago
  If they don’t require an ID card from their cash receiver.
  - CydeWeys 7y ago
    The kind of people you're transacting Bitcoin for cash with definitely don't want to check ID, just the opposite. They likely don't want you to know who they are either.
- notyourday 7y ago
  And now that person knows exactly who you are.
- johnpowell 7y ago
  Then the feds find the guy you sold to when they try to sell them on Coinbase. And that person knows your e-mail, number, what you look like. You had to get the coins to them somehow. Actually, that is kinda scary. The bitcoin I just got for selling a shirt could be one transaction away from child pornography. And it is all in a pubic database.
  - klipt 7y ago
    I'm assuming someone looking to launder a large quantity of BTC wouldn't spend it all on individually purchased shirts. But who knows.
celticninja 7y ago
Cash sales of cryptocurrency.
icelancer 7y ago
>> You'll either buy something and ship it to yourself You will? Also, you have an infinite number of trivially easy to make BTC wallets that are not registered to anyone. That's how you can make it anonymous.
- notyourday 7y ago
  > Also, you have an infinite number of trivially easy to make BTC wallets that are not registered to anyone. That's how you can make it anonymous. That's not a problem. The problem is that if you are not trading with yourself whoever gets your bitcoins has a connection between a physical "you" and and a wallet that "you" used to transfer money. Now the opsec of the transaction depends not only on "you" but also on opsec of that other person. Eventually someone in that path decides it to cooperate with whoever leans on them in the real, not bitcoin world and the security of that stage is blown. Repeat until "you" is discovered.
- bloopernova 7y ago
  I feel like I'm missing an obvious point here, could you possibly help me? Evil Criminal Mastermind amasses wealth in BTC. --> They have that BTC in a wallet. --> The Feds know that Dirty Money has gone to that wallet's address. --> ECM makes a new wallet, transfers BTC to it. --> Feds know that BTC went from wallet A to wallet B. However many wallets Evil Criminal Mastermind makes, they're still going to be traceable by the Feds, right?
  - icelancer 7y ago
    >> However many wallets Evil Criminal Mastermind makes, they're still going to be traceable by the Feds, right? Yes, if: >>ECM makes a new wallet, transfers BTC to it. But if ECM initiates a new wallet with cash or other methods and doesn't tie their identity to it, then no.
  - DaiPlusPlus 7y ago
    > The Feds know that Dirty Money has gone to that wallet's address They don’t. A wallet can have infinitely many addresses with nothing linking them together externally - only the holder of the wallet knows they’re related. Think of a Bitcoin wallet as macOS’ Keychain or a LastPass account - and a Bitcoin address as the login credentials of each site you visit: provided you use a distinct login for each site, each site owner has no idea what other sites are in your LastPass/Keychain store. Similarly: provided you use a new address for each bitcoin transaction then people you transact with have no knowledge of other transactions you’ve had. People do often reuse addresses - however. Creating new addresses is free and instant - but consolidating your funds becomes a pain, especially if you have a lot of low-value transactions where the amount associated with each address would be eaten-up by the bitcoin network’s transaction fees. And dumb criminals reuse addresses too - sometimes you see those “I have your password, send me bitcoin” emails using leaked passwords - and they all use the same (or a small number of addresses) - if this scam was run better they’d generate a new ransom address for each mail recipient. And I think that’s how they busted the operator and customers of the website in question: because they used a single address to receive funds at.
LeifCarrotson 7y ago
If you can buy bitcoin in untraceable cash, you can sell it for untraceable cash. Also, you can (could) convert traceable payments to your electric utility and computer hardware to mining efforts that couldn't be linked to your power bill. The problem is that most people don't do either of those things, instead, they buy and sell it at exchanges with very traceable credit cards.
- deleted 7y ago
  [deleted]
- weare138 7y ago
  The problem with exchanging BTC for untraceable cash or vice versa is the people you would be dealing with are probably criminals who are not above robbing you of your BTC and/or cash.
  - jammygit 7y ago
    Iirc there is a bitcoin “atm” somewhere in my city
    - weare138 7y ago
      If the cash loaded into a bitcoin "atm" is legal, it's traceable. If it is illegal then your results may vary, most likely to your financial and legal detriment. If you think a bitcoin "atm" is a solution to this problem then hopefully your lawyer accepts bitcoins.
    - dylz 7y ago
      Every Bitcoin ATM I've seen here require you to look into the front-facing camera and insert/swipe ID.
      - abeld 7y ago
        An easy solution to that is to find a homeless person nearby and use fake IDs -- i.e. bribe someone else do the transaction instead of you
cortesoft 7y ago
Aren't there bitcoin mixers? Where like, 100 people put in x number of bitcoins, they get combined into one wallet, then x bitcoins are sent to 100 new wallets? That makes it so you don't know which of the hundred new wallets is tied to the one input wallet?
- henryfjordan 7y ago
  And 100 people just joined a criminal conspiracy...
  - cortesoft 7y ago
    It would be an interesting legal case... you would have to demonstrate that the other participants in the mixing should have reasonably knew that the other participants were laundering money.
    - belltaco 7y ago
      https://www.coindesk.com/eu-authorities-crack-down-on-bitcoin-transaction-mixer https://www.coindesk.com/eu-authorities-crack-down-on-bitcoi...
      - cortesoft 7y ago
        Have they gone after any of the users of the mixer?
  - quickthrower2 7y ago
    What criminal conspiracy? Using a mixer is not a crime. There is no communication with other users of the mixer. There is no crime being planned.
- thaumasiotes 7y ago
  Interestingly, as far as I understand it, the bitcoin protocol does not technically allow bitcoins to be combined, only split. The blockchain records transactions (balance transfers, basically) sourced from other transactions, so any output of the mixer wallet is conceptually traceable right through the mixer back to the input wallet[1]. There is an explicit link in the protocol. Now, the rules of operation of the mixer may (and in practice, definitely do) invalidate that link in reality, but it still exists in the protocol and can be the subject of legislation. [1] For example, if the mixer wallet is created with nothing and receives 100 BTC from 8 other wallets, there's no record that looks like "Mixer Wallet: 100 BTC". Instead, there's a set of records that looks like this: Mixer received 52 BTC from tx 5d41 [which deposited 2,000 BTC in Kingpin] Mixer received 20 BTC from tx 402a [which deposited 20 BTC in Whore] Mixer received 10 BTC from tx bc4b [which deposited 100 BTC in Hitman] Mixer received 13 BTC from tx 2a76 [which deposited 2,000 BTC in Kingpin] Mixer received 5 BTC from tx b971 [which deposited 8 BTC in Smuggler] And payouts from the mixer create records that are in turn explicitly sourced from those. This mixer can't pay out more than 52 BTC in a single transaction, because that is the largest single amount it received.
DaiPlusPlus 7y ago
You can buy goods and services that don’t need physical shipping, as in this case: CP images and videos. You can earn bitcoin anonymously by mining it - at least this was more feasible a couple of years ago than it is now - but in 2011-2017 if you were to buy $4,000 worth of graphics cards you could mine $4,000 worth of cryptocurrency on Nicehash in a few months (and keep going to make a profit too). No ID required (though they probably track your IP address somewhere...)
- dylz 7y ago
  Didn't Nicehash turn out to be a scam and its (former) CTO was arrested this month?
  - DaiPlusPlus 7y ago
    Nicehash worked for me - I made a few thousand dollar’s worth of BTC by mining Ethereum for them. ...after spending a few thousand on GPUs first, right before the crash. Ouch.

CydeWeys 7y ago

You can sell Bitcoin in person for cash.

kjeetgill 7y ago
Is there a big enough cash market for it to be worth "criminal enterprise" level money?
- Karunamon 7y ago
  I'm not sure what you're defining as "big enough" here, but localbitcoins.com shows verified, well-reviewed people in my smallish city that would be willing to do up to $30KUSD in one transaction.
w1nst0nsm1th 7y ago
If they don’t require an ID card from their cash receiver.
- CydeWeys 7y ago
  The kind of people you're transacting Bitcoin for cash with definitely don't want to check ID, just the opposite. They likely don't want you to know who they are either.
notyourday 7y ago
And now that person knows exactly who you are.
johnpowell 7y ago
Then the feds find the guy you sold to when they try to sell them on Coinbase. And that person knows your e-mail, number, what you look like. You had to get the coins to them somehow. Actually, that is kinda scary. The bitcoin I just got for selling a shirt could be one transaction away from child pornography. And it is all in a pubic database.
- klipt 7y ago
  I'm assuming someone looking to launder a large quantity of BTC wouldn't spend it all on individually purchased shirts. But who knows.

celticninja 7y ago

Cash sales of cryptocurrency.

icelancer 7y ago

>> You'll either buy something and ship it to yourself You will? Also, you have an infinite number of trivially easy to make BTC wallets that are not registered to anyone. That's how you can make it anonymous.

notyourday 7y ago
> Also, you have an infinite number of trivially easy to make BTC wallets that are not registered to anyone. That's how you can make it anonymous. That's not a problem. The problem is that if you are not trading with yourself whoever gets your bitcoins has a connection between a physical "you" and and a wallet that "you" used to transfer money. Now the opsec of the transaction depends not only on "you" but also on opsec of that other person. Eventually someone in that path decides it to cooperate with whoever leans on them in the real, not bitcoin world and the security of that stage is blown. Repeat until "you" is discovered.
bloopernova 7y ago
I feel like I'm missing an obvious point here, could you possibly help me? Evil Criminal Mastermind amasses wealth in BTC. --> They have that BTC in a wallet. --> The Feds know that Dirty Money has gone to that wallet's address. --> ECM makes a new wallet, transfers BTC to it. --> Feds know that BTC went from wallet A to wallet B. However many wallets Evil Criminal Mastermind makes, they're still going to be traceable by the Feds, right?
- icelancer 7y ago
  >> However many wallets Evil Criminal Mastermind makes, they're still going to be traceable by the Feds, right? Yes, if: >>ECM makes a new wallet, transfers BTC to it. But if ECM initiates a new wallet with cash or other methods and doesn't tie their identity to it, then no.
- DaiPlusPlus 7y ago
  > The Feds know that Dirty Money has gone to that wallet's address They don’t. A wallet can have infinitely many addresses with nothing linking them together externally - only the holder of the wallet knows they’re related. Think of a Bitcoin wallet as macOS’ Keychain or a LastPass account - and a Bitcoin address as the login credentials of each site you visit: provided you use a distinct login for each site, each site owner has no idea what other sites are in your LastPass/Keychain store. Similarly: provided you use a new address for each bitcoin transaction then people you transact with have no knowledge of other transactions you’ve had. People do often reuse addresses - however. Creating new addresses is free and instant - but consolidating your funds becomes a pain, especially if you have a lot of low-value transactions where the amount associated with each address would be eaten-up by the bitcoin network’s transaction fees. And dumb criminals reuse addresses too - sometimes you see those “I have your password, send me bitcoin” emails using leaked passwords - and they all use the same (or a small number of addresses) - if this scam was run better they’d generate a new ransom address for each mail recipient. And I think that’s how they busted the operator and customers of the website in question: because they used a single address to receive funds at.

LeifCarrotson 7y ago

If you can buy bitcoin in untraceable cash, you can sell it for untraceable cash. Also, you can (could) convert traceable payments to your electric utility and computer hardware to mining efforts that couldn't be linked to your power bill. The problem is that most people don't do either of those things, instead, they buy and sell it at exchanges with very traceable credit cards.

deleted 7y ago
[deleted]
weare138 7y ago
The problem with exchanging BTC for untraceable cash or vice versa is the people you would be dealing with are probably criminals who are not above robbing you of your BTC and/or cash.
- jammygit 7y ago
  Iirc there is a bitcoin “atm” somewhere in my city
  - weare138 7y ago
    If the cash loaded into a bitcoin "atm" is legal, it's traceable. If it is illegal then your results may vary, most likely to your financial and legal detriment. If you think a bitcoin "atm" is a solution to this problem then hopefully your lawyer accepts bitcoins.
  - dylz 7y ago
    Every Bitcoin ATM I've seen here require you to look into the front-facing camera and insert/swipe ID.
    - abeld 7y ago
      An easy solution to that is to find a homeless person nearby and use fake IDs -- i.e. bribe someone else do the transaction instead of you

cortesoft 7y ago

Aren't there bitcoin mixers? Where like, 100 people put in x number of bitcoins, they get combined into one wallet, then x bitcoins are sent to 100 new wallets? That makes it so you don't know which of the hundred new wallets is tied to the one input wallet?

henryfjordan 7y ago
And 100 people just joined a criminal conspiracy...
- cortesoft 7y ago
  It would be an interesting legal case... you would have to demonstrate that the other participants in the mixing should have reasonably knew that the other participants were laundering money.
  - belltaco 7y ago
    https://www.coindesk.com/eu-authorities-crack-down-on-bitcoin-transaction-mixer https://www.coindesk.com/eu-authorities-crack-down-on-bitcoi...
    - cortesoft 7y ago
      Have they gone after any of the users of the mixer?
- quickthrower2 7y ago
  What criminal conspiracy? Using a mixer is not a crime. There is no communication with other users of the mixer. There is no crime being planned.
thaumasiotes 7y ago
Interestingly, as far as I understand it, the bitcoin protocol does not technically allow bitcoins to be combined, only split. The blockchain records transactions (balance transfers, basically) sourced from other transactions, so any output of the mixer wallet is conceptually traceable right through the mixer back to the input wallet[1]. There is an explicit link in the protocol. Now, the rules of operation of the mixer may (and in practice, definitely do) invalidate that link in reality, but it still exists in the protocol and can be the subject of legislation. [1] For example, if the mixer wallet is created with nothing and receives 100 BTC from 8 other wallets, there's no record that looks like "Mixer Wallet: 100 BTC". Instead, there's a set of records that looks like this: Mixer received 52 BTC from tx 5d41 [which deposited 2,000 BTC in Kingpin] Mixer received 20 BTC from tx 402a [which deposited 20 BTC in Whore] Mixer received 10 BTC from tx bc4b [which deposited 100 BTC in Hitman] Mixer received 13 BTC from tx 2a76 [which deposited 2,000 BTC in Kingpin] Mixer received 5 BTC from tx b971 [which deposited 8 BTC in Smuggler] And payouts from the mixer create records that are in turn explicitly sourced from those. This mixer can't pay out more than 52 BTC in a single transaction, because that is the largest single amount it received.

DaiPlusPlus 7y ago

You can buy goods and services that don’t need physical shipping, as in this case: CP images and videos. You can earn bitcoin anonymously by mining it - at least this was more feasible a couple of years ago than it is now - but in 2011-2017 if you were to buy $4,000 worth of graphics cards you could mine $4,000 worth of cryptocurrency on Nicehash in a few months (and keep going to make a profit too). No ID required (though they probably track your IP address somewhere...)

dylz 7y ago
Didn't Nicehash turn out to be a scam and its (former) CTO was arrested this month?
- DaiPlusPlus 7y ago
  Nicehash worked for me - I made a few thousand dollar’s worth of BTC by mining Ethereum for them. ...after spending a few thousand on GPUs first, right before the crash. Ouch.