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Crypto, or at least bitcoin, is not anonymous. On the contrary the payment trail is there for the whole world to see. Governments could blacklist those coins su

Crypto, or at least bitcoin, is not anonymous. On the contrary the payment trail is there for the whole world to see. Governments could blacklist those coins such that no exchange or legitimate vendor would ever take them. They choose not for whatever reason but not because the technology offers anonymity.

lucasmullens 6y ago
If there's a centralized government blacklist of certain bitcoins that everyone has to follow, doesn't that defeat the point of cryptocurrency? Also a hacker could just buy something with the coins between the time the victim sends the money and the time the government is notified.
- pinkybanana 6y ago
  There are already blacklists and sanctioned bitcoin addresses. It might defeat your point of bitcoin, whatever that is, but not mine... There is no universally agreed "point of BTC".
- bradleyjg 6y ago
  Depends on what you think the point of cryptocurrency is. I’ve heard a lot of different explanations over the years. I believe the most popular one currently is an inflation resistant store of value, which should be compatible with blacklists. As for timing, either blocking spending or tracing the transaction back to a person is equally valuable as a deterrent.
  - GauntletWizard 6y ago
    Here’s how blacklists destroy your “store of value” argument: Transactions don’t require the receiver’s consent. It’s easy to find large wallets (wallet balance is public record), and then once you’ve carried out your ransomeware attack and gotten paid, your black wallet sends to whatever poor schmuck you want to destroy. Because sends blacken anything they touch, you’ve just turned a lot of money into nothing, at the cost of whatever action it took to get that wallet blacklisted in the first place.
    - bradleyjg 6y ago
      The blacken anything it touches wasn’t my argument. Investigate everything it touches, yes, but if it turns out to be no connection you just confiscate the proceeds of a crime and move on.
    - Jommi 6y ago
      Destroy? All the wallet needs to do is send it back. Or not use it. Simple and probable.
pinkybanana 6y ago
It is quite difficult to have global, functioning blacklist system. I would guess for example some country in Asia might have quite different blacklist compared to let's say to some country in Europe. From criminals perspective they probably have money launderers on darknet markets who are willing to take the dirty crypto, deduct their hefty fee and offer clean crypto instead.
- bradleyjg 6y ago
  A bitcoin that couldn’t be spent anywhere outside of e.g. China would be far less valuable than one that could be spent anywhere. At very least this would reduce the profitability of ransomware attacks.
  - pinkybanana 6y ago
    How much less valuable exactly would you estimate? These markets for dirty bitcoins probably already exist, I would guess. I think someone would swap dirty btc to clean with price like 10% or maybe 20%. For criminals that would be just the cost of laundering the coins.
Rygian 6y ago
For this to work, the blacklist should apply to the receiving wallet AND CASCADE through to wallets to which that wallet issued any subsequent transfers. Coins used to pay ransomware should effectively taint and freeze everything they touch.
- Sebb767 6y ago
  So you want to convert them to a free weapon to freeze random wallets? Guess you could use that dor demanding ransoms...
  - robocat 6y ago
    A government could have a “burner” account where all tainted money could be sent. A system where you are warned of tainted deposits (for example, use a micro-transaction from a “US taint detected” account as the message). You have x days to pay the received tainted money to the burner account, or your account gets tainted too. Of course every jurisdiction would want to be in on the “free” bitcoins so lots of complications...
toss1 6y ago
And there are plenty of ways to circumvent that, including converting it to various privacy coins, using mixer services, using it to buy mining power, etc., etc., etc. Heck, crypto may have even more ways to launder money than cash, and those won't go away with blacklists - which will just make the "privacy" coins, services, etc. more valuable. The only way it could even plausibly work is for every visible and darknet service in the world to subscribe to and abide by the exact same crypto-wallet blacklist. Good luck making that happen when nuclear superpower governments are in fact transnational crime syndicates. Assuming that the tracing capabilities are useful for anything beyond taking down the amateurs is overly optimistic.
- bradleyjg 6y ago
  Nothing is ever perfect. It doesn’t mean you shouldn’t at least try to track down criminals. Which has essentially been the West’s response to ransomware so far.
  - toss1 6y ago
    No question, nothing is ever perfect, and best efforts should be made to utilize the available tracking. Especially so, when the threat is rising to the level of national security concerns as attacks start moving to infrastructure, and are sponsored or unofficially sanctioned by criminal nation-sates, where the response should be kinetic. The problem is that to kill ransomware, we would need a near-perfect system, and that is extremely unlikely, or thee will be substantial leakage, and continued profit for ransomers. I'd say it'd be easier to entirely shut down crypto globally than to ransomware-proof existing crypto. Probably means that the real solution will be to do both. Sanction only fully traceable cryptocurrencies and shut down the rest.
    - megameter 6y ago
      I don't see this going in the direction of a heavily enforced response, although some places may talk big. While a collective ban is rationally sensible, nations are made of individuals and every person will do a calculation of personal benefit relative to national interest. Crypto is valuable as a refuge, so a recurring story is currently playing out in destabilized nations all over the world where crypto is used to escape the inflated local currency: the government gets wishy-washy about what it's going to do with the stuff, with different officials taking wildly different stances according to their own self-interest. They talk of a ban, and then of national cryptocurrency, and then of nationalized mining. Everyone is looking for safe harbor but pulls in a different direction. Focusing on controlling onramps and offramps to cryptocurrency, like controlling goods import/export, is a relatively straightforward compromise to this internal dilemma and allows the government to be a player in the space without much direct oversight, even if some folks are slipping through the cracks. A sloppy, haphazard enforcement is likely to prevail. And there's another way to reassert state control within that framework. If the bad cryptocriminals come for your stuff, the government can bail you out - if you play by their rules. The loss compensation mechanism is a simple plan to mitigate dangers, since it's easy for governments to create and redistribute credit internally and doing so can build consent. Submitting to this framework does mean that the government is truly in competition with decentralisation to provide a better, more trustworthy service to handle central credit, and has to massively step up security efforts in the process. Everyone started "asleep at the wheel" on this, with individual tech firms all building out their own insecure house-of-cards fiefdoms and relying on the intellectual property law framework to keep them up. But everyone knows it's flawed - of course you can copy, what's important is if you can get credit, and that part is also changing with the crypto sector - assignment of credit is the whole thing of NFTs in a nutshell. The nation that can grasp this the quickest and turn it into a coherent part of their economic framework will cruise ahead.
cutemonster 6y ago
> Governments could blacklist those coins How would they know if the coin is from ransomware? If the randomware criminals say it's not, so it's word against word? And if they accepted just one payment to the wallet (so there's not a pattern of accepting money from strangers) Or if the organization that got broken in to, doesn't want to be public about that? (Doesn't want to talk with the government) (I don't know much about crypto coins.)

lucasmullens 6y ago

If there's a centralized government blacklist of certain bitcoins that everyone has to follow, doesn't that defeat the point of cryptocurrency? Also a hacker could just buy something with the coins between the time the victim sends the money and the time the government is notified.

pinkybanana 6y ago
There are already blacklists and sanctioned bitcoin addresses. It might defeat your point of bitcoin, whatever that is, but not mine... There is no universally agreed "point of BTC".
bradleyjg 6y ago
Depends on what you think the point of cryptocurrency is. I’ve heard a lot of different explanations over the years. I believe the most popular one currently is an inflation resistant store of value, which should be compatible with blacklists. As for timing, either blocking spending or tracing the transaction back to a person is equally valuable as a deterrent.
- GauntletWizard 6y ago
  Here’s how blacklists destroy your “store of value” argument: Transactions don’t require the receiver’s consent. It’s easy to find large wallets (wallet balance is public record), and then once you’ve carried out your ransomeware attack and gotten paid, your black wallet sends to whatever poor schmuck you want to destroy. Because sends blacken anything they touch, you’ve just turned a lot of money into nothing, at the cost of whatever action it took to get that wallet blacklisted in the first place.
  - bradleyjg 6y ago
    The blacken anything it touches wasn’t my argument. Investigate everything it touches, yes, but if it turns out to be no connection you just confiscate the proceeds of a crime and move on.
  - Jommi 6y ago
    Destroy? All the wallet needs to do is send it back. Or not use it. Simple and probable.

pinkybanana 6y ago

It is quite difficult to have global, functioning blacklist system. I would guess for example some country in Asia might have quite different blacklist compared to let's say to some country in Europe. From criminals perspective they probably have money launderers on darknet markets who are willing to take the dirty crypto, deduct their hefty fee and offer clean crypto instead.

bradleyjg 6y ago
A bitcoin that couldn’t be spent anywhere outside of e.g. China would be far less valuable than one that could be spent anywhere. At very least this would reduce the profitability of ransomware attacks.
- pinkybanana 6y ago
  How much less valuable exactly would you estimate? These markets for dirty bitcoins probably already exist, I would guess. I think someone would swap dirty btc to clean with price like 10% or maybe 20%. For criminals that would be just the cost of laundering the coins.

Rygian 6y ago

For this to work, the blacklist should apply to the receiving wallet AND CASCADE through to wallets to which that wallet issued any subsequent transfers. Coins used to pay ransomware should effectively taint and freeze everything they touch.

Sebb767 6y ago
So you want to convert them to a free weapon to freeze random wallets? Guess you could use that dor demanding ransoms...
- robocat 6y ago
  A government could have a “burner” account where all tainted money could be sent. A system where you are warned of tainted deposits (for example, use a micro-transaction from a “US taint detected” account as the message). You have x days to pay the received tainted money to the burner account, or your account gets tainted too. Of course every jurisdiction would want to be in on the “free” bitcoins so lots of complications...

toss1 6y ago

And there are plenty of ways to circumvent that, including converting it to various privacy coins, using mixer services, using it to buy mining power, etc., etc., etc. Heck, crypto may have even more ways to launder money than cash, and those won't go away with blacklists - which will just make the "privacy" coins, services, etc. more valuable. The only way it could even plausibly work is for every visible and darknet service in the world to subscribe to and abide by the exact same crypto-wallet blacklist. Good luck making that happen when nuclear superpower governments are in fact transnational crime syndicates. Assuming that the tracing capabilities are useful for anything beyond taking down the amateurs is overly optimistic.

bradleyjg 6y ago
Nothing is ever perfect. It doesn’t mean you shouldn’t at least try to track down criminals. Which has essentially been the West’s response to ransomware so far.
- toss1 6y ago
  No question, nothing is ever perfect, and best efforts should be made to utilize the available tracking. Especially so, when the threat is rising to the level of national security concerns as attacks start moving to infrastructure, and are sponsored or unofficially sanctioned by criminal nation-sates, where the response should be kinetic. The problem is that to kill ransomware, we would need a near-perfect system, and that is extremely unlikely, or thee will be substantial leakage, and continued profit for ransomers. I'd say it'd be easier to entirely shut down crypto globally than to ransomware-proof existing crypto. Probably means that the real solution will be to do both. Sanction only fully traceable cryptocurrencies and shut down the rest.
  - megameter 6y ago
    I don't see this going in the direction of a heavily enforced response, although some places may talk big. While a collective ban is rationally sensible, nations are made of individuals and every person will do a calculation of personal benefit relative to national interest. Crypto is valuable as a refuge, so a recurring story is currently playing out in destabilized nations all over the world where crypto is used to escape the inflated local currency: the government gets wishy-washy about what it's going to do with the stuff, with different officials taking wildly different stances according to their own self-interest. They talk of a ban, and then of national cryptocurrency, and then of nationalized mining. Everyone is looking for safe harbor but pulls in a different direction. Focusing on controlling onramps and offramps to cryptocurrency, like controlling goods import/export, is a relatively straightforward compromise to this internal dilemma and allows the government to be a player in the space without much direct oversight, even if some folks are slipping through the cracks. A sloppy, haphazard enforcement is likely to prevail. And there's another way to reassert state control within that framework. If the bad cryptocriminals come for your stuff, the government can bail you out - if you play by their rules. The loss compensation mechanism is a simple plan to mitigate dangers, since it's easy for governments to create and redistribute credit internally and doing so can build consent. Submitting to this framework does mean that the government is truly in competition with decentralisation to provide a better, more trustworthy service to handle central credit, and has to massively step up security efforts in the process. Everyone started "asleep at the wheel" on this, with individual tech firms all building out their own insecure house-of-cards fiefdoms and relying on the intellectual property law framework to keep them up. But everyone knows it's flawed - of course you can copy, what's important is if you can get credit, and that part is also changing with the crypto sector - assignment of credit is the whole thing of NFTs in a nutshell. The nation that can grasp this the quickest and turn it into a coherent part of their economic framework will cruise ahead.

cutemonster 6y ago

> Governments could blacklist those coins How would they know if the coin is from ransomware? If the randomware criminals say it's not, so it's word against word? And if they accepted just one payment to the wallet (so there's not a pattern of accepting money from strangers) Or if the organization that got broken in to, doesn't want to be public about that? (Doesn't want to talk with the government) (I don't know much about crypto coins.)