4 ms·

"Any application that could be done on a blockchain could be better done on a centralized database. Except crime." So you're saying there IS a use case :)

by dvh1990 5y ago

nikanj 5y ago
And that use case is HUGE. Cryptos are really enabling unprecedented efficiency in a wide variety of crime
- Scarblac 5y ago
  Imagine when ransoms had to be paid in suitcases full of dollar bills with non-sequential serial numbers. Bitcoin has made it all so much easier.
  - germinalphrase 5y ago
    If all transaction can be tracked, what prevents the [FBI\et al] from simply following the bitcoin trail until someone cashes out?
    - andrewla 5y ago
      The fungibility of cash is what makes it hard, although likely law enforcement will be able to trace many of these. For example, you take your ill-gotten gains and just randomly send $1 to a million different addresses, some owned by you, some owned by random people or exchanges or whatever. Nobody's going to say no to free money, so the trail goes cold. Or you use an offshore exchange that doesn't really practice strong KYC, and exchange the ill-gotten gains for a different cryptocurrency and now without the private ledger of the exchange, the trail is cold. At one point "mixing services" were the talk of the town, but at this point it's clear that you can get 99% of the benefits of mixing without having to go through an explicit service.
      - zaphar 5y ago
        For example, you take your ill-gotten gains and just randomly send $1 to a million different addresses, some owned by you, some owned by random people or exchanges or whatever. Nobody's going to say no to free money, so the trail goes cold. This one wouldn't really cause the trail to go cold though. It would be trivial to automate the tracking and if all of those funds end up in a single location eventually that would also be trivial to automate tracking. You really would need to do a Mixing with other counterparties to get any kind of anonymity. Even then mixing can be detangled as well.
    - michaelsbradley 5y ago
      For Ethereum, there's Tornado Cash[1] and other projects based on zk-SNARK[2] or similar tech. I'm not sure if there's a fully decentralized equivalent for Bitcoin. [1] https://tornado.cash/ https://tornado.cash/ [2] Why and How zk-SNARK Works: https://arxiv.org/abs/1906.07221 https://arxiv.org/abs/1906.07221
    - tim333 5y ago
      They cash out in Russia is one thing that happens.
throwawayffffas 5y ago
Actually I think he is wrong about that, crime can be done better on a centralized infrastructure. See all crime before cryptocurrencies were a thing.
- soco 5y ago
  For some reason all ransoms are requested in cryptocurrencies as of late. There must be a reason, hmm...
  - thinkmassive 5y ago
    " as mainstream adoption of cryptocurrency has grown, the percentage of transactions used to promote or conceal crime has also decreased." - FinCEN Chief Digital Currency Advisor, Michele Korver https://www.coindesk.com/policy/2021/07/06/fincen-hires-doj-crypto-czar-as-first-chief-digital-currency-advisor/ https://www.coindesk.com/policy/2021/07/06/fincen-hires-doj-...
    - hn8788 5y ago
      Keyword there is percentage.
    - Bigpet 5y ago
      "As deaths due to covid increased, the percentage of deaths due to car crashes has decreased" I somehow think that doesn't mean we made any progress in car/traffic safety. And should not be used as an argument to dismiss/minimize the impact of traffic fatalities.
    - kbenson 5y ago
      That is entirely consistent with a few possible (and I would say likely) explanations that include cryptocurrency being beneficial for crime. I'll cover one below. If crime accounts for some small percentage of financial transactions (we'll say 1% to make it easy, even if that's very unlikely), and those transactions migrate to cryptocurrency first, then what you'll see is a very high percentage of crime in cryptocurrencies, that then drops as the much larger normal transaction flow shifts, even the total amount of crime transactions might be stable or even increasing (as we're talking about percentages of a whole, normal transaction traffic and would have to be shifting very slowly and crime increasing extremely fast for us to see anything else).

"Any application that could be done on a blockchain could be better done on a centralized database. Except crime." So you're saying there IS a use case :)

nikanj 5y ago

And that use case is HUGE. Cryptos are really enabling unprecedented efficiency in a wide variety of crime

Scarblac 5y ago
Imagine when ransoms had to be paid in suitcases full of dollar bills with non-sequential serial numbers. Bitcoin has made it all so much easier.
- germinalphrase 5y ago
  If all transaction can be tracked, what prevents the [FBI\et al] from simply following the bitcoin trail until someone cashes out?
  - andrewla 5y ago
    The fungibility of cash is what makes it hard, although likely law enforcement will be able to trace many of these. For example, you take your ill-gotten gains and just randomly send $1 to a million different addresses, some owned by you, some owned by random people or exchanges or whatever. Nobody's going to say no to free money, so the trail goes cold. Or you use an offshore exchange that doesn't really practice strong KYC, and exchange the ill-gotten gains for a different cryptocurrency and now without the private ledger of the exchange, the trail is cold. At one point "mixing services" were the talk of the town, but at this point it's clear that you can get 99% of the benefits of mixing without having to go through an explicit service.
    - zaphar 5y ago
      For example, you take your ill-gotten gains and just randomly send $1 to a million different addresses, some owned by you, some owned by random people or exchanges or whatever. Nobody's going to say no to free money, so the trail goes cold. This one wouldn't really cause the trail to go cold though. It would be trivial to automate the tracking and if all of those funds end up in a single location eventually that would also be trivial to automate tracking. You really would need to do a Mixing with other counterparties to get any kind of anonymity. Even then mixing can be detangled as well.
  - michaelsbradley 5y ago
    For Ethereum, there's Tornado Cash[1] and other projects based on zk-SNARK[2] or similar tech. I'm not sure if there's a fully decentralized equivalent for Bitcoin. [1] https://tornado.cash/ https://tornado.cash/ [2] Why and How zk-SNARK Works: https://arxiv.org/abs/1906.07221 https://arxiv.org/abs/1906.07221
  - tim333 5y ago
    They cash out in Russia is one thing that happens.

throwawayffffas 5y ago

Actually I think he is wrong about that, crime can be done better on a centralized infrastructure. See all crime before cryptocurrencies were a thing.

soco 5y ago
For some reason all ransoms are requested in cryptocurrencies as of late. There must be a reason, hmm...
- thinkmassive 5y ago
  " as mainstream adoption of cryptocurrency has grown, the percentage of transactions used to promote or conceal crime has also decreased." - FinCEN Chief Digital Currency Advisor, Michele Korver https://www.coindesk.com/policy/2021/07/06/fincen-hires-doj-crypto-czar-as-first-chief-digital-currency-advisor/ https://www.coindesk.com/policy/2021/07/06/fincen-hires-doj-...
  - hn8788 5y ago
    Keyword there is percentage.
  - Bigpet 5y ago
    "As deaths due to covid increased, the percentage of deaths due to car crashes has decreased" I somehow think that doesn't mean we made any progress in car/traffic safety. And should not be used as an argument to dismiss/minimize the impact of traffic fatalities.
  - kbenson 5y ago
    That is entirely consistent with a few possible (and I would say likely) explanations that include cryptocurrency being beneficial for crime. I'll cover one below. If crime accounts for some small percentage of financial transactions (we'll say 1% to make it easy, even if that's very unlikely), and those transactions migrate to cryptocurrency first, then what you'll see is a very high percentage of crime in cryptocurrencies, that then drops as the much larger normal transaction flow shifts, even the total amount of crime transactions might be stable or even increasing (as we're talking about percentages of a whole, normal transaction traffic and would have to be shifting very slowly and crime increasing extremely fast for us to see anything else).