4 ms·

I thought crypto meant sophisticated cryptography would prevent people you don't trust from spending all your money, and from people knowing who you are and how

by sshine 4y ago

I thought crypto meant sophisticated cryptography would prevent people you don't trust from spending all your money, and from people knowing who you are and how you spend your money.

Semaphor 4y ago
This, as usual, was your crypto being held by someone else. That’s why people say "not your keys, not your crypto"
ZGDUwpqEWpUZ 4y ago
"Crypto" is named for the use of public/private keys for receiving/sending, and maybe also for the hashing algorithms in Proof of Work. For most cryptocurrencies (including Bitcoin and Ethereum) it is trivial to calculate someone's balance if you know their public key (aka wallet address). Someone can maintain multiple wallets for privacy, but transactions between them (directly or indirectly) can be used to correlate and find the source of funds. This is why bitcoin mixers[1] exist. There's a whole bunch of so-called "privacy coins" that attempt to address these issues and others (e.g. by making it harder to tell which IPs transactions are broadcast from). [1] https://techcrunch.com/2022/08/12/suspected-tornado-cash-developer-arrested-in-amsterdam/ https://techcrunch.com/2022/08/12/suspected-tornado-cash-dev...
- sshine 4y ago
  > There's a whole bunch of so-called "privacy coins" that attempt to address these issues and others. Why do you say "so-called"?
  - ZGDUwpqEWpUZ 4y ago
    Good question. Avoiding blanket endorsement/nudging people to do their own research, I guess.
  - olliej 4y ago
    To start off, I'm trying to be unbiased here, but I am generally anti-"crypto", nonetheless here goes: I obviously can't speak to OP's view, but in general the privacy coins are all small bit players. Because of that they are vulnerable to 51% attacks, this _can_ happen as the first google hit I did just now so that I could appear smart and knowledgeable :D : https://www.coindesk.com/markets/2020/11/08/privacy-coin-grin-is-victim-of-51-attack/ https://www.coindesk.com/markets/2020/11/08/privacy-coin-gri... How practical such an attack would be on the bigger networks I don't know, there were a couple of February ones saying monero was at risk, but I have no idea how plausible that would actually be. I would also consider smaller coins more likely to run into transaction correlation simply due to volume - I really don't know how secure the coins are if there are few participants, but if it's a small network looking for 10btc/eth transfer with a corresponding transaction in the small network, and then a later transaction back, doesn't seem implausible. My thinking here is purely along the lines of "imagine a mixer that only has 1 participant", that's obviously going to achieve nothing, but how many participants are needed before it stops being useless?
mrjin 4y ago
Cryptos were *Catch-22* created without understanding the real problem, why centralized institutions are there, and naively thought fraud was all about trustworthy of the records. So they made the ledgers open and let *ALL participants* run the same calculation at the same time with a fancy name Proof-of-Work. So with some easy cross ref you can easily find out exactly who did what and own how much etc.. Dumb huh? But it doesn't end there. Soon the participants realized they could not trust their counter parties. In a scenario that someone trade his/her crypto for fiat money(let's say money from now on) is not guaranteed to receive the money after the cryto transferred out or vice versa as transfer of crypto and transfer of money are two separate processes and none one can make sure both to happen as intended. So the exchanges came into play. But wait, weren't they the centralized institutions crytos aimed to remove? Decentralize by centralizing but with almost no regulations. I cannot find anything better for frauds.
- sshine 4y ago
  Yes, so apparently our societies necessitate a level of trust demonstrated by the prevalence of centralised exchanges: Technology is difficult, and we outsource the management massively. --- I once found a locked iPhone and tried to give it back to the owner by asking Siri to dial random sound bits (I didn't know about "ICE"). The first two people in the person's phone books were super sketchy people who claimed it was their phone, and when I asked what number they were calling from, started walking sideways in the conversation. Social recovery wallets are great if you have trustworthy friends. ;-)
throw101010 4y ago
You thought right, but the people affected were using a centralized financial institution called Celsius, which collected their PII and held custody of their crypto and fiat. They leaked (actually the court) this information, not a blockchain or a specific cryptocurrency network. You cannot expect privacy with cryptocurrencies when you renounce to it voluntarily by doing this. In addition leaks of this kind when it comes to credit card numbers and other sensitive financial information are not very rare unfortunately, hopefully you express the same concern when it happens to millions of people every year.

by sshine 4y ago

I thought crypto meant sophisticated cryptography would prevent people you don't trust from spending all your money, and from people knowing who you are and how you spend your money.

Semaphor 4y ago

This, as usual, was your crypto being held by someone else. That’s why people say "not your keys, not your crypto"

ZGDUwpqEWpUZ 4y ago

"Crypto" is named for the use of public/private keys for receiving/sending, and maybe also for the hashing algorithms in Proof of Work. For most cryptocurrencies (including Bitcoin and Ethereum) it is trivial to calculate someone's balance if you know their public key (aka wallet address). Someone can maintain multiple wallets for privacy, but transactions between them (directly or indirectly) can be used to correlate and find the source of funds. This is why bitcoin mixers[1] exist. There's a whole bunch of so-called "privacy coins" that attempt to address these issues and others (e.g. by making it harder to tell which IPs transactions are broadcast from). [1] https://techcrunch.com/2022/08/12/suspected-tornado-cash-developer-arrested-in-amsterdam/ https://techcrunch.com/2022/08/12/suspected-tornado-cash-dev...

sshine 4y ago
> There's a whole bunch of so-called "privacy coins" that attempt to address these issues and others. Why do you say "so-called"?
- ZGDUwpqEWpUZ 4y ago
  Good question. Avoiding blanket endorsement/nudging people to do their own research, I guess.
- olliej 4y ago
  To start off, I'm trying to be unbiased here, but I am generally anti-"crypto", nonetheless here goes: I obviously can't speak to OP's view, but in general the privacy coins are all small bit players. Because of that they are vulnerable to 51% attacks, this _can_ happen as the first google hit I did just now so that I could appear smart and knowledgeable :D : https://www.coindesk.com/markets/2020/11/08/privacy-coin-grin-is-victim-of-51-attack/ https://www.coindesk.com/markets/2020/11/08/privacy-coin-gri... How practical such an attack would be on the bigger networks I don't know, there were a couple of February ones saying monero was at risk, but I have no idea how plausible that would actually be. I would also consider smaller coins more likely to run into transaction correlation simply due to volume - I really don't know how secure the coins are if there are few participants, but if it's a small network looking for 10btc/eth transfer with a corresponding transaction in the small network, and then a later transaction back, doesn't seem implausible. My thinking here is purely along the lines of "imagine a mixer that only has 1 participant", that's obviously going to achieve nothing, but how many participants are needed before it stops being useless?

mrjin 4y ago

Cryptos were *Catch-22* created without understanding the real problem, why centralized institutions are there, and naively thought fraud was all about trustworthy of the records. So they made the ledgers open and let *ALL participants* run the same calculation at the same time with a fancy name Proof-of-Work. So with some easy cross ref you can easily find out exactly who did what and own how much etc.. Dumb huh? But it doesn't end there. Soon the participants realized they could not trust their counter parties. In a scenario that someone trade his/her crypto for fiat money(let's say money from now on) is not guaranteed to receive the money after the cryto transferred out or vice versa as transfer of crypto and transfer of money are two separate processes and none one can make sure both to happen as intended. So the exchanges came into play. But wait, weren't they the centralized institutions crytos aimed to remove? Decentralize by centralizing but with almost no regulations. I cannot find anything better for frauds.

sshine 4y ago
Yes, so apparently our societies necessitate a level of trust demonstrated by the prevalence of centralised exchanges: Technology is difficult, and we outsource the management massively. --- I once found a locked iPhone and tried to give it back to the owner by asking Siri to dial random sound bits (I didn't know about "ICE"). The first two people in the person's phone books were super sketchy people who claimed it was their phone, and when I asked what number they were calling from, started walking sideways in the conversation. Social recovery wallets are great if you have trustworthy friends. ;-)

throw101010 4y ago

You thought right, but the people affected were using a centralized financial institution called Celsius, which collected their PII and held custody of their crypto and fiat. They leaked (actually the court) this information, not a blockchain or a specific cryptocurrency network. You cannot expect privacy with cryptocurrencies when you renounce to it voluntarily by doing this. In addition leaks of this kind when it comes to credit card numbers and other sensitive financial information are not very rare unfortunately, hopefully you express the same concern when it happens to millions of people every year.