8 ms·

"mixers—large digital pools where crypto owners can deposit funds to obscure their origins." I have a quibble with articles about cryptocurrency fraud. They al

"mixers—large digital pools where crypto owners can deposit funds to obscure their origins." I have a quibble with articles about cryptocurrency fraud. They always get around to mixers and then they define it as if it were some relatively legitimate thing, like an odd bank. "large digital pools", "deposit funds". You have to get to the last phrase ("obscure their origins") to understand what mixers really are. A proposed alternate definition: "mixers - international money laundering services where illegally obtained cryptocurrency can be mixed with other fraud proceeds making it harder for the legal system to trace". (The definition I really would like: "mixers - services that look to hide your funds but are actually operated by intelligence agencies to track illegal activity". I imagine at least one mixer is a honeypot of sorts.)

judge2020 4y ago
I thought the ultimate goal was using legitimate exchanges as your mixer, since if a mixer only handles illegal crypto, chances are the funds can be traced to every destination address and the exchanges are tasked with reporting anything that comes from those addresses to federal law enforcement. The only real anonymity is in tornado cash.
earnesti 4y ago
Basically almost all custodial crypto exchanges and services function as mixers, as they don't separate customer funds. Using Blockchain analysis you can see that certain transaction likely belongs to certain service, but to get the details you have to file a data request, and hope that the service has done the KYC properly.
acidtakes1 4y ago
I don't understand why technology that provides a modicum of privacy must be demonized. It must be for money laundering and criminals. It can't have a legitimate use case. Is it used for nefarious activities? Of course, but not exclusively so.
- zht 4y ago
  Can I use an RPG-7 to kill animals like bears that threaten my life on my property? Yes. It’s definitely usable for non nefarious activities. Should I be demonized for having one in my house? Probably
  - eterps 4y ago
    And when it's less obvious? Should I be demonized for using TOR? Monero? Signal? GPG?
- axlee 4y ago
  If 99% of BTC mixers' volume is helping laundering international drug trade money, arms or human trafficking, it's not exactly hard to demonize mixing itself. I have no data to base this on, but I assume that privacy absolutists are a tiny, tiny drop in the pool of blood and crime.
  - lovich 4y ago
    Would privacy absolutists even use BTC? I was under the impression that every transaction was out in the open and permanent.
    - thefounder 4y ago
      The answe is no but they can make a trade off using something like monero. BTC's only read advantage is the network effects. As far as the tech is concerned it is mediocre compared with other ledgers.
  - throwaway290 4y ago
    Privacy absolutists are free to deal in cash. Whatever amounts they send and receive, criminals and dictators do orders of magnitude more and people suffer as a result. If it wasn't so sad it would be funny that the countries with highest levels of freedom and least corruption tend to be the ones with most vocal privacy absolutists...
barnabee 4y ago
Ideally we would have a world where privacy is the default and everyone has it. Because we don’t, and there is considerable friction required to have financial privacy, most people don’t bother unless they really need it or are unusually privacy conscious. Really needing it may often mean they are doing something nefarious. That doesn’t mean the technology to enable privacy is “bad”, it means it’s too hard to use and that as a society we have done poorly at guaranteeing people’s right to privacy. Not so long ago you might have ben able to say the same thing about people communicating with end-to-end encryption, but thanks to a concerted effort to improve the UX of this tech. and it’s adoption by some very widely used services, it’s now commonplace. End to end encryption could no longer be argued to be mostly used by criminals. Hopefully we will get there with financial privacy too. NB: in neither case am I suggesting that the government should be unable to require you to provide information in some situations (or face the consequences of withholding it against, say, a court order), only that dragnet surveillance of everyone by default is never acceptable.
- Hyption 4y ago
  I'm overall not for financial privacy. Unfortunately I'm a normal person with my primary/only income being my salary. I benefit from this 100 times more than not. I can't and won't do tax evasion. The rich and bad do.
ETH_start 4y ago
Smart contract based mixers like Tornado Cash are just code for encrypting transactions. The only reason that a large proportion of Tornado Cash transactions were criminal in origin is that the legitimate parties were largely scared off from using it, because of the legal uncertainty around it, with people fearing what exactly ended up happening - with OFAC sanctioning the actual code - happening. This left only the bravest parties, and criminals to use it, leading to a high proportion of users being criminals. If it weren't for that uncertainty about the legal treatment TC would receive from government (say if Congress passed legislation explicitly providing a right to use financial privacy technology), a huge proportion of the whole crypto economy would have been using Tornado Cash, as they should be, because privacy is an absolute bare minimum for a functioning financial system. The conceptual treatment you're giving transaction encryption is to treat privacy as criminal. This is an ideological outlook that promotes putting total trust and faith in a small elite in government and finance to engage in warrantless dragnet surveillance of every one's financial transactions.
woah 4y ago
Why don’t you post your credit card statement below if you have nothing to hide since you’re not a criminal?
neilv 4y ago
"Mixers" of various kinds (even before cryptocurrency) used to seem a legitimate, if nerdy, idea for privacy. One of the more recent difficulties with a lot of privacy technology is that the main user might not be the abused and those wanting to avoid being abused, but instead... really awful criminals. And with anything cryptocurrency or blockchain in the last decade, it's not only the users who are criminals, but much of the technology itself is built by scamming atop scamming. I'd quibble with any article today that mentions cryptocurrency/blockchain at all without acknowledging how sketchy the entire space is. Pre-Web cynical cyberpunk writers were better at predicting much of the modern world, than were the optimistic techies who mostly saw tremendous opportunity for goodness.

judge2020 4y ago

I thought the ultimate goal was using legitimate exchanges as your mixer, since if a mixer only handles illegal crypto, chances are the funds can be traced to every destination address and the exchanges are tasked with reporting anything that comes from those addresses to federal law enforcement. The only real anonymity is in tornado cash.

earnesti 4y ago

Basically almost all custodial crypto exchanges and services function as mixers, as they don't separate customer funds. Using Blockchain analysis you can see that certain transaction likely belongs to certain service, but to get the details you have to file a data request, and hope that the service has done the KYC properly.

acidtakes1 4y ago

I don't understand why technology that provides a modicum of privacy must be demonized. It must be for money laundering and criminals. It can't have a legitimate use case. Is it used for nefarious activities? Of course, but not exclusively so.

zht 4y ago
Can I use an RPG-7 to kill animals like bears that threaten my life on my property? Yes. It’s definitely usable for non nefarious activities. Should I be demonized for having one in my house? Probably
- eterps 4y ago
  And when it's less obvious? Should I be demonized for using TOR? Monero? Signal? GPG?
axlee 4y ago
If 99% of BTC mixers' volume is helping laundering international drug trade money, arms or human trafficking, it's not exactly hard to demonize mixing itself. I have no data to base this on, but I assume that privacy absolutists are a tiny, tiny drop in the pool of blood and crime.
- lovich 4y ago
  Would privacy absolutists even use BTC? I was under the impression that every transaction was out in the open and permanent.
  - thefounder 4y ago
    The answe is no but they can make a trade off using something like monero. BTC's only read advantage is the network effects. As far as the tech is concerned it is mediocre compared with other ledgers.
- throwaway290 4y ago
  Privacy absolutists are free to deal in cash. Whatever amounts they send and receive, criminals and dictators do orders of magnitude more and people suffer as a result. If it wasn't so sad it would be funny that the countries with highest levels of freedom and least corruption tend to be the ones with most vocal privacy absolutists...

barnabee 4y ago

Ideally we would have a world where privacy is the default and everyone has it. Because we don’t, and there is considerable friction required to have financial privacy, most people don’t bother unless they really need it or are unusually privacy conscious. Really needing it may often mean they are doing something nefarious. That doesn’t mean the technology to enable privacy is “bad”, it means it’s too hard to use and that as a society we have done poorly at guaranteeing people’s right to privacy. Not so long ago you might have ben able to say the same thing about people communicating with end-to-end encryption, but thanks to a concerted effort to improve the UX of this tech. and it’s adoption by some very widely used services, it’s now commonplace. End to end encryption could no longer be argued to be mostly used by criminals. Hopefully we will get there with financial privacy too. NB: in neither case am I suggesting that the government should be unable to require you to provide information in some situations (or face the consequences of withholding it against, say, a court order), only that dragnet surveillance of everyone by default is never acceptable.

Hyption 4y ago
I'm overall not for financial privacy. Unfortunately I'm a normal person with my primary/only income being my salary. I benefit from this 100 times more than not. I can't and won't do tax evasion. The rich and bad do.

ETH_start 4y ago

Smart contract based mixers like Tornado Cash are just code for encrypting transactions. The only reason that a large proportion of Tornado Cash transactions were criminal in origin is that the legitimate parties were largely scared off from using it, because of the legal uncertainty around it, with people fearing what exactly ended up happening - with OFAC sanctioning the actual code - happening. This left only the bravest parties, and criminals to use it, leading to a high proportion of users being criminals. If it weren't for that uncertainty about the legal treatment TC would receive from government (say if Congress passed legislation explicitly providing a right to use financial privacy technology), a huge proportion of the whole crypto economy would have been using Tornado Cash, as they should be, because privacy is an absolute bare minimum for a functioning financial system. The conceptual treatment you're giving transaction encryption is to treat privacy as criminal. This is an ideological outlook that promotes putting total trust and faith in a small elite in government and finance to engage in warrantless dragnet surveillance of every one's financial transactions.

woah 4y ago

Why don’t you post your credit card statement below if you have nothing to hide since you’re not a criminal?

neilv 4y ago

"Mixers" of various kinds (even before cryptocurrency) used to seem a legitimate, if nerdy, idea for privacy. One of the more recent difficulties with a lot of privacy technology is that the main user might not be the abused and those wanting to avoid being abused, but instead... really awful criminals. And with anything cryptocurrency or blockchain in the last decade, it's not only the users who are criminals, but much of the technology itself is built by scamming atop scamming. I'd quibble with any article today that mentions cryptocurrency/blockchain at all without acknowledging how sketchy the entire space is. Pre-Web cynical cyberpunk writers were better at predicting much of the modern world, than were the optimistic techies who mostly saw tremendous opportunity for goodness.