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> I don't know why the author dismisses Bitcoin as an anonymous payment mechanism. As he said: "No bitcoin service accepts any anonymous funding source; most

by judofyr 14y ago

> I don't know why the author dismisses Bitcoin as an anonymous payment mechanism. As he said: "No bitcoin service accepts any anonymous funding source; most only accept bank transfers." The problem here isn't bitcoin per se, but the initial trading of bitcoin for USD. Every bitcoin trade can be traced through the blockchain. So if he does use his true identity to buy bitcoins, they will be able find the seller. And you never know how easily the seller will reveal your identity…

crazygringo 14y ago
Wow, I was under the mistaken impression that Bitcoin was anonymous, but researching it more, it's not really. Does anyone know if this was a deliberate political choice in designing Bitcoin (so it wouldn't solely turn into a network for money laundering), or if there just wasn't any way to make the cryptography work for truly anonymous transactions that could still be verified?
- mindslight 14y ago
  Expediency. The novel part of bitcoin is the usage of the proof-of-work to also perform probabilistic byzantine agreement, and Satoshi didn't wait to invent two new things. I read the paper when it first came out, saw that it was based on signature chaining, and dismissed it as uninteresting. Didn't forsee the social echo chamber of everyone telling each other it was anonymous due to the present lack of identification. Oh well.
- jnbiche 14y ago
  1. I don't think it was a deliberate choice in the design of Bitcoin. I think Satoshi was hoping for full anonymity. That said, this ability to track Bitcoin payments to the payee has been leveraged by some of the present Bitcoin principals to convince governments that Bitcoin is kosher. (Satoshi is no longer involved in the development of Bitcoin) 2. That said, it is possible to use bitcoin anonymously, you just have to be careful and use some of the techniques described above: buying btc anonymously with cash, buying bitcoins via regular channels and "mixing" them via some online btc mixing sites, and/or generating your own btc but taking care to keep the client on a trusted vpn (like Mullvad, for example). Also, it's interesting to note that -- as far as I'm aware -- none of the perpetrators of the large bitcoin thefts have been tracked down, despite the best efforts of many smart people. And these are people that can be clearly tracked to very specific bitcoins. This may have changed in recent months, but it's certainly not a trivial task to track down even someone who has not used the techniques I describe above. It's certainly a hell of a whole lot more anonymous than Paypal or credit cards.
- alister 14y ago
  I would agree with the others who already replied that it was the latter, i.e., there wasn't a way to make all transactions totally anonymous. If you look at the protocol, you can see that there is no obvious way to modify the protocol so that it doesn't have transaction history. For anyone reading this thread, I highly recommend the original Bitcoin paper: http://bitcoin.org/bitcoin.pdf http://bitcoin.org/bitcoin.pdf It easily understood by anyone with the equivalent of first year university courses in computer science and mathematics, and it is just nine pages long.
  - deleted 14y ago
    [deleted]
- weavejester 14y ago
  Bitcoin isn't inherently anonymous, but neither is TCP. However, that doesn't mean you can't send data anonymously over the internet through services like Tor, and the same applies to bitcoin. Bitcoin can be made anonymous by swapping coins of equivalent value between accounts; as there's nothing that connects an account to a person, you can muddy the waters enough so that it's impossible to know which coins belong to you.
  - cookiecaper 14y ago
    It takes some effort to make the laundering believable, especially if you use an exchange to get your bitcoins (which most do). I think that online laundry services have the potential to be much more effective than an individual operator in most cases, but then you have to decide if you trust btc mixers/launderers and most of them charge a significant fee.
weavejester 14y ago
Once you buy an amount of bitcoins, you can trade those for other bitcoins of equal value from other individuals, or just swap the coins between temporary accounts you've created. Do this several times over the course of a few weeks or so and there's nothing to connect you back to the coins in your account.

by judofyr 14y ago

crazygringo 14y ago

Wow, I was under the mistaken impression that Bitcoin was anonymous, but researching it more, it's not really. Does anyone know if this was a deliberate political choice in designing Bitcoin (so it wouldn't solely turn into a network for money laundering), or if there just wasn't any way to make the cryptography work for truly anonymous transactions that could still be verified?

mindslight 14y ago
Expediency. The novel part of bitcoin is the usage of the proof-of-work to also perform probabilistic byzantine agreement, and Satoshi didn't wait to invent two new things. I read the paper when it first came out, saw that it was based on signature chaining, and dismissed it as uninteresting. Didn't forsee the social echo chamber of everyone telling each other it was anonymous due to the present lack of identification. Oh well.
jnbiche 14y ago
1. I don't think it was a deliberate choice in the design of Bitcoin. I think Satoshi was hoping for full anonymity. That said, this ability to track Bitcoin payments to the payee has been leveraged by some of the present Bitcoin principals to convince governments that Bitcoin is kosher. (Satoshi is no longer involved in the development of Bitcoin) 2. That said, it is possible to use bitcoin anonymously, you just have to be careful and use some of the techniques described above: buying btc anonymously with cash, buying bitcoins via regular channels and "mixing" them via some online btc mixing sites, and/or generating your own btc but taking care to keep the client on a trusted vpn (like Mullvad, for example). Also, it's interesting to note that -- as far as I'm aware -- none of the perpetrators of the large bitcoin thefts have been tracked down, despite the best efforts of many smart people. And these are people that can be clearly tracked to very specific bitcoins. This may have changed in recent months, but it's certainly not a trivial task to track down even someone who has not used the techniques I describe above. It's certainly a hell of a whole lot more anonymous than Paypal or credit cards.
alister 14y ago
I would agree with the others who already replied that it was the latter, i.e., there wasn't a way to make all transactions totally anonymous. If you look at the protocol, you can see that there is no obvious way to modify the protocol so that it doesn't have transaction history. For anyone reading this thread, I highly recommend the original Bitcoin paper: http://bitcoin.org/bitcoin.pdf http://bitcoin.org/bitcoin.pdf It easily understood by anyone with the equivalent of first year university courses in computer science and mathematics, and it is just nine pages long.
- deleted 14y ago
  [deleted]
weavejester 14y ago
Bitcoin isn't inherently anonymous, but neither is TCP. However, that doesn't mean you can't send data anonymously over the internet through services like Tor, and the same applies to bitcoin. Bitcoin can be made anonymous by swapping coins of equivalent value between accounts; as there's nothing that connects an account to a person, you can muddy the waters enough so that it's impossible to know which coins belong to you.
- cookiecaper 14y ago
  It takes some effort to make the laundering believable, especially if you use an exchange to get your bitcoins (which most do). I think that online laundry services have the potential to be much more effective than an individual operator in most cases, but then you have to decide if you trust btc mixers/launderers and most of them charge a significant fee.

weavejester 14y ago

Once you buy an amount of bitcoins, you can trade those for other bitcoins of equal value from other individuals, or just swap the coins between temporary accounts you've created. Do this several times over the course of a few weeks or so and there's nothing to connect you back to the coins in your account.