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Bitcoin transactions are permanent sure, but they have no identity tied to them, unless they were purchased with something that already had an identity associat

by jmtame 14y ago

Bitcoin transactions are permanent sure, but they have no identity tied to them, unless they were purchased with something that already had an identity associated (eg never buy Bitcoins with PayPal, because PayPal already knows who you are). If Joe wants to buy drugs, then he can walk into any bank and do a cash deposit to a BitInstant account, which gets dumped into MtGox and he can then move it around any way he wants, including online marketplaces. There's no identity that can be traced back to him except for the bank's video surveillance, and how long is that stored at a bank? Without the surveillance, there's no way to tie any transaction Joe does back to his identity. The wallet, the address, the marketplace (if done right using tumbling and encrypting all messages) all leave no trace to a transaction.

chewit 14y ago
How about whenever you try to take money out? How can you get money out without it coming to an account that is associated with you? Can't the coins be tracked from the illicit purchase to this point? I'm not clear on the process at all!
- hilko 14y ago
  A site such as bitcoin-24.com allows you to create an account with no personal identification. It also allows you to send cash money (converted from bitcoin, usually) to an address. And if you want to avoid the address issue, you can (currently) use one of the many 'exchanges' at localbitcoins.com and pick it up personally. Hell, if that's too dangerous you can probably get a minion to do it for you. If the government ever cracks down on this kind of stuff, for example by making it harder to be a local trader at localbitcoins.com, then I have no doubt that a small industry of 'illegal traders' will appear, or methods of laundering the money.
lurkinggrue 14y ago
It would not be hard. We have seen over and over again how anonymous data can suddenly be tied down. Example: http://www.wired.com/threatlevel/2013/03/anonymous-phone-location-data/ http://www.wired.com/threatlevel/2013/03/anonymous-phone-loc... Remember: Attacks only get better, not worse.
- jmtame 14y ago
  Wow, nice find. I hadn't thought about tracing the cell phone before, of all things. Practically, it seems like a stretch to try and look at GPS logs through a carrier and prove that someone was at a bank at a given time. It says the precision is down to 2 hours, so you can theoretically get to a bank, not make/receive any calls, and get back before that 2 hour window and nothing would ever be recorded by the cell towers. If anything, this only proves that you were in a geographic region. Plausible deniability? Also, this problem goes away completely if you leave your cell phone at home. An easy trick to adopt for the Joes looking to buy Bitcoins anonymously.
  - lurkinggrue 14y ago
    True, but my point is given a large data set we find surprising ways to trace it back to people. So at some point I would expect goverment/people to crack open the bitcoin data and stat mapping it to people and looking for trends. I don't think that is specifically a bad thing but you should conciser it before doing something foolish with bitcoins.
    - jmtame 14y ago
      I definitely agree that someone who buys Bitcoins needs to think about how identity is tied back to them, but so far it's not a convincing point that Joe is at a high degree of risk if he's cautious. Those points need to be debated specifically, and not from an abstract or high level. The cell phone example was the first I heard of that, and a really good example. But it's not going to break anonymity. It sounds way too hand-wavy to me to say things like "Well, Bitcoins.. It's a con.. the government will find Joe, somehow.. Be afraid!" So far, my point stands that you can remain completely anonymous while buying Bitcoins. The article started out with fear mongering, and so far, I'm unconvinced that it has any substance to it. To call it a "con" is sensationalism at best.

by jmtame 14y ago

chewit 14y ago

How about whenever you try to take money out? How can you get money out without it coming to an account that is associated with you? Can't the coins be tracked from the illicit purchase to this point? I'm not clear on the process at all!

hilko 14y ago
A site such as bitcoin-24.com allows you to create an account with no personal identification. It also allows you to send cash money (converted from bitcoin, usually) to an address. And if you want to avoid the address issue, you can (currently) use one of the many 'exchanges' at localbitcoins.com and pick it up personally. Hell, if that's too dangerous you can probably get a minion to do it for you. If the government ever cracks down on this kind of stuff, for example by making it harder to be a local trader at localbitcoins.com, then I have no doubt that a small industry of 'illegal traders' will appear, or methods of laundering the money.

lurkinggrue 14y ago

It would not be hard. We have seen over and over again how anonymous data can suddenly be tied down. Example: http://www.wired.com/threatlevel/2013/03/anonymous-phone-location-data/ http://www.wired.com/threatlevel/2013/03/anonymous-phone-loc... Remember: Attacks only get better, not worse.

jmtame 14y ago
Wow, nice find. I hadn't thought about tracing the cell phone before, of all things. Practically, it seems like a stretch to try and look at GPS logs through a carrier and prove that someone was at a bank at a given time. It says the precision is down to 2 hours, so you can theoretically get to a bank, not make/receive any calls, and get back before that 2 hour window and nothing would ever be recorded by the cell towers. If anything, this only proves that you were in a geographic region. Plausible deniability? Also, this problem goes away completely if you leave your cell phone at home. An easy trick to adopt for the Joes looking to buy Bitcoins anonymously.
- lurkinggrue 14y ago
  True, but my point is given a large data set we find surprising ways to trace it back to people. So at some point I would expect goverment/people to crack open the bitcoin data and stat mapping it to people and looking for trends. I don't think that is specifically a bad thing but you should conciser it before doing something foolish with bitcoins.
  - jmtame 14y ago
    I definitely agree that someone who buys Bitcoins needs to think about how identity is tied back to them, but so far it's not a convincing point that Joe is at a high degree of risk if he's cautious. Those points need to be debated specifically, and not from an abstract or high level. The cell phone example was the first I heard of that, and a really good example. But it's not going to break anonymity. It sounds way too hand-wavy to me to say things like "Well, Bitcoins.. It's a con.. the government will find Joe, somehow.. Be afraid!" So far, my point stands that you can remain completely anonymous while buying Bitcoins. The article started out with fear mongering, and so far, I'm unconvinced that it has any substance to it. To call it a "con" is sensationalism at best.