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> Bitcoin in traceable. Much more traceable than something like cash or gold. This is something that is often forgotten in these discussions. Everything is pub

> Bitcoin in traceable. Much more traceable than something like cash or gold. This is something that is often forgotten in these discussions. Everything is public with bitcoins. The only open issue is binding the transactions to an ip and via that to a person. And considering how widely the internet is monitored these days that should not pose a problem. After that analyzing connections between wallets is a similar problem as analyzing friendships in a massive social network. Transactions form a graph from wallet to wallet. If massive drug rings would use Bitcoin instead of cash it would actually be easier to track them down than it is right now. In addition bitcoin is trivially forkable. It has only as much value as people want to give it. It is in essence as imaginary as any fiat currency is.

runako 13y ago
>> binding the transactions to an ip and via that to a person Naive question: since IP's don't map 1:1 to people (proxies, the tendency of people to use lots of devices in lots of places), how does this work in practice? Does it really work in practice?
- sharpneli 13y ago
  It doesn't have to work 1:1 all the time for every IP a person may use to make transactions. Unlike in torrents where one download cannot be tied to another and you have plausible deniability that you yourself might've not used that, with bitcoin the history stays. As an example if you issue transactions from your home and from your place of work you are immediately nailed (e.g brought to questioning) even if there are 1000 transactions in your walled made behind 7 proxies. Open WiFi argument doesn't hold water in that case. And even a single access from a place that maps to someone will taint the wallet permanently, as an example: Busting a drug ring. Set of wallets are suspected to be a part of a massive drug and money laundering operation (few of the wallet addresses are advertised on silk road and are getting a lot of transactions in, and a bunch of laundering addresses are recognized as a dense cluster in the graph).Then some not so smart subordinate accidentally uses a wallet app from his normal cellphone. That will instantly cause the cops to go after him and investigations will start. Basically if you have ever used your wallet from places where you can be recognized the wallet is tainted. You will be investigated if the said wallet is ever used for anything shady ever. The key here is that even if a single access does not automatically link it to you, multiple accesses will. The only way to keep clean is always route every transaction always trough weird proxies. And hope that everyone you transfer to/from will do the same. Get a gift from your mom who doesn't do it? That's it. She may be interrogated and you're bust.
- yebyen 13y ago
  You may notice he called those open issues. In other words, for at least the two reasons you cited, they are not solved problems. It's also not an unsolved problem, since communication using IP protocol means that someone must assign you an IP, and those assignments can be logged... similarly operating a proxy server means that you are a target for government and court subpoenas, and in some jurisdictions it may be mandatory to maintain these logs and produce them on request, regardless of the sometimes in-feasibility of that. The internet is really just a series of tubes.
- diminoten 13y ago
  Realistically, I don't need to do that. In an investigation, they'd eventually get a warrant for your electronics. They'd comb through them, and probably find your bitcoin wallet. In the event where it's relevant to the case that they see the contents of your bitcoin wallet, you'd be compelled to decrypt it. So they wouldn't ever have to tie your IP address to a transaction - the feds or local police would just get your wallet and trace backwards from there.
- wmf 13y ago
  Actually, you don't use IP addresses at all when tracing Bitcoins. You subpoena the exchanges for customer information and trace from there.

runako 13y ago

>> binding the transactions to an ip and via that to a person Naive question: since IP's don't map 1:1 to people (proxies, the tendency of people to use lots of devices in lots of places), how does this work in practice? Does it really work in practice?

sharpneli 13y ago
It doesn't have to work 1:1 all the time for every IP a person may use to make transactions. Unlike in torrents where one download cannot be tied to another and you have plausible deniability that you yourself might've not used that, with bitcoin the history stays. As an example if you issue transactions from your home and from your place of work you are immediately nailed (e.g brought to questioning) even if there are 1000 transactions in your walled made behind 7 proxies. Open WiFi argument doesn't hold water in that case. And even a single access from a place that maps to someone will taint the wallet permanently, as an example: Busting a drug ring. Set of wallets are suspected to be a part of a massive drug and money laundering operation (few of the wallet addresses are advertised on silk road and are getting a lot of transactions in, and a bunch of laundering addresses are recognized as a dense cluster in the graph).Then some not so smart subordinate accidentally uses a wallet app from his normal cellphone. That will instantly cause the cops to go after him and investigations will start. Basically if you have ever used your wallet from places where you can be recognized the wallet is tainted. You will be investigated if the said wallet is ever used for anything shady ever. The key here is that even if a single access does not automatically link it to you, multiple accesses will. The only way to keep clean is always route every transaction always trough weird proxies. And hope that everyone you transfer to/from will do the same. Get a gift from your mom who doesn't do it? That's it. She may be interrogated and you're bust.
yebyen 13y ago
You may notice he called those open issues. In other words, for at least the two reasons you cited, they are not solved problems. It's also not an unsolved problem, since communication using IP protocol means that someone must assign you an IP, and those assignments can be logged... similarly operating a proxy server means that you are a target for government and court subpoenas, and in some jurisdictions it may be mandatory to maintain these logs and produce them on request, regardless of the sometimes in-feasibility of that. The internet is really just a series of tubes.
diminoten 13y ago
Realistically, I don't need to do that. In an investigation, they'd eventually get a warrant for your electronics. They'd comb through them, and probably find your bitcoin wallet. In the event where it's relevant to the case that they see the contents of your bitcoin wallet, you'd be compelled to decrypt it. So they wouldn't ever have to tie your IP address to a transaction - the feds or local police would just get your wallet and trace backwards from there.
wmf 13y ago
Actually, you don't use IP addresses at all when tracing Bitcoins. You subpoena the exchanges for customer information and trace from there.