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There's Bitcoin laundering. https://en.bitcoin.it/wiki/Mixing_service https://en.bitcoin.it/wiki/Mixing_service

by lazyloop 13y ago

songgao 13y ago
Interesting. Is it mathematically impossible to trace back to source (and intermediate nodes) or is it just harder?
- gnerd 13y ago
  Not mathematically impossible just computationally infeasible, that is assuming a good implementation.
- Groxx 13y ago
  Done correctly, mixing N together means a strict 1/N chance of getting the source correct, and being more certain is impossible. Trivialized example: a friend and I split a single bitcoin each and send half to address A and half to address B, and we each control one address. Who owns A and who owns B? If A is used to buy something, am I the buyer or my friend? Since the private keys are generated offline, the fact that two sources sent to both A and B is all the information that exists. I've "tainted" both addresses, anyone can see that, but that's all. But even when done correctly, odds are you still expose your identity through your use of the coins in the future. So you run through a random number of mixers, and then you behave extremely carefully, since there's some taint to everything and someone could be watching any of a billion addresses for signs of you (shipment to your house, for example). Given enough connections, you can get pretty reasonable probabilities and start forming deeper and more confident paths.
  - shawabawa3 13y ago
    Aren't there mixing services that completely sever the connection to you? i.e. Me and you both want to launder coins, so through this mixing service we essentially swap coins. Now my spends get traced to you and vice versa (obviously this works a lot better with more people involved)
    - pavel_lishin 13y ago
      I don't think that severs the connection to you; you are now connected to the service, and so is your friend, and therefore potentially to each other.
- deleted 13y ago
  [deleted]
legulere 13y ago
To be effective only tiny amounts of the 700k bitcoins would be able to be hidden

There's Bitcoin laundering. https://en.bitcoin.it/wiki/Mixing_service https://en.bitcoin.it/wiki/Mixing_service

songgao 13y ago

Interesting. Is it mathematically impossible to trace back to source (and intermediate nodes) or is it just harder?

gnerd 13y ago
Not mathematically impossible just computationally infeasible, that is assuming a good implementation.
Groxx 13y ago
Done correctly, mixing N together means a strict 1/N chance of getting the source correct, and being more certain is impossible. Trivialized example: a friend and I split a single bitcoin each and send half to address A and half to address B, and we each control one address. Who owns A and who owns B? If A is used to buy something, am I the buyer or my friend? Since the private keys are generated offline, the fact that two sources sent to both A and B is all the information that exists. I've "tainted" both addresses, anyone can see that, but that's all. But even when done correctly, odds are you still expose your identity through your use of the coins in the future. So you run through a random number of mixers, and then you behave extremely carefully, since there's some taint to everything and someone could be watching any of a billion addresses for signs of you (shipment to your house, for example). Given enough connections, you can get pretty reasonable probabilities and start forming deeper and more confident paths.
- shawabawa3 13y ago
  Aren't there mixing services that completely sever the connection to you? i.e. Me and you both want to launder coins, so through this mixing service we essentially swap coins. Now my spends get traced to you and vice versa (obviously this works a lot better with more people involved)
  - pavel_lishin 13y ago
    I don't think that severs the connection to you; you are now connected to the service, and so is your friend, and therefore potentially to each other.
deleted 13y ago
[deleted]

legulere 13y ago

To be effective only tiny amounts of the 700k bitcoins would be able to be hidden