Bitcoin Forum

I'm not a conspiracy theorist, but I'm reading about the U.S. senate requesting that the Dept. of Homeland Security "look into this bitcoin thing".  If they aren't already, I'm sure they are going to start putting together a database matching bitcoin addresses with people's real identities.  They almost NEED to in order to comply with the Anti-money laundering legislation that the U.S. has in effect.  Other countries are bound to follow suit.  In the spirit of staving off a whole bunch of secret government surveillance programs, I'm wondering if we should beat them all to the punch.

I'm suggesting that we put together a public, searchable database that cross references people's identities with their bitcoin addresses.  Sort of like a yellow pages for bitcoin.

There will always be bitcoin laundry providers for people that need anonymity, but shouldn't those of us that aren't buying pot from the Dread Pirate Roberts be willing to build a bridge to the inevitable government push towards data collection?  Governments have been collecting information on people's revenue since the dawn of civilization and I think its naive that they won't figure out SOME way to do it with virtual currencies.    I love the idea of tax free income via bitcoin, but I also know that if bitcoins were more easily taxed then governments would be much more likely to start accepting it. 

Should we take a hit on our perceived anonymity for the sake of creating a more viable currency?

just use a new address with each transaction.

Terrible idea.

Usually a shop generates a new adress for every customer to track payments since you don't know the customers sending adress it's impossible to track who payed for their 1BTC shoes and who didn't. This problem could be solved with some technical efford, but as long as everybody can generate a new adress it's pointless since it proves nothing.

On the other hand it is dangerous to have a database for kidnappers to search victims who are capable of anonymous payment of 1000BTC.

Actually I wonder why kidnappers don't use bitcoins yet ...

Apart from the problems pointed out by others, the biggest issue is that this doesn't work.
Bitcoin addresses have plausible deniability. I can trivially prove I control an address. But the reverse is impossible. Therefore the same person who publicly claims to own 1BTC can also own 100BTC in undeclared addresses, and no one can catch him. That makes a "yellow pages" absolutely useless to the government.

I find the idea of a central bitcoin database vile, myself.  I really do.  I'm just looking ahead a year or two and this is where I expect things will be going.  I'll admit that there a lot of people smarter than me on these forums, so I'm happy to be wrong, but creating new addresses for each transaction probably does NOT make you anonymous, especially if you actually use your bitcoins for things that link you to an identity. 

Read http://arxiv.org/pdf/1107.4524v2.pdf for a more detailed explanation on why real anonymity is something you have to work hard at with bitcoins. 

Law enforcement is already using bitcoin addresses to ID drug traffickers and even seizing bitcoins

http://www.dailymail.co.uk/news/article-2357954/First-Bitcoin-bust-Feds-seize-electronic-currency-connection-shadowy-internet-drug-bazaar-Silk-Road.html

Let's throw that case out though, for the sake of argument, and say that the guy arrested just didn't cover his tracks.

If at ANY time in the future, someone or some algorithm does start to connect the dots, then every transaction you've ever made leads back to you (unique addresses or not).  I'm not saying that it finds every address out there you own.  Obviously that's not possible, but it does link income and expenditures to you.  That makes it likely that a government is going to want a piece.  Whether its a piece of 1 BTC or a piece of 100 BTC will depend on how well you isolated yourself.  For a variety of reasons, it makes sense to know what addresses are linked to your ID and which are "undeclared".  No?

Building bridges between the government and existing financial systems absolutely does create a more viable currency.  You SHOULD care if governments accept bitcoins or not because that will have a direct impact on their value and longevity as a storage of wealth. 

I'm assuming the "dogs" in your comment are supposed to be the governments that track revenues for the sake of collecting taxes?  If you currently pay taxes in any way, shape or form you're already "lying down with the dogs" on some level.  Might as well be the top dog if you're there.

We've already seen people targeted for large scale bitcoin thefts.  The information is available to those that have the skills to find it.

However, the danger is not lost on me.  Having everyone's data publicly viewable might do more harm than good.  I personally would still want to see what addresses are linked to me, though.  It's in the same vein as wanting to know what my credit report looks like.

So, the Big Brother(DHS) will run a full node? Good! Maybe they could run a Stratum server along with it, no?

Reminds me of the paranoid "NSA are collecting the whole internet" stuff, I'd be more concerned if there was a viable way for them to use the data at the same rate they can collect it. Until they can turn the data into information at even half the rate at which it's reeled in, we're still winning, unless you try your best to get yourself noticed :D. The money-flow between public keys of every crypto-coin around is never going to be easy to stay on top of, it's a game of cat and mouse that must be a nightmare to these enforcement agencies.

Strong anonymity isn't a lost cause.

At the Bitcoin 2013 Conference, one of the talks I went to was on Zerocoin. Basically, there's a way to construct a "bucket", such that you can put a number in the bucket, and you can prove that a particular number is in the bucket, without anyone being able to deduce, out of all the times that something had gone in, which one was the one that added your number. In other words, you can bolt a trust-free coin mixer directly onto the blockchain. Unfortunately, it's not suitable for inclusion in Bitcoin itself for the moment; aside from problems with the lifetime of the accumulator, the proof necessary to redeem an anonymized bitcoin is something like 40KB long, which is far too much blockchain real estate for a single transaction. But the technology is there, so an optimist would say that it's only a matter of time before it's made practical.

I agree that strong anonymity is valuable, but I disagree that anonymity should be the de-facto standard for how crypto-currencies operate.  We should use it when we need it.  I don't think the creators of the bitcoin protocol ever placed anonymity as a preeminent design goal.  There are lots of methods like what you discussed hearing about at the conference.  (It's AWESOME that you went, by the way.  I'm jealous). 

Maybe I'm wishing here, but I'd like to think that bitcoin will become a viable challenger to credit cards and wire transfers. 

I don't see that kind of mainstream adoption happening though if we can't beat the PR stigma of a "currency used for buying drugs and laundering money".  Doesn't matter if its true or not.  Crossing the chasm between the early adopters and mainstream non-technical users is a battle for public perception.  Don't you think that standing on the cornerstone of anonymity calls our motives into question?

Not a new idea TitanBTC, but a good one nontheless.

Bitcoin is not to be coddled!  Sure, it is still young, more an entity of potential than one of power, but to achieve it's potential it must be prepared for adulthood.  Satoshi knew this when he made the code open source from the outset.  Sure, an attacker might more easily find a critical flaw, but this threat also stirred developers and white hats to harden the code and better prepare for disaster.  ASIC development, regulators/banks attacking exchanges, illegal activity, incompetent/deceptive reporting, hackers, scammers, all of these things are challenging Bitcoin in the short term, and making it more robust.

Of course, we should be careful not to overdo it.  I'm reminded of Satoshi's "No, don't 'bring it on,'" in response to the suggestion that Wikileaks accept Bitcoin as a challenge to it's enemies.  However, the maxim "that which does not kill us makes us stronger" is undoubtedly a theme to Bitcoin's story.

The open development of a public database will make clearer and more real the power that those tracking bitcoins in secret have.  If this project is completely unsuccessful in identifying even casual users and their purchases, then confidence in Bitcoin's often criticized practical anonymity will rise.  If, instead, the project is able to identify many people, even some of those who are relatively careful with their privacy, then great attention and funding will focus on the development of privacy.

The alternative may be a future where the power to track exists but rests only with the rich and powerful.  Is this not the antithesis of Bitcoin's spirit?  Wouldn't both total anonymity and total transparency be superior outcomes to this vulgar anti-symmetry?

TL;DR: Such a database, if open and public, would ultimately bolster bitcoiners' true financial privacy in the long term.

I take your point here.  Nevertheless I think it would not be a good idea to make such data readily available to everyone ... even when I should be aware that, if I don't use bitcoin correctly, someone with sufficient skills can deduce information about my identity and my purchases, I don't think it is a good idea to allow everyone, even my technically unskilled neighbours or the kidnappers cited above, to find that information with a simple web search about me (or something like that).

However, I think that research into ways to analyse the blockchain data and uncover identities is necessary on a public and academic level, so identify possible attacks and give everyone the information necessary to mitigate them in order to protect as good as possible from black hat attackers.  Think of things like the research papers already existing on blockchain analysis or the "taint analysis" function of blockchain.info - and hopefully more advanced results in the future.  Those give me as well as developers of mixing services the power to investigate the available privacy and identify security holes, if I want to.

http://dot-bit.org/Namespace:Identity

It's decentralized. Electrum integration is planned so you can send BTC directly to an id.


To keep anonymity it would be interesting to link to an address generator.

If public, academic research and a small market of privacy enthusiasts provides adequate security, then why should we expect the development of the described database to lead to a public, easy to use, and effective web-search of bitcoiners' personal financial information?

Something like this?

http://blockchain.info/tags

What a terrible idea.

No. Learn more about bitcoin and why this doesn't matter.

No need to track bitcoin transactions. They are archived forever in the block chain, so why would you need to track them?

As long as the public/private key encryption holds up, there will be no way to link different addresses. So just create a new address for each TX.

If for some reason this encryption doesn't hold up, then bitcoin users could be in trouble and their anonymity would be lost. But, that could be a long way in the future.

Of course there is, already now:  By following change coins to new addresses, and when you use more than one input for a transaction.  Using new addresses for every transaction makes it more difficult to uncover your trail, but it is still far from impossible (even without breaking any encryption / ECDSA).  Only mixing or things like zerocoin can help you there.

This is not true.


This is not true either.

Take a look at Bittorrent, that's where we'll be in a couple of years, the U.S will try their best to shut it down and they may get a few sites or companies ( Like they've done with MT.GOX recently ) or they'll try and do the blockade thing that the U.K government is trying to do to stop me from using it but since it's all open source and P2P there will be nothing they can do in the long run to shut it all down. I know it's a bit extreme example but if you for instance get these mad people who would sue you for listening to their music on a radio or looking at a picture of there's on the internet you may as well gouge out their eyes or slice off their ears as punishment because that's the only way you're going to get people to stop doing it and that's because they're trying to punish people for the act of listening or viewing material not actually stealing anything.

That said, these people are that insane they probably would do that if they knew they could get away with it.

Bit-torrent is very nearly a direct comparison. A transfer protocol that gets blocked at the network level by some ISPs irrespective of the content, and yet BBC Television use the Bit-torrent protocol to reduce their bandwidth costs with their streaming/catch up service. The same ISPs won't be blocking the BBC.

Just like the banks, really: big financial corporations can trade in all sorts of financial instruments both dubious and benign, but Bitcoin users can get victimised for sending or receiving from exchanges. One rule for us, another rule for them.

if you're paying taxes and doing it properly, all the gpus, asics and such you buy are tax write-offs.  it's not so bad, esp if you are in a high tax bracket

Do you have any idea how the current banking system modern western society works?

"Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety"
- Benjamin Franklin

Also, this idea is unfeasible when you create new address for each payment.

i agree, this will be a list of people to rob/infect with RAT

So you understand that we are already completely dependent on a network of computers, the availability of electricity etc. and that floods, EMPs and other real world threats on a level that would threaten the Bitcoin network would already cause devastation to society? And therefore building a protocol on top of this to be used as a currency and using it as a store of wealth is not much further a stretch?

I'd like to declare my address as "Green". That's one use for such a database of addresses made public and tied to people. You can be 100% sure that any payment from me to you will not be double-spent; there won't be even an attempt to do so.

However, I still recommend you wait for at least 1 confirmation.

Instead of a yellow pages of bitcoin address, I propose a "green pages". How green an address is is left up to the trust and reputation of the owner of that address.

The other problem with this are the following two reasons:
1. I can prove I control an address. I just sign a message or send some coins.
2. I can prove I no longer solely control an address. All I have to do is publish the private key. (Of course, I'd never use that address again.)
3. No one can prove I am linked to any other address, even the one I just sent to. I just claim, I don't have to the private key to that one, or it's not mine.

Fuck reputation, put some cash on the table if this shouldn't end like the "trust-system" here.

A group of (really really) trustworty people handle some funds for all green adresses. If you want to get on the list that is good for 100BTC you have to pay a insurance premium to that group and they would have to pay any double spends. Giving them the 2nd key to your wallet and that premium would be very small.

I'm sorry for whatever I said that directed such a torrent of hateful assumptions towards me.  You must have really been hurt by people that invaded your privacy or took something that was important to you.  I feel your pain, as its happened to me too.  I assure you that I'm merely a pragmatist with no "significant" mental deficiencies that I'm aware of. 

I WILL be honest with you though...Getting rich quick does sound nice.  Getting rich slow would be fine too, am I right?

Being fine with government involvement is quite different than acknowledging that government involvement is inevitable.  We, the torch bearers for this new form of currency, have a choice at the current state of things.  We can either:

1.) Play with our toys in the corner with big brother secretly looking over our shoulders with "dark intentions", or we can

2.) Shake hands with the "enemy" out in the open and create cooperation between bitcoin supporters and goverment entities on mutually beneficial terms. 


I'm simply in favor of the latter, and I don't mind if you disagree with me.

Brilliant.  I couldn't have said it better myself. 

Bravo.

In order for bitcoin to be useable as currency it has to be able to store wealth or nobody would accept them is exchange for something of value. The current market cap is tenfolds to small to handle even all transactions of a bigger town so it's nessasary for some people to put their wealth in it (and some to make some serious money).

You seem to want crypto to get used AND nobody to profit from it that just risked their wealth. One isn't possible without the other.

We already have a viable currency. What we lack is respectful government. There is no need to modify bitcoin so that governments can infringe on people's rights. If having government intrusion has value then the government can launch their own cryptocurrency and see how many people they can force to use it. We don't need to help them.

You had an interesting idea about getting there first as perhaps a way to strengthen anonymity, but understand that an unjust government will take what they want once you've done the work for them.

That would only work for people who have 100 BTC, and that means either big sites or big online wallets or big exchanges. For everyone else, or for those who don't need the speed, stick to waiting for at least 1 confirmation, since that is free. Or use a wallet like inputs.io where transfers are considered instant (and accepted by at least 1 dice site) if you are impatient.

That wouldn't have to be a big fee, so this could be done as adertisment and quality improvement. There are more ways to screw a customer and a insurance gives an improvement for both. With the insurance group holding a 2nd key of that adress or an other form collateral that fee would be in the area of transaction fee.

Back to topic:
The better way would be if those group of trustworthy handle the proposed "green adresses". They have the 2nd key and the right to freze funds when some basic rules are broken. They know the names of the adresses and are willing (or more realistic forced) to cooperate with gov. This makes BTC no different than bank wires and kills the argument about bitcoin tax avasion.

It's an illusion that BTC stays so unregulated for ever.

I very rarely post in actual BTC forums and mention eMunie, but as someone has piped up with Zerocoin earlier, I thought I would chip in.

For you that dont know, eMunie is NOT a BTC fork.  We started the code from scratch, with a different ideal on how a digital currency could build on BTC strengths and mitigate some of the weaknesses.

eMunie manages both in a lot of area's but the interesting one here is the anonymity.

Very briefly, in our protocol, all transaction data are encrypted with the receivers public key (which can only be decrypted with the private key), signatures are created using a throwaway key pair.  A secret is created which is passed to the receiver in the encrypted data packet for them.  This allows them the verify the senders signature, and also provides the proof required that any particular transaction is owned by who claims it as only the receiver can decrypt that information.

The sender and receiver addresses are never publicly available in the block tree (we use a tree, not a single chain), thus the only parties that know that transaction occurred are the sender and receiver.  Yet with the throw away sig pair, and the generated secret, future spends can be verified without needing to know who sent what to where.

Transaction sizes are marginally larger than a BTC transaction (about 30% or 1.5k on average) as opposed to 30-40kb for Zerocoin.

We believe our protocol is the most secure and anonymous transaction protocol available today with current technology, while still keeping performance high, and storage requirements acceptable.

If you'd like more info on the protocol or anything else to do with the above, feel free to PM me :)

Its really quite simple - if you have money in the bank, then you are already dependent on 'fucking network of computers that requires electricity to even run'. That shouldn't be too difficult to understand.

Now if you fully expect some sort of apocalyptic mass flooding/asteroid strike/nuclear holocaust etc. to occur any time soon, don't keep your money in the bank, and certainly don't keep any in Bitcoin. Buy gold, silver, tinned food, weapons, ammo, go build a bunker in the woods and start preparing to ride it out.

I think he is trying to tell you that the world economy relies on computers, and would be affected by an EMP attack, just like Bitcoin. He is not saying it is a good idea to store all your money in BTC.