Lmfao. They wrote an article including statistics regarding coinjoins. You misquoted those statistics as applying to mixers. Your response is "go cry to them". For what? Not writing the article you thought they wrote? If you order wine and the waiter brings you a beer, do you complain to the brewery for not making wine?

Wrong again. I've got some coins in a ChipMixer voucher which have probably been there for over 6 months. I might withdraw them today, I might withdraw them in another 6 months. Good luck grouping that in to one of your mythical "sessions times".

Again, not even close to being true, but even if it was, it doesn't matter. I don't care if you can identify an output as coming from a mixer or coming from a coinjoin, and these tools were never designed to hide this fact (although I realize now you don't understand how these tools work or the threats they protect against). The fact is you cannot link these output to an input, which is the whole point in the first place.

Even if that were true, your logic is that it is best to let them collect all the data they can about you because then they hopefully won't actually look at it, whereas if you obfuscate your transaction and protect your privacy by using mixers then they might actually look at... the data they don't have about you?

You have absolutely no idea how mixers work, do you?

Yeah, that's not how mixers work, like at all.

You are citing stats related to coinjoins, not mixers, although it is becoming increasingly obvious you do not understand the difference or indeed the first thing whatsoever about on-chain privacy.

Lol. You are really scrapping the bottom of the barrel here. This is such a stupid statement, even for you, that it does not even warrant a response.

The correct response to an exchange such as Binance deciding that some bitcoin is somehow "unclean" and not good enough for them is not for you to bend over backwards and completely compromise your own privacy in order to only use coins which Binance deem acceptable; it is to stop using Binance! If other customers of your bank were depositing cash in to their accounts and your bank was then seizing not only that cash but all the money in all their accounts and leaving them financially screwed, would you keep using that bank or would you find another one which didn't do this?

I have traded exclusively peer to peer for the entire time I have used bitcoin. I extensively mix, coinjoin, swap to Monero, and otherwise obfuscate my coins. I have literally never once encountered a problem with taint or dirty coins because I do not use any centralized exchange or service which buys in to such nonsense and perpetuates this attack on the fundamentals of bitcoin.

Obviously centralized services are sending huge amounts of data to blockchain analysis companies, or in some cases (such as Coinbase) actually running their own blockchain analysis subsidiaries and linking in to all the information they gather from their exchange and the other products and services they offer. Which is part of the reason I have never used such a service and why I am consistently vocal about not using these services, never completing KYC anywhere, using decentralized exchanges to trade peer-to-peer, and mixing or otherwise obfuscating your transaction history. And yes, if all these centralized services stopped spying on you and sharing your data then it would go some way to gaining back a bit of privacy.

But collecting data from centralized exchanges is far from the only method these blockchain analysis companies use. Just because I avoid such exchanges does not make me instantly immune to surveillance. They do everything from dust attacks to running SPV servers, and use blockchain analysis to link it all together. So no, while you keep bleating the same nonsense about how your name isn't stored on the blockchain and it is all the centralized services' fault, it is trivial for anyone (except you, apparently) to see how these firms use the blockchain to link all your data and all your transactions together.

If you don't want that to happen, then you either need to obfuscate your coins or be like franky1 and trust completely in governments around the world always having your best interests at heart and only spying on you for your own good.

I'm probably the wrong person to answer here since I would never actually use either centralized platform, but putting that aside for a minute then I'm choosing Exchange 1.

If I use a centralized exchange or platform to hold my bitcoin, issue me a card, and convert my bitcoin on the fly so I can use my card to pay in fiat, then I know that:

• 1) I am entirely dependent on that platform for the security of all my coins, and if the platform goes bankrupt, scams, makes bad loans, has questionable employees, etc., then I will lose all my coins
• 2) I will have to complete KYC and therefore I am trusting that platform not to leak or sell my information
• 3) I will have absolutely zero financial privacy from that platform

Given that that is the starting point of using any such platform, then I would obviously choose the one which had passed the more stringent checks and obtained the more strict licenses. No point giving up all the benefits of decentralization and yet receiving none of the benefits of fiat bank regulation/insurance/etc. Just look at how that turned out for Celsius, Voyager, and others.

Absolutely, but this is how blockchain analysis and various heuristics work. It is all based on guesswork. Educated guesswork, sure, but guesswork nonetheless.

If you have a single input of 0.00539711 and you make a transaction with the outputs of 0.00523869 and 0.000127, with 142 sats in fees, then it is going to be more likely that the 0.000127 is the payment, rather than the alternative being that you just happened to end up with an exact round number in change, and so this is what blockchain analysis will work with.

At a minimum it should be users who are eligible to vote for DT1 members as well - i.e. the merit and rank requirements. If you let all users vote them it becomes trivial to manipulate.

Would that make much difference, though? Are there many users on DT1 who are not excluded by other DT1 users but are excluded by lots of non-DT users? And it does nothing to solve the fact that DT2 is an absolute mess.

I obviously can't speak for every country, but most (all?) states in the US can charge you with theft if you find and keep a significant amount of cash or anything of value and make no attempt to return it to the true owner or hand it over to law enforcement. This has never been tested against finding a paper wallet as far as I am aware, but I would suspect it would be a similar situation given that a paper wallet is obviously valuable. However, a paper wallet here is unique in that the contents could be stolen by anyone who sees the wallet at a later time and without leaving a trace, which will generally not be possible with cash which is handed over.

I still think the best thing for OP to do is simply post the address so the true owner can try to find him. For all we know they are hunting frantically for any mention of this address online.

Not much.

The whole point is that it makes your change the same precision as your payment. So, for example, if you were to make a 1-input-2-output transaction, with one output being 0.00012700 BTC and the other output being 0.00523869 BTC, then it is fairly obvious that the latter is most likely the change output. With output rounding enabled, it would turn those two outputs in to 0.00012700 BTC and 0.00523800 BTC, which might make it somewhat less obvious which one is change. However, you still have to consider other things which will reveal which one is the change output, such as matching the address type of the input, or if you later combine that change output with other outputs.

If you really want to confuse this change identification heuristic, then there are better ways of doing it manually, such as splitting your change across multiple outputs, deliberately sending the change to a different address type from your inputs, and so on. The best way altogether is to avoid creating change outputs at all, if possible.

So for the casual user it might provide a very small privacy improvement, but if you are serious about privacy then there are far better things you can do yourself.

There you go simping for the government again. If the government doesn't like it, it must be shady, right? You are absolutely sure your government would never look down on something you support? They are on the right side of history 100% of the time? You said you live in the UK, right? So the same UK government that is trying to abolish the Human Rights Act? Or like the Canadian government which froze the bank accounts of people donating to a political cause they didn't like? Or like all the innocent Russian citizens with frozen assets because their government are warmongers? Or the US Supreme Court which is stripping away woman's rights?

Nothing to fear, nothing to hide is your motto. So you decry privacy and open yourself up to complete surveillance in the hope they the government won't bother you too much. You'll end up leading a life so meek that you'll never dare to step out of line from what your almighty and benevolent government have deemed acceptable behavior. Just be careful you don't commit any thoughtcrime!

Right, because the NSA's only source of information is the SEC. There definitely aren't any other government agencies buying blockchain analysis services:

https://www.usaspending.gov/keyword_search/chainalysis
https://www.usaspending.gov/keyword_search/ciphertrace
https://www.usaspending.gov/keyword_search/coinbase
https://www.usaspending.gov/keyword_search/elliptic

I see the Fiscal Service, CFTC, CFPB, DOS, DEA, FBI, IRS, Justice Department, SEC, TSA, ICE, Secret Service, Department of the Interior, even the Air Force and Army. All these departments are using blockchain analysis. And that's just the US government. But yes, tell us more about the government definitely isn't spying on its citizens because you say so.

And I assume that Chainalysis just magically know which transactions are being sent to privacy tools without using any kind of blockchain surveillance?

Social recovery is used if you have lost both your phone with the Block app installed and your hardware wallet. So you would be emailing Block or filling in an online support form with details such as your name, address, or whatever else you handed over to Block when you first set up your account, or perhaps some of your bitcoin addresses so they can identify your account. It stands to reason that one of your trusted contacts, if they were conspiring with your other trusted contacts to steal your money, would be able to spoof this information without a huge amount of trouble. I don't think that presents any real barrier over your own multi-sig set up.

I accept those points, but I guess this goes back to what we discussed just the other week here: https://bitcointalk.org/index.php?topic=5407473.msg60661465#msg60661465

We are not the target audience for web wallets like blockchain.com, but we still discuss it and we still warn newbies (who are the target audience) just what a terrible idea it is to use such a wallet. And while I am not the target audience for this Block wallet, that doesn't mean I shouldn't discuss all the security and privacy vulnerabilities they are introducing with their recovery methods, especially since they themselves seem to be glossing over all these disadvantages and presenting their set up as some sort of new gold standard.

And they use the blockchain to connect the dots. This is not a difficult concept to understand, so I assume you are deliberately choosing to not understand it. Go and take some coins from your Coinbase account and send them directly to anywhere the government doesn't like (darknet market? foreign power?) without using a mixer and see just how fast the authorities, powered by blockchain analysis, knock on your door.

Right, because the NSA publish all their statistics on Google. Did you miss everything since Snowden?

And in your fantasy land, how exactly do customers get singled out for a "red flag" if they are not surveilling everyone by default? Maybe the customers email Coinbase and tell them they are going to mix their coins? Or maybe Coinbase just magically know?

I think the most likely thing here is simply that after entering those 6 words, you may very well end up on a page asking you for the other 6. The switched up order is probably just a poor attempt to make it seem more "official" and less scammy.

Brute forcing 6 words, while theoretically possible, would require a huge amount of computing power and cost. Here is an example of someone who managed to brute force 4 words in 30 hours by spending $350 renting GPUs. His benchmark was 143,000 seed phrases per second, which is very similar to the 134,000 seed phrases per second btcrecover says it can manage on some modest hardware: https://btcrecover.readthedocs.io/en/latest/GPU_Acceleration/

To brute force 6 words using these numbers, you would need to multiply those numbers by 2048². However, they ask for the 12th checksum word, so that would reduce the computational requirements as you could reject 15/16 seed phrases for failing the checksum and not have to turn the seed phrase in to an address to check for balance, which is the computational expensive part of the process. Even so, some very rough calculations puts that at ~$100 million over 900 years, or a far higher cost to rent better/more hardware and do that in anything approaching a reasonable time frame. So unless they know for a fact your Exodus wallet is holding hundreds of thousands of bitcoin, then only an idiot would attempt it.

So if anyone has given out 6 of their words to this scam, then the good news is your coins are probably not about to be stolen provided you have never and will never reveal any of your other words. You should still set up a new wallet and seed phrase and move everything across, though.

I appreciate your points, but here's the thing - the keys aren't fully theirs. One is stored by Block. One is stored in the cloud. One can be accessed by your trusted contacts. There are a lot of additional attack vectors here beyond a classic hardware wallet and a seed phrase back up.

Then set up your own multi-sig and give the seed phrase/xpub back ups to your trusted contacts yourself. Absolutely no need to involve a centralized third party with all the trust, security, and privacy implications.

Newsflash: You are already on multiple watchlists. You are already being surveilled by at least a dozen different blockchain analysis companies who sell their data and technology to governments and three letter agencies around the world. All your transactions are already being tracked, analyzed, deanonymized, and linked to all the other data you have shared and left behind every time you do anything online. If you think that you should avoid mixers so as not to draw the attention of the government and their agencies, then by that logic you also shouldn't use bitcoin at all.

Yeah, it's definitely the mixers. It definitely isn't the centralized exchanges like Coinbase which are reporting tens of thousands of their users to the government. It definitely isn't BitPay which demands KYC from all merchants and all buyers, and passes that information to the government. It definitely isn't blockchain analysis firms which are taking contracts from the FBI, CIA, IRS, DEA, SEC, CBP, CFTC, and more. No, it is definitely the mixers which are the problem here.

They don't need to. They just spend millions of dollars buying the services of Chainalysis and other analysis companies.

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You wouldn't. franky1 is of the opinion that only criminals need privacy. If you have nothing to hide, then you have nothing to fear in his eyes, which is of course an utterly moronic statement to make. Don't do anything to have any sort of privacy whatsoever because otherwise you will end up on a watchlist. Far better to simply let the government keep a close eye on every transaction you make, everything you buy, every satoshi you purchase or earn, every website you visit, every email you send, every phone call you make, everywhere you go, everything you do, everything you say, everything you think. Only then will you truly be free.

Latest update: https://wallet.build/losing-your-keys-without-losing-your-coins/

In summary:

• If you lose your phone, you can recover the app and its associated private key from a cloud back up. Because we all know how legendarily secure cloud back ups are.
• If you lose your hardware device, you can sweep all your coins to a new multi-sig set up after a delay. Better hope you see the app notification warning so you can cancel the transaction if someone else requests the sweep!
• If you lose both, you can use social recovery if you set it up in advance. Block will email some trusted contacts who will then be required to confirm it is you who is making the request. You can then use the server key plus your cloud back up to access your coins. This becomes a massive attack/phishing vector as well as relying on a whole bunch of unknowns, such as trusted contacts remaining trusted, continuing to have access to email accounts, not forgetting passwords, email clients not shutting down or locking them out of accounts, etc.

The blog post goes to great lengths to explain how bad seed phrases are. It also gives three scenarios in which the above three recovery methods would be necessary. In all three of those scenarios (lost your phone, lost your hardware, your house burned down), a seed phrase back up secured off site would solve all your problems immediately without having to rely on cloud servers, trusted contacts, delayed sweeps, etc., and all the attack vectors and points of failure that these things introduce.

It also seems quite concerning that if you don't set up social recovery, then you actually have no way of recovering your wallet.

No, your client would simply return an error if the main server you were connected to was rejecting your transaction. And the fee must have been bumped before you signed it and tried to send it to the server in question, so there would be no opportunity for the server to learn of your low fee and bump it prior to this. Electrum will quite happily let you create and sign a transaction with a fee below 1 sat/vbyte, simply showing you warning that you are below the default relay fee.

What is more likely is that you have output value rounding enabled under Tools -> Preferences as Cricktor has said above, which resulted in your change output(s) being slightly reduced to match the precision of your other output(s), with the extra few sats being added to your fee.

I would argue that this is not a benefit at all, and indeed, an active disadvantage. Often the people who have the most desire to become DT1 are the people least appropriate for the role, and their motivation to become DT1 is to allow them to game the system, retaliate, boost their friends, etc.

If the only option is to include or exclude, then I would wager that most users would simply exclude everyone not already on their list by default, resulting in mass net exclusions for everyone. If I've not added someone to my trust list already in the last several years, then simply forcing me to pick include or exclude isn't going to change that fact and make me suddenly start including them.

Exactly. You will end up with every DT1 user distrusting >50% of other DT1 users, which would (under the current exclusion rules) result in nobody being on DT1.

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I still strongly support raising the threshold for DT2 inclusion as you mention at the start of your post, though.

Thought I was in a historical thread for a second there. We discussed almost this exact thing a few months ago, when Swan leaked tons of data via Hubspot as you mentioned above, including USD deposits and investment ranges: https://bitcointalk.org/index.php?topic=5390530.msg59672479#msg59672479

Let's take a quick look back at what they said at the time: https://nitter.net/SwanBitcoin/status/1506355008127877123

They claimed to have performed a full audit of all third parties, removed all sensitive information from third party servers, and their new Chief Information Security Officer was supposed to lead a review of their data security set up and procedures. Guess they didn't actually do any of that, since this is essentially the exact same scenario again just a few months later.

This is the contempt with which centralized platforms treat their customers. Leak your data, say they will make sure it never happens again, do nothing, leak your data again. Rinse and repeat.

Another possibility would be that since they are most likely operating a fractional reserve system like every other lending platform with a very small amount of funds actually in reserve, that although the authorities have only frozen some of their funds that this represents a large proportion of the funds they actually have access to in their own wallets and therefore pushed them in to liquidity issues.

They are stating on Twitter that all funds are safe (how many times have we heard that?) and they expect the freeze to "not be too long" (whatever that means).

Hopefully no one actually loses their money here, but damn, how are people still trusting these platforms given what has happened over the last few weeks/months?