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Author Topic: Bitcoin will not help Organized Crime  (Read 2542 times)
epi 1:10,000
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May 28, 2011, 09:43:00 PM
 #1

I am somewhat worried by the tone of those on this forum who actively tout the value of bitcoin in criminally unethical enterprises.  As bitcoin becomes more popular the vast majority of its new adopters aren't necessarily going to tow the Voluntarism line.  I for example love the liberty affords people under a libertarian philosophy but when I factor in certain pragmatic realities I can't help but temper that with modern Ralwsian Liberalism or risk invalidating those liberties with irrationally musturbatory categoricalism.  The great redeeming trait of humanity is we strive for what is good and just, and its is only our correct or incorrect perception of reality that can get in the way.

IMHO Bitcoin is not vehicle for money laundering or illicit trades.  It is no where nere as anonymous and free from government regulation as touted in the sensationalist media. Because of the database is public you don't need a warrant to analyze transactions.  With modern financial and data forensic techniques bitcoin makes it easier to piece together illicit transactions as long as prosecuters due their due diligence with normal investigative techniques.  Money laundering is significantly hindered due to the fact that the largest reputable exchangers play by the SAR, KYC, and U.S. Patriot Act regulation laws thus the $1000 limit on withdraws per day.  Unfortunately this hinders adoption of bitcoin my large internet merchants because they cannot easily convert their bitcoins to cash on the high volume exchanges and to be able to due so the exchanges will have to follow U.S. Laws or risk getting shut down.  If you think a large volume Internet business can circumvent these laws by using bitcoin in its current legal state I fear you may be greatly disappointed.  For this wonderful bitcoin experiment to succeed the bitcoin community is going to actively lobby for favorable legislation or fade into obscurity.

Edit: It has come to my attention that the $1000 withdraw limit and the other compliance efforts used by some exchanges may not be enough to comply w/ U.S. law.  I certianly hope exchanges continual strive to do their due diligence to thwart criminal activity.
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May 28, 2011, 09:48:47 PM
 #2

I am somewhat worried by the tone of those on this forum who actively tout the value of bitcoin in criminally unethical enterprises.  As bitcoin becomes more popular the vast majority of its new adopters aren't necessarily going to tow the Voluntarism line.  I for example love the liberty affords people under a libertarian philosophy but when I factor in certain pragmatic realities I can't help but temper that with modern Ralwsian Liberalism or risk invalidating those liberties with irrationally musturbatory categoricalism.  The great redeeming trait of humanity is we strive for what is good and just, and its is only our correct or incorrect perception of reality that can get in the way.

IMHO Bitcoin is not vehicle for money laundering or illicit trades.  It is no where nere as anonymous and free from government regulation as touted in the sensationalist media. Because of the database is public you don't need a warrant to analyze transactions.  With modern financial and data forensic techniques bitcoin makes it easier to peace together illicit transactions as long as prosecuters due their due diligence with normal investigative techniques.  Money laundering is significantly hindered due to the fact that the largest reputable exchangers play by the SAR, KYC, and U.S. Patriot Act regulation laws thus the $1000 limit on withdraws per day.  Unfortunately this hinders adaption of bitcoin my large internet merchants because they cannot easily convert their bitcoins to cash on the high volume exchanges and to be able to due so the exchanges will have to follow U.S. Laws or risk getting shut down.  If you think a large volume Internet business can circumvent these laws by using bitcoin in its current legal state I fear you may be greatly disappointed.  For this wonderful bitcoin experiment to succeed the bitcoin community is going to actively lobby for favorable legislation or fade into obscurity.

I have no idea what "musturbatory categoricalism" is - dictionary-wise, that's way over my head... oh but by the way, you can't "peace" together transactions, you might mean "piece".

No one really knows for sure how the story of Bitcoin is going to turn out.  Maybe you will be right, or maybe you won't.  It will be enjoyable to see either way.

Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable.  I never believe them.  If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins.  I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion.  Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice.  Don't keep coins online. Use paper wallets instead.
epi 1:10,000
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May 28, 2011, 09:54:10 PM
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I have no idea what "musturbatory categoricalism" is - dictionary-wise, that's way over my head... but by the way, you can't "peace" together transactions, you might mean "piece".

No one really knows for sure how this is going to turn out.  Maybe you will be right, or maybe you won't.  It will be enjoyable to see either way.

The uncertainty is what helps make this experiment exciting. Fortunately I believe in mans extraordinary ability to adapt and there built in motivation for justice, therefor I am optimistic. Thanks for the grammatical correction.

http://www.urbandictionary.com/define.php?term=musterbation

http://en.wikipedia.org/wiki/Categorical_imperative
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May 28, 2011, 10:04:47 PM
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Well, you're right that Bitcoin is being somewhat misrepresented by the new media so far, but it is very complex so we have to give them a bit of slack in this regard.

As for your "criminal unethical" comment...  We libertarians aren't criminals, nor do we suffer criminals in our midst.  We have a very tightly defined interpretation of "criminal" and most of what statists would call criminal is nothing of the sort.  We have a broader interpretation of ethics than the general public as well.  Before you go and insult those whom you know not, take a little time to try and understand us.

To give you an example,

To a libertarian, prostitution is not criminal and should not be treated as such.  It's a business agreement between consenting adults.  There is no victim.  It can be unethical, however, as I don't know a single libertarian that would wish such a profession upon their own daughters.  But it is better than starvation or incarceration.

If there is no victim, there is no crime.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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May 28, 2011, 10:09:38 PM
 #5

Bitcoin succeeding has nothing to do with being able to make large volume cash transactions.  I'm not sure what the rest of your point was.

Civil Liberty Through Complex Mathematics
epi 1:10,000
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May 28, 2011, 10:19:55 PM
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I am not saying libertarianism, prostitution, recreational drugs, ect. is unethical; I am just saying laws that protect peoples liberties, sustain human life and enable the pursuit of happiness for all, is good. Under such circumstances one can justify the collection of taxes and reasonable people can debate on what is just or unjust taxation. But such laws must be based on our constantly expanding understanding of reality. Base not our understanding on ancient superstitions and delusional principles but on what we have learned from modern science and reason. Buy the way if a substance can take away your ability to reason and elicite schizophrenic/psychotic behavior it is perfectly reasonable to regulate it as it is reasonable to assume that people who take that substance will infringe on other peoples liberties.  Case study --> Methanphetamine   Maharaja on the other hand not so dangerous.
epi 1:10,000
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May 28, 2011, 10:24:40 PM
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Bitcoin succeeding has nothing to do with being able to make large volume cash transactions.  I'm not sure what the rest of your point was.

Indeed if bitcoin were to only succeed for small volume transactions it would be a wonderful success but I would think larger adoptions would help change how people see the practices of the modern banking systems.  Or at least be a force to lower barriers to entry into markets and there by play to humanities strengths.
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May 28, 2011, 10:26:18 PM
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To a libertarian, prostitution is not criminal and should not be treated as such.  It's a business agreement between consenting adults.  There is no victim.  It can be unethical, however, as I don't know a single libertarian that would wish such a profession upon their own daughters.  But it is better than starvation or incarceration.

This doesn't follow.  Few people want their children to grow up to be toilet cleaners either, but there is nothing unethical about janitorial work.

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May 28, 2011, 10:41:22 PM
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To a libertarian, prostitution is not criminal and should not be treated as such.  It's a business agreement between consenting adults.  There is no victim.  It can be unethical, however, as I don't know a single libertarian that would wish such a profession upon their own daughters.  But it is better than starvation or incarceration.

This doesn't follow.  Few people want their children to grow up to be toilet cleaners either, but there is nothing unethical about janitorial work.



I said it "can" be unethical.  Depends on the culture.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
smooth
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May 28, 2011, 10:46:19 PM
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To a libertarian, prostitution is not criminal and should not be treated as such.  It's a business agreement between consenting adults.  There is no victim.  It can be unethical, however, as I don't know a single libertarian that would wish such a profession upon their own daughters.  But it is better than starvation or incarceration.

This doesn't follow.  Few people want their children to grow up to be toilet cleaners either, but there is nothing unethical about janitorial work.



I said it "can" be unethical.  Depends on the culture.

Well sure, but that doesn't follow from your statement that few libertarians would want their daughters to do it.

Though I'm not really sure that it could be "unethical" to a libertarian.  As you say it is a business agreement between consenting adults.  How can that be unethical under libertarian ethics?

epi 1:10,000
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May 28, 2011, 10:46:53 PM
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To a libertarian, prostitution is not criminal and should not be treated as such.  It's a business agreement between consenting adults.  There is no victim.  It can be unethical, however, as I don't know a single libertarian that would wish such a profession upon their own daughters.  But it is better than starvation or incarceration.

This doesn't follow.  Few people want their children to grow up to be toilet cleaners either, but there is nothing unethical about janitorial work.



I said it "can" be unethical.  Depends on the culture.

A culture dedicated to truth and reason has a more solid grasp of ethics.  That is to say inflexible and excessively categorical philosophy such as the Taliban's or Shaker's lead to a system that is unjust and divergent from reality.  Regional ethics most certainly do rely on local culture but I believe it is an acceptable premise to say that some cultural practices can be detrimental to rational ethical behavior. And no, I don't think it is rational to always behave in ones own self interest.
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May 28, 2011, 10:56:02 PM
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To a libertarian, prostitution is not criminal and should not be treated as such.  It's a business agreement between consenting adults.  There is no victim.  It can be unethical, however, as I don't know a single libertarian that would wish such a profession upon their own daughters.  But it is better than starvation or incarceration.

This doesn't follow.  Few people want their children to grow up to be toilet cleaners either, but there is nothing unethical about janitorial work.



I said it "can" be unethical.  Depends on the culture.

A culture dedicated to truth and reason has a more solid grasp of ethics.  That is to say inflexible and excessively categorical philosophy such as the Taliban's or Shaker's lead to a system that is unjust and divergent from reality.

Everyone is still very much culture dependent.  For example, if you accept that the prostitute in question is legit, assuming that she is an adult and acting of her own free will (setting aside the crap about needing to eat, since that is not the john's fault to begin with)  What if she is 15 years old?  At what age is she actually an adult who can decide for herself?  At 13, as in old tribal cultures?  At the various ages of consent established by laws of various juristictions?  Or not before 18?  What if she is 22, but is mentally impaired enough that no rational person could conclude that she was capable of consent?

If she is an adult at 15, is the john still a pedafile?

Can you see why I say that ethics is culture dependent, and not entirely an objective determination?

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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May 28, 2011, 11:00:50 PM
 #13

While the underlying protocol is not anonymous, there are mechanisms to acquire anonymity.  Have you heard of the Bitcoin mixer yet?
The mixing service has a large pool of Bitcoins.  If you wish to clean your coins, you transfer a number of Bitcoins into the mixer pool.  The mixer then transfers the same number of coins (different coins from the ones which you transferred in) from the pool into a different address which you control.  The transfer is split up into multiple transactions with random values, and the timing is randomized to avoid tracking.  Assuming the mixer is not keeping logs, there is no way to connect the original address with the new address.  I believe there is already a service like this setup on TOR.

Lets assume the Bitcoin economy grows large enough where holding $1,000,000 worth of Bitcoin is useful (the exchanges are liquid enough or you can purchase enough goods with it).  If this is true, it will be a great boon to money launderers.
The most obvious advantage is the ability to anonymously transfer millions across the world, instantly.

It will help in other aspects as well.  People with a large illicit income must find a way to bring that money back into public circulation.  They want to purchase things like houses and cars.  To do this, they need to show this money legally flowing into their possession.  A common tactic is to own a cash friendly business such as a bar or restaurant.  There is no way for the government to track how much cash is spent at a bar.  So the owner can pad the nightly receipts, turning illegal money into legal profits.

Wide acceptance of Bitcoin will allow many more businesses to become money laundering fronts.  For example, an eBook publishing company that accepts Bitcoin.  There is no way to track how many eBooks were actually sold.  Nothing physical is shipped.  Many customers will be international and outside of the owners jurisdiction...  The owner could claim any amount of income they desire.
Hell, just a blog with a donation button would work.

You mention that the exchanges will be a choke point, but this will only be temporary.  As you said yourself, this must change for large players to adopt Bitcoin.

It would be nice if Bitcoin was not associated with illegal activities, but the truth is that Bitcoin is (and will always be) used for this purpose.  We must succeed in spite of this fact.
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May 28, 2011, 11:02:59 PM
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Assuming the mixer is not keeping logs

And you know this because?

There may be better ways to build anonymity on top of Bitcoin but this one isn't great.

epi 1:10,000
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May 28, 2011, 11:10:41 PM
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Everyone is still very much culture dependent.  For example, if you accept that the prostitute in question is legit, assuming that she is an adult and acting of her own free will (setting aside the crap about needing to eat, since that is not the john's fault to begin with)  What if she is 15 years old?  At what age is she actually an adult who can decide for herself?  At 13, as in old tribal cultures?  At the various ages of consent established by laws of various juristictions?  Or not before 18?  What if she is 22, but is mentally impaired enough that no rational person could conclude that she was capable of consent?

If she is an adult at 15, is the john still a pedafile?

Can you see why I say that ethics is culture dependent, and not entirely an objective determination?

I am not saying it is strictly objective, I am just saying ethics predicated only on cultural norms can be judged to be more or less just based on the acceptability of their founding premises, principals, ect.  Say a culture might classify 14 year olds as sexual predators for the rest of there life for sexting a picture of there body to another 14 year old, but is this just? Should we criminalize such human behavior, (Sex, Drugs,and Rock and Roll) that is so ingrained in the human mind based solely on the religions objections of the majority?  And if so what is a just punishment?

oillio nice post! Can anyone think of a way the bitcoin community could reduce its exploitation by criminal organizations that participate in human trafficking, murder, suppression of human rights, ect.?
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May 28, 2011, 11:13:39 PM
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Assuming the mixer is not keeping logs

And you know this because?

There may be better ways to build anonymity on top of Bitcoin but this one isn't great.



You use 5 different mixing services from around the world.  The chances are good that at least one of them cannot be compromised by the entity trying to track you.  The point is that anonymity is achievable.
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May 29, 2011, 12:28:07 AM
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Everyone is still very much culture dependent.  For example, if you accept that the prostitute in question is legit, assuming that she is an adult and acting of her own free will (setting aside the crap about needing to eat, since that is not the john's fault to begin with)  What if she is 15 years old?  At what age is she actually an adult who can decide for herself?  At 13, as in old tribal cultures?  At the various ages of consent established by laws of various juristictions?  Or not before 18?  What if she is 22, but is mentally impaired enough that no rational person could conclude that she was capable of consent?

If she is an adult at 15, is the john still a pedafile?

Can you see why I say that ethics is culture dependent, and not entirely an objective determination?

I am not saying it is strictly objective, I am just saying ethics predicated only on cultural norms can be judged to be more or less just based on the acceptability of their founding premises, principals, ect.  Say a culture might classify 14 year olds as sexual predators for the rest of there life for sexting a picture of there body to another 14 year old, but is this just? Should we criminalize such human behavior, (Sex, Drugs,and Rock and Roll) that is so ingrained in the human mind based solely on the religions objections of the majority?  And if so what is a just punishment?

oillio nice post! Can anyone think of a way the bitcoin community could reduce its exploitation by criminal organizations that participate in human trafficking, murder, suppression of human rights, ect.?
Can anyone think of a way the physics community can reduce the exploitation of nuclear power by criminal organizations? No, because technology can't be uninvented. The peer-to-peer cyptocurrency protocol will survive and grow even if the current bitcoin project fails. Criminals will use this tech because this tech is so very useful to criminals, even in the criminal organizations we call "governments".

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epi 1:10,000
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May 29, 2011, 12:35:10 AM
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Can anyone think of a way the physics community can reduce the exploitation of nuclear power by criminal organizations?

Yes I can, STUXNET.  Anonymous has used cyber attacks to hurt players it finds unjust, the question is there a way to do this ethically? Centralized mixing services could be attacked in such a way.
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May 29, 2011, 12:52:42 AM
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Can anyone think of a way the physics community can reduce the exploitation of nuclear power by criminal organizations?

Yes I can, STUXNET.  Anonymous has used cyber attacks to hurt players it finds unjust, the question is there a way to do this ethically? Centralized mixing services could be attacked in such a way.

Hurting players one finds unjust is not the same thing as preventing the proliferation of technology. You can thwart individual attempts, but information has a way of getting out.  To paraphrase Ben Frankin: three physicists (or cryptologists) can keep a secret if two of them are dead.

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