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Author Topic: Is bitcoin just for criminals and terrorists?  (Read 9426 times)
MoonShadow
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June 02, 2011, 12:07:44 AM
 #21


Your local wallet's addresses can be explored on http://blockexplorer.com/ just type one of the addresses you recently sent coins to in the box and click on the addresses in the table to explore.


This is true, but it doesn't change anything.  You can search your own addresses and see what you paid for because you have the secret knowledge necessary to make sense of that info because you were the one who did it.  Give those same addresses to your cop buddy, and send him to the blockexplorer site, and ask him if he can figure out what you bought or from whom without your help.

"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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xf2_org
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June 02, 2011, 12:42:23 AM
 #22


Your local wallet's addresses can be explored on http://blockexplorer.com/ just type one of the addresses you recently sent coins to in the box and click on the addresses in the table to explore.

This is true, but it doesn't change anything.  You can search your own addresses and see what you paid for because you have the secret knowledge necessary to make sense of that info because you were the one who did it.  Give those same addresses to your cop buddy, and send him to the blockexplorer site, and ask him if he can figure out what you bought or from whom without your help.

Silk Road takes deposits on their site, which winds up being a concentration point of illegal activity.  It will show up quite clearly on a heat map, and could potentially be identified by depositing and withdrawing a certain amount of tracked coins, at certain intervals.  A tech-savvy cop buddy could observe (a) bitcoin-like network activity at Bob's house, and (b) a flow towards the Silk Road "concentration" in the block chain.  Observe several data points over time, and you can build a decent body of data evidence.  Or simply observe Bob's web browser and BlahBlah Tor Site generating network activity at similar moments.

Serious anonymity takes a lot of work, and is darned near impossible if you are making a "noticeable" impact on the network, with your activity.

New users should get into bitcoin with their eyes open. Various amounts of tracking are already done with cash-purchased prepaid phones and debit cards.  If it's an electronic record, it can be data mined for patterns of money flows.  The government is quite skilled in picking signal out of noise, even encrypted noise.


MoonShadow
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June 02, 2011, 12:52:39 AM
 #23


Your local wallet's addresses can be explored on http://blockexplorer.com/ just type one of the addresses you recently sent coins to in the box and click on the addresses in the table to explore.

This is true, but it doesn't change anything.  You can search your own addresses and see what you paid for because you have the secret knowledge necessary to make sense of that info because you were the one who did it.  Give those same addresses to your cop buddy, and send him to the blockexplorer site, and ask him if he can figure out what you bought or from whom without your help.

Silk Road takes deposits on their site, which winds up being a concentration point of illegal activity.  It will show up quite clearly on a heat map, and could potentially be identified by depositing and withdrawing a certain amount of tracked coins, at certain intervals.  A tech-savvy cop buddy could observe (a) bitcoin-like network activity at Bob's house, and (b) a flow towards the Silk Road "concentration" in the block chain.  Observe several data points over time, and you can build a decent body of data evidence.


This is still easier said than done.  Like anyone else, Silk Road's internal escrow system can use a different address for every trade.  In practice, this means that successful trades simply show up in the blockchain as A -> B, and then sometime later B -> C.  If you can associate B to Silk Road, you can then assume that both A & C are dealing in illicit goods over Silk Road; but not only can you still not prove that, you don't know who they are and you can't find other Silk Road addresses as a result because even teh normal client will use exact value transactions without mixing them.  And if the values are a round number common on Silk Road, say an even 10 BTC, then even knowing who A is doesn't tell you if C was his dealer, as Silk Road could pay out to the dealer from any single matching transaction.  This is exactly how the bitcoin laundry works.  The client doesn't do this kind of thing right now, but it can be done.

"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'
drsaul
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June 02, 2011, 09:32:14 AM
 #24

I hear a lot of talk about this but I'm not sure I get it.

Aren't USD used to do everything illicit and illegal under the sun including pay for assassinations, war, and environmental destruction?
Aren't USD just as easy or easier to hide from the tax man's thugs than bitcoins?  The IRS has no hidden camera in my mattress. 
Don't most  "C&TO"  use USD to do business?

 


   
grah
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June 02, 2011, 11:30:49 AM
 #25

In this thread a bunch of people who know nothing about anonymity or computer security or money laundering (and Creighto) talk about why Bitcoin is worse than USD at protecting "criminals"
grah
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June 02, 2011, 11:37:49 AM
 #26

Also how are they going to tell Bob is using Bitcoin at a given time? Doesn't Bob use Tor to obfuscate protocols? How do they find Bob in the first place? I don't think you guys understand the model. I will make it short for you.

"Criminals" win
Feds lose and walk off with their tails between their legs

kthnxbye
fergalish
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June 02, 2011, 02:01:17 PM
 #27

This has gone a bit off-topic.  The point was that a bitter insider or a police/law accomplice could, maybe, quite easily bring about the financial ruin of a criminal organisation.

I mean, how many of you would trust your best friend with your wallet.dat?  Would you ask him to turn around when you type your passwoord or passphrase?  Is your wallet.dat even encrypted?  I daresay any C&TO that deals in bitcoins will take serious measures to protect their wallet.dat(s), but it would just take one person, one time, to take it all away from them.  Therefore, C&TO's will not deal in bitcoins. 

That's the hypothesis.  Is it valid?
n0m4d
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June 02, 2011, 02:19:57 PM
 #28

it would just take one person, one time, to take it all away from them.  Therefore, C&TO's will not deal in bitcoins. 

However C&TOs currently handle their finances will lead to the answer.

Perhaps they'll buy insurance.
MoonShadow
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June 02, 2011, 02:38:32 PM
 #29

This has gone a bit off-topic.  The point was that a bitter insider or a police/law accomplice could, maybe, quite easily bring about the financial ruin of a criminal organisation.

I mean, how many of you would trust your best friend with your wallet.dat?  Would you ask him to turn around when you type your passwoord or passphrase?  Is your wallet.dat even encrypted?  I daresay any C&TO that deals in bitcoins will take serious measures to protect their wallet.dat(s), but it would just take one person, one time, to take it all away from them.  Therefore, C&TO's will not deal in bitcoins. 

That's the hypothesis.  Is it valid?

Only if the organization is small and has a central command & control that is paranoid about their funds, and keeps them all in the same place.  Like any organization, C&TO's are really just groups of people acting in concert.  Bitcoin lends itself well to the movement of funds in any case, and the most likely use of Bitcoin for any organization is the compensation to their dispersed agents.  A snitch could easily get a low ranking agent's wallet.dat, but how useful that data is to tracking the funds of the organization in general depends on just how savvy they really are.  We've all seen the stupid pot dealers, they are the one's who end up in jail.  But what about the smart one's?  I've personally met a professional dealer that used a day job in the construction industry as 'cover' and was never prosecuted even though he was a 'known' criminal who had been arrested repeatedly.  Capturing an agent's wallet.dat makes tracking of funds possible but it doesn't make it likely or useful; as this requires much classic investigations beyond the digital realm.  A captured wallet.dat only lets the police watch the payments of one guy, it still doesn't tell them who the other agents are or anything about them.  For all the cops know, the wallet.dat that they captured could be the agent's personal wallet.dat, and they could be watching him buy carrots.  By definition, if the cops are watching an agent and have his wallet.dat, they already believe him to be an agent.  The data in the blockchain doesn't add any new evidence to this end, although it could be used in court to prove payments had been made in larger amounts than he paid for in taxes.

"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'
trentzb
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June 02, 2011, 03:16:58 PM
 #30

The IRS has no hidden camera in my mattress. 

Ahh, but now they know you have a mattress and where to look. Smiley
fergalish
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June 02, 2011, 08:57:15 PM
 #31

it would just take one person, one time, to take it all away from them.  Therefore, C&TO's will not deal in bitcoins. 
However C&TOs currently handle their finances will lead to the answer.
Perhaps they'll buy insurance.
I don't know that that's true.  Look at the government - if bitcoins take off, then the way the government handles its finances will be *very* different.  Me too.  Most people too.  C&TO's too, I presume, if they buy into it.


Only if the organization is small and has a central command & control that is paranoid about their funds, and keeps them all in the same place.  Like any organization, C&TO's are really just groups of people acting in concert.  Bitcoin lends itself well to the movement of funds in any case, and the most likely use of Bitcoin for any organization is the compensation to their dispersed agents.  A snitch could easily get a low ranking agent's wallet.dat, but how useful that data is to tracking the funds of the organization in general depends on just how savvy they really are.  [...]  Capturing an agent's wallet.dat makes tracking of funds possible but it doesn't make it likely or useful;

I'm not talking about obtaining a C&TO's wallet.dat so you can trace their activity.  I'm talking about obtaining the wallet.dat, then transferring the funds to your own wallet.dat, leaving the C&TO without any funds to pay their dispersed agents.  I mean, as long as a C&TO has their funds locked away in traditional assets, it's not easy to it all away at once.  But if a significant part of their wealth was in a wallet.dat and they lost that?  Picture, heck I dunno, a TO paying for an illegal arms shipment.  Both the buyer and the seller will appoint some individual to ensure the safe transfer of the BTCs, meaning you might have a wallet.dat worth millions of dollars.  For this reason, I think C&TOs might be reluctant to transfer into bitcoin-land.

The best defence would probably be to have all funds split into multiple wallet.dats, with no individual ever obtaining access to them all, but that seems far from perfect.
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