Sandia Labs to Enable Homeland Track Bitcoin TransactionsBitcoin has always been pseudonymous at best. By design, the transparent nature of blockchain enables anyone to access transaction details using block explorers. However, tracking the entire transaction history of any Bitcoin token is a cumbersome task at the moment. A tool currently under development at the Sandia National Laboratories may make it easier to track Bitcoin transactions. Once completed, the tool is expected to help...
http://www.newsbtc.com/2016/09/06/sandia-labs-track-bitcoin-transactions/ I read this but its not too forthcoming on the "math" behind how it operates. I have concerns for a user buying coins on a site like localbitcoins and then this model determines "tainted" coins and they get flagged. I visualize more problems then corrections. A follow-up question would be whether a good combo of commercial tumblers would negate this tool's investigatory abilities. Its not that a user (me for instance) is up to no good, but rather my willingness to tumble into clean making it possible for safe long term wallet holdings.
It's a horrible idea like all the AML-idiocy. It is not useful in suppressing crime it only serves as a pretext to put the ordinary people under financial surveillance, ensuring that they are not exerting their financial freedom. Tainting might destroy Bitcoin's fungibility and hence the whole currency. Bitcoin could become a surveillance nightmare, with basically everyone facing the risk of prosecution just by accepting funds from the "wrong" source. We really need privacy improvements for Bitcoin ASAP to prevent this from happening.
Bureaucracies have the tendency to grow like a cancerous blastoma, abusing their power to suck up more and more resources to grow while ignoring their own functional usefulness for whole system. The DHS is a perfect example for this. It's easy to establish a new caste of officialdom, but it's extremely difficult to get rid of it once it has gained power...
ya.ya.yo!
