Announcing the Bitcoin Laundry (beta)

[mikegogulski]

http://bitcoinlaundry.com/

The Bitcoin Laundry will accept your payment, deduct a small commission, and then forward the balance on to a Bitcoin address you designate.

The current commission rate is 1%.

Launder today!

[brocktice]

Can you explain how this works?

[kiba]

Can you explain how this works?

Apparently, you send it to a new randomly generated address and then send that to the address you want.

[brocktice]

No, I mean, what is done to make it difficult to trace? There has been some discussion on the forum about the right and wrong way to do this.

[mikegogulski]

Can you explain how this works?

Sure!

You visit the site and tell it you want to launder a certain number of bitcoins. You provide that number, along with the bitcoin address to deliver to.

The site generates a fresh new Bitcoin address and presents it to you with instructions to pay your desired amount to it.

You send the requisite number of Bitcoins to that address.

Once that transaction gets 1 confirmation, the site sends the address you provided the same number of Bitcoins, minus the commission.

Make sense?

[mikegogulski]

No, I mean, what is done to make it difficult to trace? There has been some discussion on the forum about the right and wrong way to do this.

Well, as a single operator with a single wallet on the back end there's only so much I can do.

What would you like? Multiple addresses generated for input and delivery? Transaction splitting? Deferred delivery? All doable...

[davout]

http://bitcoinlaundry.com/

The Bitcoin Laundry will accept your payment, deduct a small commission, and then forward the balance on to a Bitcoin address you designate.

The current commission rate is 1%.

Launder today!

I think you should re-read the idea I gave in the other forum thread (http://bitcointalk.org/index.php?topic=428.20), you seem to have missed a couple of key points...

It doesn't make *any* sense unless you actually take deposits, pool them together in one address and then send random payments to everyone.

mybitcoin provides the same service as yours but without the 1% fee =)

[inertia]

For a higher percentage, you could create a new wallet for the transaction.  Not sure if that offers any real benefit, though.

[inertia]

mybitcoin provides the same service as yours but without the 1% fee =)

Yes, but is mybitcoin operated by a stateless person who is immune to subpoena?

[davout]

For a higher percentage, you could create a new wallet for the transaction.  Not sure if that offers any real benefit, though.

Absolutely none.

mybitcoin provides the same service as yours but without the 1% fee =)

Yes, but is mybitcoin operated by a stateless person who is immune to subpoena?

Irrelevant. Make it accessible through Tor and you could host the service in washington DC.

[nanotube]

mybitcoin provides the same service as yours but without the 1% fee =)

so does mtgox, also with no fee. just deposit btc, withdraw btc - you'll get /different/ coins, since mtgox has a lot of btc balance, and a bitcoin client tries to use older coins first.

mike, your 'laundry' is rather ineffective, if you don't pool coins from multiple users and users tend to always get their own coins back.

[mikegogulski]

Yes, but is mybitcoin operated by a stateless person who is immune to subpoena?

My stateless status doesn't make me special. I'm certainly not immune to subpoena.

One thing I forgot to mention about this quick thing I hacked together: Once the system remits the payment minus commission to the destination address, it forgets as much of the transaction information as Bitcoin currently allows.

When I create an address to handle a transaction, I associate it with an account (formerly label) which contains a JSON object. That object includes the destination address, the amount to be paid and the commission. After sending the payment minus commission to the destination, that account/label information is deleted from the wallet.

I would like to be able to obliterate the address generated for the transaction as well, but that's not currently supported.

[davout]

Yes, but is mybitcoin operated by a stateless person who is immune to subpoena?

My stateless status doesn't make me special. I'm certainly not immune to subpoena.

One thing I forgot to mention about this quick thing I hacked together: Once the system remits the payment minus commission to the destination address, it forgets as much of the transaction information as Bitcoin currently allows.

When I create an address to handle a transaction, I associate it with an account (formerly label) which contains a JSON object. That object includes the destination address, the amount to be paid and the commission. After sending the payment minus commission to the destination, that account/label information is deleted from the wallet.

I would like to be able to obliterate the address generated for the transaction as well, but that's not currently supported.

You obviously didn't get anything about my idea.
The idea is to prevent tracing coins by using the block chain, not your wallet/client/whatever info.

Being immune to subpoena is easy, as long as you don't store customer IPs (access through Tor for example) you could give the FBI full access to your server it wouldn't be of any use to them.

Maybe I'll be the first one to launch it after all

[mikegogulski]

You obviously didn't get anything about my idea.

Dude, I'm still trying to catch up on your idea, the background, and why the issues you raise are important. And on this message I wasn't replying to ya

BTW, it looks like you have a lemur on your shoulder. Is that safe?

[slush]

It would be better to enter amount which will be received, not paid. Commision should be added to final amount to send. Currently, when I want to send 1 BTC to someone, I have to calculate commision itself.

Are you performing some scrambling in transaction? For example, when I send 1BTC, it should pay some amount instantly and some amount later even from another sending address. This way it should me much harder to pair both transactions.

By the way, I see you are living in Slovakia. Do you speak Slovak or Czech?

[ribuck]

It would be better to enter amount which will be received, not paid.

Why is there a need to pre-announce an amount? Anything that arrives at the incoming address can be delivered to the outgoing address after deducting the fee.

[nanaimogold]

Gee Mike, do you have to use the "L" word? ;-)

Are you familiar with 1MDC? It was an anonymising system for use with e-gold.

Basically it's a ledger on top of a ledger. Trades conducted by 1MDC users became invisible to e-gold because they were trading within the same e-gold account, tracked by a separate ledger.

Mybitcoin accomplishes much the same thing for bitcoin.

Mybitcoin users can trade amongst themselves and the trades never show on the bitcoin network because they are tracked on a separate book.

It was I who coined the term "blister" to describe this shared account, or book on book concept.

A system to obscure trades (blister) from the Liberty Reserve accounts ledger is HDMoney.

Shane

PS: about the "L" word. L is defined as structuring a financial transaction to obscure the origin of proceeds of crime. It's not "L" if it's not proceeds of crime. In the federation gone feral, winning a game is now a crime. Fortunately not all humans are subject to that feral fed. So, "L" becomes a matter of what state the winner is subject to - or not. ;-)

[davout]

You obviously didn't get anything about my idea.

Dude, I'm still trying to catch up on your idea, the background, and why the issues you raise are important. And on this message I wasn't replying to ya

No worries, the idea is just randomize the path of the funds through the system by mixing them up with lots of clean funds, so ultimately, instead of being able to say :
 - These 100 BTC are dirty, they come straight from a scammers address

You'd be able to say
 - These 100 BTC aggregated to have 0.1% likely to be dirty (depending the proportion of clean/dirty funds you mixed in a single receiving address before redispatching them)

BTW, it looks like you have a lemur on your shoulder. Is that safe?

Yes it is! It was safe for me, not for my bananas

That'd be really cool if you implemented that, I don't have time to do it right now, but if I did I'd put a big fat picture of a laundry machine, a receiving address, and a big fat text box where people would input like a hundred of their addresses separated by spaces, commas, lemurs, whatever for them to receive their funds back in random chunks.

The same would go for the people providing the clean money.

Ideally there would also be a way for the scammer to set the fee he's willing to pay, the more he'll pay, the more people will get incentive to provide clean funds, the more mixed and randomized his laundered funds will be.

[mikegogulski]

It would be better to enter amount which will be received, not paid. Commision should be added to final amount to send. Currently, when I want to send 1 BTC to someone, I have to calculate commision itself.

Are you performing some scrambling in transaction? For example, when I send 1BTC, it should pay some amount instantly and some amount later even from another sending address. This way it should me much harder to pair both transactions.

By the way, I see you are living in Slovakia. Do you speak Slovak or Czech?

Okay, amount received not paid is a different use case. The use case I was thinking of was a payment back to oneself on a different one-time address.

No scrambling at the moment. The code is dead simple, less than 200 lines of PHP, plus my bitcoin-php library. I'm looking for the best ideas, though.

Most of my income the past 4 years comes from translating Slovak text into English. I still have a hell of a time carrying on a conversation, but I can read the newspaper pretty well.

[theymos]

As others have mentioned, this would be pretty easy to follow in the block chain. It's not much better than creating a new address and sending some bitcoins to yourself.

I outlined a somewhat easy-to-implement method for totally secure mixing on the wiki's anonymity page:

    *Set up two Bitcoin installations.
    *Put some amount of BTC in installation B. This is the maximum amount of BTC you can deal with at once (for all customers).
    *Customers send BTC to installation A. You send them an equal number of coins (or minus a fee) from installation B. Send as 10-50 BTC increments.
    *Send all coins from A to B when all orders are satisfied. You can't send coins from A to B if you have any orders that have not been satisfied from B.
    *This can be automated, or you can do everything manually.