Anonymity

[gohan]

He clearly states that it could be extended to a decentralised model where there are multiple clearing agents, i.e. signing authorities, so on that basis it can be done.

That's what I was proposing. Your bitcoin-note might be signed by n nodes. Think of the note as (r, s1, s2, ..., sn). And let's say at least n/2+1 verifications are necessary for you to deposit. What if those n/2+1 are not online, or quit the network? What if one too many of them are malicious and give false replies?

Like fellowtraveler said: No "signing authority"? No untraceability.

That kind of thing could work as a multiple-bank system with an interbank protocol, as in the Open Transactions scheme (which by the way looks pretty cool, thank you fellowtraveler), where you trust the bank you are working with.

Our scheme, if I understand you correctly, should work differently. The network blindly signs the note and the bitcoins that are to be represented by the note are destroyed at the moment of "potential" generation. The notes don't have to be used immediately, Alice can store all her bitcoins indefinitely in such notes. When she gives one of them to Bob, Bob has to deposit the note to see if it is valid and not double-spent (a la online e-cash). Now the network verifies the note, adds it to the "spent" notes list, creates new bitcoins out of thin air and awards them to Bob. So it is radically different in the sense that "encapsulated" bitcoins are not stored anywhere but destroyed/re-created.

I'll see if I can come up with a schema that fits easily into the bitcoin transaction model for comment. Would be based around the block-generating node blind signing the transactions in essence.

Good luck. I'd like to wander to a different direction but I very much would like to know if the above scheme is also what's in your mind.

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[BitterTea]

Bitcoin solves the problem of storing the gold (through its distributed nature), but it has no intrinsic value (it's more similar to dollars than to gold, in the sense of intrinsic value, due to its fiat nature.)

Would you care to support this statement? Bitcoin has value by fiat no more than gold does. Nobody is forced to accept Bitcoin for payment of debts, as they are dollars. The only entities that accept Bitcoin are those that value it as a currency.

[Pieter Wuille]

Bitcoin solves the problem of storing the gold (through its distributed nature), but it has no intrinsic value (it's more similar to dollars than to gold, in the sense of intrinsic value, due to its fiat nature.)

Would you care to support this statement? Bitcoin has value by fiat no more than gold does. Nobody is forced to accept Bitcoin for payment of debts, as they are dollars. The only entities that accept Bitcoin are those that value it as a currency.

I believe fellowtraveler means here 'fiat' in the sense that bitcoin's only value is its use as payment, and not 'fiat' in the meaning that its value is forced by government decree. Compare this to gold which has a use as component for jewelry, even when not used as monetary system.

[fellowtraveler]

Bitcoin solves the problem of storing the gold (through its distributed nature), but it has no intrinsic value (it's more similar to dollars than to gold, in the sense of intrinsic value, due to its fiat nature.)

Would you care to support this statement? Bitcoin has value by fiat no more than gold does. Nobody is forced to accept Bitcoin for payment of debts, as they are dollars. The only entities that accept Bitcoin are those that value it as a currency.

You're right, I didn't mean fiat in the sense of "by decree", as if mandated by a government.

I just meant that Bitcoin's only value was based on the decision of early adopters to accept it, based on their future ability to pass it on to others, and not based on any other actual market value (such as a precious metal, or a bushel of wheat... or network resources.) In this sense, Bitcoin is more similar to dollars than gold, which is what I was trying to say. (Gold/silver has several thousand years of market history demonstrating that it is what markets naturally use unless they are perverted with some combination of force and fraud. You are probably closer comparing Bitcoin to the Pet Rock fad, at this point, than comparing it to Gold. Though time will tell, and I'm rooting for Bitcoin -- I'm a fan.)

My over-arching point was that if Bitcoin were used as the backing currency for an OT-based untraceable cash, and if that were built into an anonymous network (used to solve resource allocation issues) then many holes would be filled: the Bitcoin would be backed in network resources and would be untraceable, the OT would have a publicly-auditable, distributing backing, and the server could run hidden safely on the anonymous network, and the anonymous network would have proper resource allocation (which requires untraceable cash.) And those are all good things, no?

[fellowtraveler]

Right now, if you want me to use OT you're going to have to join me in my project and kind of hold my hand a little, maybe even do this with me jointly, for that I'd happily give you 1/2 of the ideas/businesses profit if it makes any.

If you want to arrange for a chat on IRC I'd be happy to do so, I've got plenty of questions about the way OT works.

Heya I'm working under my own deadline over here for the next few months anyway, so I can't take on any new projects.

What I CAN do is:
Help you get OT built on your system,
and answer any questions,
and help you with any fixes,
related to the OT API.
(And I'm happy to do a chat if you need one.)

As I said before, the Use Cases are all pretty simple stuff... issue currency, open account, withdraw cash, deposit cash, market offer, write cheque, etc. The parameters are all what you'd expect: withdraw needs to know the account ID, the amount being withdrawn etc. Compared to what's going on behind the scenes (chaumian blinding, destruction of account history, etc) I think the API is sweet and easy. That's the whole point of the library.

[Barak]

Anonymity is not a feature that most users need.

Well, we need a poll. For me, anonymity is the only feature I need

Most of the anonymity talk I see around Bitcoin seems to be oriented around the assumption that the attackers will be governments who will be forced to accumulate proof beyond a reasonable doubt in order to get a conviction in court.

I think we need to be talking as though the attackers will be criminal thugs who need just a whiff of suspicion, and who don't mind killing a lot of innocent people as long as they get the one they're after as well.

Because if Bitcoin, or some other untraceable, uninflatable, and non-centrally-controllable currency gains critical-mass popularity and takes off, that's what governments will become.

Guaranteed.

For them, it'll be a life-or-death case of us or them.

[gigitrix]

Anonymity required?

Use coin mixing and money laundering services. They are all readily available today AFAIK.

A complicated reengineering of bitcoin is the last thing we need right now.

[Disposition]

Let me see if I got this correctly since most laundering services only "mix" coins that it's trying to transfer...

What about a "cash" like system that's backed from miners(pools).

I first make these assumptions.
1. freshly generated coins from a block isn't linked to anything(or would only contain the Address of the pool which they came from.)
2. coins are tracked on a Address to Address basis.

The system is as follows.
a needs to send btc to b.
a instead send btc to S.
S as a server, uses fresh bitcoins to send the amount to b.
so the capability of S as a laundering service is equal the amount of hashrate that it generates bitcoins at.

tl;dr
Pools are the best launderers

Comments? sounds good to me.

[Monster Tent]

Its worth someone coming out with a client or even a separate alt coin because The same people who will control all of mt gox US transactions also have access to the user data from the bitcoin foundation.

This could be dangerous for anyone wanting to use bitcoin for activism purposes, with the large data matching abilities this offers.

If 80% of the network is able to be identified it compromises the other 20% who dont want this for numerous reasons. Donating to wikileaks for example.

[tekknik]

This post may cause a flame war, so I apologize in advance if it happens. Now onto my post:

Is anybody else starting to feel the anonymity of the *coin clients will ultimately be the demise of them? We see scams popping up regularly from people who think things like child pornography, selling hard drugs to any age group, and various other acts that most sane people will view as disgusting. In the IRC channels (#litecoin at least) I can't tell you how many times I've seen questions involving evading taxes, at least as often as I see questions on how to get a mining rig setup. When I ask other engineers who are not currently involved in any crypto currency why they are not the usual answer is "I do not want to be grouped with the scum using them." (their words, not mine) or "Why hide if you have nothing to hide?" I understand privacy is everybody's right and not something any government should control but it seems the scammers have once again proven they will use any means necessary to make a buck. I used to advocate the use of bitcoin due to it's anonymity and lack of control by a overall authority however after the most recent case with Liberty Reserve I can no longer in my right conscious recommend it. So now I ask the more "in the know" / senior members of this community, what valid reasons are there for preserving the users identity?

[Tom Scholl]

what valid reasons are there for preserving the users identity?

I'll have a go with an example:

Bob hears about Bitcoin from a man in a bar, who sells him ten dollars worth.
Later that day, Bob decides to gamble his Bitcoin on Satoshi Dice and wins big time!
The next day he's in the same bar, and that man sidles up to him, angling for a handout from his big win.
Bob is really creeped out by this - how did this man even know he'd been gambling?
He loses interest in Bitcoin and advises his friends to stay away from it.

You could provide this privacy with a centralised mixer like the one at blockchain.info, and they can store logs to keep the feds happy. But if you don't want to sacrifice decentralization, you end up aiming at full anonymity.

Is anybody else starting to feel the anonymity of the *coin clients will ultimately be the demise of them? ...I used to advocate the use of bitcoin due to it's anonymity and lack of control by a overall authority however after the most recent case with Liberty Reserve I can no longer in my right conscious recommend it.

This is a good point, and it's certainly what the politicians will be thinking. I think what we'll see are coin tainting and government mandated blacklist checking. It's just so easy to implement with a public ledger it's inevitable. On the conference security panel, Peter Vessenes talks like Bitcoin tainting is here already.

When blacklists are commonplace, you can still have your anonymity, you just use a "clean coins only" mixer.

[Stampbit]

This post may cause a flame war, so I apologize in advance if it happens. Now onto my post:

Is anybody else starting to feel the anonymity of the *coin clients will ultimately be the demise of them? We see scams popping up regularly from people who think things like child pornography, selling hard drugs to any age group, and various other acts that most sane people will view as disgusting. In the IRC channels (#litecoin at least) I can't tell you how many times I've seen questions involving evading taxes, at least as often as I see questions on how to get a mining rig setup. When I ask other engineers who are not currently involved in any crypto currency why they are not the usual answer is "I do not want to be grouped with the scum using them." (their words, not mine) or "Why hide if you have nothing to hide?" I understand privacy is everybody's right and not something any government should control but it seems the scammers have once again proven they will use any means necessary to make a buck. I used to advocate the use of bitcoin due to it's anonymity and lack of control by a overall authority however after the most recent case with Liberty Reserve I can no longer in my right conscious recommend it. So now I ask the more "in the know" / senior members of this community, what valid reasons are there for preserving the users identity?

You sound like you have something to hide.

[oakpacific]

This post may cause a flame war, so I apologize in advance if it happens. Now onto my post:

Is anybody else starting to feel the anonymity of the *coin clients will ultimately be the demise of them? We see scams popping up regularly from people who think things like child pornography, selling hard drugs to any age group, and various other acts that most sane people will view as disgusting. In the IRC channels (#litecoin at least) I can't tell you how many times I've seen questions involving evading taxes, at least as often as I see questions on how to get a mining rig setup. When I ask other engineers who are not currently involved in any crypto currency why they are not the usual answer is "I do not want to be grouped with the scum using them." (their words, not mine) or "Why hide if you have nothing to hide?" I understand privacy is everybody's right and not something any government should control but it seems the scammers have once again proven they will use any means necessary to make a buck. I used to advocate the use of bitcoin due to it's anonymity and lack of control by a overall authority however after the most recent case with Liberty Reserve I can no longer in my right conscious recommend it. So now I ask the more "in the know" / senior members of this community, what valid reasons are there for preserving the users identity?

I don't know about others, but for me, the reason is exactly that the authorities are, and will ask me to give up my rights whenever they have a chance. My rights(privacy, anonymity, etc) are my rights because I don't need to justify to anyone why I need it, rather, whenever I choose to compromise it a bit I do need some justifications.

[gabrield]

I don't know, I personally find it rather disconcerting if users in the chain can be identified. For example, it wouldn't be enough for me to simply get bitcoins at an exchange, send them to a random address, and then use them from that point on. Your identity would still be linked. However, given the public nature of the transactions, I'm not sure if there is any way around this.

I'm sure somebody somewhere would/will be happy to sell you bitcoins anonymously; just put cash and a bitcoin receiving address in an envelope and mail it.  The exchange (who you'd have to trust to actually send you the coins) takes the cash and send coins to the address.  They have no idea who you are, and your identity isn't linked to the coins.

Well, it isn't linked to the coins until you forget to turn on TOR or I2P before spending coins on something illegal.  Or you remain completely and utterly anonymous right up until you spend coins on something physical and have it shipped to your home address.  Or you arrange to have contraband "dead dropped" somewhere, and you get arrested when you go to pick it up.

None of which have anything to do with Bitcoins, and all of which seem to me to be more likely ways of getting into trouble than somebody managing to figure out that "transaction for purchase of illegal stuff" is linked to "Gavin purchased a bunch of Bitcoins from Bobby's Discount Bitcoin Emporium" last year.

The lack of anonymity is the worst thing in the Bitcoin protocol. In my opinion the anonymity should be fixed urgently if you want Bitcoin to be adopted my mainstream people! Most people who heard about bitcoin doesn't know their transactions could be traced. When they realize that they say bye bye Bitcoin. I was very enthusiastic about Bitcoin, I bought some domains and was going to build some websites but when I realize the lack of anonymity I stopped all my plans. Yes I know, there are work arounds but why should I use a system that involve work arounds in order to not be traced ?! If I use banks at least I know only a few people/institutions can see my transactions, using Bitcoin anybody can see my transactions, that's horror !!!

Why don't adopt zerocoin solution ? , it add complexity to protocol but mainstream people don't care about technical things, they just want an easy to use, cheap system...