The Problem With Altcoins

[St.Bit]

I am most interested in using an altcoin, and none have IP anonymity.

The question is if this is actually possible and worth waiting for.

Tor and I2P seem to be safe now, but that doesn't mean it hasn't been already compromised. The Allies used to sent ships in certain death just to protect the secret that they can encrypt Enigma, so I'd really wonder if any of them would be safe if they really want to grab some coins.

They must spend on the altcoin to be safer.

Bitcoin will become known as the government's coin, due to the cartelization of mining and the lack of safe anonymity. It will be the government approved coin. The anonymous altcoin will be the freedom coin.

Why is spending altcoins safer?

Freedom coin sounds so patriotic, how about terrorist coin or child molerster coin ...

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[AnonyMint]

I am most interested in using an altcoin, and none have IP anonymity.

The question is if this is actually possible and worth waiting for.

I've written down an algorithm.

Tor and I2P seem to be safe now, but that doesn't mean it hasn't been already compromised.

Bruce Schneier wrote about they are already coopted by the NSA some where:

https://www.schneier.com/cgi-bin/mt/mt-search.cgi?tag=surveillance

I wouldn't trust them. Not reporting your stuff to the authorities and not being anonymous means jail time and bankruptcy in this coming G20 crackdown as the sovereigns go into sovereign debt crisis spiral.

The Allies used to sent ships in certain death just to protect the secret that they can encrypt Enigma, so I'd really wonder if any of them would be safe if they really want to grab some coins.

I highly doubt the NSA hasn't been able to crack Tor given it is well documented that a global adversary can in theory crack every low-latency mix-net using timing analysis. And Tor only uses 3 hops.

They must spend on the altcoin to be safer.

Bitcoin will become known as the government's coin, due to the cartelization of mining and the lack of safe anonymity. It will be the government approved coin. The anonymous altcoin will be the freedom coin.

Why is spending altcoins safer?

Spending on the coin that has built-in Bitmessage-like anonymity (not low-latency) will ensure that your IP is not connected with the spend and thus the coin and all its ancestors. If you spend it on Bitcoin, then your IP address will not be shielded (even if you use Tor) and as well since everyone else's IP is not, then using a mixer doesn't surely help.

Freedom coin sounds so patriotic, how about terrorist coin or child molerster coin ...

We have that any way, even with fiat. You can buy a child now in South Asia and Africa (probably also South and Central America) with local fiat.

Since you are anonymous, they can't say it was you.

Whereas if you use Bitcoin and your identity gets entangled with a prior owner of the coin (something that can't happen with cash or fiat banking), you could be false accused. The issue of taint is a serious insoluble problem for Bitcoin and the holders will demand government intervention at some point to get relief.

There is no viability for freedom with Bitcoin. It is going to kill all freedom long-term, even though it provides the illusion of increasing freedom short-term while the incriminating evidence mounts in the public ledger.

I think it is insane to use a non-anonymous coin like Bitcoin.

At least get your virgin coins from mining, but you can't even get these now unless you are in a country where you can buy an ASIC. And then you still need to prove that the spend was not to yourself, when you offload the coins. Be sure your government approved exchange can prove it and records aren't lost, etc..

[Etlase2]

I highly doubt the NSA hasn't been able to crack Tor given it is well documented that a global adversary can in theory crack every low-latency mix-net using timing analysis. And Tor only uses 3 hops.

I still don't get your view on this. Even if they somehow manage to have such a massive amount of control over Tor that they can determine where a packet of data originated on the tor network, it does not prove or even imply that the transaction belongs to the originating connection. That is a preposterous presumption to make of a distributed shared file. Hell, I could imagine that even if the NSA was watching every local connection for everyone, this would be easily defeated by pseudo/fake Tor peers that occasionally feed each other nonsense data. How are they going to prove it? "We control every single node and we know that that isn't one of them?" That could be foiled by occasionally sending real data among the nonsense data.

[AnonyMint]

I highly doubt the NSA hasn't been able to crack Tor given it is well documented that a global adversary can in theory crack every low-latency mix-net using timing analysis. And Tor only uses 3 hops.

I still don't get your view on this. Even if they somehow manage to have such a massive amount of control over Tor that they can determine where a packet of data originated on the tor network, it does not prove or even imply that the transaction belongs to the originating connection. That is a preposterous presumption to make of a distributed shared file. Hell, I could imagine that even if the NSA was watching every local connection for everyone, this would be easily defeated by pseudo/fake Tor peers that occasionally feed each other nonsense data. How are they going to prove it? "We control every single node and we know that that isn't one of them?" That could be foiled by occasionally sending real data among the nonsense data.

You don't understand that all low-latency networks are vulnerable to timing attacks if the attacker can see the traffic between each peer on the network. They don't need to decrypt the traffic, they just need to see the timing. This is well proven in research papers that have analyzed Tor. Tor even admits this.

The governments can see all the traffic on the internet. They have taps on all the main lines.

Also Bruce Scheier documented other attacks NSA has against Tor, such as a weakness they exploited in the Firefox browser.

There is no way the national security agencies are going to allow themselves to be blinded. The NSA is spending something like $50 billion. Do you even fathom what that can buy in terms of hacking?

Timing analysis can't be defeated with random sends, because the pattern of the random can be identified statistically from the non-random. Low-latency is the problem. High-latency mix-nets are much more resistant to timing analysis.

If this was an easy problem to solve, Tor would have solved it instead of admitting they can't.

Do you think they built that gazillion terabyte storage facility in Utah to mop up data they can't discern.

The NSA has attacks against SSL and HTTPS too, but that is an orthogonal issue.

Also some people has thought the Tor relays are honeypots. How can you prove they are not! You can't. Who is paying to give away all those free servers and bandwidth?

Add links:

https://www.google.com/search?q=tor+timing+attack

https://blog.torproject.org/blog/one-cell-enough

[Etlase2]

You don't understand that all low-latency networks are vulnerable to timing attacks if the attacker can see the traffic between each peer on the network. They don't need to decrypt the traffic, they just need to see the timing. This is well proven in research papers that have analyzed Tor. Tor even admits this.

And this is completely irrelevant in the case of a distributed shared file. No one is trying to hide anything except for a tiny little portion that they do not want attributed to them. They DO need to be able to decrypt the traffic if they want to know what transaction originated from where.

Tor is perfectly acceptable for anonymizing transactions. Why you don't see this is beyond me. And the trade-off for high latency is an unusable network for commerce, at least of the face to face variety. In that case, only criminals are likely to use such a system making the target much juicier.

[Etlase2]

Also some people has thought the Tor relays are honeypots. How can you prove they are not! You can't. Who is paying to give away all those free servers and bandwidth?

SO WHAT? The relays do not know what the data is!

[Rassah]

Don't you see the media pushing Bitcoin? This doesn't happen without the permission of the ruling elite. It is my speculation, "they" (rockefeller/rothschilds/kissinger) created Bitcoin. Not the underlings such a Obama and Geithner. Compartmentalization of the underlings.

The government will continue to pretend to be somewhat against it, well for one thing the underlings don't know it is intended to be the next one-world digital currency. The elite don't want us to wake up too soon and realize we've unknowingly handed them the 666 control they want. They are hoping for the "there can only be one" outcome. That is why this thread is so important to me.

My apologies, I did not realize that you were a crazy person. Cary on.

[AnonyMint]

My apologies, I did not realize that you were a crazy person. Cary on.

Character assassination is what losers revert too when they can't present a cogent argument. Your prior comment was weak logic which I refuted, so then come back and character assassinate to get revenge. You take advantage of where I decided to shift from pure logic to speculation.

You decided not to quote where I wrote "Speculation follows". Speculation is not a statement of fact.

You clearly are biased for Bitcoin and will say anything to protect Bitcoin, while ignoring reality.

[AnonyMint]

You don't understand that all low-latency networks are vulnerable to timing attacks if the attacker can see the traffic between each peer on the network. They don't need to decrypt the traffic, they just need to see the timing. This is well proven in research papers that have analyzed Tor. Tor even admits this.

And this is completely irrelevant in the case of a distributed shared file. No one is trying to hide anything except for a tiny little portion that they do not want attributed to them. They DO need to be able to decrypt the traffic if they want to know what transaction originated from where.

Tor is perfectly acceptable for anonymizing transactions. Why you don't see this is beyond me. And the trade-off for high latency is an unusable network for commerce, at least of the face to face variety. In that case, only criminals are likely to use such a system making the target much juicier.

No Tor is not acceptable. See below.

There is another option that is not high-latency that eliminates timing attacks. It is a Bitmessage way of mixing, but that can't work for Tor's general application to web browsing. It can work for an altcoin.

Also some people has thought the Tor relays are honeypots. How can you prove they are not! You can't. Who is paying to give away all those free servers and bandwidth?

SO WHAT? The relays do not know what the data is!

The data goes on a public ledger. It is decrypted. Even if you send it over SSL to the mining peer or pool, then you have the problem of trusting that peer or pool is not a honeypot. And currently I don't believe Bitcoin uses SSL for that any way.

If you can correlate via timing analysis, then you know which data that is going on the public ledger correlated to which IP address that originally sent into the first relay.

With only 3 hops, if all 3 are honeypotted, they don't even need timing analysis.

You really haven't thought this through.

Now what you say?

[Etlase2]

The data goes on a public ledger. It is decrypted.

And the gigantic point that you miss is that the originator of the transaction is lost in the noise. With basic protocol encryption, the NSA would have to not only be watching your connection, but they would have to BE every peer you are connected to on the "clear net" so that they can isolate the incoming tx that you see and retransmit, then they would have to control a vast majority of every bridge or relay in the tor network to ensure that they control each hop you use (which is astronomically unlikely if the client acts as a tor bridge--unless the NSA is the only one using it, you're fairly safe).

What in the ever loving fuck are they going to do? Control every bit of data, crunch all the numbers and put it in a tidy box for the IRS to examine and send a tax bill? What happens if people start opening up their wireless connections for transactions? What happens if KimDotCom (or insert random person with wealth and anti-establishment values) creates a tor hidden service and says "send me your tx, I will forward them on"? They will now need to control every piece of tor infrastructure and his service.

The NSA does not have the ability to suppress this or do whatever it is you've gotten into your mind that they can do. Not without destroying the internet, the tool they have fallen so deeply in love with.

[AnonyMint]

The data goes on a public ledger. It is decrypted.

And the gigantic point that you miss is that the originator of the transaction is lost in the noise. With basic protocol encryption, the NSA would have to not only be watching your connection, but they would have to BE every peer you are connected to on the "clear net" so that they can isolate the incoming tx that you see and retransmit, then they would have to control a vast majority of every bridge or relay in the tor network to ensure that they control each hop you use (which is astronomically unlikely if the client acts as a tor bridge--unless the NSA is the only one using it, you're fairly safe).

Incorrect. For a timing attack, they only need to see the traffic passing between each node in the Tor network. And I asserted already, the governments tap all the traffic on the internet that passes over trunk lines (which is most of it). And you can be sure they are extra diligent to tap all traffic between Tor nodes.

They don't need to BE every peer. Not at all. You apparently don't understand how the timing attack works. Read the research if you doubt my assertion.

What in the ever loving fuck are they going to do? Control every bit of data, crunch all the numbers and put it in a tidy box for the IRS to examine and send a tax bill?

Yes. Especially those liberty loving 350,000 of us who have now clearly identified ourselves. That is only a very small percentage of the world's population. We will be tagged as "tax evaders" especially at the time the governments are going bankrupt and need revenues to pay the welfare checks and free healthcare for the rest of the masses who won't be targeted by this surveillance.

What happens if people start opening up their wireless connections for transactions?

You can't get a SIMM card in most countries without giving ID.

If you mean Ham radio, that is not going to happen. All radio operators are licensed.

The NSA does not have the ability to suppress this or do whatever it is you've gotten into your mind that they can do. Not without destroying the internet, the tool they have fallen so deeply in love with.

Yes they do. You are denying the facts.

Sorry to bring a dose of reality-check to your fantasy world. Better you wake up now.

You must have missed the links to the videos I provided upthread. Here is that post again:

https://bitcointalk.org/index.php?topic=279650.msg3497509#msg3497509

[mvidetto]

It should be noted that if for some reason bitcoin fails, we would need an alt currency to take its place.  Bitcoin 2.0 or something which corrects the flaws created by the currency and brings the cryptocurrency to a whole new level.  Of course I would never want bitcoin to fail, but just as the most secure systems in the world are eventually cracked, bitcoin may fall as well.

[AnonyMint]

It should be noted that if for some reason bitcoin fails, we would need an alt currency to take its place.  Bitcoin 2.0 or something which corrects the flaws created by the currency and brings the cryptocurrency to a whole new level.  Of course I would never want bitcoin to fail, but just as the most secure systems in the world are eventually cracked, bitcoin may fall as well.

Agreed.

And the NSA doesn't tell you when they've cracked. We went through the entire 1980s when they had cracked all encryption using differential cryptography analysis methods, and nobody knew it!!!

So why would these two guys be arguing here against having a more securely anonymous coin then? Hmmm. Etlase2 why are you are arguing against improvement of the anonymity?

[Etlase2]

Incorrect. For a timing attack, they only need to see the traffic passing between each node in the Tor network.

You do not have a grasp on the situation here. I'll leave it at that.

Hmmm. Etlase2 why are you are arguing against improvement of the anonymity?

Hmmm. AnonyMint, why are you so scared? May I imply that you are a criminal in various ways?

PS - For crying out loud, stop editing your posts.

[AnonyMint]

Incorrect. For a timing attack, they only need to see the traffic passing between each node in the Tor network.

You do not have a grasp on the situation here. I'll leave it at that.

That is not acceptable in technical debate. Refute with technical argument.

I do understand very well. You have not shown yet that you understand the technical issue.

Hmmm. Etlase2 why are you are arguing against improvement of the anonymity?

Hmmm. AnonyMint, why are you so scared? May I imply that you are a criminal in various ways?

Why are you accusing me of being a criminal?!!! Damn it that almost deserves reporting you to the moderator!

Did you fail to read what I wrote upthread? That I don't want to have to prove that some criminal who used my coin before or after I held it, was not me or not involved with me somehow (i.e. me as his financier)! Because that is not going to be easy in every case.

Also because of the Admiralty laws, governments can confiscate all money that was involved with a crime, even if you prove you were not involved.

And because the governments are going to taxing left and right, including wealth taxes and capital gains taxes. You will not retain your savings past 2020. You will be wiped out. This is the plan and the way global bankruptcy is always resolved in history.

PS - For crying out loud, stop editing your posts.

You know very well with me to wait 5 minutes or so, because I think of edits until I am satisfied with what I wrote.

[AnonyMint]

Why are you accusing me of being a criminal?!!! Damn it that almost deserves reporting you to the moderator!

Did you fail to read what I wrote upthread? That I don't want to have to prove that some criminal who used my coin before or after I held it, was not me or not involved with me somehow (i.e. me as his financier)! Because that is not going to be easy in every case.

Also because of the Admiralty laws, governments can confiscate all money that was involved with a crime, even if you prove you were not involved.

http://www.nestmann.com/civil-forfeiture-of-cash-it-could-happen-to-you

Proving that your cash is connected to a crime is surprisingly easy to demonstrate. That's because 97% or more of cash circulating today contains tiny concentrations of narcotics residues—primarily cocaine. All police need to do is to bring in a drug-sniffing dog to inspect the cash.  If the dog alerts, police seize the cash. And, under civil forfeiture rules, it's up to you to prove that the cash has a legitimate origin.

Consider the case of Emiliano Gomez Gonzolez. During a traffic stop, Nebraska state troopers asked Gonzolez for permission to search his vehicle. During the search, the troopers found bundles of currency totaling $124,700. Based on a dog sniff, police seized all the money.

Gonzolez contested the forfeiture in court. Prosecutors neither convicted nor accused Gomez or any of the other owners of the seized cash of any crime. Nor did police find any drugs, drug paraphernalia, or drug records connected to the cash. Despite these facts, a federal appeals court upheld the confiscation of every dollar found in the vehicle.

In thousands of cases across the United States each year, police follow the same pattern. In a search of someone's home or vehicle, they discover a significant quantity of cash. They then bring in a dog to sniff the cash for the presence of drug residues. The dog alerts virtually 100% of the time. This supposedly gives police probable cause to seize the cash under state or federal civil forfeiture laws.

Owners of property subject to civil forfeiture find themselves in an Alice-in-Wonderland legal landscape where the property seized is accused of a crime, rather than the owner. The owners must follow obscure rules that originate in Admiralty law, with which most attorneys aren't familiar. Under these rules, the seized property is presumed guilty, and it's up to its owner to demonstrate that the property is innocent. (Yes, it's bizarre, but it's the law!) Since obtaining legal representation in a civil forfeiture case typically requires a legal retainer of $10,000 or more, most victims of this vicious procedure never contest the seizure.

In an era of across-the-board cutbacks in public spending, civil forfeitures are a lucrative funding source for cash-strapped agencies and states. Last year, the federal government seized more than $4 billion under civil forfeiture laws, more than twice the take in 2011.

And don't forget the lesson learned from MF Global, i.e. clawbacks they can go back and get money from you that you are already disposed of.

[Etlase2]

That is not acceptable in technical debate. Refute with technical argument.

You mean like "well bruce schneier sez!!!"?

Did you fail to read what I wrote upthread? That I don't want to have to prove that some criminal who used my coin before or after I held it, was not me or not involved with me somehow

Sorry, but this fails the smell test. It is a manufactured argument for pushing an agenda. Crypto accounts can't be frozen, and they are difficult and sometimes impossible to confiscate (lol let's raid EVERYBODY!!), let alone prove that you are in possession of them.

[AnonyMint]

That is not acceptable in technical debate. Refute with technical argument.

You mean like "well bruce schneier sez!!!"?

The timing attacks research has been done by numerous different researchers from numerous prestigious universities and numerous confirmations. It is all peer reviewed. Go read the research papers so you are not ignorant on this.

Did you fail to read what I wrote upthread? That I don't want to have to prove that some criminal who used my coin before or after I held it, was not me or not involved with me somehow

Sorry, but this fails the smell test. It is a manufactured argument for pushing an agenda.

An agenda of strong IP anonymity which is only going to help us. Manufactured from reality only. Even if you don't believe there is much risk, why not protect yourself and be sure?

Sounds to me like you have some agenda to prevent us from being sure. Why?

Crypto accounts can't be frozen, and they are difficult and sometimes impossible to confiscate (lol let's raid EVERYBODY!!), let alone prove that you are in possession of them.

If they've identified the current holder of the coin, they can compel you to give your password or throw you in maximum security prison (hell on earth) for contempt of court until you do (as they did for 7 years to Martin Armstrong in the USA).

Also because of the MF Global precedent of "clawbacks", they don't need to confiscate the coin, they can confiscate everything else you have as a replacement, even if you already disposed of the original holding that is involved.

[AnonyMint]

Any idea how much drug trading is going on with Bitcoins? And money laundering?

I will say it again. I wouldn't own large holdings of Bitcoin if you paid me to do so! These large Bitcoin holders even if they dispose of their Bitcoins are potentially screwed for life, unless they were virgin mined and they never dispose of them (that would be safe).

With strong IP anonymity built-in to the altcoin, I would buy it like hotcakes. And I am hoping I will be able to soon.

I hoping someone will implement my ideas. I have algorithms if any one is serious to implement, contact me in PM.

[Etlase2]

The timing attacks research has been done by numerous different researchers from numerous prestigious universities and numerous confirmations. It is all peer reviewed. Go read the research papers so you are not ignorant on this.

AnonyMint, I am not going to write a whitepaper whenever I need to make an argument for you. This has already taken up way too much time. First you imply that there is some ulterior motive behind disliking your anonymizing design with your loaded question, then jump to the conclusion that I am uneducated about timing attacks based on a jab at your resort to appealing to authority.

A P2P transaction network interfacing with tor is *not* the same as your typical (lol what?) tor user scenario. No, I'm not going to hold your hand until you understand the implications of this.

Even if you don't believe there is much risk, why not protect yourself and be sure?

Because *I* have a much more idealistic outlook on life-after-cryptocurrency (NB: It is insanely unfortunate that the first had to be designed like Bitcoin). You can think the way you do, but the problem with that is that it doesn't matter what gidget you come up with to anonymize the network, shit is going to hit the mother f***ing fan. There is no winning here.

If you sacrifice liberty for security... (do I need to finish this sentence or is the ellipsis enough?) Liberty being very loosely defined as the utility and accessibility of the network. Cheap, fast, scalable are properties that are of paramount importance to anonymity. And IF you can find a way to increase anonymity via increasing difficulty/cost with little affect on those who do not want it or need it, then you allow a happy medium between both needs and, imo, have the best chance of achieving what I think is roughly the same goal between us.