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Author Topic: Bitcoin IS anonymous  (Read 4204 times)
cypherdoc
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August 03, 2011, 10:46:47 PM
 #1

if it wasn't, why hasn't anyone identified the stealer of the bitcoins of Allinvain, MyBitcoin and various other hacks?
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evolve
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August 03, 2011, 11:16:25 PM
 #2

because traffic analysis is time consuming and isnt free
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August 03, 2011, 11:18:41 PM
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Pseudo-anonymous ...

... bitcoin's biggest deficiency as money, imo.

cypherdoc
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August 03, 2011, 11:49:53 PM
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i'm not so sure how effective traffic analysis is with a determined thief.  multiple moves and splits significantly complicate identification IMO.  yes, i've read that article from those 2 researchers.
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August 03, 2011, 11:54:56 PM
 #5

multiple addresses don't matter, it only temporarily obscures things.

the principle works the same as it does with captured military communications (SIGINT/COMINT). with enough raw traffic, you can make communication maps that will reveal who is who, even if you are up against dynamic (constantly changing) callsigns.
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August 04, 2011, 12:08:41 AM
 #6

multiple addresses don't matter, it only temporarily obscures things.

the principle works the same as it does with captured military communications (SIGINT/COMINT). with enough raw traffic, you can make communication maps that will reveal who is who, even if you are up against dynamic (constantly changing) callsigns.

wouldn't you have to have revealed your identity in relation to one of the addresses?
Big Time Coin
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August 04, 2011, 12:17:15 AM
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Yeah I was going to work on a program/script to figure out where all the mybitcoin coins went to track them.  Also to make a program to hook into the bitcoin p2p network and pull the IPS of the addresses they ended up at. 

Problem #1: How the hell am I supposed to know what addresses were Mybitcoin receiving addresses to begin with?  I can start a thread, but only a tiny fraction of people are going to see it or post their receiving addresses in there. 

Problem #2: The math isn't trivial, not immediately obvious to me that the algorithm will run in O(n) time.

Problem #3: those are just the first two, they seem unsolvable without many hours of time invested, and will only lead to the discovery of problem #4-?

When jgarzik talks about bitcoin not being anonymous, he is actually talking about "in theory" they are not anonymous.  In theory someone could create a companion program to track bitcoins.

In practice, I agree that they are anonymous, for now.

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August 04, 2011, 12:23:24 AM
 #8

no, not neccessarily. traffic analysis is about looking for patterns in the communications.     

for instance (and this is a extremely basic example using callsigns)

if you were to see traffic containing the following  ( > is the direction of communication):

ABC>DEF
DEF>GHI

JKL>DEF
DEF>MNO

and later you see

ABC>XQZ
XQZ>GHI

JKL>XQZ
XQZ>MNO


you can then infer that DEF is likely XQZ


of course the real world application of this gets MUCH more complex and has many more variables, this is just a very basic example. after mapping very large amounts of traffic, you can build a map of who talks to who, and when ; communication hierarchies become apparent. identities can be  revealed in relation to the known identities of others in the communication structure.

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August 04, 2011, 12:55:45 AM
 #9

Problem #2: The math isn't trivial, not immediately obvious to me that the algorithm will run in O(n) time.

You could crowdsource that for cheaper and less effort than writing an algorithm. Make a website that lets people share links to block explorer transactions that are related, and I'm sure anyone who hasn't run screaming away from Bitcoin after the issues would be glad to help out (after all, they just got fucked hard).

In fact, I bet that's probably the more likely culprit for the price tanking rather than the coins being unloaded - lots of people got fucked hard and are exiting the market. We gotta stop pretending people's coins disappearing is good for the market, or that Bitcoin is useful solely as a store of wealth.  History has shown these two statements to be bullshit.

^_^
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August 04, 2011, 01:05:41 AM
 #10

Problem #1: How the hell am I supposed to know what addresses were Mybitcoin receiving addresses to begin with?  I can start a thread, but only a tiny fraction of people are going to see it or post their receiving addresses in there. 
Quite easily. Using the blockchain, you can narrow down which transactions were from an ewallet by looking for transactions with almost no change. From there, some additional analysis can tell you with near certainty which addresses belonged to Mybitcoin.

ctoon6
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August 04, 2011, 02:11:31 AM
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if they used a good laundering service, you would never know for sure.

cypherdoc
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August 04, 2011, 02:32:43 AM
 #12

no, not neccessarily. traffic analysis is about looking for patterns in the communications.     

for instance (and this is a extremely basic example using callsigns)

if you were to see traffic containing the following  ( > is the direction of communication):

ABC>DEF
DEF>GHI

JKL>DEF
DEF>MNO

and later you see

ABC>XQZ
XQZ>GHI

JKL>XQZ
XQZ>MNO


you can then infer that DEF is likely XQZ


of course the real world application of this gets MUCH more complex and has many more variables, this is just a very basic example. after mapping very large amounts of traffic, you can build a map of who talks to who, and when ; communication hierarchies become apparent. identities can be  revealed in relation to the known identities of others in the communication structure.



you're right.  thats an extremely simple and highly unlikely address scenario.  even for me, someone who isn't trying to hide anything, ABC & MNO would never be used twice since a new receiving address is automatically inserted in the clipboard after every receive and any change returned from a sending address gets automatically assigned to new address.
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August 04, 2011, 02:44:59 AM
 #13


Pseudo-anonymous ...

... bitcoin's biggest deficiency as money, imo.
What? that it's too anonymous or to little anonymous?

Seems that this is a good compromise between fully transparent and fully anonymous. It's traceable but only if you're prepared to do a shitload of work. Which means that people won't bother for anything but very serious cases.

Bitcoin Core developer [PGP] Warning: For most, coin loss is a larger risk than coin theft. A disk can die any time. Regularly back up your wallet through FileBackup Wallet to an external storage or the (encrypted!) cloud. Use a separate offline wallet for storing larger amounts.
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August 04, 2011, 02:49:38 AM
 #14

if it wasn't, why hasn't anyone identified the stealer of the bitcoins of Allinvain, MyBitcoin and various other hacks?

When the coins at mybitcoin are exchanged for dollars or euros, the identity of whoever converted those coins will be known to the exchange. Until that time, the coins from mybitcoin are exactly where they have always been. There is simply no way (at the moment) for their rightful owners to access them.

Bitcoin is backed by the full faith and credit of YouTube comments.
ctoon6
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August 04, 2011, 02:58:05 AM
 #15

if it wasn't, why hasn't anyone identified the stealer of the bitcoins of Allinvain, MyBitcoin and various other hacks?

When the coins at mybitcoin are exchanged for dollars or euros, the identity of whoever converted those coins will be known to the exchange. Until that time, the coins from mybitcoin are exactly where they have always been. There is simply no way (at the moment) for their rightful owners to access them.

not really, they could always dead drop it.

jgarzik
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August 04, 2011, 03:05:24 AM
 #16

No, it's not "just theory".

By observing timing and size of network traffic bursts, one may deduce who is the sender of a bitcoin transaction, even if the network connection is encrypted.  And by default, the connection is not encrypted.

This is obviously predicated on someone already observing you, as well as actively sampling the P2P network.  If you find out about a crime after the fact, it is a lot more difficult to associate a transaction with a network address.

Other spends from the same wallet may compromise your identity, if you have ever posted a public bitcoin address somewhere.

In a closed ecosystem without ISP wiretaps and social engineering, bitcoin is highly private.  Use of dead drops, transaction delaying, mixing services and other means help increase anonymity, but are too difficult / time consuming for most people to want to use.  So we must live in the real world, where methods of discovering who is using bitcoin are already well known and used in the field today (keylogging, data sniffing and snarfing, network timing analysis, ...)


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wumpus
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August 04, 2011, 03:17:08 AM
 #17

By observing timing and size of network traffic bursts, one may deduce who is the sender of a bitcoin transaction, even if the network connection is encrypted.  And by default, the connection is not encrypted.
This is why it would make no sense to just encrypt bitcoin traffic as a separate overlay network.

Making use of an existing onion net such as I2P/Tor allows hiding the bitcoin traffic between other traffic. Still not 100% fool proof, as you could always do some kind of statistic analysis, but it moves it a lot more toward the tinfoil hat domain.

Anyway, the most effective way to trace people is indeed to have inside info at the exchanges. At the point where bitcoins are exchanged for bank money it's easy to ID who is behind it. From there, the network can be followed. This will become infeasible when there are people that are only paid in bitcoin and spend bitcoin and never trade, but my gut feeling is that those are really rare at this moment.

Bitcoin Core developer [PGP] Warning: For most, coin loss is a larger risk than coin theft. A disk can die any time. Regularly back up your wallet through FileBackup Wallet to an external storage or the (encrypted!) cloud. Use a separate offline wallet for storing larger amounts.
cypherdoc
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August 04, 2011, 03:45:17 AM
 #18


Pseudo-anonymous ...

... bitcoin's biggest deficiency as money, imo.
What? that it's too anonymous or to little anonymous?

Seems that this is a good compromise between fully transparent and fully anonymous. It's traceable but only if you're prepared to do a shitload of work. Which means that people won't bother for anything but very serious cases.


i'd consider MyBitcoin to be a very serious case.  so lets see if anyone in the near future can identify the thief.  i highly doubt it. 

this will be an excellent real world test case.
cypherdoc
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August 04, 2011, 03:46:12 AM
 #19

if it wasn't, why hasn't anyone identified the stealer of the bitcoins of Allinvain, MyBitcoin and various other hacks?

When the coins at mybitcoin are exchanged for dollars or euros, the identity of whoever converted those coins will be known to the exchange. Until that time, the coins from mybitcoin are exactly where they have always been. There is simply no way (at the moment) for their rightful owners to access them.

how do you know this?  do you have access to the public addresses at which the coins are stored?  if so, please provide.
cypherdoc
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August 04, 2011, 03:50:44 AM
 #20

Use of dead drops, transaction delaying, mixing services and other means help increase anonymity, but are too difficult / time consuming for most people to want to use. 

i know of no one more motivated than MyBitcoin.

what is a dead drop?
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