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Author Topic: Mises' Regression Theorem.  (Read 5458 times)
FreeMoney
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July 25, 2010, 10:56:59 AM
 #21

Factoid of the day: I willed Bitcoin's monetary value into existence. Satoshi was all like, "This is beta, don't use it for real financial transactions." And I was like, "Dude, this is friggin' awesome! I think I'll give it monetary value." And then I did. Look it now, with the all the monetary valuing. Brings a tear to the eye, I tell ya! Cry

That's pretty cool. What was Satoshi wanting to wait for?

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Red
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July 25, 2010, 02:09:54 PM
 #22

How do you plan to remain anonymous when it comes to actually shipping the product to you? You have to give them a real-world address in order to receive anything.

If they can build an Onion router, I can build a cheeseburger router!


Worse, that location can then be tied to your Bitcoin sending address. Even if you try to obfuscate the Bitcoin address, traffic analysis can probably tie it to your other accounts unless you're absolutely paranoid about maintaining separate online identities. The fact that all transactions are public knowledge would make that kind of analysis rather simple.

Actually, this is the one feature of bitcoin I'm not enamored with. By having every transaction available to everyone whether they need to know or not, It does make traffic analysis and correlation attacks trivial. I don't think people understand how easy that is for the determined. Digital goods don't help in a lot of cases, because vendors still feel entitled to your name and address.


If one was to build a large cache of bitcoins, they could create their own bitcoin laundry service. That will probably be worth a considerable amount of N-value in the future.

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July 25, 2010, 03:01:16 PM
 #23

Red: That's the whole point of the multiple addresses.  You can send from any of them, thus they can't be linked together.  Having everyone know about every transaction is required of the algorithm to keep everything secure.

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Red
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July 25, 2010, 04:47:45 PM
 #24

Red: That's the whole point of the multiple addresses.  You can send from any of them, thus they can't be linked together.  Having everyone know about every transaction is required of the algorithm to keep everything secure.

Yes, I understand that completely. However, bitcoins create a complete public transaction graph showing who has transacted with who. This gives away lots of correlation information. Someone else drew some nice graphs in another thread.

The obvious initial identity leak is in purchasing coins. Since making fiat payment often comes with identity information you have a potential leak there. Also since on purchase, coins are likely transmitted in a single transaction to a single bitcoin address, it becomes an anchor account tied to your paypal account. (depending on the precautions of the market of course)

A second obvious identity leak is in spending the coins for hard goods. As someone previously pointed out, this ties your real address to the bitcoin address the payment was made from.

Also vendors and users publish well known bitcoin addresses tied with either a person, organization, behavior, idea, or product. Say for example, "Donate to "xxxxx" if you want to support anonymous cheeseburgers delivery." Donating "tags" your account as belonging to a carnivore just as efficiently as a carnivore tag on YouTube.

If you trade from a single bitcoin address to multiple well known addresses, it simply corrolates more information about you. Say a naive noob bought 50 BTC and had them all sent to his shiny new bitcoin address. He then sent 10 BTC to anonymously overthrow the government. Send 1 BTC for a cheeseburger, then later decided he wanted a cool "send me bitcoins if you like me!", in his forum signature, and on his facebook page. Poof, he has now tied his anti-government sympathies, cheeseburger support, forum account to his real world facebook page. Just by being a noob. If you created a second anonymous donate account, but then naively transfered those coins to your main account, you are just as screwed. The many to one, then one-to-one pattern would be obviously apparent.

Now say, both parties took lots of precautions and created lots of intermediate accounts for plausible deniability. But unfortunately decided that access to the kiddiepron site costs 123.45 BTC.  Now it is a simple matter to search for all transactions of 123.45 BTC. Then you simply follow the graph backwards and forwards until you find previous or future transactions that collate to the real world.

Generating coins is anonymous, so un-traded coins are safer. Single use bitcoin addresses are safer. Trading entire blocks of coins at once so there is no forking or merging is safer. Always trading in standard size amounts is safer.

If someone created a "trusted laundry service" (danger word) where you could transfer 100 BTC to the service and have it copy 1 BTC to each of 100 new addresses from it's coin cache, (not your previous transaction), that would be even safer.

But in all cases, the number of private keys that people have to track is going to get huge. This means the likelihood of key-loss goes up.
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July 25, 2010, 06:05:25 PM
 #25

Factoid of the day: I willed Bitcoin's monetary value into existence. Satoshi was all like, "This is beta, don't use it for real financial transactions." And I was like, "Dude, this is friggin' awesome! I think I'll give it monetary value." And then I did. Look it now, with the all the monetary valuing. Brings a tear to the eye, I tell ya! Cry

That's pretty cool. What was Satoshi wanting to wait for?
I don't know for sure, you'd have to ask him. I just figured it was either that he took real financial transactions very seriously or he didn't want people to get too invested in it so that he could make breaking changes if needed or as the developer, he perhaps wanted to stay independent of the financial side of it. To this day I've never bought or sold any bitcoins from/to him and I have absolutely no idea how many bitcoins he has. But the way I looked at it, the idea was too golden to have it sit in obscurity. Earning money wasn't my goal and I'm not a libertarian; I just wanted this revolutionary technology to get the exposure it deserved. Factoid of the day (that last one counts as yesterday): I chose this user name and marketed my now retired website toward the End the Fed movement, libertarians, the Tea Party movement and related movements because I figured that was the best way to get the word out. But I'm not part of any of the above and I don't have any problem with fiat currencies, the Federal Reserve, the current banking system or the current majority party in the United States or the general direction the current government is moving. There are some things I don't like about government and a few decisions from the current administration that I strongly disagree with, but I'm a very traditional USA democrat, so I'm quite content with the general direction in which things are moving.

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joechip
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July 27, 2010, 06:12:28 PM
 #26

But I'm not part of any of the above and I don't have any problem with fiat currencies, the Federal Reserve, the current banking system or the current majority party in the United States or the general direction the current government is moving. There are some things I don't like about government and a few decisions from the current administration that I strongly disagree with, but I'm a very traditional USA democrat, so I'm quite content with the general direction in which things are moving.

This is a fascinating admission, honestly, and ironic.  Thanks.

Ta,
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