Bitcoin FBI Report April 2012

[DeathAndTaxes]

They didn't even mention that beyond a network P2P, that there could be exchange of Wallet.dat files that the network wouldn't even see.

That is non-viable method beyond immediate and well trusted peers and only for tiny amounts of money.

[1715060731]

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[1715060731]

1715060731

[JusticeForYou]

They didn't even mention that beyond a network P2P, that there could be exchange of Wallet.dat files that the network wouldn't even see.

That is non-viable method beyond immediate and well trusted peers and only for tiny amounts of money.

I would tend to believe that the people that would do that in a serious Organized Crime way, would be trusted or dead.

Just saying...

[Raoul Duke]

They didn't even mention that beyond a network P2P, that there could be exchange of Wallet.dat files that the network wouldn't even see.

That is non-viable method beyond immediate and well trusted peers and only for tiny amounts of money.

I would tend to believe that the people that would to that in a serious Organized Crime way, would be trusted or dead.

Just saying...

Trust, money and criminality don't get along very well...

Just saying...

[DeathAndTaxes]

I would tend to believe that the people that would to that in a serious Organized Crime way, would be trusted or dead.

Sure.  You understand stand that at any point in the future anyone who had access to the wallet.dat could spend it and that spend would be untraceable.

So I buy $1M in drugs from you and give you a $1M wallet.dat.  You don't spend/transfer it to a secure address.  You pass that wallet.dat up to your boss, up to his boss up to his boss.

Suddenly one day the wallet is empty.  Who stole it?  You, me, your boss, your boss to frame me, your boss to frame you, you to frame your boss and take his job?

[JusticeForYou]

They didn't even mention that beyond a network P2P, that there could be exchange of Wallet.dat files that the network wouldn't even see.

That is non-viable method beyond immediate and well trusted peers and only for tiny amounts of money.

I would tend to believe that the people that would to that in a serious Organized Crime way, would be trusted or dead.

Just saying...

Trust, money and criminality don't get along very well...

Just saying...

Orly? Ok, nvm then.

[JusticeForYou]

I would tend to believe that the people that would to that in a serious Organized Crime way, would be trusted or dead.

Sure.  You understand stand that at any point in the future anyone who had access to the wallet.dat could spend it and that spend would be untraceable.

So I buy $1M in drugs from you and give you a $1M wallet.dat.  You don't spend/transfer it to a secure address.  You pass that wallet.dat up to your boss, up to his boss up to his boss.

Suddenly one day the wallet is empty.  Who stole it?  You, me, your boss, your boss to frame me, your boss to frame you, you to frame your boss and take his job?

Would want me to explain how that process would work, in public?

You see only A and Z could spend. All the A(...)Z between only passed it along.

but meh...


Sorry went off Topic here. Back to Topic.

[DeathAndTaxes]

Would want me to explain how that process would work, in public?

You see only A and Z could spend. All the A(...)Z between only passed it along.

Simple it is called a copy. 

It would be trivial for any entity B through Y to make a copy.  Hell it beomes trivial for Z to steal the funds and then blame it on A.  Even "IF" (and that is a big if) everyone is honest it becomes impossible to prove that B through Y only passed it along without making a copy.  Even if when Z gets it the funds are still there it is now unprovable if the funds are secure.  They could "disappear" in the next second or the next year.  When they do nobody can prove who took it.  

Also if I am "A" I really don't want to be doing business with an entity so stupid as to essentially leave 7 figures lying around in big piles without any protection or accountability.  When it goes missing I don't want them coming to look for me ... especially if I didn't even have anything to do with it.

Also maybe "A" gets jammmed up and is going to be dead if he doesn't come up with some money.  Better to steal from Z that risk guaranteed death from this new threat.  So Z needs to trust that not only is A honest right NOW but he will continue to be honest forever.  If "Z" needs to send funds to someone else that simply extends this chain of trust and unaccountability.

There is a reason we hash tx into blocks.

[JusticeForYou]

Would want me to explain how that process would work, in public?

You see only A and Z could spend. All the A(...)Z between only passed it along.

It's called a copy.  It becomes impossible to prove than B through Y only passed it along without making a copy.  Even if when Z gets it the funds are still there it is now unprovable if the funds are secure.  They could "disappear" in the next second or the next year.

Also if I am "A" I really don't want to be doing business with an entity so stupid as to essentially leave money lying around in big piles without any accountability.  When it goes missing I don't want them coming to look for me ... especially if I didn't even have anything to do with it.

Ok, Ok, It can't be done. It's not possible. You're right.

[julz]

I think Matthews 'troll' shrieks with dubious reasoning were a bit of a red herring.. however, he may be onto something as far as who the uploader is.
Matthew may be right for mostly the wrong reasons.

I didn't notice at first that it was 'tradebitcoin' who uploaded it (though it's in plain view).  Clearly the OP Andrew Bitcoiner knows something about the source.

If this is fake, it makes far more sense as an attempt to gain hits/eyeballs to a commercial operation (Andrew Bitcoiner's tradebitcoin.us or bitcoinadvertisers.com) than as a mere 'troll'.
This is another case of the word 'troll' being bandied about in a timewasting fashion.

Andrew Bitcoiner - please either come clean about this as a fake, or make some statement about how it is you came to upload it to scribd.


...and (if applicable) by coming clean sooner rather than later - avoid my requests to forum mods to have you labelled as a scammer.

[SgtSpike]

As I mentioned in the other thread, I just don't see this as being a fake, especially after spending so much time reading through each and every word typing it up.  The endnotes are too carefully constructed and accurate.  The theme of the paper is about criminal uses of Bitcoin, not about Bitcoin being criminal itself.  The wording chosen is consistent with other high-level government writings.

Anyone looking to gain financially from such a move (as julz suggests) would be much better served spending those hundreds of hours elsewhere.  Anyone looking to distribute FUD about bitcoin would likely spend much less time on such a project, or their motives would be called into question.  Why would you be so adamantly against Bitcoin as to spend hundreds of hours crafting a fake FBI document?  Especially a document that focuses solely on the potential criminal uses of Bitcoin, and not Bitcoin itself?

I just don't see it.  Certainly, people are welcome to have their own opinions, and I certainly have no proof that this is a legitimate FBI document.  I am just throwing my opinion out there, and in my opinion, this is definitely not a fake.

[Yankee (BitInstant)]

I think Matthews 'troll' shrieks with dubious reasoning were a bit of a red herring.. however, he may be onto something as far as who the uploader is.
Matthew may be right for mostly the wrong reasons.

I didn't notice at first that it was 'tradebitcoin' who uploaded it (though it's in plain view).  Clearly the OP Andrew Bitcoiner knows something about the source.

If this is fake, it makes far more sense as an attempt to gain hits/eyeballs to a commercial operation (Andrew Bitcoiner's tradebitcoin.us or bitcoinadvertisers.com) than as a mere 'troll'.
This is another case of the word 'troll' being bandied about in a timewasting fashion.

Andrew Bitcoiner - please either come clean about this as a fake, or make some statement about how it is you came to upload it to scribd.


...and (if applicable) by coming clean sooner rather than later - avoid my requests to forum mods to have you labelled as a scammer.

I've met Andrew, and he joined us outside the Future of Money Summit for a Bitcoin chat, super nice guy.

When this paper was leaked by him last night, he emailed it to a number of undisclosed recipients.

He also privately emailed me and said "the fbi report was forwarded to me by a trusted source  "

That, and based on the thorough analyses by SgtSpike and myself I strongly agree this is authentic.

My legal team is making inquiries and going over it as well, will update as I get more info

-Charlie

[SgtSpike]

I would also like to point out the three phone numbers listed at the bottom of page 10.  If anyone REALLY wants to confirm legitimacy of the paper, they could simply call those phone numbers, verify the identity of the individuals or departments on the other end of the line, and ask them if they really did publish this paper.

[julz]

I think Matthews 'troll' shrieks with dubious reasoning were a bit of a red herring.. however, he may be onto something as far as who the uploader is.
Matthew may be right for mostly the wrong reasons.

I didn't notice at first that it was 'tradebitcoin' who uploaded it (though it's in plain view).  Clearly the OP Andrew Bitcoiner knows something about the source.

If this is fake, it makes far more sense as an attempt to gain hits/eyeballs to a commercial operation (Andrew Bitcoiner's tradebitcoin.us or bitcoinadvertisers.com) than as a mere 'troll'.
This is another case of the word 'troll' being bandied about in a timewasting fashion.

Andrew Bitcoiner - please either come clean about this as a fake, or make some statement about how it is you came to upload it to scribd.


...and (if applicable) by coming clean sooner rather than later - avoid my requests to forum mods to have you labelled as a scammer.

I've met Andrew, and he joined us outside the Future of Money Summit for a Bitcoin chat, super nice guy.

When this paper was leaked by him last night, he emailed it to a number of undisclosed recipients.

He also privately emailed me and said "the fbi report was forwarded to me by a trusted source  "

That, and based on the thorough analyses by SgtSpike and myself I strongly agree this is authentic.

My legal team is making inquiries and going over it as well, will update as I get more info

-Charlie

Thanks Charlie...  It struck me as a little odd that the 1st release should appear to be from a bitcoiner - but as I mentioned in earlier posts, I totally agree that the content itself is extremely plausible.

[jgarzik]

Current top link on cryptome.org: http://cryptome.org/2012/05/fbi-bitcoin.pdf

[Steve]

Would want me to explain how that process would work, in public?

You see only A and Z could spend. All the A(...)Z between only passed it along.

Simple it is called a copy.  

It would be trivial for any entity B through Y to make a copy.  Hell it beomes trivial for Z to steal the funds and then blame it on A.  Even "IF" (and that is a big if) everyone is honest it becomes impossible to prove that B through Y only passed it along without making a copy.  Even if when Z gets it the funds are still there it is now unprovable if the funds are secure.  They could "disappear" in the next second or the next year.  When they do nobody can prove who took it.  

Also if I am "A" I really don't want to be doing business with an entity so stupid as to essentially leave 7 figures lying around in big piles without any protection or accountability.  When it goes missing I don't want them coming to look for me ... especially if I didn't even have anything to do with it.

Also maybe "A" gets jammmed up and is going to be dead if he doesn't come up with some money.  Better to steal from Z that risk guaranteed death from this new threat.  So Z needs to trust that not only is A honest right NOW but he will continue to be honest forever.  If "Z" needs to send funds to someone else that simply extends this chain of trust and unaccountability.

There is a reason we hash tx into blocks.

BTC_Bear is right.  If done properly, any copies that any intermediaries made would simply be of encrypted gibberish.  Only A and Z could spend from the wallet.  The B-Y handlers would only have an encrypted form of the wallet…make all the copies you want, they would be useless without the private key that Z possesses and which is needed to decrypt the wallet.

[EhVedadoOAnonimato]

watching

[DeathAndTaxes]

BTC_Bear is right.  If done properly, any copies that any intermediaries made would simply be of encrypted gibberish.  Only A and Z could spend from the wallet.  The B-Y handlers would only have an encrypted form of the wallet…make all the copies you want, they would be useless without the private key that Z possesses and which is needed to decrypt the wallet.

LOLZ.  That is the solution?

Um how does "B" make sure the wallet is valid if it is encrypted?  Trust the criminal counterpart with $1M in product? So "B" (or any number of intermediaries) hand "Z" a wallet and ... oops turns out it is encrypted garbage.  Guess "A" just stole $1M.

Now lets say it is valid.  That does nothing to address the fact that "A" could simply steal from "Z" at will any time in the future until the funds are moved.

Now lets pretend A is honest.

What does "Z" do w/ this encrypted wallet when he needs to spend it?  Sell it to a new party?  Then Mr. "New Party" has to trust not just Z but also A (and maybe A did the same thing so he is trusting people he doesn't even know).

Once again there is a reason why we hash tx into blocks.  People are afraid to sell a 1 BTC steam game on a 0-confirm tx but somehow think criminals will trust counterparts they know are criminals with multi-million dollar drug tx and keep them 0-confirm not for 10 minutes but to hours, weeks, or even years?  LOLZ.  If you can trust your counterparty to never cheat you then you don't need a blockchain to begin with.  Without the blockchain to enforce irreversibility it is simply an IOU.

[Raoul Duke]

BTC_Bear is right.  If done properly, any copies that any intermediaries made would simply be of encrypted gibberish.  Only A and Z could spend from the wallet.  The B-Y handlers would only have an encrypted form of the wallet…make all the copies you want, they would be useless without the private key that Z possesses and which is needed to decrypt the wallet.

LOLZ.  That is the solution?

Um how does B make sure the wallet is valid if it is encrypted?  Trust the criminal counterpart with $1M in product? So "B" (or any number of intermediaries) hand "Z" a wallet and ... oops turns out it is encrypted garbage.  Guess "A" just stole $1M.

Now lets say it is valid.  That does nothing to address the fact that "A" could simply steal from "Z" at will any time in the future until the funds are moved.

Now lets pretend A is honest.

What does "Z" do w/ this encrypted wallet when he needs to spend it?  Sell it to a new party?  Then Mr. "New Party" has to trust not just Z but also A (and maybe A did the same thing so he is trusting people he doesn't even know).

Once again there is a reason why we hash tx into blocks.  People are afraid to sell a 1 BTC steam game on a 0-confirm tx but somehow think criminals will trust counterparts they know are criminals with multi-million dollar drug tx and keep them 0-confirm not for 10 minutes but to hours, weeks, or even years?  LOLZ.  If you can trust your counterparty to never cheat you then you don't need a blockchain to begin with.  Without the blockchain to enforce irreversibility it is simply an IOU.

I'm sure criminals would love to do business this way with BTC_Bear and Steve...
We already know who would end up with no money and no product

[EhVedadoOAnonimato]

@Death&Taxes,

Ok, so sending private keys around is a horrible method. But the point is: you can have BTC transactions which leave no trace in the blockchain. Actually, which leave no trace anywhere. Two examples are the use of physical medium like bitbills or casacius coins, or the use of an Open Transactions server in cash-only mode, with bitcoin-backed tokens.
There's always some level of trust needed, but the transfers are fully anonymous. Much more anonymous than blockchain transfers.
BTC_Bear initial comment that started this parallel discussion of yours remains valid, from this point of view.

[triplehelix]

whats the bounty for a good text version?  i can make this happen.