Why the feds took down one of Bitcoin’s largest exchanges • Hacker News Board

Re: Why the feds took down one of Bitcoin’s largest exchanges

#31

Post by celticninja » Sat, Jul 29, 2017, 10:14 PM UTC

ineedasername wrote: post #8

This is what I never understood about bitcoins's reputation, especially earlier on, about its supposed anonymity. I suppose that's much less the case now. But it always seemed odd that people considered it at all anonymous when the blockchain kept a record of everything. Sure it might not be immediately identifiable with a specific individual, but unless it was a wholly closed system, entry & exit points would always…

0.1btc was only worth approx $200 in the last 12 months so I am not sure how you sold 1/10th of a bitcoin for $200 a few years ago because 1 bitcoin would have cost approximately that.

Re: Why the feds took down one of Bitcoin’s largest exchanges

#32

Post by Dylan16807 » Sat, Jul 29, 2017, 10:15 PM UTC

ineedasername wrote: post #19

TylerE wrote: post #12

Earlier quoted context omitted.

Anonymous != Untraceable. Anonymous means, well, anonymous.

Nice, succinct, seems the essence of the misconception. Thanks :D

Not really. The transactions are very far from anonymous. You don't have to attach your real name, which makes it pseudonymous. Cash is actually anonymous (assuming no serial number tracking).

Re: Why the feds took down one of Bitcoin’s largest exchanges

#33

Post by StavrosK » Sat, Jul 29, 2017, 10:24 PM UTC

FRex wrote: post #30

>Money laundering is the process of transforming the profits of crime and corruption into ostensibly "legitimate" assets. >A cryptocurrency tumbler is a service offered to mix potentially identifiable or 'tainted' cryptocurrency funds with others, with the intention of confusing the trail back to the fund's original source. English might not be my native language but I can see lots of parallels. I never actually cons…

Laundering isn't about traceability. It's about taking money that's been gotten illegally (and thus you can't spend without the IRS asking questions) and paying tax on it so it appears as if you earned it by legitimate means.

Making traceable money untraceable doesn't mean it's now clean.

Re: Why the feds took down one of Bitcoin’s largest exchanges

#34

Post by StavrosK » Sat, Jul 29, 2017, 10:27 PM UTC

honestlyreally wrote: post #23

steveeq1 wrote: post #20

Earlier quoted context omitted.

Etherdelta already works: https://etherdelta.github.io/

Which sadly doesn't get enough love. It's going to take Gox 2.0 before people realise its true value.

It's really slow to load for me, but can you buy BTC with USD from it, for example? Otherwise it's not really solving the hard part of the problem...

Re: Why the feds took down one of Bitcoin’s largest exchanges

#35

Post by microsage » Sat, Jul 29, 2017, 10:28 PM UTC

> The language in the indictment about BTC-e’s “criminal design” mimics the indictment against Liberty Reserve — an anonymous currency service taken down by law enforcement in 2013 — which also accused the online exchange of having a “criminal design” and a system “designed so that criminals could effect financial transactions under multiple layers of anonymity.”

Basing the indictment on the intent of the design - something hard to prove or reason about objectively - seems like a very slippery slope. Couldn't a similar statement be made about almost any system that protects user privacy? Or maybe they're referring to specific legal requirements not being conformed to rather than a general "criminal design"?

Re: Why the feds took down one of Bitcoin’s largest exchanges

#36

Post by nikanj » Sat, Jul 29, 2017, 10:29 PM UTC

honestlyreally wrote: post #26

chx wrote: post #22

> There are many legitimate uses of Bitcoin What are those. I have claimed here and will repeatedly do so -- there are none. I mean, sure, there are a few companies which integrate the sell-your-bitcoins-buy-our-product in one go but the volume of that is near irrelevant. And no, international transfers do not count as a usage because not only the sender needs to buy bitcoins the seller needs to sell them too...

Very bizarre to state the obvious use cases, then nullify it with handwaving. The current cost to move $10m of bitcoin across international borders is about $1. Attempt the same via conventional means and you'll quickly realise it's benefits go beyond monetary efficiency. As for current working use cases Factom[0] stores an auditable timestamped data trail in a merkle tree structure, which is then anchored into the b…

What's the legal status for moving $10m across international borders like that?

Re: Why the feds took down one of Bitcoin’s largest exchanges

#37

Post by StavrosK » Sat, Jul 29, 2017, 10:29 PM UTC

chx wrote: post #22

> There are many legitimate uses of Bitcoin What are those. I have claimed here and will repeatedly do so -- there are none. I mean, sure, there are a few companies which integrate the sell-your-bitcoins-buy-our-product in one go but the volume of that is near irrelevant. And no, international transfers do not count as a usage because not only the sender needs to buy bitcoins the seller needs to sell them too...

"What are the legitimate uses of Bitcoin? I have claimed here and will repeatedly do so -- there are none. I mean, sure, there are plenty, but apart from those, there are none."

Re: Why the feds took down one of Bitcoin’s largest exchanges

#38

Post by StavrosK » Sat, Jul 29, 2017, 10:30 PM UTC

gruez wrote: post #18

jstanley wrote: post #10

Earlier quoted context omitted.

https://bisq.io/ is a decentralised exchange.

sorry i didn't clarify in my first post but by "exchange", i mean a place where there is 1 orderbook that every participant uses and transactions are done automatically, rather than some ad-hoc system where participants transact between each other. exchanges: gdax, bitstamp, nyse marketplaces: localbitcoins, bitcointalk, otc markets bitsquare is closer to localbitcoins than bitstamp.

How are you going to do transactions automatically when you can't send your money to one place? Whose bank account will your USD end up in so you can get some balance in this system?

Re: Why the feds took down one of Bitcoin’s largest exchanges

#39

Post by maxerickson » Sat, Jul 29, 2017, 10:41 PM UTC

pmorici wrote: post #15

erikpukinskis wrote: post #4

What happens when someone builds an autonomous Bitcoin exchange on Ethereum?

It still has to interact with the banking system at some point unless all your pairs are only cryptos.

I though we all agreed to call them cybers?

Re: Why the feds took down one of Bitcoin’s largest exchanges

#40

Post by vkou » Sat, Jul 29, 2017, 10:45 PM UTC

abetusk wrote: post #17

ineedasername wrote: post #8

This is what I never understood about bitcoins's reputation, especially earlier on, about its supposed anonymity. I suppose that's much less the case now. But it always seemed odd that people considered it at all anonymous when the blockchain kept a record of everything. Sure it might not be immediately identifiable with a specific individual, but unless it was a wholly closed system, entry & exit points would always…

It's the difference between pseudonymity and anonymity. Saying that I've transferred B bitcoin to identity A doesn't tie that identity to a "real" person, it just says whoever holds A's identity (secret keys) can do other transactions with the bitcoins A holds. In practice this gets complicated as some exchanges require a valid government ID (drivers license say) and that's why these so-called "tumbling" services spr…

> Presumably even sending bitcoin from an identity that's tied to your meat space identity directly to another identity that you create provides a layer of protection.

But then any transaction from your second, secret identity that compromises you will retroactively compromise all other transactions made from that identity. Your opsec has to consistently be perfect.