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Chainalysis CTO said blockchain is easier to trace than paper money

lancengym.medium.com

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Re: Chainalysis CTO said blockchain is easier to trace than paper money

#41

Post by SevenNation »

That's because when most people use "blockchain" or "DeFi" they're using AML/KYC entities that post their transaction logs to public servers. Law enforcement eats this up because it saves them the trouble of getting warrants for investigations.

Bad for customers to be sure. Most have no idea what they're doing and have fallen for a scam hook, line, and sinker. They (loudly, incessantly) proclaim to their friends the benefits of a new money paradigm while deriving all sustenance through the umbilical cord of OldFi. ChromaFlair on a Model T.

The article itself is a hot mess of muddled thinking. It starts by talking about the Bitcoin white paper (not a "manifesto"), then asking the absurd question: "Why can't DeFi make good on the promise?" The reason is that "DeFi" is about as far from Bitcoin as "car" is from "carpet."

The Bitcoin white paper describes the application of proof of work to the problem of electronic cash. The vast majority of DeFi projects are just centralized ledgers operating through trusted institutions. They are the very definition of "mint" in the white paper - a single, corruptible player that sets the rules - arbitrarily if need be.

Re: Chainalysis CTO said blockchain is easier to trace than paper money

#43

Post by lupire »

insanitybit wrote: post #28
prvit wrote: post #4

Entirely traceable money is easier to trace than borderline untraceable money? Great.

> The traditional banking model achieves a level of privacy by limiting access to information to the parties involved and the trusted third party. The necessity to announce all transactions publicly precludes this method, but privacy can still be maintained by breaking the flow of information in another place: by keeping public keys anonymous. The public can see that someone is sending an amount to someone else, but…

Satoshi+in their writings) didn't understand the side channel attack of the Blockchain-meatspace bridge. Bitcoin only meets its design guarantees in a purely virtual world or with anonymous terminals. Bitcoin is already expensive enough to transact in, are you also going to move to a different location every time your transact?

Re: Chainalysis CTO said blockchain is easier to trace than paper money

#44

Post by arberx »

SevenNation wrote: post #41

That's because when most people use "blockchain" or "DeFi" they're using AML/KYC entities that post their transaction logs to public servers. Law enforcement eats this up because it saves them the trouble of getting warrants for investigations. Bad for customers to be sure. Most have no idea what they're doing and have fallen for a scam hook, line, and sinker. They (loudly, incessantly) proclaim to their friends the…

Sounds like you've never used a DeFi application...Yes, the bridging between on-chain/off-chain still happens through centralized entities, but things like uniswap are entirely run on-chain and don't require any central authority or centralized ledger.

Re: Chainalysis CTO said blockchain is easier to trace than paper money

#45

Post by AlexandrB »

imdsm wrote: post #26
jqpabc123 wrote: post #3

Functional money is built around trust and consensus. A critical weakness of crypto is that the actors involved are *less* trustworthy than government. And this lack of trust and transparency and oversight; combined with the fact that anyone and his brother can mint their own crypto, makes a general consensus on the value of crypto unlikely.

> A critical weakness of crypto is that the actors involved are less trustworthy than government. If anything, "crypto" is based on the idea that people can't be trusted, and is thus a trustless system, based on an agreed upon protocol with cryptographic controls. It isn't meant as an improvement to an existing system, but as an alternative system, and while we often hear of people who say it is a scam, that it won't…

> If anything, "crypto" is based on the idea that people can't be trusted, and is thus a trustless system, based on an agreed upon protocol with cryptographic controls.

Those controls only address problems created by the distributed nature of crypto (double spend), but don't touch the most common types of financial fraud which is why wash trading and rug pulls are so common. Crypto effectively assumes that people can't be trusted to exchange currency fairly, but can (and indeed must) be trusted to do everything else (pricing, disclosure, governance, etc.) fairly.

Re: Chainalysis CTO said blockchain is easier to trace than paper money

#46

Post by jqpabc123 »

imdsm wrote: post #26
jqpabc123 wrote: post #3

Functional money is built around trust and consensus. A critical weakness of crypto is that the actors involved are *less* trustworthy than government. And this lack of trust and transparency and oversight; combined with the fact that anyone and his brother can mint their own crypto, makes a general consensus on the value of crypto unlikely.

> A critical weakness of crypto is that the actors involved are less trustworthy than government. If anything, "crypto" is based on the idea that people can't be trusted, and is thus a trustless system, based on an agreed upon protocol with cryptographic controls. It isn't meant as an improvement to an existing system, but as an alternative system, and while we often hear of people who say it is a scam, that it won't…

If anything, "crypto" is based on the idea that people can't be trusted, and is thus a trustless system

LOL!

When you buy crypto, how do you determine what price is fair? Most people turn to an unregulated "exchange" that can easily manipulate prices in a multitude of different ways.

This is called "trust" --- blind, misplaced trust --- without any oversight or transparency.

You have reiterated a common crypto fallacy --- that blockchain accounting somehow makes the overall system "trustless". Nothing could be further from the truth.

Re: Chainalysis CTO said blockchain is easier to trace than paper money

#47

Post by z3c0 »

convery wrote: post #40
insanitybit wrote: post #11

Earlier quoted context omitted.

I don't think they're confused, I think the vast majority of people involved in crypto or who are spectators of crypto are confused. I have repeatedly heard that crypto enables "anonymous" transactions for years. Also he literally links the original paper, quoting the part where it talks about transactions being harder to trace. "without telling who the parties are".

The "without telling who the parties are" is more about non-personal identifiers. Similar to how knowing your IP address doesn't really identify you by itself, you need to go through (often several levels of) other parties to get that info. Which in addition is ephemeral, others will be assigned your IP and tracing which requests were made by you vs. someone else is a lot harder than tracing a credit-card.

This seems to be lost on a lot of folks, which I find strange in a tech-centric forum. Bitcoin is perfectly pseudonymous, as it strives to be, and not anonymous, which it has never attempted to be.

Re: Chainalysis CTO said blockchain is easier to trace than paper money

#48

Post by agentultra »

> The recent spate of losses suffered by crypto exchanges and digital wallets

... have been on-going for years.

Complex systems introduce a huge amount of attack surface. Verifying systems is expensive and slow. And this was all a scam anyway.

This is mostly an article about the exchanges and gets a few details wrong but the overall gist is that the federal agencies and regulators are cracking down and finding out what the black hats knew all along.

Re: Chainalysis CTO said blockchain is easier to trace than paper money

#49

Post by lupire »

insanitybit wrote: post #36
AlexandrB wrote: post #32

Earlier quoted context omitted.

> The most sensible thing to do with blockchain is to track produce from when it's picked to when it's sold for QC. I don't understand why even this is sensible. Why not just use a database? The only miners/validators on a produce blockchain are likely to be agri-companies anyway.

I also find it to be a confusing use case. The point of blockchain is that it's useful if you assume that some parties are malicious . Who are we protecting against in the produce supply chain?

Fraudulent suppliers, of course. But Blockchain can't prevent against that.

Re: Chainalysis CTO said blockchain is easier to trace than paper money

#50

Post by louwrentius »

SevenNation wrote: post #41

That's because when most people use "blockchain" or "DeFi" they're using AML/KYC entities that post their transaction logs to public servers. Law enforcement eats this up because it saves them the trouble of getting warrants for investigations. Bad for customers to be sure. Most have no idea what they're doing and have fallen for a scam hook, line, and sinker. They (loudly, incessantly) proclaim to their friends the…

What is the point you are trying to convey?
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