Chainalysis CTO said blockchain is easier to trace than paper money • Hacker News Board

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

#151

Post by cowtools » Mon, Oct 17, 2022, 2:56 PM UTC

arberx wrote: post #44

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.

privacy through voluntary swaps is not sybil-proof

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

#152

Post by cowtools » Mon, Oct 17, 2022, 2:57 PM UTC

TigeriusKirk wrote: post #145

throw10920 wrote: post #141

Earlier quoted context omitted.

This comment is one of the laziest ones that you can make. "No it isn't" is literally the top (least useful) strata of the argument pyramid, provides precisely zero extra information, and doesn't belong on Hacker News.

It's not worth going point by point when there's so many fundamental misconceptions. Best to reject the entire comment. What HN needs is less engagement with useless, time consuming misinformation, and more outright rejection of it.

No, This is incorrect

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

#153

Post by adjkant » Mon, Oct 17, 2022, 2:57 PM UTC

codyb wrote: post #121

alexb_ wrote: post #80

I have refused to shop at numerous stores because they make a point of not accepting cash. Cash is incredibly important for modern society due to actually being untraceable and allowing for private transactions. Plus, a society without cash is one where you are forced to use central banking. Blockchain is just trying to imitate cash digitally, which as it turns out is really hard to do. So it just ends up that people…

I think it's illegal in NYC to not accept cash and I fully support that. There are a lot of unbanked people here that have enough on their plates without further discrimination. And also cash is king and coins and bills are very neat.

Actually not sure of the law here myself but FWIW as a NYC resident I regularly encounter places that don't accept cash.

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

#154

Post by alexb_ » Mon, Oct 17, 2022, 2:58 PM UTC

O__________O wrote: post #131

alexb_ wrote: post #80

I have refused to shop at numerous stores because they make a point of not accepting cash. Cash is incredibly important for modern society due to actually being untraceable and allowing for private transactions. Plus, a society without cash is one where you are forced to use central banking. Blockchain is just trying to imitate cash digitally, which as it turns out is really hard to do. So it just ends up that people…

My understanding is that much like tracing blockchain transactions, cash is much easier to trace for governments than most people realize. For example, it is my understanding, most banks and ATMs scan serial numbers when receiving or distributing cash; oddly, banks will not give you itemized list of serial numbers of the bills they distributed, which would be useful in cash seizures. Also my understanding that most c…

You can track where a bill was distributed, what bank it came from, who withdrew that cash, but past that you can't track any of the transactions that happen. The transactions being tracked is the important part here.

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

#155

Post by imdsm » Mon, Oct 17, 2022, 2:58 PM UTC

jqpabc123 wrote: post #46

imdsm wrote: post #26

Earlier quoted context omitted.

> 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 fallac…

I'm not sure this is the forum for capital lols, but to answer your question:

> how do you determine what price is fair?

Well that comes down to you, doesn't it? Would you buy a litre of milk for $10? $5? $3? $2? $1? What about if you were buying some sterling to come and visit us here in the sunny UK, what exchange rate would you say is fair? £0.50? £0.75? £0.80? £0.85? What about if I was selling you a kg of Palladium, would you pay $100,000? $90,000? $70,000? [Assumed dollar currency but arbitrary to the point.]

That last question may be harder to answer without a google, as you might find it hard to determine what price is fair. If you can't determine the fair price for something you're buying, the question should be whether you should be buying it at all.

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

It seems to me that you're having an adverse reaction to my comment, so I won't address the final two lines.

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

#156

Post by dimitrios1 » Mon, Oct 17, 2022, 2:59 PM UTC

nimbius wrote: post #84

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…

The whole article is a plug for Chainalysis, a company that sells its ability to trace crypto transactions to the US government who ironically gave them KYC, the most fundamental and lazy ability to start a business that traces stuff like this. What I'd like to see Grigg admit to with a straight face is his companies ability to trace monero. his company got the US Government bid for a $625,000 bounty to trace it, and…

Call me skeptical of any assumed ill intentions as $625,000 is not a big enough chunk of change to convince me that there is some form of grift going on here, as there's millions to be made elsewhere grifting crypto.

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

#157

Post by smcl » Mon, Oct 17, 2022, 3:02 PM UTC

Stagnant wrote: post #99

RuggedPineapple wrote: post #51

Earlier quoted context omitted.

>Personally, all I see are a string of obvious scams collapsing. I think you and rational people agree, it's just the rational people see the whole space as a scam, and they're not wrong. It's been, from it's very start, a Dunning-Kruger trap sold on lies. First it was supposed to be a currency, but was created from the ground up to be deflationary, which is a death knell for a currency and leads to perpetual recessi…

>First it was supposed to be a currency >Then it was an asset that can only go up >Then it was an inflation hedge that would keep you up when markets went down All of these are just random narratives that you sometimes see being pushed on reddit or twitter. No credible person would make the last two claims. I get it, shitting on crypto has become hip especially in the last couple of years. But it doesn't change the f…

So can you tell us what the use case is? Because I've been watching for far longer than the last couple of years, and I've seen those three narratives being pushed exactly as GP described. If there's someone credible who knows, they're not making themselves heard and it's certainly not clear to me right now what it's for if not those.

> I get it, shitting on crypto has become hip

To be honest if GP was trying to shit on crypto they would've mentioned the ridiculous NFT craze and multitude of shitcoin grifts of the last few years. They're being very charitable by sticking to some very simple things.

> the general trend for bitcoin has been a steady increase in value

There has been nothing steady about Bitcoin's value, wild swings up and down are the norm. I mean if you look at the exchange rate to an actual currency 10 years ago vs today then pretend nothing happened in between, then yes that's a nice steady rate of growth. However that would be ignoring multiple huge, sudden spikes and falls that have happened during this period.

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

#158

Post by rabuse » Mon, Oct 17, 2022, 3:05 PM UTC

breck wrote: post #110

helf wrote: post #52

“No shit”. Wait, you mean something that literally tracks any and all actions in a literal chain of history that is immutable is easy to track?!? You mean that pattern recognition can be applied to even “randomized” in both size, time, and destination of transactions can be done to track like how they can track burner phones? I’m shocked! Shocked I say!

This is really concerning. How are people going to use blockchain to do nefarious things if it's easier to track?

That's what "Coin Mixers" would do in the past, but the good one's stopped operating.

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

#159

Post by subradios » Mon, Oct 17, 2022, 3:05 PM UTC

jonhohle wrote: post #61

rtkwe wrote: post #37

Earlier quoted context omitted.

Yeah this is the fundamental problem, the only benefit you get with a blockchain is you know the data hasn't been altered from the original but there's no guarantee the data originally entered was correct. All the pitches about tracking shipments have the same issue, shipping companies already do most of that without blockchain and the main issue of people lying to the computers isn't solved by adding a chain to the…

Why is blockchain needed for that and not any other immutable ledger?

Because a blockchain can operate in the presence of even large and powerful malicious actors.

The issue here is a social/regulatory/legal one. The current international shipping game is a cartel business, and the cartel doesn't want competition - so they can use government, brand recognition, etc to maintain their moat.

It's not that the blockchain version isn't clearly better, it's that the getting there part is a very difficult and tricky process.

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

#160

Post by imdsm » Mon, Oct 17, 2022, 3:06 PM UTC

AlexandrB wrote: post #45

imdsm wrote: post #26

Earlier quoted context omitted.

> 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…

They address more than just double spend attacks, but also ownership and control. Without a private key, in a protocol where every transaction must be signed, no changes can be made to a ledger where balances are associated with corresponding public keys.

The human issues that we have from use of the system, fraud, P&D schemes, non-custodial wallets (exchanges) etc, aren't fundamental issues with the technology itself, but with the periphery. Cash can be used to buy drugs, bank accounts can be used for money laundering, financial markets can be manipulated.

We must be cognisant of the fact that where there are people, there will be misuse. Crypto is no different.

> 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.

Must we assume that pricing is to be trusted? What pricing is this, exchange pricing? If you're using centralised exchanges then the issue is whether you trust the centralised exchange to keep an honest order book, and whether you're able to determine whether the exchange rate reflects the value of the token/asset.

Many people have recently begun trading on financial markets, see Gamestop, wallstreetbets etc, without the proper knowledge required to ensure they're making the right decisions. This is no different from buying BTC because your neighbour told you it'll hit $100k by Christmas.

These are societal problems from people who want to get rich quick and almost always get hurt trying.