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Internal FBI risk assessment of Bitcoin network [pdf]

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Re: Internal FBI risk assessment of Bitcoin network [pdf]

#101

Post by MichaelGG »

dmix wrote: post #77
feral wrote: post #55

Earlier quoted context omitted.

>Given that Bitcoin records all transactions for posterity, and given the ongoing rise of "big data" analytics, I'd say Bitcoin is likely to be harder, in the long run, to use for shenanigans. A government currency has forms in which transactions create no paper trail. Bitcoin does not. I did some research on anonymity (mentioned in that document); I find it hard to project how private Bitcoin will be in future. Our…

What about bitcoin tumbling services? They obscure transactions quickly and cheaply.

Obscure being the key word. There's no proof of security there, right?

Re: Internal FBI risk assessment of Bitcoin network [pdf]

#102

Post by Androsynth »

peteretep wrote: post #73
cynoclast wrote: post #69

Earlier quoted context omitted.

You really do not have a clue how our monetary system works, do you?

So enlighten us all, rather than posting snarky comments.

Obligatory link to Irwin Schiff's 'How an Economy Grows and Why it Doesnt' http://freedom-school.com/money/how-an-economy-grows.pdf

But regarding your original point, foreign govts and banks hold the US dollar because historically it has been strong, stable and accepted everywhere. It has no intrinsic value and recently governments are moving away from solely pegging their currencies to the US dollar as it has weakened relative to other currencies in the past few decades (eg Euro).

Another reason they take the US dollar is that they have no other choice. If China or Saudi Arabia were to say 'we want gold!' or 'we want resources!', trade relations would have stopped a long time ago.

Re: Internal FBI risk assessment of Bitcoin network [pdf]

#103

Post by Groxx »

dmix wrote: post #77
feral wrote: post #55

Earlier quoted context omitted.

>Given that Bitcoin records all transactions for posterity, and given the ongoing rise of "big data" analytics, I'd say Bitcoin is likely to be harder, in the long run, to use for shenanigans. A government currency has forms in which transactions create no paper trail. Bitcoin does not. I did some research on anonymity (mentioned in that document); I find it hard to project how private Bitcoin will be in future. Our…

What about bitcoin tumbling services? They obscure transactions quickly and cheaply.

As long as they don't keep records - the mixer knows everything. And I'm not aware of any running instances of a decentralized mixer like e.g. described here: http://blog.ezyang.com/2012/07/secure-multiparty-bitcoin-ano...

Re: Internal FBI risk assessment of Bitcoin network [pdf]

#104

Post by jff »

sturadnidge wrote: post #82
Nursie wrote: post #51

Earlier quoted context omitted.

Value is just what people think something is worth, it's a shared illusion, not an intrinsic property of ... anything much. Having a static, fixed supply and independence from central control makes something valuable to you, not so much to me. >If the supply of BTC was infinite, it would have essentially no value But there are many other circumstances that could result in BTC having no value, regardless of scarcity.…

You misunderstand. Independence from central control has nothing to do with it. I'm not defining value in the philosophical sense, which as you point out is entirely subjective, but you seem to be arguing against the generally accepted definition of value as applied to a system where something is exchanged in return for something else. > But there are many other circumstances that could result in BTC having no value,…

> And thanks for the completely unnecessary downvote.

Have another, for whining about it!

Re: Internal FBI risk assessment of Bitcoin network [pdf]

#105

Post by Groxx »

Unless I misunderstand Bitcoin more than I think I do, this is flat-out wrong (~1/3 of the way through the document):

  (U) What Users Can Do To Increase Anonymity
  ...
  • (U) Combine the balance of old Bitcoin addresses
        into a new address to make new payments.
Combining balances just means you have a bunch of disparate nodes in the network which may not be related, and you are intentionally connecting them. So if you combined anonymous nodes A-Y with Z which was linked to you, A-Y are now logically linked to you because Z tainted the whole pool. (edit: or at the very least, all the money in A-Y)

Yeah, there are ways to make it true/er, but I'm arguing against the principle of the suggestion. And I have doubts that combining (only your) addresses will ever increase anonymity.

Re: Internal FBI risk assessment of Bitcoin network [pdf]

#106

Post by sp332 »

Groxx wrote: post #105

Unless I misunderstand Bitcoin more than I think I do, this is flat-out wrong (~1/3 of the way through the document): (U) What Users Can Do To Increase Anonymity ... • (U) Combine the balance of old Bitcoin addresses into a new address to make new payments. Combining balances just means you have a bunch of disparate nodes in the network which may not be related, and you are intentionally connecting them. So if you co…

It makes it a little harder to prove. If you do something sketchy and get bitcoins in wallet 1, and then buy something from wallet 1, people will see that the same wallet that did something sketchy also bought something.

On the other hand, if you move bitcoins from wallet 1 to wallet 2, then do the buying from wallet 2, there's some separation and people aren't sure if it's the same person.

Re: Internal FBI risk assessment of Bitcoin network [pdf]

#107

Post by Ingaz »

piokoch wrote: post #5

Nice document. It shows well the way of thinking of our governments. "detecting suspicious activity, identifying users, and obtaining transaction records is problematic for law enforcement." - That must deeply hurts FBI people :) "Despite the virtual nature of Bitcoin, users value the currency for many of the same reasons people trust Federal Reserve notes: they believe they can exchange the currency for goods, servi…

I am Russian. Years ago I had strange experience: my friend invited me as unofficial expert.

I was amazed: the guys whom I talked were "right guys". One of them told me: "From the call log I can tell more than a guy think himself" (Excuse me for bad English) M

Re: Internal FBI risk assessment of Bitcoin network [pdf]

#108

Post by Groxx »

sp332 wrote: post #106
Groxx wrote: post #105

Unless I misunderstand Bitcoin more than I think I do, this is flat-out wrong (~1/3 of the way through the document): (U) What Users Can Do To Increase Anonymity ... • (U) Combine the balance of old Bitcoin addresses into a new address to make new payments. Combining balances just means you have a bunch of disparate nodes in the network which may not be related, and you are intentionally connecting them. So if you co…

It makes it a little harder to prove. If you do something sketchy and get bitcoins in wallet 1, and then buy something from wallet 1, people will see that the same wallet that did something sketchy also bought something. On the other hand, if you move bitcoins from wallet 1 to wallet 2, then do the buying from wallet 2, there's some separation and people aren't sure if it's the same person.

This is suggesting doing something sketchy with 1 and then moving it and 2 and 3 to 4. You can improve your odds of evading detection by moving things around a bit, yes, but most applications I'm aware of will simply move them all in a single transaction. There have also been some fairly large-scale network analysis papers showing linked accounts and the flow of e.g. one big theft a while back - unless you run it through a mixer, you're only mixing with yourself, which runs the risk of revealing everything if you leak a little too much.

And regardless, if you then use 4 to do anything that's linked to you, it's further evidence that you are linked to all the accounts - in no way better than before, and possibly worse. You also can't use the money from 2 or 3 to do things linked to you, because now they're linked to you and the sketchy 1. If you had left them isolated, observers would only have information on 1, nothing would have changed, and you could use 2 and 3 without leaking any information about 1.

Re: Internal FBI risk assessment of Bitcoin network [pdf]

#109

Post by sp332 »

arrrg wrote: post #54
Tyrant505 wrote: post #23

Earlier quoted context omitted.

Doesn't Germany hold a huge amount of gold? Additionally, the only euro country not collapsing on itself?

The only? Greece may be collapsing. To say that other Euro countries are also collapsing would at this point be hyperbole.

Spain's economy is headed for a depression, Ireland's credit is shot after their bailout, Portugal collapsed almost immediately and is suffering high unemployment even after a bailout, Cyprus's credit rating is junk and they've applied for a bailout. So it's not just Greece. Several other countries were headed for trouble but seem to have things under control now: Italy, Belgium, France, the UK, Switzerland, Germany, and Slovenia.

Source: http://en.wikipedia.org/wiki/European_sovereign-debt_crisis

Re: Internal FBI risk assessment of Bitcoin network [pdf]

#110

Post by finnw »

dmix wrote: post #79
delinka wrote: post #60

Earlier quoted context omitted.

By "difficult" the FBI certainly means "we'd have to perform some amount of manual reconciliation because the meaningful data won't just fall into our laps." Pretty standard for the last 15 years. As for "obfuscation," I was under the impression that the system doesn't attempt to obfuscate what payment addresses are involved in a transaction. It's not pertinent to the network which physical person controls which addr…

The network doesn't automatically obfuscate transactions, but it's easy to do using tumbling services.

If the FBI were following a trail involving my wallet, I would also want to avoid being linked to the tumbling services.
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