How to launder Bitcoins
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How to launder Bitcoins
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Re: How to launder Bitcoins
#2Pretty much just CoinJoin, which is in development.
Re: How to launder Bitcoins
#3Pretty much just CoinJoin, which is in development. https://bitcointalk.org/index.php?topic=279249.0
I mentioned explicitly why it's not like CoinJoin. CoinJoin leaves a trace of "structuring money", while perfect mixing needs to leave no such trace. All transactions must look like regular payments, statistically indifferent from any other payment. Also, CoinJoin in present form requires a trusted operator who can mark all transactions as "laundering".
CoinJoin is better for making Bitcoin look good in the eyes of law enforcement. You can get your privacy with it from everyone, except law enforcement. Lawful citizens and cops must be both happy and not fear that Bitcoin will be used for "terrorism".
Re: How to launder Bitcoins
#4There are other approaches for laundering which do not rely on insurance contracts, such as http://zerocoin.org/
Re: How to launder Bitcoins
#5Pretty much just CoinJoin, which is in development. https://bitcointalk.org/index.php?topic=279249.0
I mentioned explicitly why it's not like CoinJoin. CoinJoin leaves a trace of "structuring money", while perfect mixing needs to leave no such trace. All transactions must look like regular payments, statistically indifferent from any other payment. Also, CoinJoin in present form requires a trusted operator who can mark all transactions as "laundering". CoinJoin is better for making Bitcoin look good in the eyes of l…
If you're doing it persistently you just end up flooding the blockchain with useless information. At least with CoinJoin you're reducing the number of payment TXs that need to be stored and validated. The blockchain is already getting annoyingly large (20GB+ with indexes) without adding fluff like that.
If you really want to hide your tracks without hiding your tracks, just use any service with a shared wallet.
Re: How to launder Bitcoins
#6There are other approaches for laundering which do not rely on insurance contracts, such as http://zerocoin.org/
Zerocoin is interesting, but Bitcoin in its current form has two practical advantages:
1. Cryptographic primitives used in Bitcoin are old and well-tested. There's no crypto code in Bitcoin that was invented by Satoshi and could have been badly broken in a subtle manner. Zerocoin's commitment scheme requires years of testing, attempts to crack it and fixing may be impossible. If the problem is discovered, the whole thing may lose all value overnight.
2. Bitcoin is more friendly in the eyes of the law enforcement. Bitcoin looks like a traceable, compatible with "tracking all citizens" policy. It gives it a green light from the governments. Of course, in reality, you can launder bitcoins and hide yourself quite well, but that's extra work and complexity. Meanwhile, like a Trojan horse, Bitcoin comes to the legal scene as a nice instrument that allows to track "bad" guys. Not relevant in the long term, but important in the short term to get legality and massive adoption.
Re: How to launder Bitcoins
#7There are other approaches for laundering which do not rely on insurance contracts, such as http://zerocoin.org/
Zerocoin is interesting, but Bitcoin in its current form has two practical advantages: 1. Cryptographic primitives used in Bitcoin are old and well-tested. There's no crypto code in Bitcoin that was invented by Satoshi and could have been badly broken in a subtle manner. Zerocoin's commitment scheme requires years of testing, attempts to crack it and fixing may be impossible. If the problem is discovered, the whole t…
> There's no crypto code in Bitcoin that was invited by Satoshi and could have been badly broken in a subtle manner.
Read up on the history of the client. Satoshi was innovative but could certainly not code securely to save themselves. Most of the script OP codes are still disabled because they introduced huge vulnerabilities. You could spend anybodies coins in Satoshi's client, or create integer overflows that created billions of coins in a transaction.
The client is a lot better now, but to say it's perfect because it was there from inception is a huge mistake.
Re: How to launder Bitcoins
#8Earlier quoted context omitted.
I mentioned explicitly why it's not like CoinJoin. CoinJoin leaves a trace of "structuring money", while perfect mixing needs to leave no such trace. All transactions must look like regular payments, statistically indifferent from any other payment. Also, CoinJoin in present form requires a trusted operator who can mark all transactions as "laundering". CoinJoin is better for making Bitcoin look good in the eyes of l…
If you're doing it persistently you just end up flooding the blockchain with useless information. At least with CoinJoin you're reducing the number of payment TXs that need to be stored and validated. The blockchain is already getting annoyingly large (20GB+ with indexes) without adding fluff like that. If you really want to hide your tracks without hiding your tracks, just use any service with a shared wallet.
You pay for transactions. Don't tell people what to do with their money. Most of the transactions wouldn't be mixed at all. Just using new addresses with small balances is good enough for daily purchases. Mixing is needed only in certain cases like before and after big consolidating transactions.
CoinJoin is nice too, but it does not look well in the eyes of "anti-structuring" laws.
Shared wallet is an FBI honeypot unless proven otherwise (which is impossible to do). The best way is to have as big pool of random nodes as possible participating in the laundering. Like with Tor: the more users join it, the safer you are from some malicious entities.
Re: How to launder Bitcoins
#9Earlier quoted context omitted.
Zerocoin is interesting, but Bitcoin in its current form has two practical advantages: 1. Cryptographic primitives used in Bitcoin are old and well-tested. There's no crypto code in Bitcoin that was invented by Satoshi and could have been badly broken in a subtle manner. Zerocoin's commitment scheme requires years of testing, attempts to crack it and fixing may be impossible. If the problem is discovered, the whole t…
> There's no crypto code in Bitcoin that was invited by Satoshi and could have been badly broken in a subtle manner. Read up on the history of the client. Satoshi was innovative but could certainly not code securely to save themselves. Most of the script OP codes are still disabled because they introduced huge vulnerabilities. You could spend anybodies coins in Satoshi's client, or create integer overflows that creat…
Which only proves my point. It's really hard to make it right in v0.1 and you have to make it right, otherwise the whole thing is forever broken. Even then, there were two huge bugs: one with integer overflow that created billions of bitcoins in one transaction. Another was with OP_RETURN that allowed to spend bitcoins from any transactions without any effort.
Bitcoin wins over more complex schemes because it has less moving parts. Fortunately, the parts that were enabled work fine and give us awesome possibilities. Otherwise, they'd be disabled too.
Re: How to launder Bitcoins
#10There are other approaches for laundering which do not rely on insurance contracts, such as http://zerocoin.org/
He does mention Zerocoin. His argument is that when using it, your intent to hide your transaction history is explicit, while with the proposed "mixing" you supposedly can't tell it from regular transactions.