I'm starting to get sick of these Bitcoin posts.
HN needs a downvote button for articles. I think that would solve this quickly.
It has a 'flag' function if you've got enough karma to see it.
How to launder Bitcoins
81–85 of 85 posts
Re: How to launder Bitcoins
#82I might have missed something, but how can we be sure that malicious nodes do not just steal your money?
Insurance deposits. Both nodes lock up much more money than being "promised". If one node does not deliver, another node will automatically destroy both deposits. Nodes thus are motivated to follow the protocol and not cheat. Since the process is automated, there's no one to play extortion games. The insurance contract is a special type of transaction that I invented: http://blog.oleganza.com/post/58240549599/contrac…
I like your transaction idea and have an improvement. The trick is to reduce the costs of one-time punishment. This makes transactions less risky for contract keepers and more risky for contract breakers:
Terminology: I would call a contract where both parties lock up funds to be released on successful contract completion a "co-investment contract". Then I would add third parties we can call "co-investment insurers".
A co-investment insurer could be any party with a solid reputation of their own to keep, and who has a long term relationship with you (your bank for instance). For a small fee, (1%?) the co-investment insurer agrees to cover your investment loss if a contract fails.
Then the economics work like this:
1) People will not be afraid to lock up co-investments when their investment is insured because the worst that can happen if a contract is broken is they are out the small insurance fee.
2) Any party who gets insurance will still be incentivized to complete the contract successfully, so as not to harm their reputation with their long term co-investment insurer. (Who could increase their insurance fee or cancel their account if many transactions failed.)
3) Not everyone needs to buy co-investment insurance for this to have a big impact. The mere possibility of insurance makes punishment a stronger threat and therefore contracts more reliable.
4) As the systems's reputation for reliably punishing contract breakers increases, the insurance costs go down, making it even more affordable. This further increases the system's reliability for punishing contract breakers.
Given that all this can be automated, and reinforces incentives to keep contracts, I would think that insurance fees of only 1% or even less would become possible.
Re: How to launder Bitcoins
#83I'm starting to get sick of these Bitcoin posts.
Yeah I can actually understand where you are coming from. I spend a lot of time with Bitcoin but never come to HN for Bitcoin information, I prefer my HN being startups and programming/algorithm stuff. I think one of the reasons Bitcoin is becoming more popular on HN is that a lot of us are interested in fun/challenging tech ways to make a decent living or even make a million bucks. At the moment Bitcoin is making a…
Hi josephagoss, could you please share with us your source of Bitcoin information?
In case you want to keep it private, I have an email provided.
Re: How to launder Bitcoins
#84That is not what structuring is at all. Structuring is conducting transactions in a way that will avoid triggering reporting requirements. If the legislation in your country requires financial services providers to report any cash transaction greater than or equal to say, $10,000, and you go and deposit $9500 five times with the sole purpose being to avoid these reporting requirements, then you are in breach of struc…
Structuring laws are pretty shitty there have been plenty of examples of people being screwed over by the government w/o legal due process for just conducting legitimate businesses that happen to receive a lot of cash payments from customers. Just one recent one... http://overlawyered.com/2013/09/institute-justice-tackles-st...
This seems to me to be more a problem of rampant abuse of forfeiture laws rather than a failure of structuring laws. The many stories I have read recently of "forfeiture corridors" in the USA would seem to reinforce that.
Re: How to launder Bitcoins
#85Earlier quoted context omitted.
Yeah I can actually understand where you are coming from. I spend a lot of time with Bitcoin but never come to HN for Bitcoin information, I prefer my HN being startups and programming/algorithm stuff. I think one of the reasons Bitcoin is becoming more popular on HN is that a lot of us are interested in fun/challenging tech ways to make a decent living or even make a million bucks. At the moment Bitcoin is making a…
Hi josephagoss, could you please share with us your source of Bitcoin information? In case you want to keep it private, I have an email provided.
Haha nowhere special, everything I know originates from Bitcointalk. A lot of information about the people, code, economy is there. However you do have to spend sometime searching and sifting through the noise.
Apart from the massive signal to noise ratio any site or related information ends up on that forum one way or another, it is a fantastic central hub. Just be warned, 99% of the stuff there is absolute rubbish.
A lot of the code has been explained over the years on the forum and a lot of discussion takes place about how certain things might be better off different. (At the moment a big area of interest is Coinjoin and Zerocoin is discussed quite a bit too.) Also the inventor of hashcash frequents the forum sometimes and offers good insight.