Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Internal FBI risk assessment of Bitcoin network [pdf]

wired.com

Post reply on HN
Print view View original

141–150 of 152 posts

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

#141

Post by sliverstorm »

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…

Nice document. It shows well the way of thinking of our governments.

Yea, it sure does reveal how silly the FBI is. I mean, why would the organization tasked with domestic security & stability analyze the potential threats of Bitcoin? Bitcoin is made of lollipops and rainbows; it could never be used maliciously.

Seriously, analyzing it critically doesn't mean they are afraid of it. It just means it is an unknown that they want to understand.

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

#142

Post by Groxx »

sliverstorm wrote: post #138
Groxx wrote: post #132

Earlier quoted context omitted.

Yeah, it's not a clear-cut connection if you do it in multiple steps. Hence the caveat that there are ways to make it (more) true. But what improvement in anonymity does it provide over leaving them separate? If they can't infer that X belongs to you, then if you don't send it to account Y (linked to you) you certainly don't leak that X belongs to you. If you do , it's not proof, but it certainly doesn't improve matt…

I think what you're looking at is something more like, if someone employs this tactic, they can't identify that addresses X, Y, and Z belong to the same person, whether or not they know who that person is. Linking together abstract pieces like that can be one of the first steps to figuring out a very anonymous network.

I can't tell if you're agreeing with me or disagreeing...

And yes, those links are basically all you can use in an anonymous network to deanonymize actions. So how is linking things better than not?

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

#143

Post by sliverstorm »

Groxx wrote: post #142
sliverstorm wrote: post #138

Earlier quoted context omitted.

I think what you're looking at is something more like, if someone employs this tactic, they can't identify that addresses X, Y, and Z belong to the same person, whether or not they know who that person is. Linking together abstract pieces like that can be one of the first steps to figuring out a very anonymous network.

I can't tell if you're agreeing with me or disagreeing... And yes, those links are basically all you can use in an anonymous network to deanonymize actions. So how is linking things better than not?

Now I think I'm just confused by the way you're describing things. I'll hope someone else is better able to understand.

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

#144

Post by oillio »

tbrownaw wrote: post #117
JulianMorrison wrote: post #34

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. Really the big disruption Bitcoin could cause if it becomes well established, is to act as a stable reference frame against which th…

Really the big disruption Bitcoin could cause if it becomes well established, is to act as a stable reference frame against which the other currencies can be compared What would make it any more (or less) stable than the traditional reference currencies of gold, ammo, and canned baked beans?

The supply of bitcoins used as currency is fixed while the supply to all other reference currencies are variable in some way or another.

Fiat is obviously variable on the whims of the issuing government.

Gold may be taken out of circulation to make jewelry or electronics (or another use not yet discovered). Ammo and baked beans can be consumed. Bitcoin has no utility value and cannot be used for anything other than as a currency.

Similarly, the supply of these other items can be expanded. An asteroid full of gold could be mined, a new ammunition factory built, or a bean farm planted. Bitcoin has no physical identity, it cannot be reproduced, counterfeited, or grown outside of the well defined properties laid down in the original protocol.

Bitcoin is truly the first pure reference currency. Manipulative games can still be played with bitcoin markets, but the risk of external non-economic events affecting your money supply is removed. A political party can't decide the world needs more bitcoins, a new vein of bitcoins cannot be discovered, and nor can a new use for bulk bitcoins be invented.

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

#145

Post by michaelt »

rorrr wrote: post #118
Groxx wrote: post #108

Earlier quoted context omitted.

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 thr…

What would stop me from creating a thousand (or a million) wallets, and just randomly shuffling money between them a thousand times per day, creating a visibility of activity? As long as you control all the wallets, the money is still yours.

If there's 1000 wallets that only transact with each other and never (or rarely) with other wallets, it might be possible to identify them as an island in the transaction graph - see [1] for an example of automatic graph clustering (I think the image is communities in facebook's social graph, but the same algorithm could be applied to a transaction graph)

Of course, whether that behavior would stand out depends on how other users of the system behave.

[1] http://www.ece.umd.edu/~wenjunlu/images/gephi.png

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

#146

Post by Groxx »

sliverstorm wrote: post #143
Groxx wrote: post #142

Earlier quoted context omitted.

I can't tell if you're agreeing with me or disagreeing... And yes, those links are basically all you can use in an anonymous network to deanonymize actions. So how is linking things better than not?

Now I think I'm just confused by the way you're describing things. I'll hope someone else is better able to understand.

Hah, sorry if I am :) Not sure how I can significantly improve things without writing a blog post or something :|

Anyway. Thanks for chiming in :)

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

#147

Post by cwkoss »

politician wrote: post #90

"All Bitcoin transactions are published online and Internet Protocol (IP) addresses are linked to the public Bitcoin transactions." How are IP addresses linked to the block chain?

Nodes can see which IP address sent them the transaction. Usually, this is a "supernode" connected to hundreds of others which received the transaction from someone else.

However, if you have your own supernodes and can see which node first broadcast that transaction, and you know either they sent it or are more connected to the original sender than you are.

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

#148

Post by PeterisP »

sturadnidge wrote: post #49

s/Bitcoin/cash/ and all the negative arguments about propensity for criminal activity are quite amusing.

Bitcoin does share some those properties with cash. That's the whole point.

Cash (in volume) is currently treated with suspicion for criminal activity, and is the center of attention for policing crime/drug money, financial fraud and money laundering. So bitcoin should be as well.

And it can be regulated in the same way as cash - you can ask financial institutions to report any bitcoin deals above $xxx (as they do for cash), you can regulate any intermediaries/payment services to follow the existing money laundering laws also for bitcoin - a core provision is know-your-customer, i.e., no anonymous customers allowed.

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

#149

Post by arrrg »

sp332 wrote: post #116
arrrg wrote: post #114

Earlier quoted context omitted.

That’s not collapse in any sense of the word. Even if I were to agree with you on the collapse, that’s not all Euro countries. Germany, for example, had never any problems or trouble that could by any sane person be described as collapse.

CBS says it's a collapse. http://www.cbsnews.com/8301-505123_162-57406006/spains-colla...

I think describing a recession or even depression as a collapse is wrong.

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

#150

Post by rorrr »

michaelt wrote: post #145
rorrr wrote: post #118

Earlier quoted context omitted.

What would stop me from creating a thousand (or a million) wallets, and just randomly shuffling money between them a thousand times per day, creating a visibility of activity? As long as you control all the wallets, the money is still yours.

If there's 1000 wallets that only transact with each other and never (or rarely) with other wallets, it might be possible to identify them as an island in the transaction graph - see [1] for an example of automatic graph clustering (I think the image is communities in facebook's social graph, but the same algorithm could be applied to a transaction graph) Of course, whether that behavior would stand out depends on ho…

You will probably find many of these islands even right now.

Plus, I can divide my 1000 wallets into 20 islands, and only have 1-2 transactions between the islands.

Post reply on HN