Bitcoin's mining difficulty has increased by 41.9% over the last 30 days • Hacker News Board

Re: Bitcoin's mining difficulty has increased by 41.9% over the last 30 days

#241

Post by jgalt212 » Tue, Dec 22, 2015, 6:01 PM UTC

ikeboy wrote: post #240

jgalt212 wrote: post #237

Earlier quoted context omitted.

Actually, we're both wrong. Just because you have not been caught does not mean there hasn't been loss of anonymity. And if you mix enough coins you can decrease the chances of being pinpointed exactly as the source, but you cannot definitively remove yourself from the bucket of suspects.

>And if you mix enough coins you can decrease the chances of being pinpointed exactly as the source, but you cannot definitively remove yourself from the bucket of suspects. Not in my understanding. I have some coins X that are tainted. I send them to you, Y. You, Y, happen to have other coins completely unrelated to the address I sent my X coins to, and you send them to me at address Z. There's no blockchain link be…

This is what I mean about reading the whole ledger. If wallet X is a target, then anyone who transacts with X is a target (which includes Y (anyone with a direct link to X) and Z (anyone with an indirect link to X)). We are dealing in probabilities here, but we definitely don't have untraceable transcations. The authorities have a finite number network paths/leads they can track down.

Of course, the more washing transactions you do with dirty coins the harder it is to track down the original wallet. That being said, the blockchain is somewhat self limiting in how many transactions it can processes per unit of time and thus the its obfuscating capabilities are diminished.

Re: Bitcoin's mining difficulty has increased by 41.9% over the last 30 days

#242

Post by csseinpoont » Tue, Dec 22, 2015, 6:04 PM UTC

lukifer wrote: post #153

csseinpoont wrote: post #119

Earlier quoted context omitted.

Every fiat currency ever has collapsed, yet gold is still being hoarded in vaults. You have a limited perspective of history.

I'm no fan of fiat, but your statement is tautological at best: the fiat currencies that have collapsed, collapsed. Communications tech and electronic fiat make the future anyone's bet.

Tomorrow always different right?

You're some saying it'll be different this time, and the only explanation you give is, 'communications' and 'electronic', and yet plenty of fiat currencies have collapses under such systems. Again, every fiat currency that has ever existed has collapsed, sure there are some new ones that haven't yet but to believe they won't is magical thinking.

Again gold, after thousands of years, is still being hoarded in vaults by every major and minor world power, you really need to review some history.

Re: Bitcoin's mining difficulty has increased by 41.9% over the last 30 days

#243

Post by vezzy-fnord » Tue, Dec 22, 2015, 6:17 PM UTC

crdoconnor wrote: post #211

vezzy-fnord wrote: post #68

Earlier quoted context omitted.

The problem sounds like the debts, not the gold. Since, if you accept the debt deflation hypothesis and the idea of debt overhangs, these obviously occur in fiat money systems as well. Gold makes it hard to inflate monetarily, but we observe that catastrophic debts still occur in its absence.

A gold standard makes debt deflation routine whereas fiat money systems make it much easier to adjust to systemic capital flows. In essence the problems faced by Greece are due to a reinvention of the gold standard despite there not being gold involved this time around. Point being that Gold only "worked" for a small elite and it was largely devastating to the rest.

The problems faced by Greece are from a lack of monetary sovereignty, but to equate it as somehow being like a gold standard simply on locus of control alone sounds more like a political talking point than anything else.

Re: Bitcoin's mining difficulty has increased by 41.9% over the last 30 days

#244

Post by ikeboy » Tue, Dec 22, 2015, 6:23 PM UTC

jgalt212 wrote: post #241

ikeboy wrote: post #240

Earlier quoted context omitted.

>And if you mix enough coins you can decrease the chances of being pinpointed exactly as the source, but you cannot definitively remove yourself from the bucket of suspects. Not in my understanding. I have some coins X that are tainted. I send them to you, Y. You, Y, happen to have other coins completely unrelated to the address I sent my X coins to, and you send them to me at address Z. There's no blockchain link be…

This is what I mean about reading the whole ledger. If wallet X is a target, then anyone who transacts with X is a target (which includes Y (anyone with a direct link to X) and Z (anyone with an indirect link to X)). We are dealing in probabilities here, but we definitely don't have untraceable transcations. The authorities have a finite number network paths/leads they can track down. Of course, the more washing tran…

But Y might be over Tor, or might not keep logs. There's no mechanism I can see for getting past wiped logs after the fact. If everything is done in RAM, and the machine is rebooted every few days, there's pretty much nothing you could do afterwards.

If all you need is a finite number of leads, then trivially the number of humans/bitcoin users is finite. I don't think that makes a difference.

Re: Bitcoin's mining difficulty has increased by 41.9% over the last 30 days

#245

Post by CyberDildonics » Tue, Dec 22, 2015, 6:35 PM UTC

gritzko wrote: post #236

CyberDildonics wrote: post #232

Earlier quoted context omitted.

You seem adamant about something that you clearly do not understand. > Because if somebody can spend $1mln to perform 51% attack and move around $1bln, that will likely be done. Then why hasn't it been done? The answer is that bitcoin doesn't even remotely work like this. You would have to sign a transaction, then double spend it to yourself, then BY CHANCE mine enough blocks to satisfy the person giving you whatever…

You are focusing on a single scenario of an individual double-spender. Why don't you consider some other scenario, e.g. a hacker getting control of a major BitCoin mining facility to disrupt things just for a laugh? I've seen a lot of that happening. There are tens of possible scenarios. Mining capacity is highly centralized these days and that trend will likely develop further (see the subj). The mental model of "on…

If a miner gets hacked, then their blocks will go to the attacker, or they won't be mining. Blocks will be mined more slowly and transactions may take longer for the same number of confirmations until the miner comes back. If a bank gets hacked, people steal money enormous amounts of money by directly changing their ledgers. I don't see this as some sort of a loss for cryptocurrencies.

I'm not sure what you mean by turnover although you might want to learn more about bitcoin before you rail so hard against it.

Re: Bitcoin's mining difficulty has increased by 41.9% over the last 30 days

#246

Post by morenoh149 » Tue, Dec 22, 2015, 6:58 PM UTC

nemild wrote: post #30

forrestthewoods wrote: post #29

Bitcoin feels a bit like the gold standard. Massive mining operations dumping huge volumes of resources and energy to acquire some thing that is only mildly useful. It seems quite wasteful.

There's a pretty good writeup about this issue in the Stanford/Princeton Cryptocurrency Class: https://drive.google.com/uc?id=0B4-bDFu_72Beelkxd3VlbXoyd0E&... Excerpt: According to our estimates then, the whole Bitcoin network is consuming maybe 10% of a large power plant’s worth of electricity. Although this is not an insignificant amount of power, it's not yet a large amount of electricity compared to all the other…

can you share more pdfs ?

Re: Bitcoin's mining difficulty has increased by 41.9% over the last 30 days

#247

Post by jgalt212 » Tue, Dec 22, 2015, 7:03 PM UTC

ikeboy wrote: post #244

jgalt212 wrote: post #241

Earlier quoted context omitted.

This is what I mean about reading the whole ledger. If wallet X is a target, then anyone who transacts with X is a target (which includes Y (anyone with a direct link to X) and Z (anyone with an indirect link to X)). We are dealing in probabilities here, but we definitely don't have untraceable transcations. The authorities have a finite number network paths/leads they can track down. Of course, the more washing tran…

But Y might be over Tor, or might not keep logs. There's no mechanism I can see for getting past wiped logs after the fact. If everything is done in RAM, and the machine is rebooted every few days, there's pretty much nothing you could do afterwards. If all you need is a finite number of leads, then trivially the number of humans/bitcoin users is finite. I don't think that makes a difference.

Regardless of whether or not Y is over TOR, it cannot serve as a cut out. All the transactions are stored on the blockchain. So if Y tries to convert to dollars, then they have him. Or if Y's proxy Z tries to convert to dollars, they have Z (and by extension Y).

For these reasons, I cannot figure out why they don't know who stole the MtGox bitcoins. The only way to hide is to forever keep your booty in bitcoins. Whenever the thief tries to convert his/her bitcoins to money or goods, the veil of anonymity will be pierced. And given the amount money involved in MtGox, it would be blow wide open.

As an aside, this has to be one of the deeper HN threads that has not devolved into a flame war. kudos to us.

Re: Bitcoin's mining difficulty has increased by 41.9% over the last 30 days

#248

Post by nemild » Tue, Dec 22, 2015, 7:07 PM UTC

morenoh149 wrote: post #246

nemild wrote: post #30

Earlier quoted context omitted.

There's a pretty good writeup about this issue in the Stanford/Princeton Cryptocurrency Class: https://drive.google.com/uc?id=0B4-bDFu_72Beelkxd3VlbXoyd0E&... Excerpt: According to our estimates then, the whole Bitcoin network is consuming maybe 10% of a large power plant’s worth of electricity. Although this is not an insignificant amount of power, it's not yet a large amount of electricity compared to all the other…

can you share more pdfs ?

Sure, take a look at the syllabus here: https://crypto.stanford.edu/cs251/syllabus.html

(all are hyperlinked)

Re: Bitcoin's mining difficulty has increased by 41.9% over the last 30 days

#249

Post by [deleted] » Tue, Dec 22, 2015, 7:23 PM UTC

homogeneous wrote: post #54

nemild wrote: post #30

Earlier quoted context omitted.

There's a pretty good writeup about this issue in the Stanford/Princeton Cryptocurrency Class: https://drive.google.com/uc?id=0B4-bDFu_72Beelkxd3VlbXoyd0E&... Excerpt: According to our estimates then, the whole Bitcoin network is consuming maybe 10% of a large power plant’s worth of electricity. Although this is not an insignificant amount of power, it's not yet a large amount of electricity compared to all the other…

> Any payment system requires energy and electricity. With traditional currency, lots of energy is consumed guarding and moving gold bullions around Whenever the topic of bitcoin's inherent wastefulness is discussed, someone always brings up this point, but it's a fallacious comparison because most of the power consumed by the traditional financial system is spent in its capacity as a ubiquitous pillar of modern soci…

[deleted]

Re: Bitcoin's mining difficulty has increased by 41.9% over the last 30 days

#250

Post by ikeboy » Tue, Dec 22, 2015, 7:59 PM UTC

jgalt212 wrote: post #247

ikeboy wrote: post #244

Earlier quoted context omitted.

But Y might be over Tor, or might not keep logs. There's no mechanism I can see for getting past wiped logs after the fact. If everything is done in RAM, and the machine is rebooted every few days, there's pretty much nothing you could do afterwards. If all you need is a finite number of leads, then trivially the number of humans/bitcoin users is finite. I don't think that makes a difference.

Regardless of whether or not Y is over TOR, it cannot serve as a cut out. All the transactions are stored on the blockchain. So if Y tries to convert to dollars, then they have him. Or if Y's proxy Z tries to convert to dollars, they have Z (and by extension Y). For these reasons, I cannot figure out why they don't know who stole the MtGox bitcoins. The only way to hide is to forever keep your booty in bitcoins. When…

It doesn't matter if they catch Y, as long as he didn't keep logs. Nobody, not even Y, knows who Z is, so Z can safely use his coins.

>For these reasons, I cannot figure out why they don't know who stole the MtGox bitcoins.

When you don't understand something, something might be wrong with your model. (http://lesswrong.com/lw/if/your_strength_as_a_rationalist/ comes to mind).

The exact addresses of the Gox stolen coins aren't known AFAIK. Even if they were, to cash out you only need to get someone to accept them without verifying ID. I can send coins to an exchange, and have them send me other coins in a different cryptocurrency, and send those to another exchange, then convert back to btc. If the intermediate currency is something like Monero, then the chain analysis must stop there.

I'm not saying most mixing happens through alts, but it is a fairly foolproof method for anonymity, at the cost of not supporting volume and high fees.

Also, you can sell to people for cash, so any investigation hits a dead end. There are probably dozens more ways to cash out anonymously.