There is a difference in how the two scale, because one is physical. Adding a BTC to a transaction doesn't really require any additional infrastructure. But once you've packed your first tanker with gold, you kind of have to hire a second boat. Given the way each scales, it seems that BTC transfers are easier, at least at some values.
There is not enough gold in the whole world to fill up a tanker.
The word "tanker" was evocative, I wouldn't get hung up on it.
All I was saying was that physical stores of value increase in awkwardness (principally through weight and volume) when you increase their number, not so for digital.
Because "online wallet" sites are the sort of bad idea that _needs_ to have access to the private keys. If you can spend bitcoin out of an "online wallet", the person in control of the software managing that wallet _does_ have access to your bitcoin. Even if they've tried to set things up "securely", the very best they can do is achieve Lavabit levels of security - if they (or someone coercing them) wants to, they'll…
True. I may be wrong here - but is the private key only required to send the money? So, if the user kept the key and it wasn't recorded on the server...or if they use some type of password hash for encrypting it, then there wouldn't be hundreds or thousands of wallets stolen at once. The user would enter their password when they want to transfer funds, the hash is calculated, private key decrypted, transaction made,…
If the user kept the secret key, that's not much of an online wallet - you might as well just use your secret key at home and send it directly yourself. They could encrypt it with a password or a pin that isn't saved on their site so that you would have to enter it to decrypt the secret key. That still counts on the site not just lying and keeping it or you getting it keylogged or otherwise compromised on your side. Many online wallets do nothing of the kind, they simply have the secret key and use it to send. Someone with your password or access to the site could do the same. It's the same as a normal bank really, you have no physical/technical control over what they or someone who snuck into the bank does. You can control your access credentials (passwords, cards, account numbers, ID info, etc) and that's good and well, but there's nothing preventing it from disappearing on their side besides what they (not you) do for security.
The legislators can make whatever they want illegal, but that doesn't make it necessarily enforceable. Thing about mixing is, since any person (or autonomous process) can generate wallets and send BTC to those on the fly, how do you prove that you used a tumbling service and not that you gave coins to a guy who gave coins to a guy who split them up into separate wallets who each gave coins to a guy, etc etc etc. As B…
It's trivial to make it enforcable. Whenever BTC leave the mixed wallet into a regulated area, bust the person doing so for violating money laundering laws if they used mixing. If they didn't use mixing, but received mixed funds you can probably impound some fraction of their funds to. Either way you now have enough evidence to raid their PC to check for further laundered funds and generally make their lives miserabl…
How do you prove that circulated coins are the product of a mixing operation and not just normal transactional flow?
Someone mines coins and gives coins to a guy who gives coins to a guy who gives coins to a guy (repeat n times) who gives coins to you, and every link in the chain is following best practices by generating new wallets for each transaction, how would the adversary prove that you're doing something untoward (and since we're discussing law at this point, beyond a reasonable doubt?)
Consider this: They paid $0.00 for the transfer of $150 million dollars. A direct (i.e. not based on third party credit, regulations, etc.) transfer of wealth of this magnitude between two entities usually consists of a heavily guarded, insured, physical shipment of cash or gold. Depending how safely you want to make the transfer, and how far the entities are on the globe, it can cost hundreds of thousands to million…
I have 1BTC. I wish I could turn the money in that into more. Wish I would have bought more initially.
It's trivial to make it enforcable. Whenever BTC leave the mixed wallet into a regulated area, bust the person doing so for violating money laundering laws if they used mixing. If they didn't use mixing, but received mixed funds you can probably impound some fraction of their funds to. Either way you now have enough evidence to raid their PC to check for further laundered funds and generally make their lives miserabl…
How do you prove that circulated coins are the product of a mixing operation and not just normal transactional flow? Someone mines coins and gives coins to a guy who gives coins to a guy who gives coins to a guy (repeat n times) who gives coins to you, and every link in the chain is following best practices by generating new wallets for each transaction, how would the adversary prove that you're doing something untow…
This is no different than laundering cash, except that there is more information about the actual transaction flow.
How do you prove that circulated coins are the product of a mixing operation and not just normal transactional flow? Someone mines coins and gives coins to a guy who gives coins to a guy who gives coins to a guy (repeat n times) who gives coins to you, and every link in the chain is following best practices by generating new wallets for each transaction, how would the adversary prove that you're doing something untow…
This is no different than laundering cash, except that there is more information about the actual transaction flow.
You didn't really answer my question. Assume you're in some position of authority. With the knowledge that bitcoin wallets can be generated out of thin air, how do you prove that a given transaction chain was the product of a mixing operation and not the product of normal transactional flow?
Fiat currency is valueless and can only be used because people trust the government issuing it. If Bitcoin can gain the trust of enough people, it can easily become more 'valuable' then many currencies in existence at the moment.
Fiat currency is backed by the legal obligations of the country that issues it that it is a suitable means to extinguish debts. Bitcoin is not. No one is obliged to accept Bitcoin as a currency for settling debts anywhere in the world, it has to be converted to something else. Similarly to gold - you don't have to accept gold as payment for debt, but you do have to accept USD. This is where the problem lies: BTC acts…
It does have value. It's long lasting, pseudonymous, secure, and it costs less to make transfers between two parties. These are qualities that are hard to find in a physical commodity. What gives value to an individual bitcoin is the Bitcoin network. There is real value there.
This is no different than laundering cash, except that there is more information about the actual transaction flow.
You didn't really answer my question. Assume you're in some position of authority. With the knowledge that bitcoin wallets can be generated out of thin air, how do you prove that a given transaction chain was the product of a mixing operation and not the product of normal transactional flow?
Physical wallets can also be created out of thin air. I'm not a forensic accountant, so detailing precisely how is not in my area of expertise, but we successfully prosecute people for laundering cash, and bitcoin only has more information, more accessible than cash. I am not saying it can be done with just the block chain, but the block chain is a piece of evidence that is far more easily accessible than a criminal enterprises' individual ledgers.
"Where did this money come from?" I guess, not from you. Is that the reason to question it? "Was tax paid?" What makes you think that this money supposed to be taxed?
If it is a transfer between two accounts owned by two different people - I guess that this huge amount would be taxable with some amount.
What is taxable is not determined by the amount nor by ownership of accounts.
It's trivial to make it enforcable. Whenever BTC leave the mixed wallet into a regulated area, bust the person doing so for violating money laundering laws if they used mixing. If they didn't use mixing, but received mixed funds you can probably impound some fraction of their funds to. Either way you now have enough evidence to raid their PC to check for further laundered funds and generally make their lives miserabl…
How do you prove that circulated coins are the product of a mixing operation and not just normal transactional flow? Someone mines coins and gives coins to a guy who gives coins to a guy who gives coins to a guy (repeat n times) who gives coins to you, and every link in the chain is following best practices by generating new wallets for each transaction, how would the adversary prove that you're doing something untow…
There is a much lower burden for confiscating currency than beyond a reasonable doubt.