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Chainalysis: A startup that helps governments trace crypto

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Re: Chainalysis: A startup that helps governments trace crypto

#51

Post by wyre »

houstonn wrote: post #47
pclmulqdq wrote: post #18

As far as I know, the state of crypto privacy is that everything is directly traceable except: * Bitcoin lightning transactions when the lightning nodes involved are trusted to not keep logs * Transactions through mixers with a lot of users * Monero transactions * Zcash private transactions And everything is de-facto traceable except: * Tornado cash users who use standard-size amounts (or users of another equivalentl…

Satoshi's largest error was not making Bitcoin private by default and it strikes me as out of character given his/her level of commitment to being anonymous.

>Privacy for me, but not for thee

Re: Chainalysis: A startup that helps governments trace crypto

#52

Post by SkyMarshal »

houstonn wrote: post #47
pclmulqdq wrote: post #18

As far as I know, the state of crypto privacy is that everything is directly traceable except: * Bitcoin lightning transactions when the lightning nodes involved are trusted to not keep logs * Transactions through mixers with a lot of users * Monero transactions * Zcash private transactions And everything is de-facto traceable except: * Tornado cash users who use standard-size amounts (or users of another equivalentl…

Satoshi's largest error was not making Bitcoin private by default and it strikes me as out of character given his/her level of commitment to being anonymous.

I don’t recall why that decision was made, but there could be a couple reasons.

First, it isn’t easy technically. Especially back when you’re designing the very first decentralized cryptocurrency and have no prior experience informing your design. ZCash, Monero, MimbleWimble and others came later after learning from Bitcoin, and there’s zero chance they could have come first.

Second, shielded transactions risk undetected inflation bugs, which actually happened to ZCash some years ago.

Third, Bitcoin was designed shortly after the Liberty Dollar founder was arrested and jailed, and everyone in Bitcoin was concerned about that too, including Satoshi. He may have decided just not to push his luck.

Re: Chainalysis: A startup that helps governments trace crypto

#53

Post by wickoff »

houstonn wrote: post #47
pclmulqdq wrote: post #18

As far as I know, the state of crypto privacy is that everything is directly traceable except: * Bitcoin lightning transactions when the lightning nodes involved are trusted to not keep logs * Transactions through mixers with a lot of users * Monero transactions * Zcash private transactions And everything is de-facto traceable except: * Tornado cash users who use standard-size amounts (or users of another equivalentl…

Satoshi's largest error was not making Bitcoin private by default and it strikes me as out of character given his/her level of commitment to being anonymous.

He wanted to, but blockspace-efficient privacy cryptography wasn't discovered back then.

Re: Chainalysis: A startup that helps governments trace crypto

#54

Post by thinkmassive »

helsinkiandrew wrote: post #16
jcbrand wrote: post #14

Earlier quoted context omitted.

Transactions are moving to layer 2 solutions like the lightning network. Individual lightning transactions are not recorded on the blockchain and are not subject to chain analysis.

But aren't lightning transactions limited to 0.5 BTC?

No, there was a limit in the early days (0.16777215 BTC for channels, 0.04294967 BTC payments) but it’s been optimal for about two years.

Direct peers are only limited by channel capacity, and the biggest nodes (exchanges like Bitfinex) keep 5+ BTC public channels (could be much larger unannounced channels).

As far as routing larger payments across the network, the Loop service handles 1.2 BTC swaps today:

https://twitter.com/alexbosworth/status/1570189188091514880

Re: Chainalysis: A startup that helps governments trace crypto

#55

Post by cowtools »

SkyMarshal wrote: post #52
houstonn wrote: post #47

Earlier quoted context omitted.

Satoshi's largest error was not making Bitcoin private by default and it strikes me as out of character given his/her level of commitment to being anonymous.

I don’t recall why that decision was made, but there could be a couple reasons. First, it isn’t easy technically. Especially back when you’re designing the very first decentralized cryptocurrency and have no prior experience informing your design. ZCash, Monero, MimbleWimble and others came later after learning from Bitcoin, and there’s zero chance they could have come first. Second, shielded transactions risk undete…

Let's not speculate:

https://satoshi.nakamotoinstitute.org/quotes/privacy/

https://bitcointalk.org/index.php?topic=770

It seems like satoshi thought pseudo-anonyminity was sufficient. The integration of zero-knowlege proofs into cryptocurrencies was not really well understood at the time.

Re: Chainalysis: A startup that helps governments trace crypto

#56

Post by acdha »

pclmulqdq wrote: post #18

As far as I know, the state of crypto privacy is that everything is directly traceable except: * Bitcoin lightning transactions when the lightning nodes involved are trusted to not keep logs * Transactions through mixers with a lot of users * Monero transactions * Zcash private transactions And everything is de-facto traceable except: * Tornado cash users who use standard-size amounts (or users of another equivalentl…

The category of risk I'd add is that a public ledger means you have to also consider the odds of future improvements — for example, if someone else's data leak contributes some information about a set of transactions[1] or the analysis tools get more sophisticated then people who thought they were secure at the time might turn out not to be. This seems like a fairly risky gamble versus simply not publishing a detailed transaction log.

1. e.g. what happens if a large exchange's records leak / are subpoenaed, a criminal group being compromised by law enforcement, etc. means that a fair fraction of a mixer's transaction volume at a particular time can be identified, making it easier to focus on the remainder?

Re: Chainalysis: A startup that helps governments trace crypto

#57

Post by cowtools »

WHATDOESIT wrote: post #48
houstonn wrote: post #47

Earlier quoted context omitted.

Satoshi's largest error was not making Bitcoin private by default and it strikes me as out of character given his/her level of commitment to being anonymous.

Perhaps it was a tradeoff they knowingly made to not have it become illegal immediately.

No, it wasn't.

Re: Chainalysis: A startup that helps governments trace crypto

#58

Post by guywithahat »

unstatusthequo wrote: post #45

Not just governments. I have it and use it.

Yeah considering in the article he says half of his clients are private sector this seems like a bad title. Maybe they meant because most revenue comes from government? Hard to say

Re: Chainalysis: A startup that helps governments trace crypto

#59

Post by pjc50 »

zeroclip wrote: post #25
pclmulqdq wrote: post #18

As far as I know, the state of crypto privacy is that everything is directly traceable except: * Bitcoin lightning transactions when the lightning nodes involved are trusted to not keep logs * Transactions through mixers with a lot of users * Monero transactions * Zcash private transactions And everything is de-facto traceable except: * Tornado cash users who use standard-size amounts (or users of another equivalentl…

Seems about right. More users would use Tornado Cash if regulation was clear and allowed it. Zcash and Monero lack smart contracts which limits their use cases. ZK based privacy was possible and working fine for many users through TC before the sanctions. Now it is risky as you may end up with locked funds or in jail for seeking privacy. Edit: Should also mention Aztec and Aleo. These are working currently but in the…

> More users would use Tornado Cash if regulation was clear and allowed it

This is simply not going to happen in the current anti-money-laundering environment. The US made Switzerland give up hiding money, they're not going to let some random geeks make trillions of dollars vanish.

Re: Chainalysis: A startup that helps governments trace crypto

#60

Post by TrapLord_Rhodo »

houstonn wrote: post #47
pclmulqdq wrote: post #18

As far as I know, the state of crypto privacy is that everything is directly traceable except: * Bitcoin lightning transactions when the lightning nodes involved are trusted to not keep logs * Transactions through mixers with a lot of users * Monero transactions * Zcash private transactions And everything is de-facto traceable except: * Tornado cash users who use standard-size amounts (or users of another equivalentl…

Satoshi's largest error was not making Bitcoin private by default and it strikes me as out of character given his/her level of commitment to being anonymous.

its not an error or oversight but a feature.

Being anonymous to the 'Real world' but carry an identity in the "BTC world". Wallets, mining, interactions are all public within the network and significantly contributed to it's 'Community', 'make btc wallet size go up', and increase account nonce with use.

Early in the community, these metrics where your 'leaderboards'.

BTC never was anonymous, but rather a 'seperate idenitity'.

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