[Cryptography] Our leader opines on cryptocurrencies

mccorrinall mccorrinall at firemail.cc
Tue Aug 6 10:01:00 EDT 2019

Howard Chu:
> jamesd at echeque.com wrote:
>> On 2019-07-25 7:00 pm, Peter Fairbrother wrote: If you buy
>> bitcoins for fiat money through coinbase and spend them on
>> something illegal, then you are toast.  And if you acquire
>> bitcoins from something illegal, then turn them into fiat money
>> through coinbase then you are toast.
>> So, don't do that.  If you stay away from coinbase and similar,
>> you will usually be fine.  It is the websites that are the
>> problem.
> If you don't buy bitcoins from coinbase, you're likely to get coins
> that are already tainted/blacklisted. At best, you're doing poorly
> what coins like Monero already do automatically. But mostly, you're
> doing nothing useful at all, while paying a lot in transaction fees
> for every additional step.
> Everything you do on Bitcoin can be unraveled far more easily than
> you can even attempt to obfuscate it. 
> https://marc.info/?l=cypherpunks&m=151429933610511&w=2

The principle of fungibility applies to paper currencies AND to crypto
currencies, therefore it doesn't really matter if your coin is
"tainted/blacklisted", unless you are the individual which committed
the crime.

Every 1$ note is the same as every other 1$ note.
Every bitcoin is the same as every other bitcoin.

An example:
The cryptocurrency exchange "coindisgrace" got hacked one day ago and
now the cyberpolice will investigate the theft. After some blockchain
analysis they are able to link a wallet, where a coin from the theft
currently resides in, with a real person. However, as you are not the
criminal who pulled of the hack, the cyberpolice has no permission to
remove the coin from your pocket, as it is not your fault that the
coin was involved in a previous crime.
The money stays in your wallet. Be it black or not. If they'd start
freezing funds, it would hurt the whole currency.

The link to the reddit post is interesting, and I honestly believe
that some three-letter-agencies might have easy access to the KYC
databases major exchanges. It would only make sense to create graphs
for them and their wallets.
However, that's already on the same level of PRISM just for crypto
currencies, and I'm sure that the "normal" police officers have no
access to such tools. We'd be already aware of that. And I sincerely
doubt that anyone on this mailing list is a darknet market operator.

But Monero is not the solution to this privacy problem, as it doesn't
scale at all due to its insanely huge transactions. Sure, the concept
is interesting, but Monero will always only be used by very few
people. If you want to run a currency, you want to target mass
adoption. A currency, which no one uses, is useless.

And no, Runes of Magic Gold isn't an option either.

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