[Cryptography] Our leader opines on cryptocurrencies

[Peter Fairbrother]

On 25/07/2019 05:19, jamesd at echeque.com wrote:

> Hiding the IP numbers associated with bitcoin transactions using Tor and 
> suchlike is almost irrelevant.  The problem is that you do transactions 
> using the web and the DNS, which record everything. The web and the DNS 
> is the big privacy hole, not the bitcoin blockchain.

The big privacy hole is the very existence of the (public) blockchain.

Suppose the DEA bust someone with a few drugs, paid for by bitcoin. 
"Hey, we'll go light on you if you tell us about the blockchain 
transaction".

So they can, quite easily, find the dealer's bitcoin wallet. As soon as 
the dealer buys anything with those bitcoins, due to the public nature 
of the blockchain they know the seller's wallet. If the seller is legit 
and his ownership of the wallet is public - and why not? - they ask him 
who paid him and what for. Does he have the dealer's address?

And so the dealer gets busted. No web or DNS involved.

Bitcoin is not reliably anonymous. Neither is TOR, but that's another 
matter.


Some perhaps interesting figures:

USD circulating cash in US: $0.9 trillion
USD circulating cash abroad: $0.6 trillion
USD other "narrow cash": $2.0 trillion
USD USG bonds held by foreigners: $6.2 trillion
USD M2 (~total issued): $18 trillion

Bitcoin total issued: $0.17 trillion

US external debt: $20.0 trillion


-- Peter Fairbrother