[Cryptography] Our leader opines on cryptocurrencies

Howard Chu hyc at symas.com
Mon Jul 29 11:06:19 EDT 2019

jamesd at echeque.com wrote:
> On 2019-07-25 7:00 pm, Peter Fairbrother wrote:
>> 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?
> Common use cases for bitcoin privacy are buying gray market drugs such as testosterone over the internet, and publishing crimethought over the internet.  Works
> for those cases, provided one takes appropriate precautions
> So, if you get bitcoins for drugs, and you want to use your bitcoins to buy from amazon, you launder the bitcoins first.  I launder my bitcoins regularly, not
> for drugs, but for crimethoughts.
> You want to publish evil crimethoughts, so you rent a server using bitcoin.  You get the bitcoin by donations, or by buying them from friends rather than by
> buying them through coinbase .  They will not be able to dox the person paying for the server.
> Again I generally buy my bitcoins from a friend of a friend, and launder it on top of that.  Trying to track me through my bitcoin transactions is like trying
> to track me through the serial numbers on cash transactions.  Doable in principle, but difficult in practice.
> 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.

  -- Howard Chu
  CTO, Symas Corp.           http://www.symas.com
  Director, Highland Sun     http://highlandsun.com/hyc/
  Chief Architect, OpenLDAP  http://www.openldap.org/project/

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