‘One of the weirdest things in recent financial/criminal history is that for a while people really believed that Bitcoin, an electronic payments method that creates a permanent, traceable, public record of all transactions and links them to identifiable accounts, was somehow a good way to pay for crime. “It’s completely anonymous,” people thought, “like digital cash, but you can send it anywhere and no one will be able to trace you.” Not really! I suppose it was even true for a little while, but eventually law enforcement agencies figured out how to trace Bitcoin transactions, and then the fact that years’ worth of criminal financial transactions were just forever openly available to them on the Bitcoin blockchain was … bad for criminals.‘
I wonder if the media around BTC being anonymous and untraceable was actually encouraged by the intelligence community and law enforcement. It's certainly been a boon for tracking down a lot of criminals.
In that spirit, Levine ends his comment as follows: ‘Do you think maybe Satoshi Nakamoto works for the FBI, and invented Bitcoin as a way to get criminals to make a convenient permanent record of their transactions?’
I seriously doubt it. Remember, "never ascribe to malice that which can be adequately explained by incompetence or stupidity." Our law enforcement community isn't that bright or long-term thinking. Plus, once criminals get it through their thick skulls that BTC really is traceable after all, they won't use it any more.
I doubt it too, but dislike the meme you cited. Intelligence agencies are very much capable of producing elaborate, long term plans and are quite good with crypto. They could introduce it to the world without cooperation or coordination with regular law enforcement. Not saying that they did.
I have never heard a convincing argument for your quote and would like everyone to at least consider malice when the situation warrants it. Maybe "follow the money" would be an equally valid, but contradictory heuristic to deal with unclear situations.
Yes, there is no stable state of the system in which ignorance and malice are assessed accurately. If you don't want the rate of malicious action to increase, you need to overdiagnose it.
The aphorism does not call upon you to assume good intentions, but to avoid attempting to establish intention when it has no benefit to solving the problem noted.
> You can use Bitcoin anonymously, but it's like using the web anonymously i.e. it takes a lot of effort and a single mistake screws it up.
I don't really get it, but you have a "money out" problem like any fraud.
Even if you buy bitcoin in untraceable in cash, you transfer it to wallets, you have two eventual issues. You'll either buy something and ship it to yourself, or you'll need to get real cash out. The former leaves a vendor ready to give you up, and the latter only works with exchanges that have your ID.
If you can buy bitcoin in untraceable cash, you can sell it for untraceable cash. Also, you can (could) convert traceable payments to your electric utility and computer hardware to mining efforts that couldn't be linked to your power bill.
The problem is that most people don't do either of those things, instead, they buy and sell it at exchanges with very traceable credit cards.
The problem with exchanging BTC for untraceable cash or vice versa is the people you would be dealing with are probably criminals who are not above robbing you of your BTC and/or cash.
If the cash loaded into a bitcoin "atm" is legal, it's traceable. If it is illegal then your results may vary, most likely to your financial and legal detriment. If you think a bitcoin "atm" is a solution to this problem then hopefully your lawyer accepts bitcoins.
> Also, you have an infinite number of trivially easy to make BTC wallets that are not registered to anyone. That's how you can make it anonymous.
That's not a problem. The problem is that if you are not trading with yourself whoever gets your bitcoins has a connection between a physical "you" and and a wallet that "you" used to transfer money. Now the opsec of the transaction depends not only on "you" but also on opsec of that other person. Eventually someone in that path decides it to cooperate with whoever leans on them in the real, not bitcoin world and the security of that stage is blown. Repeat until "you" is discovered.
I feel like I'm missing an obvious point here, could you possibly help me?
Evil Criminal Mastermind amasses wealth in BTC. --> They have that BTC in a wallet. --> The Feds know that Dirty Money has gone to that wallet's address. --> ECM makes a new wallet, transfers BTC to it. --> Feds know that BTC went from wallet A to wallet B.
However many wallets Evil Criminal Mastermind makes, they're still going to be traceable by the Feds, right?
> The Feds know that Dirty Money has gone to that wallet's address
They don’t. A wallet can have infinitely many addresses with nothing linking them together externally - only the holder of the wallet knows they’re related.
Think of a Bitcoin wallet as macOS’ Keychain or a LastPass account - and a Bitcoin address as the login credentials of each site you visit: provided you use a distinct login for each site, each site owner has no idea what other sites are in your LastPass/Keychain store.
Similarly: provided you use a new address for each bitcoin transaction then people you transact with have no knowledge of other transactions you’ve had.
People do often reuse addresses - however. Creating new addresses is free and instant - but consolidating your funds becomes a pain, especially if you have a lot of low-value transactions where the amount associated with each address would be eaten-up by the bitcoin network’s transaction fees.
And dumb criminals reuse addresses too - sometimes you see those “I have your password, send me bitcoin” emails using leaked passwords - and they all use the same (or a small number of addresses) - if this scam was run better they’d generate a new ransom address for each mail recipient. And I think that’s how they busted the operator and customers of the website in question: because they used a single address to receive funds at.
You could trade your Bitcoin for Ethereum with A and then trade Ethereum with Bitcoin with B and you get back Bitcoin that can't be digitally tied back to your original source.
And where are you going to trade your Bitcoin for Ethereum and vice versa?
It may not be traceable directly through the blockchain(s), but the exchange destination will be, and they're almost certainly going to be complying with local laws which means they'll respond to a subpoena for data and give law enforcement whatever info they have on you, and most exchanges require KYC verification to handle any significant amount of funds.
You can buy goods and services that don’t need physical shipping, as in this case: CP images and videos.
You can earn bitcoin anonymously by mining it - at least this was more feasible a couple of years ago than it is now - but in 2011-2017 if you were to buy $4,000 worth of graphics cards you could mine $4,000 worth of cryptocurrency on Nicehash in a few months (and keep going to make a profit too). No ID required (though they probably track your IP address somewhere...)
Aren't there bitcoin mixers? Where like, 100 people put in x number of bitcoins, they get combined into one wallet, then x bitcoins are sent to 100 new wallets? That makes it so you don't know which of the hundred new wallets is tied to the one input wallet?
Interestingly, as far as I understand it, the bitcoin protocol does not technically allow bitcoins to be combined, only split. The blockchain records transactions (balance transfers, basically) sourced from other transactions, so any output of the mixer wallet is conceptually traceable right through the mixer back to the input wallet[1]. There is an explicit link in the protocol.
Now, the rules of operation of the mixer may (and in practice, definitely do) invalidate that link in reality, but it still exists in the protocol and can be the subject of legislation.
[1] For example, if the mixer wallet is created with nothing and receives 100 BTC from 8 other wallets, there's no record that looks like "Mixer Wallet: 100 BTC". Instead, there's a set of records that looks like this:
Mixer received 52 BTC from tx 5d41 [which deposited 2,000 BTC in Kingpin]
Mixer received 20 BTC from tx 402a [which deposited 20 BTC in Whore]
Mixer received 10 BTC from tx bc4b [which deposited 100 BTC in Hitman]
Mixer received 13 BTC from tx 2a76 [which deposited 2,000 BTC in Kingpin]
Mixer received 5 BTC from tx b971 [which deposited 8 BTC in Smuggler]
And payouts from the mixer create records that are in turn explicitly sourced from those. This mixer can't pay out more than 52 BTC in a single transaction, because that is the largest single amount it received.
I think the idea is you'd have mixers for each denomination e.g. 5 BTC, 100 BTC, etc, and you'd just send that amount so everyone gets the same payout and you can't tell clean coins from dirty.
Which IMO just makes everyone liable, the law usually doesn't look favourably upon intentionally tricky bullshit.
The denomination doesn't mean much. When the mixer pays out 5 BTC, it must source those 5 BTC from a transaction that gave at least 5 BTC to the mixer. In the example, that's all of the transactions, but if you wanted to pay out 15 BTC at once, you'd be limited to the first two.
A transaction has only one source, so that payout is obviously attributable to the source transaction. If the mixer gave you 5 BTC from Whore, you're holding Whore bitcoins. If the mixer gave you 5 BTC from Kingpin, you're holding Kingpin bitcoins.
The idea is that 100 people put in the 5 bitcoins, then each of those 100 get back 5 bitcoins to a different address... yes, you can track the bitcoins themselves, but you don't know which of the new wallets belonged to which of the old wallets... the 5 tainted bitcoins (from an illegal activity) might end up going to a totally different person who had nothing to do with the illegal activities.
In your example, the original owner of the whore coins would end up with the kingpin coins and vice versa.
Yes, I understand this idea, and it is what I mean when I say that the rules of operation of the mixer invalidate the link -- in reality -- between the coins that you got from a mixer (post-mixing) and the coins that were given to the mixer (pre-mixing).
But the protocol doesn't reflect the reality of the mixer; the mixer is built on top of the protocol. Within the protocol, those coins are still linked, allowing perfect tracking of coins as they pass through the mixer.
You can argue in court that your kingpin coins aren't really kingpin coins, but you'll always be hamstrung by the evidence. What you really have are plainly-labeled kingpin coins and an admission to purposefully receiving contraband.
That's the usual argument, but I don't see how that sticks around when it's pretty much just money laundering without even a cover story.
At the end of the day that new wallet needs to be converted to cash or use to pay for something to be useful, which makes it traceable, which ties the person to using a mixer which I have no doubts will become illegal itself if it becomes a problem.
It would be an interesting legal case... you would have to demonstrate that the other participants in the mixing should have reasonably knew that the other participants were laundering money.
Then the feds find the guy you sold to when they try to sell them on Coinbase. And that person knows your e-mail, number, what you look like. You had to get the coins to them somehow.
Actually, that is kinda scary. The bitcoin I just got for selling a shirt could be one transaction away from child pornography. And it is all in a pubic database.
I'm not sure what you're defining as "big enough" here, but localbitcoins.com shows verified, well-reviewed people in my smallish city that would be willing to do up to $30KUSD in one transaction.
The kind of people you're transacting Bitcoin for cash with definitely don't want to check ID, just the opposite. They likely don't want you to know who they are either.
So are tumblers not a thing any more? I thought in general tumblers made it pretty impossible to trace things unless you are moving a volume of money that is much bigger than what the tumbler typically processes in a day.
I think the real problem is high volume transactions. In theory, buying money off of localbitcoins assuming you connected to their service anonymously, met with the seller anonymously, etc. should be safe.
But if you're accepting payment and then cashing out, you will need a safe way to cash out and localbitcoins will get you caught fast. Agents would see the money going to a localbitcoins user. They could either setup a sting or just contact whomever has been buying these coins off of you.
Trace btc to the localbitcoin guy, find intersection of his location data from cellphone service company with location data of others around the time of transaction.
> " Law enforcement was able to trace payments of bitcoin to the Darknet site by following the flow of funds on the blockchain. Separately, Chainalysis said it was their Chainalysis Reactor software used to analyze the blockchain transactions."
By design, bitcoin uses a public ledger. This sort of investigation being possible shouldn't catch anybody by surprise.
Wouldn't it be amazing if years from now, we found out that Satoshi Nakamoto was an intelligence agent, and that there was a massive state-backed social media campaign to convince the dark web to use Bitcoin, for this very reason?
If that's true, you could consider updating the Wikipedia page [0] for him! In any case, that's what I get for only checking Wikipedia, but I didn't follow that particular drama closely in the first place.
The two things that really jumped out at me was that they were able to rescue a bunch of children being abused (probably at least one in the US since one of the LE officers was charged with producing) and that a huge percentage of the content they found was previously unknown. The impression I've gotten from stories in the past is that there's a lot of child abuse material that has been circulating for years, so taking down producers is a big deal.
The thing that gets you when you realise it is that most of the criminals that get discovered/prosecuted are discovered because they were doing something stupid, like using the equivalent of a public ledger to make transactions. You don't hear a lot of stories about smart criminals getting caught.
Except for white collar crimes. Someone actually did the math on this and it's actually positive for white collar crimes and often those people can have good lawyers and punishment for white collar crimes don't often carry huge sentences. The combination of a high payout plus good lawyers and light punishment makes white collar crimes net positive in terms of risk vs. reward.
I hate to say this but I found the same when I studied this issue in my business ethics class in grad school (MBA). I wrote my end of term paper on this exact issue.
What it boils down to is that, on average, white collar criminals can expect to go home to $1 million per year of time actually served behind bars.
It made me wonder what the expected outcome of the class was.
People transfer it and convert it into property of their spouse, children and friends. In some cases this is extremely transparent and done days before charged, and its rarely ever recovered when that happens.
The people who get caught are, on average, able to hide enough of the money from the authorities through various means that they have some money to come home to, if you will.
This means some people exit jail penniless and some exit jail with hundreds of millions.
Perhaps the authors of the paper should have presented the median rather than the average; however as a typical college student I was more focused on delivering the assignment than criticizing the researchers.
But even if that wasn't true, you could still compare expected value. For instance, if you had an 80% chance of successfully embezzling $8 million without getting caught, and a 20% chance of serving 2 years of jail, this would translate to an expected value of $1 million per year served.
Which is zero in many (most?) cases, because you don't get caught.
The expected number of years served is gonna be something like, say, 80% chance of 0 years, or 20% chance of 10 years, averaging out to 2 years (I'm making these figures up). So if you get $2M from that, then you're averaging two years.
I'm sure there's always the possibility of arbitrage, since the payout from crime changes constantly and laws (and law enforcement) struggle to keep up.
I wish I hadn't put off doing my taxes until a few days ago ... but I did. I don't go committing crimes but I am hardly good at making logical decisions.
Why crime is so attractive I think has evolutionary basis: sure, many will fail, but those that succeed will have increased their attractiveness to mates a great deal. For a similar reason you see a lot of variance in the behavior and capabilities of men.
There are also likely a lot of people who get out before they are caught, after making a modest amount of money.
There is a dead comment on this thread which is suggesting that Bitcoin is more useful than any other form of money for law enforcement because it is only pseudo-anonymous. I'm not sure why it is dead (perhaps the reference to Stasi/etc) but I think this is a valid point and is why I didn't buy more than a few hundred in Bitcoin many years ago to get a feel for the currency. I gave it all away because I did not believe it is a valid form of money.
I have never understood the appeal of BitCoin as a means of purchasing or selling illegal materials. The entire transaction history is literally encoded in a public ledger!
All Law Enforcement has ever needed to do is trace back the transactions - something that's almost impossible with conventional currencies. Heck the equitable principle of 'Tracing' exists in Law because it's normally impossible to do that once monies have intermingled.
The sheer practicality of it is demonstrated in the fact that it's only worthwhile or practicable for Law Enforcement to investigate _large-scale_ money-laundering operations. Yet with Bitcoin you can essentially read back the exact history of every single satoshi.
If you're a small enough fish you can assume that law enforcement won't bother to get back to you, especially if you're purchasing a small amount of weed or shrooms online instead of child pornography or hiring a hitman.
Then it's more about convenience than anything else. Bitcoin usability is abysmal when compared to Paypal or Visa but it's pretty great when neither of these things are an option and usually drug dealers won't manage to get a Visa or Paypal vendor account working for very long.
> If you're a small enough fish you can assume that law enforcement won't bother to get back to you...
yet. If this becomes a problem, it will be fully automated. Why wouldn't it be? You're literally leaving a trail of every unlawful payment you've ever made and waving it around in front of police. You don't think they'll pay someone to automate de-anonymiziation and automatic suspicious transaction flagging?
It reminds me of yesterday's story about states going after decades old public assistance overpayments. Somebody at a firm like Deloitte will figure out how to automate it and sell it as a service to law enforcement.
Won't they have to prove in court that the payment was indeed for the purchase of weed and not payment for something legal?
It could be a loan/gift or whatever made to the individual by someone who is not knowledgeable about their criminal behaviour like a cousin or uncle.
I don't live in the US but it seems from what the police say on the tv series cops that all are to be treated as innocents until proven otherwise..
But then again, me and my friends here in Norway has always reworded that to "All blacks are considered guilty until proven white" so it might not really mean anything in practice.
Won't they have to prove in court that the payment was indeed for the purchase of weed and not payment for something legal?
If you purchase from someone who's only job was selling weed, and deposited your money into his account labeled "weed sales," then they probably have a good case.
Running a red doesn’t fund international terrorism and skirt sanctions. Trust me if it did every single person a hair over the line would have tickets up to their eyeballs.
>I have never understood the appeal of BitCoin as a means of purchasing or selling illegal materials. The entire transaction history is literally encoded in a public ledger!
Don't most illegal users use tumblers that commingle money from many addresses and then send back (in different quantities and at random times and sometimes from unrelated addresses) bitcoin of roughly the same value? Or is that no longer the case now that transaction costs are higher?
It seems like a huge part of criminal investigation is tracing opportunity and motive, and only then proving that the suspect was involved. We conflate filtering with proving all the time. Filtering strategies don't have to hold up in court. They don't have to prove anything, except whether I'm definitely looking at the wrong guy(s). The evidence gathered after I've filtered down to 5 supects is the stuff I'd be using in court. I (proverbial "I", as I'm not in law enforcement) need Due Process for every step after that.
If you can narrow a suspect pool from millions down to hundreds by showing they were at the same 'location' as the perpetrator, that's not great but it's surely a start.
What percentage of people using tumblers aren't up to something sketchy? Even if that's 95% that's still greatly amplifying the signal when you're talking about looking for one individual among a hundred thousand.
That's the scary thing. Today, it's using a tumbler that filter you in. Tomorrow it's not having a 24/7 camera/mic in your house connected to the internet with weakened or no encryption.
Tumblers aren't magic and they're a great example of why you have to look at the security of an entire system with a particular threat model in mind: when law enforcement sees one in use, they don't say it's impossible and give up. Instead, every point where real money enters or leaves the system is an area to apply existing legal tools to compel people to document that they aren't violating money laundering laws, etc. Because every Bitcoin transaction is public that provides a strong disincentive for anyone legitimate to use a tumbler — how many reasons do you have which are strong enough to risk having to prove that you weren't part of another user's illegal activity? — further increasing the likelihood that simply sending or receiving funds from one would be considered probable cause.
For awhile, there was a capabilities gap that criminals could exploit because while the ledger is traceable, LEOs lacked the tools to do so (especially if higher-entropy techniques were used to obfuscate transactions).
It seems perhaps that gap is closing now. Like other free markets, crime is an arbitrage system.
This was always just demonstrating the power of wishful thinking over reality: anyone who trusted it was gambling that every law-enforcement officer was unfamiliar with the technology, unable to get help, and that situation would continuously be the case in the future at least past the statue of limitations where applicable. All of those were obviously unwise assumptions before Bitcoin even existed.
It's pretty safe for the buyer when they mined their own coins, or bought them from a friend who did, using cash irl.
The real concern IMHO is the seller's opsec. When you're sending them pgp-encrypted orders containing your shipping address for receiving contraband. Are they sticking your address in an addressbook? Keeping the messages around long-term? If they get busted, will law enforcement be able to access all their encrypted messages?
If the communications aren't immediately destroyed, it's very likely a busted dealer will cooperate with law enforcement for a reduced sentence, which will almost certainly include granting access to all their encrypted communications.
Fortunately for buyers, all legal systems don't enforce 0 tolerance policies for end users, at least regarding drug use. In western Europe, drug use is officially prosecuted but in reality it is rarely the case.
Because it's often enough to ensure you're anonomous when transfering to/from $GOVERNMENT_CURRENCY (in person meetings in the woods for example) for the transactions to be untracable.
Or, buying BTC via a credit card from an exchange in a legal jurisdiction local police isn't going to bother with, so the money->BTC trace is lost. Tracing transactions in a local currency is a lot easier than having to issue warrants over international borders.
No, don't do that. You don't want any data about the transfer, period. Even if no one can see it now, you should assume (given you want to hide what you're doing) that any trace you leave, wherever, will eventually become public or seen by the one you're trying to hide from.
The only way to make yourself untracable is to leave no trace
How does one acquire BTC without any trace? Around here there's BTC ATMs that will accept cash in exchange for coins, but I assume those have cameras on them to record in the event of a theft.
local.bitcoin.com . It's non-custodial and does not rely on a trusted third party. So it's impossible to regulate. You buy peer-to-peer directly from a dealer. You technically get BCH, not BTC, but you can convert after. This is the most anonymous way to get it.
Sure, my point is that without BTC the options most people have are cash, which requires a physical meetup, cash in the mail (risk & can be/easily traced), or a bank transfer in their native country.
I'm pointing out that even if it's traced, getting to pick who traces you can add a layer of practical anonymity.
If you can find an exchange that doesn't require Personal Identifiers (PID) before purchasing, you'd be in luck. Even localbitcoins.com sellers require enormous amount of info about the buyers before they even consider the transaction.
No, people just use monero and convert to bitcoin last minute through xmr.to . Bitcoin is used because it's the most popular cryptocurrency. What's a better alternative, credit cards?
Problem is that what "doing illegal things" mean changes over time, and in different places. What someone assumes to be legal everywhere, could be illegal in most places, and vice-versa
Luckily for us, most "western" jurisdictions don't allow for ex post facto prosecutions. They're actually unconstitutional in the United States. And when they are incidentally permitted outside the US, it's usually for something egregious.
Further, if something's illegal in a different jurisdiction than you are in, you aren't usually exposed to any liability, as any tourist to Amsterdam will tell you. And not having a payment record doesn't change the fact you did it and will undoubtably have left other evidence.
Once again, these are social problems that magic beans won't solve.
> Further, if something's illegal in a different jurisdiction than you are in, you aren't usually exposed to any liability, as any tourist to Amsterdam will tell you.
Many years ago I was going to be traveling to Europe, and I thought to self, "Self, Cuban cigars are not illegal there. Maybe you could see what the big deal is."
My mental model was like yours, and like friends in college who fantasized about road trips to another state or Canada to find a bar that would serve 19 year olds. Not all laws are about the location of the act. Countries can and occasionally do bar their citizens from doing things anywhere, as was the case of Cuban goods.
There's also some weird extradition stuff that's been floating around lately that I can't make heads or tails of. There's definitely some fearmongering going on around it but I don't know if that means I should be concerned or dismissive.
And then there's one little idea. This may be crazy, but if the citizens of your country generally agreed that something was dirtbag behavior, you going somewhere where there is no law against it still makes you a dirtbag. Just a law-fearing dirtbag.
In the case of Cuba, Canada has laws to the effect that they must help someone from the US violate US sanctions on Cuba. International trade gets very hard when your company has offices in more than one country. I can't export things to my counterpart in Canada if it is going to Cuba, but if I ask is the product going to Cuba my counterpart is legally required to lie to me. (fortunately I don't deal in international shipping so I don't have to figure out how to deal with that)
That depends. For drugs you can generally get away with breaking laws back home while abroad. However the US (and most other countries) will prosecute you for human trafficking even if you only do it in countries where it is legal. Assuming they catch you of course.
Definitely, but that wasn't the question. For instance, I wouldn't expect UnionPay to allow me to fund pro-democracy organizations. I similarly wouldn't expect Visa and MasterCard to allow me to buy drugs legal in Canada or Portugal.
These are again, very much, social and not technological problems that require cryptocurrency.
In Canada for instance, you can easily get a merchant account with Moneris (a Canadian payment processor) and take card transactions over Interac (the Canadian debit network). Yeah, Square's bound by their US banks, because they're a US company with an overwhelmingly US product being sold internationally.
> I similarly wouldn't expect Visa and MasterCard to allow me to buy drugs legal in Canada
Ironically the government here in Ontario will sell you marijuana by mail and they accept Visa and Mastercard! The rules must be very vague and inconsistent.
There's a lot of boundary testing going on lately around the Rule of Law. And of course there's the whole era of McCarthyism, which is sort of the poster child for being mindful of what things go on your permanent record.
Ex post facto requires maintenance and vigilance, like any piece of safety equipment. Don't just count on it always being there. We all have to work at it.
In California, marijuana is legal now, but credit card networks will not accept transactions because marijuana is still against federal law. Dispensaries that risk taking credit cards also risk all their bank assets being frozen and seized.
All societal problems are solvable. Bitcoin is by no means a silver bullet. It requires 600kWh and 95g of e-waste per transaction (and rising). It allows all sorts of transactions we don't want including avoiding sanctions, funding terrorism, wealth accretion by rogue states, extortion scams -- the cost of which far outweighs the transactions we do want but can't have under our current system. It's not the answer to this question, or any other IMO.
Is the Hong Kong protests sponsored by Visa? If so I look forward to Morgan Freeman's next commercial. Even then it would seem to make sense to pay cash.
Part of me thinks this is definitely something an authoritarian government would try to do, but then I wonder: how has this not happened already? Has it happened somewhere I've missed?
I suspect that banning cash would result in an ad hoc barter system for goods and services. If people are engaging in economic activity they want to hide from the government, and find others willing to engage in the same activity, they'll probably work something out, right? Whether it's masks that could potentially hide someone from facial-recognition cameras or something else.
It's the sort of thing you spend a few years normalizing instead of implementing in one fell swoop. Rapid changes unnerve people and a rapid elimination of cash could cause civil or economic unrest. I believe India has experimented with demonetizing larger bills, and in Sweden businesses that accept cash are becoming increasingly uncommon, as are people who use cash.
When the majority no longer consider cash important, eliminating cash becomes safer. More people adopt the mentality that cash users are criminals with something to hide or generally just paranoid weirdos, and are consequently less likely to object when the use of cash is further restricted. Moreover, with fewer people using cash, the government has largely achieved their objective already. When few people use cash the haystack the needles are hidden in becomes much smaller.
Yeah but then using a barter system is probably outlawed in those societies, which would have a chilling effect because you don't know if someone is safe to ask about the alternative method for fear of being reported.
A casual interaction between shopkeeper and customer would never be facilitated by barter in such a hostile environment.
> I suspect that banning cash would result in an ad hoc barter system for goods and services.
Regular people who don't care about privacy or censorship resistance will use credit cards. This is in the interest of the powerful because you can easily disable service for undesirables.
Well, as this article points out, Bitcoin transactions aren't anonymous, they're pseudonymous. If they became popular, automated de-anonymization tools would sort this out. Further, nobody accepts Bitcoin for anything material, so you're going to get caught at your on-ramp and off-ramp.
> Further, nobody accepts Bitcoin for anything material,
That's partially true. Off the top of my head you can convert it to bullion fairly easily [1][2] and there are DNM cash out services on most DNMs too, a lot of trust there but if you spread it out over multiple vendors and smaller transactions you could convert it to physical cash. Each transaction increases your risk of detection by postal police and by just getting ripped off by the seller or the mail carrier though.
This whole thread reminds me of the early South Park episode where all the Catholic diocese...s? meet to figure out how to stop getting caught molesting children.
You could stop molesting children. That would definitely work.
If blockchain analysis companies can't trace monero, I doubt the government can either. Hell, wasabi bitcoin wallet can't even be traced by chainalysis.
Bitcoin is traceable, but you don't need to use any kind of document to have an address / wallet. It was not created to be anonymous or for use in illegal transactions. It was created to be the most reliable way to conduct an online transaction.
Although it can be traced. No one has the power to block or return a transaction. Once sent, it was gone.
With any other traditional means of payment, money can be withdrawn or blocked with a court order. With Bitcoin, if there is no collaboration from the wallet owner, this is impossible.
Those who use Bitcoin for illegal activities are at various risk of being tracked, not just by ledger. A good investigator and the criminal system need much more evidence.
Now one risk he does not want to make is selling the goods and not receiving the money. It is this reliability that Bitcoin offers that compensates for the risk of being tracked eventually.
>I have never understood the appeal of BitCoin as a means of purchasing or selling illegal materials. The entire transaction history is literally encoded in a public ledger!
In defense of it, there are various sites where you can find a local seller online and go give them cold hard cash and have it sent to a one time wallet. Then go home and then, or at some date in the future, deposit it into a DNM wallet and order whatever you want.
From that point you basically have to have a DNM compromised, them to track every single external deposit, track down BilboBaggins17 that you traded cash for, then attempt to get the records for the site you contacted him via as well as try to get him to remember where he met you and when to go attempt to get surveillance then hope either the logs of the site or the surveillance video lead them to you so they can hope to find some way to catch you buying another ounce of shrooms in the future.
But yes, it's stupid for things like the above where creeps probably went to an exchange, bought bitcoin with their bank account then transferred it to their wallet then the ring (or directly to the ring).
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Now as a seller, yeah bitcoin is generally just dumb. Sure there are DNM vendors that will convert it to cold hard cash for you (I suspect in the U.S. this is probably being done by some dispensaries, or companies serving dispensaries, to get some of their cash digital) but there is a lot of trust there. Aside from those services, there's no really semi-anonymous way to convert your bitcoin that you obtain from illicit trade into fiat unless you want to get really complicated and shift it from bitcoin to some other crypto, then probably go another step and shift it from that crypto to a third crypto, then from there convert the crypto to fiat. Each stage you are losing transaction fees and probably paying some sort of premium which is going to really start digging into your profit and then you still have to clean the fiat to make it legitimate if you're talking about money you plan to live off of. If you were a small-time seller of something you might fly under the radar by claiming it's various mined and day-traded crypto you've been holding for years but you're probably going to want to pay short term capital gains on it when ou convert fiat and get hammered hard on the taxes which to me would make breaking multiple laws just not worth it.
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What I really want to know is how are the larger ransomware operators converting it to fiat unless they are just using it to buy drugs and/or carded merchandise then sell that for fiat.
I don't think you know how drug dealers do it. local.bitcoin.com is what drug dealers use these days. it's non-custodial, is not a "company" (so it can't be regulated) and is trustless because it uses data signatures. (kind of like a multi-sig wallet) I'd say converting to fiat from bitcoin is one of the EASIER things they have to do.
If you want to go to the BTM route, they convert to monero, and use the "monerujo wallet" to auto-convert to bitcoin at the BTM. The only downfall is the btm asks for ID after $2000 or so. So I assume it's taxed in some way. The margins on drugs is high enough where the extra fee they have to pay is negligable
> Aside from those services, there's no really semi-anonymous way to convert your bitcoin that you obtain from illicit trade into fiat
> What I really want to know is how are the larger ransomware operators converting it to fiat
Nothing is off limits for them. They can buy credit cards and bank account credentials, exchange coins to it and withdraw cash through ATMs, or buy something with that money and sell it cheaper for cash.
What you see in the ledger is money moving from address X to Y to Z, or very often it's more complicated like Z paying to A, B and C in one transaction.
You don't get any other identifiers. You might get an IP address that broadcasted the transaction, but that's not in the blockchain.
And it's trivial to create a new address. Or a thousand of them.
So besides a few known addresses, you're not going to easily find the owner of address X. Some exchanges might sell you some info, but not openly.
No, what I'm saying is that if one wants to be anonymous with Bitcoin, it's really easy, and the fact that the blockchain has all the transactions doesn't help to uncover anything.
You’re going to have to walk me through that. Because from where I’m sitting it’s almost trivial if you view it through a graph database lens.
For reference: https://www.youtube.com/watch?v=XCR_LBzur-k (and that was years ago)
Possible the thought is that in a country where online transactions are not well monitored, it might take a while to be traced down.
Personally, I don't understand how one time use money cards would have any preventions to prevent the same thing from happening. One could send someone to buy a stack of them with a wad of cash, and the original store the cards are delivered to might be tracked, but after that, what else is there? The money gets transferred out, and they might not even know what the purchase was.
There are more private cryptocurrencies, but it's near mathematically provable that all with sufficient transaction history and brute forcing capability are traceable. In the case of law enforcement, all they have to do is sit in these transactions until the have the CPU power to break them. I'd had to be the one that used cryptocurrency to buy something illegal knowing that 50 copies of the ledger exist on other people's computers.
Note that brute-forcing an exponential-time algorithm is not generally possible. If you have an algorithm with a runtime of 10^N, then after N=61 the runtime of the algorithm will be greater than the age of the universe expressed in the Planck Time. For a 2^N algorithm it'd take about N=202. If you're willing to talk in nanoseconds instead of Planck Times (chosen because our current understanding of physics breaks down at that scale), it's more like N=26 for the 10^N case.
Practically speaking, though, users of privacy coins are usually looking for plausible deniability rather than total untraceability. The legal standard for criminal cases is "beyond a reasonable doubt"; if there's even a 50% chance that you're just an innocent person caught up by circumstances, you'll have trouble convincing a jury of guilt.
I like your thinking, but all of this is assuming that runtime for something stays precisely the same no matter what. Most operations are at least reasonably parallelizable, and I would argue that cryptocurrency depends largely parallel operations, which in general should mean that breaking it is also a parallel operation. Plus with advances in quantum computing, regular computing and storage, it's hard to be sure how long any of this information will be stored for or long long someone would crack it for, or wait for it to be crackable.
Also, you imply that some amazing computational shortcuts aren't ever going to be arrived at. This historically, is hard to be sure of. Not saying everything will be broken, but more of it is all the time.
I'm not sure what your point is. You can get satoshi or any cryptocurrency for that matter anonymously, there doesn't need to be a record somewhere that ties wallets to real people.
One of the more plausible invention stories is that Satoshi was an arms trafficker who needed a verifiable way to pay large sums of cash anonymously, so it isn’t a lot of work to consider that it could be used successfully for such purposes. That won’t stop idiots from being caught by good investigative work - nothing can prevent that! - but it certainly does appear to meet the needs of highly competent criminals, whatever other pros and cons it may have.
Satoshi writings show he/she/they knew it wasn't anonymous. If that was the goal, then surely Satoshi would have kept working on it until it got there right?
> One of the more plausible invention stories is that Satoshi was an arms trafficker who needed a verifiable way to pay large sums of cash anonymously.
Let's leave the conspiracy theories to the pro-Bitcoin folks, it's kind of their speciality.
I'll be the first to apologize for dismissing your comment. The crypto space is full of outlandish claims, wild conspiracy theories and general craziness. I think the way you phrased your comment caused me to dismiss it, and without linking to evidence I took it as "just another (pro-/anti-)crypto conspiracy theory." That article is a great read, though while I’m not sold yet, there’s certainly a compelling narrative there :) I've removed my downvotes.
It is actually the perfect means to buy illegal things if you are the purchaser. A person can use cash at a bitcoin machine and buy them anonymously. Walk up to the machine with a mask on and when you leave no one knows who you are and now you have bitcoin no one knows who owns it. If you order drugs and the police show up you can just say you had no idea why anyone would send those. I don't know how the seller easily gets his money out and wouldn't really care as long as my order went through. The public ledger would show that bitcoin was sent but no identity as to by who. Make a new wallet each purchase and have very little linking you to illegal purchases.
Edit: upon reading up on the bitcoin ATM's it looks like some of them have started requiring phone verification where they will text you a sms, in that case you could need to use a burner phone creating one more step in the process of remaining completely anonymous. But certainly a doable step.
There are many ways to get indirectly caught, either with physical proofs (fingerprints, gait recognition) or metadata (triangulating your cellphone signal to determine where you were approximately at a given time. None of this are definitive proofs, but it adds up.
And showing up at an ATM with a mask will definitely attract some attention. I wouldn't be surprised if they further improve their system and requires facial detection (not necessarily recognition) as well.
Yes but looking at the original post I was replying to "I have never understood the appeal of BitCoin as a means of purchasing or selling illegal materials. The entire transaction history is literally encoded in a public ledger!"
The point I was trying to get across is that with some effort bitcoin can be anonymous. Right now the machines don't require facial anything and I can tell you those machines are all over Vancouver. I did not mean walk in with a Halloween mask, although with Halloween coming it would be a fine time to go in to the machine and do such a thing with little people looking at you. Yes there are other risks of being caught, an adjacent store camera or cell tower pinging like you say so you would need to be aware of these and other risks and minimize as many as possible. This is a lot of effort for some people but for others the risk of being caught buying illegal items with cash is way to high. Also, where can you go and buy almost pure drugs, certainly not the streets of Vancouver. The dark net already has a reputation of selling better quality drugs as the sellers get rated on the dark markets. Also the availability of certain drugs just isn't there on the streets where on the darknet every thing imaginable is available. So that is why I believe bitcoin makes an appealing medium to purchase illegal materials. How the person selling these items gets their money I am not sure. Ordering drugs to your door always carries a risk but at least with everything for the payment separate you can deny it. Hand full of cash and drugs when the cops show up it is game over.
> Among the 36 Americans named in the indictment, at least three were federal law enforcement employees who had been arrested earlier in this long-term investigation.
Seems like an abnormally high proportion. Hopefully it's just because of a small sample size and not indicative of a Catholic church level cover-up in our law enforcement circles.
It is an abnormally high proportion because the Three Letters agencies have bare-minimum budgets and have to go after the highest value targets, ignoring low value criminals (abusers and people in power being most valuable)
It takes $X million to collect evidence, hire a prosecutor, take time up in court AND they still have to balance the budget by going after different kinds of criminals so the agency looks like it's doing something to the general public.
So no, it's not a stupid conspiracy. Pay your taxes and vote for representatives that will increase funding!
You probably missed all those East Bay cops across several cities serving and protecting in a very specific way that underage prostitute. Statistic wise they seem to have beaten the Church, and the most of those cops are still cops there, in particular because there were "insufficient evidence that they knew that the girl was under 18" as were concluded by the judge in a dismissed case against one of the officers.
Statistic wise they seem to have beaten the Church
Not very hard, since the chances of a child being abused by a priest are incredibly small. I saw a chart of it from a .gov web site a couple of years ago, and it had public school teachers at 5x the rate of priests.
The reason the Church thing is a big scandal isn't because of the frequency, it's because of the cover-ups, and because priests are supposed to be at the top of the list of people that children can trust.
If that’s true, that’s one of the most cynical-inducing facts. If the abuse of children by priests is within expected ranges, and dwarfs other professions, then wow that’s depressing.
Also I recall this story, so hoping your statistics are off-
"Judge Jon Rolefson dismissed charges against former Contra Costa County Sheriff's Deputy Ricardo Perez [...]
Perez was charged with felony unlawful sex with a minor, felony oral copulation with a minor, and two misdemeanor counts of engaging in lewd conduct. But Rolefson decided there was insufficient evidence Perez knew that Guap was under age 18. "
the cover up in public education is where the real dirt hides but one would suppose the best place to hide is within any government agency, especially those given access.
it all just comes down to that the walls of anonymity are coming down and the privacy we are so afraid will be taken away by some corporation was long lost to the government who valued it even less
Makes sense: Being a law enforcement officer makes it easier to earn the trust of strange child while also threatening them into silence. If you get caught you can just blame it Black Lives Matter or something and have your union provide a vigorous defense free of charge.
I don't think Bitcoin can be anonymous if it goes through an exchange, because you have to create an account with identifying information. I you host the endpoint yourself, it may be possible to completely mask the source, but I'm really not sure.
Yes, Bitcoin is anonymous only under certain circumstances. You can get Bitcoin anonymously, and you can make transactions anonymously, but it takes know-how
Without the exchange it is difficult to convert the Bitcoins into goods and services. That's where the governments are getting people: when they try to spend their ill-gotten gains.
In theory a tumbler could disconnect the identify information even on coins bought initially on an exchange with KYC compliance. Not sure if anyone's figured out how to track transactions through those yet with just public info from the blockchain. (I imagine they'd keep it pretty quiet if they had)
Tracking coins going through a tumbler is a probabilistic exercise. You need to either be willing to wait a long time or find a tumbler with a lot of activity to effectively hide from someone searching the blockchain. Basically to build up enough noise floor for you to hide yourself.
But it may be moot if the exchanges simply mark any bitcoin that has gone through a tumbler as tainted and refuse to convert it into anything else.
This assumes that the operators of the tumblers are to be trusted and aren’t state actors themselves. It would be a pretty smart move for the Feds to run one or more of those operations.
It will take a stroke of a pen for the US Government to require that exchanges do not accept any coins that have gone through a known tumbler after <certain date>
Imagine a money laundering operation, where every laundered physical dollar gets a physical stamp of 'THIS CAME THROUGH A MONEY LAUNDERING OPERATION'. That's the current state of BitCoin tumblers.
> It will take a stroke of a pen for the US Government to require that exchanges do not accept any coins that have gone through a known tumbler after <certain date>
Assuming they can actually identify it as having gone through a tumbler, sure, but it's not like tumblers advertise the addresses they use. Especially not distributed systems like CoinJoin. These are just ordinary transactions that happen to include inputs and outputs from multiple, unrelated sources. Following long-established best practices, any given address will only be used once.
They could ban exchanges from accepting coins that do not come directly from another authorized, compliant exchange, but that would be tantamount to banning cryptocurrencies altogether. It wouldn't stop them of course, just drive them underground.
That really just starts the true cat and mouse game of trying to hide tumblers as legitimate flows.
edit: To expand it's harder than tracking normal money laundering too because the "businesses" (ie wallets) can be generated by the thousands per second.
Many of the larger exchanges will track funds moving into or out of their customers' accounts, and will close accounts which appear to be transferring a lot of funds to/from tumblers.
I like to think of exchanges as an unacknowledged patch to the Bitcoin protocol as it stands in 2019. Or even as it stood in 2012 or 2011.
No, they're not in the source code itself, but without them the project would still be sputtering along in almost total obscurity, if not abandoned altogether by now.
Couldn't you steal an identity first, then have that identity register on the exchange and buy Bitcoin? Cash out to bank accounts controlled by an anonymous corporation.
I wonder if there will be increased interest in more privacy focused cryptocurrencies like Monero? I don't follow this news closely so I am genuinely curious if anyone has any insights.
I thought I saw a chart where it was the second-most-accepted coin, but I couldn't find it, so I may be wrong.
I did find a chart where it is the 4th most accepted after BTC, LTC, and ETH.
I imagine those other coins are more accepted because they have larger network effects. I also imagine that Monero's network will grow even more as it becomes more developed.
Holy crap, straight out of Law and Order plots, a former HSI agent was caught in the investigation, if I read this correctly:
HSI computer forensic examiners found more than 1,000 images and 125 videos depicting the sexual victimization of children on Pannell’s home-built tower computer. The images and videos depicted pre-pubescent girls, including toddlers, engaged in sexual acts with adults.
Pannell faces five to 20 years in prison, up to a life term of supervised release, and a $250,000.00 fine, as well as registering as a sex offender. U.S. District Judge Greg G. Guidry will sentence him on Dec. 17.
Former HSI agent Richard Nikolai Gratkowski, 40 at the time, was sentenced in May to 70 months in federal prison on child pornography charges. The investigation showed that Gratkowski, in San Antonio, received hundreds of videos of pre-pubescent children engaged in a variety of sexual acts and had also bought access with cryptocurrency.
> In cases where that was insufficient, account information combined with open source intelligence and standard investigative techniques were enough to identify users.
The site says users spent millions of dollars, but they only arrested 337 people. Did they only arrest a small percentage, or were these some really rich scumbags?
Seems unlikely they'd get everyone, but keep in mind, millions divided by several hundreds is only thousands per person over some months/years.
Edit: and given that they have rescued dozens of abused children, I assume they optimized for active abusers, but were happy to scoop up anyone else who surfaced in their investigation.
I’ve never used bitcoin, but everyone I know closely that does uses it for drugs, and when someone who doesn’t do drugs is about it I always have this nagging feeling their investment is just to cover up a child porn thing. It’s for sure a prejudice, but i can’t shake it
we actually track a large list of digital currency, more and more each week and there is a ton of funding more than we'd ever expect being given for getting anything we need done, i dont see it really as an issue.. digital currency has been great for us
I'm very skeptical that you're tracing Monero. Unless you've broken ed25519, that is. In which case, you have better things to do than crack minor cryptocurrency transactions...
Ring signature size is still a problem. Yes, it masks the originating address of a transaction. But you know its 1 of N (currently 11 I think?). We know that most people buy coins from exchanges and then send them to their destination. An authority can simply subpoena every top exchange for users for whom any one of the addresses in the ring signature belong to. That's 11 addresses. If we assume the user may have made an intermediate transaction, we can go up two levels. That's 11^2 addresses. Three levels, 11^3. Given normal people's typical usage, monero's anonymity falls to broad subpoena power.
Once you tumble your coins in the Monero blockchain, it's practically untraceable. Every transaction makes it harder and harder for authorities to track.
At this point in time, consensus is that Monero is safe.
It honestly breaks my heart to know that there is such massive demand for these videos, where thousands of people will pay millions. It means children will always be exploited since there’s tons of money to be made.
I used to work for Kodak doing "photofinishing" in college. We used to get all the rolls of film for overnight processing in Oregon, Idaho, and Washington. I was one of two people who worked in the digital room. My job was to spend all night scanning rolls of film and then it would get sent over to a computer where I would click on each photo so it was upright and then we would burn cds with the pictures.
This was back in 2000 and digital cameras were rare, expensive, and not the best quality. So we were how a lot of people got their film onto the Internet. I had a special number for the police on speed dial. A few times a week I would have to call because of kiddie porn. Clearly sexual stuff and not just kids in the bathtub. It always struck me as odd that people used our service since you actually had to pick up the cds. Where the police would be waiting for you.
We also had to process crime scene pictures for some smaller police stations. Lots of suicide pictures. I do not miss that job.
Conundrums like this make my head spin when I try to consider my position on Internet freedoms.
On the one hand I believe the Internet should be a truly personalized, private interface for humans all over the world to be able to communicate freely and privately - safe from censorship, mass-surveillance, profiling, and so on.
On the other hand I also believe if the Internet was that way, then it would mean that these elements of society, the ones that seek to horrifically and tragically exploit the most vulnerable of us, would be able to do so relatively unimpeded.
Then I realized that nothing about moving humans online made humans magically more virtuous than they are in meatspace, and the tools we've used to audit and intercept bad-behaving humans in the real world have merit online too.
There's a reason so much motion online in the past two decades has been in the direction of "de-wild-Westing" it.
It does make direct coercive power online (ie. violence) difficult. I agree with you, but I do think that the internet reduces the harm inflicted by human vices
A helping thought is that those that commit assault of children don't generally consider the possibility of getting caught and will use their personal phone and tools rather than technology that are safe from censorship and mass-surveillance. Sexual assault is not part of rational thinking.
The major problem is when someone want to earn money by becoming a distributor that sits between producer and consumer, like the one in the article, and those people usually do consider the risk of getting caught. There is however a silver lining in that those are quite few and tend to become major target for law enforcement and sooner or later the opsec will have a flaw. It is questionable if Internet can ever become so safe that a person can be one of a handful few that earn millions for years without giving out any clues to whom they are.
So to me this resolve conundrum. Neither criminal is likely to operate unimpeded even when the Internet become safer from censorship and mass-surveillance.
Indeed, it’s not like it’s invulnerable to economics. We need to make sure that the costs are too high. Like most crime, this is less about sentencing than it is about the probability of getting caught.
It would be interesting to know if suffering has increased or decreased over the years and while the extra measures are being put in place. I agree with your opinion btw. I'm just skeptical if for all we know there is now more suffering than before because of the internet.
Unfortunately, some relative comparisons don't matter as much as the absolute. A world where the number of slaves is objectively increasing (as it has now) is worse I'd say. The total amount of suffering is more, even if there are billions more happy people oblivious to your plight.
I have struggled to understand how this proclivity can be evolutionarily possible and the only thing I can come up with is this unfortunate combination of elements:
1) the necessary sexual dimorphism that makes sexual reproduction possible, actually took an unfortunate shortcut: childlike features are retained in females (https://en.wikipedia.org/wiki/Neoteny), which ostensibly requires "less" DNA encoding, while males actually "develop" into more "adult" forms (body hair, musculature, height, deeper voice, etc.)
2) the reproductive window of women is far smaller than men, causing men of all ages to be drawn mainly to this small subselection of all women
3) consequently, men who were more likely to choose women in this younger reproductive window might have been selected for;
4) some portion of these men (due to natural variation), in being drawn to the paedomorphic features of women, actually are "steered too low" in preferential age genetically and are thus born having to deal with this unfortunate proclivity.
Ethical question: If no children were harmed and 100% of the videos and images produced were synthetic, would simply consumption of the media still be a problem?
> while males actually "develop" into more "adult" forms
No.
Neoteny in humans apply to both males and females and apply not only to physical appearance, but also behavior. You can compare with other primates – Chimps can be very friendly until they reach adulthood, when they become less social and more aggressive.
The secondary characteristics develop at puberty on both sexes, they are just different.
In fact, there is a reason why they develop past a certain age. The individuals we are discussing here are not going to be selected for this trait, as they would not be able to reproduce.
> Ethical question: If no children were harmed and 100% of the videos and images produced were synthetic, would simply consumption of the media still be a problem?
No. Because the reason people are prosecuted is that, at some point, someone has been harmed.
There are some very disturbing (to my senses) cartoons out there. No-one is jailed for drawing or viewing cartoons in any democratic society.
You might want to take a look at laws concerning those cartoons. They don't seem to have as strict an enforcement, but they aren't nearly as rational as you are claiming.
I will preface this with the disclaimer that I am a structural biologist; not an evolutionary one.
It seems to me that this hypothesis is unlikely. Is there any evidence that:
1) Sexual preference is genetic? (It seems intuitive that women whose bodies exhibit extremely visual traits of reproduction would be selected for. However, I don't the connection between that and there being equivalent selective pressure on men to be attracted to that). i.e. where is the gene that makes men attracted to young women specifically, and how and why is that under selective pressure?
2) Is there any evidence that pedophilia isn't a mental disorder caused by something else? Hormone imbalance? Developmental deficiency?
However, your theory does explain why so many more men than women are pedophiles, although it seems entirely inadequate at explaining the few number of women pedophiles that do exist.
Either way, it's a curious and interesting point. Thank you for making it.
I have a different and not mutually exclusive speculation:
It's often assumed that only females have a "biological clock." Maybe that's not true. Maybe males start to crave offspring too, and some mistake these feelings for sexual attraction.
> 4) some portion of these men (due to natural variation), in being drawn to the paedomorphic features of women, actually are "steered too low" in preferential age genetically and are thus born having to deal with this unfortunate proclivity.
Yes but no one is attracted to anyone when they're born. That happens later, and how and why exactly some people are attracted to some sexes, or traits, or fetishes is still up in the air. It's likely some combination of genetic and developmental, and what the exact contributions are to pedophilia are unknown.
Identical twins raised separately have a >75% concordance in orientation, as opposed to no concordance as would be expected if there was no genetic input.
So there is definitely a genetic input, and it is definitely large, although it's not the whole story.
Partly. Orientation is something like 75% genetic based on identical-twins-raised-separately studies. Why would I assume any particular orientation would be any different, without supporting evidence? Because the prospect of a world where people are born with such a proclivity is emotionally upsetting for you?
Massive demand in this case being 300 some users worldwide. The site had generated a million addresses, but it's clear that most of them were not being used.
You should feel better that on a per-capita basis this is an extremely rare occurrence. Like around the same chances as being struck by lightning. It's horrible, but not widespread.
> It means children will always be exploited since there’s tons of money to be made.
You can thank anti social capitalist system for that. In some countries some people are so desperate to make some money that they are willing to make porn with their own children and sell it to strangers.
"Eschew flamebait. Don't introduce flamewar topics unless you have something genuinely new to say. Avoid unrelated controversies and generic tangents."
I was about to ignore your comment but then remembered a story one of my ex-gf's told me. She said her mom, who was addicted to meth, literals tried to sell her to her meth dealer because she didn't have any money.
It has some effect. If you deposit bitcoin into an exchange and it's coming from an address that's associated with a hack or other criminal activity, it's more likely to get flagged. It's hard to say for sure, though. Different exchanges probably use different mechanisms.
I must be missing something, I buy Bitcoin with a USD bank account, I send to another address and then this address sends to a known drug dealer. How do they establish the second address's identity?
I guess the investigators found out somehow, for example by looking at transactions on a computer already seized for realayed investigations. Also by sending bitcoin to the service themselves, the investigators could trace the flow of coins into addresses used by the dealers to spend their bitcoins. Then backwards from there to other users payments.
This is so disheartening. 6-20 yrs is not enough prison time. This isn't acceptable. Law makers around the globe need to rewrite the punishments for these crimes. Child abuse seems to be much higher than older days.
As much as I love tech community, it's sad to see how most comments here are discussing the technical details of the case and not enough outraged by it?
> I have never understood the appeal of BitCoin as a means of purchasing or selling illegal materials.
> I don't think Bitcoin can be anonymous if it goes through an exchange.
> This is why you should exchange your Bitcoin to Monero.
> How do they establish the second address's identity?
It's plenty of time. This idea that just increasing sentences indefinitely will improve things is wrong. The endless ratcheting of sentencing is wrong. 20 years seems low only because we've become so desensitized to absurdly long sentences that comparatively this seems low. Americans need to change their relationship with justice and punishment.
Don't know if you're talking only in terms of US prison system; US has a whole different problem there.
Leaving such corrupted/psychopathic people out in public is hopelessly dangerous. ANYONE who has violated a child's life in this way doesn't deserve a second chance. They have spoilt several lives already till now.
Perhaps on a technical level it's easier to access the Bitcoin ledger than bank records but LE has far more experience with the later.
Also, if you solely receive and send bitcoin outside of an exchange, you can easily remain pseudo-anonymous in that anyone can see that wallet X has received Y bitcoins and send W bitcoins but without a person attached to the wallet, it's useless information.
This is way crypto currencies are regulated at the edges, if fiet to crypto is watched just like any other bank/exchange, then criminal activity has a hard time getting money out. At the end of the day, it's difficult to buy 'real' things; food, clothing, housing with bitcoin.
> Also, if you solely receive and send bitcoin outside of an exchange, you can easily remain pseudo-anonymous in that anyone can see that wallet X has received Y bitcoins and send W bitcoins but without a person attached to the wallet, it's useless information.
If this thing were a big enough problem, the government could easily require you to provide a ledger of all the parties you've transacted with (Your wallet is doing book-keeping, how hard would it be for a legitimate user to enter a small memo for every transaction, anyways?)
Failure to provide a ledger, or for your ledger to fail to cross-correlate with that of your counterparty would, of course, imply that you're a criminal.
Unlike cash, bitcoin leaves a very obvious breadcrumb trail, that can, with a bit of legislature, be turned into an incredibly useful tool for LE.
I've made this exact point before as well. High on the wish list of any authoritarian/repressive regime would be a monetary system where all economic activity and transaction is visible to them.
Section 10 of the original white paper is about privacy. It imagined bitcoin transactions being public, but still about as private as stock trading transactions that are published on a ticker tape.
Bitcoin transactions turned out to be a great deal less private than that, because separate transactions from the same wallet can be linked via the change outputs (unlike separate trades on a ticker tape).
Be careful speaking in such absolutes as "nobody". Back when Silk Road was all the buzz, people who may've lacked the same technical knowledge you and I have would claim that using Bitcoin on Silk Road was an anonymous way to pay for what you bought.
I'm pretty sure by now somebody has seriously claimed that Bitcoin cures cancer, speaks Romanian and cure male pattern baldness.
Anonymity and protection from the Big Bad Government were definitely talking points used by many cryptocurrency enthusiasts. "It can't be banned and can't be seized", rings a bell? Except of course if the Big Bad Government comes knocking at your door and tells you to hand your wallet over "or else".
This part is sort of true. A government can ban fiat <-> BTC conversion but there isn't really a way to stop people from providing services in exchange for BTC.
And how are they going to know you even HAVE a wallet? There are anonymization techniques like wasabi and monero that are fairly trivial to use. It's basically like trying to outlaw software piracy, it's a hard sell.
I think anonymous/not anonymous binary distinction is too black/white.
Bitcoin is more anonymous than a bank transaction. If I buy something with a credit card, they have my credit card number that is easily linked to me. With Bitcoin it is less easy. Unfortunately with Bitcoin once you have been 'revealed' then your transaction 'graph' is then revealed in the public, whereas the credit card doesn't have that problem.
It depends who you want to be anonymous from. Governments can easily get bank transactions, and also they can investigate bitcoin-based crime and then just trace the public ledger.
Businesses will not easily get bank transactions or map general bitcoin addresses to people, but if you use a credit card you tend to have to give them a lot of other matching information such as your name and address, whereas with bitcoin you don't need to give them anything. Assuming there is no delivery involved it can be pretty anonymous. But again if they did happen to pattern match (maybe they have another customer who you have dealt with too) they could join some dots.
But to be safe it's best to assume Bitcoin is not anonymous and that anyone can find out eventually where you have spent your money.
Not BTC being anonymous, but that BTC "mixer" services would anonymize the data in an untrackable way.
I never trusted the mixers personally. But it was a hot debate item a few years back whether or not law enforcement could track transactions through a mixer.
Its always been my firm belief that a mixer was just automated money laundering and probably puts you up for legal scrutiny as well. But we'll see how the FBI decides to handle those...
More importantly receiving money from a mixer could taint your wallet for converting the bitcoins into real money. KYC laws kick in. It's easy to check if you've ever had coins from a mixer enter your wallet.
The idea that your transactions are mixed up and impossible to track doesn't matter so much if they just assume everybody who uses a mixer is a criminal.
You can't reject someone depositing to your address. So a tumbler can taint whichever addresses it pleases
You aren't tracking coins with the ledger, only totals. So address A can have 10 btc, tumbler adds 5 to A, then A transfers 5 to B, 5 to C. If C is an exchange, does it consider that A is still holding 5 tumbled coins? Or does it say B has the tumbled coins? Or does it reject A's offer of 5? Feel free to shift values such as A having 100 BTC, receiving 0.01 tumbled BTC, & wanting to send 1 BTC to exchange
Also hard to track something like A sending tumbled coins to B, which triggers the owner of B to have C send non tumbled coins to D. You can even have this service offered at an exchange rate, so D receives less than B did
Easiest solution is to just taint any wallet that has ever had a coin from a known tumbler added to it. It's harsh and a malicious tumbler could mess up famous wallets, but easy to implement and "safe" to a point.
A harder solution only allows them to withdraw up to the number of coins you can verify were not tumbled. So if some malicious tumbler deposits 0.000001 coin in your wallet you can convert all but 0.000001 of your wallet's value at an exchange.
You get around that by converting from btc to monero and then back again. Either through bisq or through xmr.to. "mixers" are obsolete now because it's a central point of failure.
Hackers use "bisq" which is a decentralized exchange to get around this problem. I am baffled as to how "kingpin money launders" don't do this. I'm not a money launderer and I know this.
As for the fbi consdering monero a "money laundering scheme" in the future. They can outlaw it, I guess, but it's like trying to outlaw video and music piracy, it's hard to do in practice.
> Hackers use "bisq" which is a decentralized exchange to get around this problem.
How does "bisq" provide anonymity to its users? If you're trading BTC, your wallets are still being connected to each other and provably written into the blockchain for all of eternity. Same with Ethereum and other "mainstream" cryptocoins.
If the FBI only cares about "anonymous" coins, like Monero, and ONLY targets those, then all payment processors would "taint" Monero wallets (or any BTC coins which ever touched a Monero-related wallet), and refuse to process them.
Its really not that hard for Monero (or any other minority-coin) to be shut out of the payment processor market and relegated to black-market goods.
Because there are legimitate uses for monero and if you use a service like xmr.to to convert to bitcoin (which mixes the bitcoin on top of that), you are "far enough removed" from the tainted transaction to establish "plausible deniability".
Under the legal theory that mixers are illegal, that sounds very illegal to me.
What is the purpose of mixing the coins? You only help criminals. Gray-market goods (ex: legal pornography) are already solved by the traditional BTC network without anonymity.
Between KYC (Know your Customer) and other such laws in the USA, it is clear to me that anonymizing your transactions is very much frowned upon by the powers that be. If anything, fully transparent and trackable BTC "in the open" has numerous advantages with regards to being a "good citizen".
xmr.to is illegal in the united states so hackers use vpn to get around it.
And there are legitimate reasons to use monero and bitcoin. Sending money to family in countries such as china, iran, and venezuela is one. Another use is legitimiate "adult entertainment" sites where people don't want their sexual fetishes appearing on a credit card or ending up on a blockchain somewhere where the public can see.
> Another use is legitimiate "adult entertainment" sites where people don't want their sexual fetishes appearing on a credit card or ending up on a blockchain somewhere where the public can see.
Have you ever actually purchased adult entertainment on a credit card? They are inconspicuous companies that don't exactly flag what fetish you're into. At worst, you get a cover-company that doesn't actually match up to the website name. I dare say that this is a solved problem in the credit-card world.
Worst case scenario: buy Visa / AmEX gift-cards with cash and use that to fund your porn-stash. If you really have someone watching over your credit-card statements that you're worried about. There are very simple means of avoiding the problem in the traditional credit-card world. If credit-cards are available, then no form of cryptocoin is necessary for any kind of anonymity or protection.
> And there are legitimate reasons to use monero and bitcoin. Sending money to family in countries such as china, iran, and venezuela is one.
No, at best, that's a reason to use BTC. No reason to use Monero yet. And furthermore, using BTC to avoid local currency laws is going to probably put you up to scrutiny by the local authorities.
I don't think the US cares about sending money abroad... but China probably cares if you're avoiding their Yuan -> USD restrictions or creating a secondary market to trade Yuan / USD.
Or maybe they don't. Usually, governemnt agencies outsource to private companies to do the tracking. And big companies like chainalysis admit they can't do much about monero or wasabi. Usually, when people get caught it's because the criminal was being stupid rather than the government being smart.
Are any of the mixers still up? I remember about a year ago when one of the most popular ones abruptly shut down when it became clear the government would go after him for abetting money laundering if he continued.
Yeah. There was a leak recently from a Chainalysis employee who claimed that they were unable to trace transactions through the Wasabi wallet, which is a wallet that integrates a coinjoin mixer. I think there are other coinjoin-based mixer services operating.
It remains to be seen if the methods used by monero, dash, and various zk-proof based coins are enough to prevent de-anonymization when a motivated state actor is involved.
Gotta say though, this is one of the few times I'm glad to see someone too stupid to use proper anonymization tools.
I know you were trying to be objective but Monero has to be considered in isolation
There already have been indictments that happened to involve finding a Monero wallet on a seized computer and the state was unable to discern any information about the current balance or transactions accompanying it
Again this would be another culprit busted because of their known bitcoin transactions, and the other wallets were just found alongside. So it doesn't prove or disprove that starting with a Monero transaction would net results, but it provides an ongoing and improving degree of confidence.
It effectively embeds a coin mixer in every transaction, so to speak. In bitcoin you can trace transactions from one account to the next in the public ledger, with Monero theoretically you won't be able to follow the funds quite as easily.
Of course it remains to be seen if it really works if some three-letter organization really wants to figure out who you are.
Maybe, but not in a usable way - if anybody had been working off of an assumption that Bitcoin were anonymous, they know better now. So if Monero is, as you say, compromised/compromisable, the government can only pull that trigger once before the cat’s out of the bag.
Meh. The NSA will simply fabricate evidence if they really want to get you.
As an individual, I can't stop the NSA if they are genuinely out to get me. All I can do is increase the cost enough that random bureaucrats have to get up from their computer, sign a form, and expend some money to do so.
Does it remain to be seen? There have been busts and indictments where the state was not able to determine anything about the Monero wallet that were also seized in the operation
Can't the data just be taken directly from the ISP connecting to whatever crypto services are out there? If the FBI really wanted to get that info, I would think they can track all activity from the main hub directly.
Monero nodes see IP addresses, but they do not see the sender's crypto address, and they do not see the receiver's crypto address.
So in its current state, ISPs would only know what someone has launched a Monero wallet at some point in time. Using Monero is completely benign.
In its also current but also upcoming state, Monero clients automatically connect to TOR or I2P. So a Monero node would not know your IP address and an ISP therefore would not either.
Monero exchanges are merely Monero clients, and a Monero client knows its own address, and it knows the address the sender told it to send to which would be the receiver. But neither of these addresses are ever seen on the blockchain, and the receiver's Monero client does not know which address sent to it.
Since the receiver's client doesn't reveal which address sent to it, and there is no passive blockchain sleuthing possible, and the nodes don't see any of this either, there is very little the FBI could do if users are following best practices which are the default behaviors of this network.
Non-default behavior would be users that rely on exchanges exclusively: they send their 2 Monero from one exchange to another exchange. Exchange 1 is an account that belongs to the user, and it knows the address of Exchange 2. Exchange 2 is an account that belongs to the user, and it only has the same balance and transaction id as Exchange 1's send. The FBI happened to have subpoena'd both exchanges and found the same transaction id. Improbable now, but it could happen anytime in the future.
When the user adds their own Monero client into the mix (exchange 1 - client - exchange 2, + time + different amounts), this gets exponentially more difficult as you already need access to the user, the subpoena, and their Monero client. There are many barriers to getting that, especially in the face of benign economic activity, and the blockchain itself doesn't help.
You also aren't supposed to re-use addresses. This is true for Bitcoin and all cryptocurrencies. It means that an exchange wouldn't even know if you were sending to yourself, one of your other wallets, to a vendor to pay someone, or what. With Monero none of those recipients know who sent to them.
Give over. The guy is focusing on the technical aspect of the story which is the reason it's on this site. Stop trying to make out that he's morally inferior to you.
>Do you find it a little odd that in response to an article about rampant pedophilia you are admonishing people for not using Monero?
This is a hacker site. Is the most important point in the article that the Feds traced Bitcoin transactions to nab criminals, or that extensive child-porn rings exist? Only one of those is hacker-newsworthy.
It's somewhat surprising this hasn't happened earlier. They've been tracking these things for years, surely not everyone has been careful enough to keep it hidden.
Nah, they've taken down many others using different methods. Besides there's several competing organizations trying to take stuff down from different countries.
‘One of the weirdest things in recent financial/criminal history is that for a while people really believed that Bitcoin, an electronic payments method that creates a permanent, traceable, public record of all transactions and links them to identifiable accounts, was somehow a good way to pay for crime. “It’s completely anonymous,” people thought, “like digital cash, but you can send it anywhere and no one will be able to trace you.” Not really! I suppose it was even true for a little while, but eventually law enforcement agencies figured out how to trace Bitcoin transactions, and then the fact that years’ worth of criminal financial transactions were just forever openly available to them on the Bitcoin blockchain was … bad for criminals.‘