Well, if someone wants to say bitcoin enables child pornography, I think they should show some correlation of such sites before and after crypto currencies.
And besides, for a currency that is supposed to be anonymous, seems like a lot of people got busted precisely because they used bitcoin. Emperor’s new coins, I guess.
Were the creeps, for example, buying exactly $49.95 in bitcoin on the exchanges and then immediately spending that precise amount on the porn? Now I’m curious to actually research this and normally I find the topic in general sufficiently distasteful to steer clear of it.
Bitcoin is only anonymous if you do your transactions entirely in bitcoin. Once you start converting bitcoin to and from actual money and actual products, it’s not actually anonymous anymore, as there’s a tie to a real person where you converting to and from regular currency of some sort. Since Bitcoin explicitly keeps a public record of every transaction, once you have an endpoint tied to a point, you can track the flow of money. Dong things like shuffling money around through different wallets mildly obfuscates the flow of money for a person looking at it, but it’s really easy for a forensic investigator to write a program that sorts all of that out with little effort.
The flow is something like: buy some money on the exchange to get bitcoins, maybe move your bitcoins to another bitcoin wallet (or several wallets) you control, then transfer 49.95 from a wallet or wallets that you control to the wallet where you pay for the porn, then collect the porn. The thing is that it’s easy to track the flow of money from where you buy it to the porn site, as a feature of Bitcoin is that it records and shares all transactions ever. The theoretical anonymity of Bitcoin gets broken pretty easy in the practical implementation.
I didn’t read the article, but if that’s what it says, then it’s wrong. Compared to cash, Bitcoin is very, very easy to trace. Traceability is baked into the underlying blockchain technology, which maintains a permanent, widely distributed record of every transaction that has ever been carried out. If police can tie any one transaction to illegal activity, then they can examine all past and future transactions with the associated Bitcoin wallet. At some point the owner may have converted (or may one day convert) their Bitcoins to cash (and these days most exchanges have strict ID policies), or they may have made (or may one day make) a transaction with someone whose identity is already known or easily discoverable and who can therefore ID the owner.
The world was flooded with child porn, adult porn, and human sex trafficking long before Bit Coin was ever even thought of.
Everything’s more easy to trace than cash, but you can’t send cash over the internet. Although not impossible to trace bitcoin is harder to trace than the more standard ways of paying electronically, which simply involve looking up who the credit card is registered to, and always involve a third party directly facilitating the transaction.
It’s actually easier in a lot of ways in the easier to use practical implementation. While wallets aren’t registered to a person in the system, it’s easy to track money going from wallet to wallet, and at points where real money enters and leaves the system there is a third party directly facilitating the transaction who are easy to subpoena for records. It’s possible to use bitcoin in a more anonymous way, especially if you don’t mind having significant cash tied up in bitcoin instead of real-world currency and are willing to take some risks of getting screwed over to have more shadowy people putting money in and out, but it’s also a major amount of work to do so. For people who just convert some USD into bitcoins at an exchange and then later buy illict stuff, there really isn’t the level of anonymity people think there is.
I feel like too much is being made of the anonymity whereas the unblockability is equally as important. Wikileaks, for example, was banned from taking Visa and Mastercard donations. For Wikileaks donors, the anonymity wasn’t important as it’s not illegal to donate to Wikileaks. But Bitcoin was still useful because it was a payment rail that wasn’t under the control of any state.
Similarly for child porn, bitcoin remains anonymous as long as opsec on both sides isn’t broken and there’s a risk of getting caught that’s commensurate with all the other risks that opsec needs to mitigate. But what was truly revolutionary is that the combo of Crypto + TOR allowed digital marketplaces that were uncensorable.
Bitcoin is the most traceable currency in history, and probably played a significant part in how the authorities were able to shut down that site. In fact, my pet hypothesis is that bitcoin was actually created by the NSA, FBI, or other authorities specifically to make it easier to track criminal activity. But they can’t come right out and say that, or criminals would stop using it, and so they couldn’t catch criminals that way any more. So when they make a big bitcoin-enabled bust, they have to blame bitcoin for all of the world’s ills, to keep the operation going.
I don’t think so. Reading the basic implementation information it looks like a ‘proof of concept’ type of program - something that you come up with to show that it could work, but that doesn’t cover all of the real world cases. The biggest one, I think that if a three letter agency made up a cryptocurrency to trace people more easily, they wouldn’t have included the tight limit on transactions per second (the max is between 7 and 30 while VISA handles something like 1700 on average). I think if they actually created it as a honeypot, they would have made it more attractive to use.
I don’t doubt that they like criminals using bitcoin and are happy to reverse-psychology encourage people to use it because it is so easy to trace, but I doubt the theory that they created it and tried to get people to use it as a massive sting operation.
How are doing getting those millions back from QuadrigaCX?
“How are they doing” I meant to say.
The comment you’re replying to was about traceability, and they’re having no problem at all tracking where the millions from QuadrigaCX went. The big problem for QuadrigaCX is a completely different issue, that they don’t have the private keys to get access to large chunks of money because the CEO was the only one who knew them and he is now dead. The fact that money in bitcoin can become inaccessible without private keys doesn’t mean that you can’t trace it, just that no one can move it to anywhere else.