“This is the story of the revelation in late 2013 that Bitcoin was, in fact, the opposite of untraceable—that its blockchain would actually allow researchers, tech companies, and law enforcement to trace and identify users with even more transparency than the existing financial system.”
I don’t think this story is correct, just to chime in with everybody else. It was explicitly stated that bitcoin was a public ledger in the whitepaper.
There’s a difference between “bitcoin is a public ledger” and “we can determine that Alice paid Bob 1 bitcoin”.
The bitcoin devs thought they could achieve the “public ledger” part while avoiding the second part. It turns out they couldn’t.
What part do you not consider correct?
That someone busted the myth of Bitcoin four years after it was made public knowledge that bitcoin was not anonymous.
There was no myth to bust. Bitcoin was explicitly public from its inception.
I guess you hadn’t read the article. The point wasn’t that the ledger is public, but that the accounts allegedly were deemed anonymous.
My point is read the article then criticize it.
It’s paywalled.
I read it, the point is that people who hadn’t even read the basic information about Bitcoin presented by it’s creator assumed Bitcoin was anonymous.
This is not as groundbreaking as you seem to think it is.
Some people didn’t take the time to read closely or think critically and then made poor assumptions.
Like you, for instance, with your comment.
The main way criminals are caught is when they transfer their crypto to an exchange so they can convert it to cash. Law enforcement will subpoena the exange and ask “Hey, who exchanged 0.7886 bitcoin for cash on this date?” and they will get their identity. Using the public ledger, they will be able to trace the transactions done and show that this person sent money to an address advertised as belonging to a trafficking site, an illegal market, or recieved money from the bad wallet address.
The address owner is anonymous until there is a source of data that ties information the wallet, and often transactions can be used to do that, just as any way to advertise a wallet belongs to you can, or any way to exchange crypto to cash can.
Which part of public ledger they don’t understand?
The anonymity part
Clearly the public part.
Transactions are public. But wallet ownership is not.
That’s why it’s widely used in cybercrime. You can make a wallet and authorities may know which wallet receibe the money, but it may be imposible to link that wallet with an actual person.
Yeah, but retrieving actual useful currency from that wallet becomes nearly impossible. At that point, the only way, really, is peer-to-peer transaction. And even then, it seems fraught.
Yeah, but retrieving actual useful currency from that wallet becomes nearly impossible.
Then how do people set up drug empires built around it?
Use your brains.
The same way they do everywhere else… Complex webs of money laundering, but that’s not cheap, or easy.
Or nearly impossible, as evidenced by the litany of small-time vendors who have been operating for years.
On a side note, where are you getting this information from?
You said drug empires, not guy selling 8 balls and 10 packs on a darknet market.
I’m not going to provide sourcing for my throw away comment. Take it, or leave it, doesn’t really matter to me.
You said drug empires, not guy selling 8 balls and 10 packs on a darknet market.
Yeah, because those are the ones LE focuses on. So we can agree that players both big and small are able to cash out on cryptocurrency and your initial point is wrong.
I’m not going to provide sourcing
Lol, okay. You can just admit you don’t have one.
You got me, I’m just making this shit up. I have never even heard of any of the publicly available blockchain forensics databases, or reviewed any of the ample examples of reporting and analysis on the subject.
If this was some obtuse or obscure subject, I’d take the time to cite sources, but it’s not, it’s extremely well covered, so stop being a lazy twat and look for yourself.
I remember when Bitcoin first came out and one of the selling points of bitcoin was that literally anyone could trace the transfers using the wallet codes and what not no? I don’t ever remember there being claims that it was untraceable at least as the selling point to the average consumer. There was even tools in like 2012 for tracking whether stuff internally in bitcoin was stolen or whatever…
“While the taint analysis tool aims at measuring the “correlation” between two addresses, there is another notion of taint in the Bitcoin community which refers to the percentage of bitcoins, that come from a known theft or scam and have been blacklisted by popular exchange markets. For example, in 2012 the bitcoin exchange Mt.Gox froze accounts of customers, who owned bitcoins that could be directly related to such an incident [20].” https://maltemoeser.de/paper/money-laundering.pdf
I think people confuse anonymity (similar to the made up names we use here, or character names in online games, and your wallet ID in a crypto coin) to privacy. Technically, if you receive all your funds in crypto, and you spend all the crypto directly (on goods and services that do not require you to give any PII) without it ever turning to fiat. Then yes, it is anonymous but not private. People can see that wallet hash x received funds from wallet hash y and send some of that to wallet hash z and will be able to confirm that for as long as a copy of the ledger exists somewhere.
Really not sure a codebreaker needed to work this out. Anyone that spent a bit of time understanding how it worked would realise this right away. I have no doubt though, that many people had a total pikachu face when their barely concealed illegal activities were easily discovered.
