Great article, good to see bitcoin is at this stage less influenced by news flow and transaction volume of silk road like activities. (Silk Road while interesting to proponents of agoric defacto legal reform by weakening enforceability of drug laws, which it seems was DPR/Ulbricht was a proponent of, the strong short-term success might have been hazardous to bitcoin itself. And I think doesnt really rely on bitcoin anyway as there are in many countries cash pre-paid credit-cards and similar types of systems.) Its a curious effect that part of bitcoins bootstrap to non-toy price, may have been accelerated by silk road itself historically. I suppose its not a unique situation that criminal privacy or non-criminal but privacy sensitive business areas (eg online porn) are innovators in adopting new technolgy with some media reputation for privacy. I am not sure bitcoin is particularly anonymous given the fact exchange interactions are covered by AML/KYC and all payments publicly logged in the clear for anyone to see, and that mixing attempts have been shown to be weak and of questionable effectiveness by statisticians and data analysts (complete with pretty graphs), and that most clients have no automated coin control or sub-wallet feature. There maybe more conventional higher anonymity systems like perhaps pre-paid credit cards, phone cards and such things which can actualy be bought for paper cash, and sometimes deposited electronically (I'm sure criminals and money laundering experts have a better understanding of which systems provide anonymity, those were just off the top of head non-bitcoin, non-cash, payment anonymity examples. An envelope of cash in the mail probably works too though I think that is technical illegal to do even with nominal amounts in some countries). I'm quite sure the criminal options at all levels of scale for payment remote and local involve many more options than bitcoin. At the higher end it blends with and solicits and obtains likely knowing service from established but greedy market players. You can see the odd dataset, eg HSBC being caught laundering $880m of drug cartel and even dirtier money. At least to say its clearly quite dangerous to rely strongly on bitcoin anonymity for non-technical people, or even technical people without serious operational attention and careful tool analysis and selection. A few trivia items from the Silk Road story that seem ambiguous - they opened a package coming from canada to him with fake ids. Seemingly he wanted fake ids for some reason relating to operating the servers (more on that next). But why did they open his package? Bad luck random spot check? Or (more plausible) he bought the fake ids from an ongoing fake-id sting operation in Canada? Or alternatively evidence of parallel constructon disguising NSA Tor backtrace? About why did he even think he needed fake ids. Surely you only need a physical fake id if you are renting servers in person. But why would you do that - physical servers you interact with physically are a needless risk no - if backtraced to IP by Tor attack, the physical connection is made? (Why not rent cloud servers? If renting cloud servers why not pay with prepaid credit cards bought for cash (or bitcoin)? If need to send fake ID to rent cloud servers, surely its lower risk to photoshop them than accept physical delivery of illegal forged ID to your own address, from a criminal or sting fake-id service with a copy of your photo! I dont really get it. Adam On Mon, Oct 07, 2013 at 11:37:56AM +0200, Eugen Leitl wrote:
http://thegenesisblock.com/analysis-silk-roads-historical-impact-bitcoin/
Analysis of Silk Road’s Historical Impact on Bitcoin