Re: The National: Colonial Pipeline’s ransom recovery sparks debate on Bitcoin traceability

[Karl]

On Sat, Jun 12, 2021, 2:07 PM David Barrett <dbarrett at expensify.com> wrote:

> I am very confused why anyone thinks Bitcoin is untraceable, anonymous, or
> anything less than a privacy disaster.  It is literally the least private
> currency ever devised: once I know your wallet, I know truly everything you
> have ever done back to the very start.  Bitcoin is as private as sharing
> all your credit card purchases via twitter: yes, very noisy, but totally in
> the open (and "mixing" things between wallets is just silly -- computers
> can unwind all that in a millisecond).
>
> If you have a mapping of "human identity to wallet" (which the government
> nearly always has because virtually every path to convert BTC to
> USD/EUR/etc is regulated), then no matter how many intermediate steps and
> secret wallets are used as some kind of
>

Wallets are often associated with many identities, e.g. in exchanges.  So
it's not quite that easy, it's comparable to ip addresses.  C Wiley claimed
Cambridge Analytica made a complete ip-address-to-name database.

"factoring" approach toward money laundering, you can always figure out who
> is being paid by whom.  In fact, it's *easier* for the FBI to unwind your
> laundering via BTC than normal banks, because normal banks *have shitloads
> of privacy protections and subpoena requirements that BTC doesn't*.
>
> The only way it's private is if you skip every exchange, but that's the
> classic tradeoff of privacy for convenience -- yes, there are lots of ways
> to maintain your privacy inconveniently, and BTC is just one more.  And if
> the only way to truly do anonymous transfers is by meeting up in person to
> exchange cash for a keydrive containing a wallet private key, then BTC is
> really no better on the privacy/convenience spectrum than just handing
> someone a suitcase of gold.
>

Your behavior data is still stored permanently on the blockchain.
Deanonymising you just takes dev effort.


> Blockchain is great and all, but in none of the ways people investing in
> it claim.
>
> -david
>

It seems like the belief that bitcoin is anonymous stems from the
difficulty of people understanding it when it was new.

How much technology should different people worry about other people having?

Effective mediation in conflicts would solve such things.
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