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Comment by krageon | Hacker News Reader

Bitcoin is traceable by nature. Anyone who makes claims of anonymity either doesn't understand how it works or has a system in place that provides uncertainty (ie tumbling).

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Tumbling is plagued by a horrible tragedy of the commons problem: the more tainted your coins are, the more you want to tumble them. People who legitimately acquired their bitcoins don't need to tumble them, so chances are you are just getting other tainted coins in return.

People seem to think that coins are 'clean' after tumbling, but I think its much more likely that you'll get back more suspicious coins: superlatively, "Here's my personal-use drug bitcoin, give me coins that were earned by assassinating someone"

Isn't the whole goal of tumbling to provide plausible deniability? The goal is to avoid tying the coins earned or used in an illicit activity with the the people involved in those activities. If a drug dealer gets an assassin's coins and vice versa then the goal is still accomplished even though all the coins involved are tainted. The drug dealer's possession of the assassin's coins don't help in building a case against his or her drug dealing operation.

True, but being in possession of coins tied to an assassination probably puts you at greater risk of being the subject of a federal investigation than being in possession of drug-related coins.

Traceable yes, but also anonymous since a BTC address is just a number without any personally identifiable information attached to it. It's at the edges - e.g. exchanges - where it becomes traceable.

Pseudonymus

Good luck using bitcoin in a way where you can't connect the BTC address to a real person after a small number of transactions. Anonymizing data is very hard, pseudonyms are almost never anonymous.

I know people who have exchanged bitcoins and cash anonymously on the street. Sounds pretty risky to me and I certainly don’t think it’s feasible for large volumes of either currency, but it’s possible and has happened, at least.

> I know people who have exchanged bitcoins and cash anonymously on the street.

If I were a narcotics undercover agent, I'd be working to become The Guy locally to trade Bitcoins with in this manner.

Have a partner snap a photo or follow them home to compile a list of people transacting like this.

Chances are good this is already happening in some cities.

Sure, as I said it sounds pretty risky (for many reasons), I’m just saying that it does happen and st least has a possibility of anonymity.

And vendors. https://www.technologyreview.com/s/608716/bitcoin-transactio...

And if your id is leaked in one transaction, it links your id to all other transactions done with that wallet.

If you buy them with cash and use them in a way that can't be traced back to you, you can stay fairly anonymous, but you still have to be very very careful.

Unless your cash-bitcoin counterparty is the mole.

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