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Comment by jcranmer | Hacker News Reader

I have to imagine that the first person at the FBI (or whichever agency is responsible for tracking money laundering) to come across bitcoin fell out of their chair laughing when they came across it. It's a protocol that has a public, dated, irrefutable log of every transaction made... and its users think it untraceable (or at least, they thought it untraceable back when it first came out).

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Monerro is the only currency that is very very hard to trace. Most other currencies are a joke.

Why? It seems to me that Z-Cash is much stronger than monero.

With ZCash, you have to trust the few men that did the "trusted setup". The point about privacy is to trust no one.

A related read that gets posted on HN every once in a while:

https://petertodd.org/2016/cypherpunk-desert-bus-zcash-trust...

This reminds me what I learned about secrets as a child: the only way to keep a secret is to not share it.

As long as you're able to create btc addresses without having to show an id to an official, it should be possible to anonimize them. Or at least create a pseudo plausible story of getting them in a legal fashion. Of course, it's pretty difficult for an authority to believe that you received 10k stolen BTCs from donations in the address that you posted on your blog, but it's also pretty difficult to prove that you sent them yourself.

Perhaps not outright, but it CAN be anonymous / difficult to trace depending on HOW you do things.

> and its users think it untraceable

In my experience this is very rarely the case for any serious bitcoin user I have met. In fact, those seeking anonymity have moved on to monero etc. For many the traceability just doesn't matter that much.

it's about as untraceable as cash. If you pick some up anonymously, then use a different address for each transaction, all while obfuscating your connection using Tor or the like, your transactions should be difficult to trace.

You don't have to do any of that with cash.

Really? you think cash that you withdraw from the ATM is not traceable to you?

No. Banks don't tie the serial numbers on bills dispensed at an ATM to the cardholder who withdrew it.

Assuming you're right, though, other anonymous ways to get cash include:

- selling something

- getting paid in cash (as many restaurant and undocumented workers do)

- laundering it

- stealing it

- using a stolen ATM card

At the two American banks that I'm familiar with the cash serial numbers are not tracked.

> If you pick some up anonymously,

That's quite the premise. For the layperson, there are very few ways to come across Bitcoin anonymously.

Mine it

Mining requires enough infrastructure and investment to be easily identified. Mining might have been anonymous 4+ years ago, but not now.

Mine some alt-coin such as ETC and then exchange it for BTC using shapeshift or changelly.

Laypeople don't mine Bitcoin.

What makes cash difficult to trace is the difficulty of establishing that transactions took place in the first place, let alone other potentially pertinent details.

The fact that Bitcoin has a public record of all transactions makes it far easier than cash to deanonymize addresses. Suppose you bought $2.56 worth of Bitcoin via credit card from a friendly Bitcoin seller that doesn't keep any record of this transaction. The government can go to VISA and ask "okay, who gave $2.56 to this vendor within this time frame." Now the government knows your credit card, and can then ask VISA to find all of the other transactions you did, and then look for bitcoin movement of the appropriate size to those transactions involving single-use addresses. All of those addresses are now tied together.

See, the untraceability is entirely dependent on how good your operational security is, and how well you know the capabilities of government financial tracking. And, when you consider that governments have been trying to tackle this problem for difficult-to-trace cash flow, bitcoin is at best no harder and at worst much easier.

Visa would not be considered an anonymous source.

And cash has ID numbers, of which official entities and corporations also track.

Both cash and bitcoin require good opsec.

How do you trace mined coins?

Watch the markets and exchanges.

Presumably GRU was using its mined coins to spend on things like hosting for shady sites. The idea isn't to cash it out for rubles.

They’re not traced until someone wants to do something with them that then makes them traceable (along with many related accounts). Is owning an “asset” useful if you can’t do anything with it? At that point when someone:

1. Converts to Fiat 2. Buys/Ships something online 3. Transfers to an exchange

It’s now fairly visible to entities keeping a close eye (governments).

> ...they thought it untraceable back when it first came out

I'm guessing you haven't read the white paper where this was directly addressed - by the creator. Page 6 of a 9 page document: https://bitcoin.org/bitcoin.pdf

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