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Comment by johnzim | Hacker News Reader

I have never understood the appeal of BitCoin as a means of purchasing or selling illegal materials. The entire transaction history is literally encoded in a public ledger!

All Law Enforcement has ever needed to do is trace back the transactions - something that's almost impossible with conventional currencies. Heck the equitable principle of 'Tracing' exists in Law because it's normally impossible to do that once monies have intermingled.

The sheer practicality of it is demonstrated in the fact that it's only worthwhile or practicable for Law Enforcement to investigate _large-scale_ money-laundering operations. Yet with Bitcoin you can essentially read back the exact history of every single satoshi.

View on HN

If you're a small enough fish you can assume that law enforcement won't bother to get back to you, especially if you're purchasing a small amount of weed or shrooms online instead of child pornography or hiring a hitman.

Then it's more about convenience than anything else. Bitcoin usability is abysmal when compared to Paypal or Visa but it's pretty great when neither of these things are an option and usually drug dealers won't manage to get a Visa or Paypal vendor account working for very long.

> If you're a small enough fish you can assume that law enforcement won't bother to get back to you...

yet. If this becomes a problem, it will be fully automated. Why wouldn't it be? You're literally leaving a trail of every unlawful payment you've ever made and waving it around in front of police. You don't think they'll pay someone to automate de-anonymiziation and automatic suspicious transaction flagging?

At least with Visa they need a warrant.

It reminds me of yesterday's story about states going after decades old public assistance overpayments. Somebody at a firm like Deloitte will figure out how to automate it and sell it as a service to law enforcement.

Automated like red light cameras? That went over well.

Running a red doesn’t fund international terrorism and skirt sanctions. Trust me if it did every single person a hair over the line would have tickets up to their eyeballs.

I think you misunderstood—they do have tickets up their eyeballs now.

Won't they have to prove in court that the payment was indeed for the purchase of weed and not payment for something legal?

It could be a loan/gift or whatever made to the individual by someone who is not knowledgeable about their criminal behaviour like a cousin or uncle.

I don't live in the US but it seems from what the police say on the tv series cops that all are to be treated as innocents until proven otherwise..

But then again, me and my friends here in Norway has always reworded that to "All blacks are considered guilty until proven white" so it might not really mean anything in practice.

Won't they have to prove in court that the payment was indeed for the purchase of weed and not payment for something legal?

If you purchase from someone who's only job was selling weed, and deposited your money into his account labeled "weed sales," then they probably have a good case.

If you label it weed sales of course, but if you label it gift or whatever there is no such proof.

I'm not in this business myself but I suspect they don't write these things down in the transaction but I've been wrong before :p

if that's all they have, it's a good case for a warrant at best, or maybe reason to decline granting security clearance

Maybe ... but the point is, they can always get back to you.

>I have never understood the appeal of BitCoin as a means of purchasing or selling illegal materials. The entire transaction history is literally encoded in a public ledger!

Don't most illegal users use tumblers that commingle money from many addresses and then send back (in different quantities and at random times and sometimes from unrelated addresses) bitcoin of roughly the same value? Or is that no longer the case now that transaction costs are higher?

It seems like a huge part of criminal investigation is tracing opportunity and motive, and only then proving that the suspect was involved. We conflate filtering with proving all the time. Filtering strategies don't have to hold up in court. They don't have to prove anything, except whether I'm definitely looking at the wrong guy(s). The evidence gathered after I've filtered down to 5 supects is the stuff I'd be using in court. I (proverbial "I", as I'm not in law enforcement) need Due Process for every step after that.

If you can narrow a suspect pool from millions down to hundreds by showing they were at the same 'location' as the perpetrator, that's not great but it's surely a start.

What percentage of people using tumblers aren't up to something sketchy? Even if that's 95% that's still greatly amplifying the signal when you're talking about looking for one individual among a hundred thousand.

That's the scary thing. Today, it's using a tumbler that filter you in. Tomorrow it's not having a 24/7 camera/mic in your house connected to the internet with weakened or no encryption.

Tumblers aren't magic and they're a great example of why you have to look at the security of an entire system with a particular threat model in mind: when law enforcement sees one in use, they don't say it's impossible and give up. Instead, every point where real money enters or leaves the system is an area to apply existing legal tools to compel people to document that they aren't violating money laundering laws, etc. Because every Bitcoin transaction is public that provides a strong disincentive for anyone legitimate to use a tumbler — how many reasons do you have which are strong enough to risk having to prove that you weren't part of another user's illegal activity? — further increasing the likelihood that simply sending or receiving funds from one would be considered probable cause.

I’d assume a lot of mixers are operated or taken over by law enforcement.

For awhile, there was a capabilities gap that criminals could exploit because while the ledger is traceable, LEOs lacked the tools to do so (especially if higher-entropy techniques were used to obfuscate transactions).

It seems perhaps that gap is closing now. Like other free markets, crime is an arbitrage system.

The only gap that ever existed was an “interest” gap. The minute LEO became interested in bitcoin they loved it.

This was always just demonstrating the power of wishful thinking over reality: anyone who trusted it was gambling that every law-enforcement officer was unfamiliar with the technology, unable to get help, and that situation would continuously be the case in the future at least past the statue of limitations where applicable. All of those were obviously unwise assumptions before Bitcoin even existed.

It's pretty safe for the buyer when they mined their own coins, or bought them from a friend who did, using cash irl.

The real concern IMHO is the seller's opsec. When you're sending them pgp-encrypted orders containing your shipping address for receiving contraband. Are they sticking your address in an addressbook? Keeping the messages around long-term? If they get busted, will law enforcement be able to access all their encrypted messages?

If the communications aren't immediately destroyed, it's very likely a busted dealer will cooperate with law enforcement for a reduced sentence, which will almost certainly include granting access to all their encrypted communications.

Fortunately for buyers, all legal systems don't enforce 0 tolerance policies for end users, at least regarding drug use. In western Europe, drug use is officially prosecuted but in reality it is rarely the case.

That shouldn't be the only concern.

I suspect nobody wants their name and address added to any of the relevant lists law enforcement could trivially maintain at little cost.

Also, laws change.

> cooperate with law enforcement for a reduced sentence

This isn't actually a feature of most legal systems, so depends where they're located.

Because it's often enough to ensure you're anonomous when transfering to/from $GOVERNMENT_CURRENCY (in person meetings in the woods for example) for the transactions to be untracable.

Or, buying BTC via a credit card from an exchange in a legal jurisdiction local police isn't going to bother with, so the money->BTC trace is lost. Tracing transactions in a local currency is a lot easier than having to issue warrants over international borders.

No, don't do that. You don't want any data about the transfer, period. Even if no one can see it now, you should assume (given you want to hide what you're doing) that any trace you leave, wherever, will eventually become public or seen by the one you're trying to hide from.

The only way to make yourself untracable is to leave no trace

How does one acquire BTC without any trace? Around here there's BTC ATMs that will accept cash in exchange for coins, but I assume those have cameras on them to record in the event of a theft.

> How does one acquire BTC without any trace?

You mine the coin yourself. That minimizes the info you have to provide.

It's one of the reasons why China became such a hotspot of Bitcoin mining.

local.bitcoin.com . It's non-custodial and does not rely on a trusted third party. So it's impossible to regulate. You buy peer-to-peer directly from a dealer. You technically get BCH, not BTC, but you can convert after. This is the most anonymous way to get it.

Sure, my point is that without BTC the options most people have are cash, which requires a physical meetup, cash in the mail (risk & can be/easily traced), or a bank transfer in their native country.

I'm pointing out that even if it's traced, getting to pick who traces you can add a layer of practical anonymity.

If you can find an exchange that doesn't require Personal Identifiers (PID) before purchasing, you'd be in luck. Even localbitcoins.com sellers require enormous amount of info about the buyers before they even consider the transaction.

No, people just use monero and convert to bitcoin last minute through xmr.to . Bitcoin is used because it's the most popular cryptocurrency. What's a better alternative, credit cards?

Not doing illegal things, then paying with your Visa card.

People buying masks in Hong Kong might disagree.

Is the Hong Kong protests sponsored by Visa? If so I look forward to Morgan Freeman's next commercial. Even then it would seem to make sense to pay cash.

Well, as this article points out, Bitcoin transactions aren't anonymous, they're pseudonymous. If they became popular, automated de-anonymization tools would sort this out. Further, nobody accepts Bitcoin for anything material, so you're going to get caught at your on-ramp and off-ramp.

> Further, nobody accepts Bitcoin for anything material,

That's partially true. Off the top of my head you can convert it to bullion fairly easily [1][2] and there are DNM cash out services on most DNMs too, a lot of trust there but if you spread it out over multiple vendors and smaller transactions you could convert it to physical cash. Each transaction increases your risk of detection by postal police and by just getting ripped off by the seller or the mail carrier though.

[1] for example JM Bullion (and others) accept bitcoin https://www.jmbullion.com/buying-gold-silver-bitcoin-faq/

[2] some sellers on /r/pmsforsale will accept bitcoin occasionally.

People buying masks in Hong Kong do so in person using cash.

Do you speak for all the people who buy masks?

cash will be banned in the future

Part of me thinks this is definitely something an authoritarian government would try to do, but then I wonder: how has this not happened already? Has it happened somewhere I've missed?

I suspect that banning cash would result in an ad hoc barter system for goods and services. If people are engaging in economic activity they want to hide from the government, and find others willing to engage in the same activity, they'll probably work something out, right? Whether it's masks that could potentially hide someone from facial-recognition cameras or something else.

Yeah but then using a barter system is probably outlawed in those societies, which would have a chilling effect because you don't know if someone is safe to ask about the alternative method for fear of being reported.

A casual interaction between shopkeeper and customer would never be facilitated by barter in such a hostile environment.

> "I wonder: how has this not happened already?"

It's the sort of thing you spend a few years normalizing instead of implementing in one fell swoop. Rapid changes unnerve people and a rapid elimination of cash could cause civil or economic unrest. I believe India has experimented with demonetizing larger bills, and in Sweden businesses that accept cash are becoming increasingly uncommon, as are people who use cash.

When the majority no longer consider cash important, eliminating cash becomes safer. More people adopt the mentality that cash users are criminals with something to hide or generally just paranoid weirdos, and are consequently less likely to object when the use of cash is further restricted. Moreover, with fewer people using cash, the government has largely achieved their objective already. When few people use cash the haystack the needles are hidden in becomes much smaller.

> I suspect that banning cash would result in an ad hoc barter system for goods and services.

Regular people who don't care about privacy or censorship resistance will use credit cards. This is in the interest of the powerful because you can easily disable service for undesirables.

The rest will use Bitcoin

Problem is that what "doing illegal things" mean changes over time, and in different places. What someone assumes to be legal everywhere, could be illegal in most places, and vice-versa

Luckily for us, most "western" jurisdictions don't allow for ex post facto prosecutions. They're actually unconstitutional in the United States. And when they are incidentally permitted outside the US, it's usually for something egregious.

Further, if something's illegal in a different jurisdiction than you are in, you aren't usually exposed to any liability, as any tourist to Amsterdam will tell you. And not having a payment record doesn't change the fact you did it and will undoubtably have left other evidence.

Once again, these are social problems that magic beans won't solve.

> Further, if something's illegal in a different jurisdiction than you are in, you aren't usually exposed to any liability, as any tourist to Amsterdam will tell you.

You may not be exposed to liability back in the US, but that doesn't mean your Visa/Mastercard will necessarily work if you're doing something illegal in the US: https://www.cbc.ca/news/canada/toronto/square-canada-1.53031...

Definitely, but that wasn't the question. For instance, I wouldn't expect UnionPay to allow me to fund pro-democracy organizations. I similarly wouldn't expect Visa and MasterCard to allow me to buy drugs legal in Canada or Portugal.

These are again, very much, social and not technological problems that require cryptocurrency.

In Canada for instance, you can easily get a merchant account with Moneris (a Canadian payment processor) and take card transactions over Interac (the Canadian debit network). Yeah, Square's bound by their US banks, because they're a US company with an overwhelmingly US product being sold internationally.

> I similarly wouldn't expect Visa and MasterCard to allow me to buy drugs legal in Canada

Ironically the government here in Ontario will sell you marijuana by mail and they accept Visa and Mastercard! The rules must be very vague and inconsistent.

Many years ago I was going to be traveling to Europe, and I thought to self, "Self, Cuban cigars are not illegal there. Maybe you could see what the big deal is."

My mental model was like yours, and like friends in college who fantasized about road trips to another state or Canada to find a bar that would serve 19 year olds. Not all laws are about the location of the act. Countries can and occasionally do bar their citizens from doing things anywhere, as was the case of Cuban goods.

There's also some weird extradition stuff that's been floating around lately that I can't make heads or tails of. There's definitely some fearmongering going on around it but I don't know if that means I should be concerned or dismissive.

And then there's one little idea. This may be crazy, but if the citizens of your country generally agreed that something was dirtbag behavior, you going somewhere where there is no law against it still makes you a dirtbag. Just a law-fearing dirtbag.

In the case of Cuba, Canada has laws to the effect that they must help someone from the US violate US sanctions on Cuba. International trade gets very hard when your company has offices in more than one country. I can't export things to my counterpart in Canada if it is going to Cuba, but if I ask is the product going to Cuba my counterpart is legally required to lie to me. (fortunately I don't deal in international shipping so I don't have to figure out how to deal with that)

That depends. For drugs you can generally get away with breaking laws back home while abroad. However the US (and most other countries) will prosecute you for human trafficking even if you only do it in countries where it is legal. Assuming they catch you of course.

To be fair I'm very okay with that.

There's a lot of boundary testing going on lately around the Rule of Law. And of course there's the whole era of McCarthyism, which is sort of the poster child for being mindful of what things go on your permanent record.

Ex post facto requires maintenance and vigilance, like any piece of safety equipment. Don't just count on it always being there. We all have to work at it.

> Once again, these are social problems that magic beans won't solve.

So because the root cause is a (probably unsolvable) societal problem, we should just forget about technical workarounds like Bitcoin?

All societal problems are solvable. Bitcoin is by no means a silver bullet. It requires 600kWh and 95g of e-waste per transaction (and rising). It allows all sorts of transactions we don't want including avoiding sanctions, funding terrorism, wealth accretion by rogue states, extortion scams -- the cost of which far outweighs the transactions we do want but can't have under our current system. It's not the answer to this question, or any other IMO.

I hadn't heard about these e-waste and energy statistics, can you provide a source?

[1] https://digiconomist.net/bitcoin-energy-consumption

[2] https://digiconomist.net/bitcoin-electronic-waste-monitor

[3] https://www.cbeci.org/

In California, marijuana is legal now, but credit card networks will not accept transactions because marijuana is still against federal law. Dispensaries that risk taking credit cards also risk all their bank assets being frozen and seized.

Thank you.

This whole thread reminds me of the early South Park episode where all the Catholic diocese...s? meet to figure out how to stop getting caught molesting children.

You could stop molesting children. That would definitely work.

Monero is also traceable.

https://www.wired.com/story/monero-privacy/

No, Monero is not traceable in any real-world, common-sense way. This "attack" is academic and theoretical.

And outdated (when it was published).

This is the HN discussion when that article was posted a year ago:

https://news.ycombinator.com/item?id=16687008

This is the r/Monero discussion where people much smarter than myself talked about the article's shortcomings:

https://old.reddit.com/r/Monero/comments/87hr28/hn_discussio...

If blockchain analysis companies can't trace monero, I doubt the government can either. Hell, wasabi bitcoin wallet can't even be traced by chainalysis.

Other than a suposed chainanalysis employee attempting an AMA on reddit, is there any proof that they can't trace it?

It's hard/impossible to prove a negative.

If someone CAN prove it, I'm all ears. . .

Bitcoin is traceable, but you don't need to use any kind of document to have an address / wallet. It was not created to be anonymous or for use in illegal transactions. It was created to be the most reliable way to conduct an online transaction.

Although it can be traced. No one has the power to block or return a transaction. Once sent, it was gone.

With any other traditional means of payment, money can be withdrawn or blocked with a court order. With Bitcoin, if there is no collaboration from the wallet owner, this is impossible.

Those who use Bitcoin for illegal activities are at various risk of being tracked, not just by ledger. A good investigator and the criminal system need much more evidence.

Now one risk he does not want to make is selling the goods and not receiving the money. It is this reliability that Bitcoin offers that compensates for the risk of being tracked eventually.

>I have never understood the appeal of BitCoin as a means of purchasing or selling illegal materials. The entire transaction history is literally encoded in a public ledger!

In defense of it, there are various sites where you can find a local seller online and go give them cold hard cash and have it sent to a one time wallet. Then go home and then, or at some date in the future, deposit it into a DNM wallet and order whatever you want.

From that point you basically have to have a DNM compromised, them to track every single external deposit, track down BilboBaggins17 that you traded cash for, then attempt to get the records for the site you contacted him via as well as try to get him to remember where he met you and when to go attempt to get surveillance then hope either the logs of the site or the surveillance video lead them to you so they can hope to find some way to catch you buying another ounce of shrooms in the future.

But yes, it's stupid for things like the above where creeps probably went to an exchange, bought bitcoin with their bank account then transferred it to their wallet then the ring (or directly to the ring).

---

Now as a seller, yeah bitcoin is generally just dumb. Sure there are DNM vendors that will convert it to cold hard cash for you (I suspect in the U.S. this is probably being done by some dispensaries, or companies serving dispensaries, to get some of their cash digital) but there is a lot of trust there. Aside from those services, there's no really semi-anonymous way to convert your bitcoin that you obtain from illicit trade into fiat unless you want to get really complicated and shift it from bitcoin to some other crypto, then probably go another step and shift it from that crypto to a third crypto, then from there convert the crypto to fiat. Each stage you are losing transaction fees and probably paying some sort of premium which is going to really start digging into your profit and then you still have to clean the fiat to make it legitimate if you're talking about money you plan to live off of. If you were a small-time seller of something you might fly under the radar by claiming it's various mined and day-traded crypto you've been holding for years but you're probably going to want to pay short term capital gains on it when ou convert fiat and get hammered hard on the taxes which to me would make breaking multiple laws just not worth it.

---

What I really want to know is how are the larger ransomware operators converting it to fiat unless they are just using it to buy drugs and/or carded merchandise then sell that for fiat.

> Aside from those services, there's no really semi-anonymous way to convert your bitcoin that you obtain from illicit trade into fiat

> What I really want to know is how are the larger ransomware operators converting it to fiat

Nothing is off limits for them. They can buy credit cards and bank account credentials, exchange coins to it and withdraw cash through ATMs, or buy something with that money and sell it cheaper for cash.

I don't think you know how drug dealers do it. local.bitcoin.com is what drug dealers use these days. it's non-custodial, is not a "company" (so it can't be regulated) and is trustless because it uses data signatures. (kind of like a multi-sig wallet) I'd say converting to fiat from bitcoin is one of the EASIER things they have to do.

If you want to go to the BTM route, they convert to monero, and use the "monerujo wallet" to auto-convert to bitcoin at the BTM. The only downfall is the btm asks for ID after $2000 or so. So I assume it's taxed in some way. The margins on drugs is high enough where the extra fee they have to pay is negligable

What you see in the ledger is money moving from address X to Y to Z, or very often it's more complicated like Z paying to A, B and C in one transaction.

You don't get any other identifiers. You might get an IP address that broadcasted the transaction, but that's not in the blockchain.

And it's trivial to create a new address. Or a thousand of them.

So besides a few known addresses, you're not going to easily find the owner of address X. Some exchanges might sell you some info, but not openly.

You’re assuming that the bitcoin was obtained anonymously, and that no “identifyable purchases” were made using the same wallet.

No, what I'm saying is that if one wants to be anonymous with Bitcoin, it's really easy, and the fact that the blockchain has all the transactions doesn't help to uncover anything.

You’re going to have to walk me through that. Because from where I’m sitting it’s almost trivial if you view it through a graph database lens. For reference: https://www.youtube.com/watch?v=XCR_LBzur-k (and that was years ago)

Possible the thought is that in a country where online transactions are not well monitored, it might take a while to be traced down.

Personally, I don't understand how one time use money cards would have any preventions to prevent the same thing from happening. One could send someone to buy a stack of them with a wad of cash, and the original store the cards are delivered to might be tracked, but after that, what else is there? The money gets transferred out, and they might not even know what the purchase was.

There are more private cryptocurrencies, but it's near mathematically provable that all with sufficient transaction history and brute forcing capability are traceable. In the case of law enforcement, all they have to do is sit in these transactions until the have the CPU power to break them. I'd had to be the one that used cryptocurrency to buy something illegal knowing that 50 copies of the ledger exist on other people's computers.

Note that brute-forcing an exponential-time algorithm is not generally possible. If you have an algorithm with a runtime of 10^N, then after N=61 the runtime of the algorithm will be greater than the age of the universe expressed in the Planck Time. For a 2^N algorithm it'd take about N=202. If you're willing to talk in nanoseconds instead of Planck Times (chosen because our current understanding of physics breaks down at that scale), it's more like N=26 for the 10^N case.

Practically speaking, though, users of privacy coins are usually looking for plausible deniability rather than total untraceability. The legal standard for criminal cases is "beyond a reasonable doubt"; if there's even a 50% chance that you're just an innocent person caught up by circumstances, you'll have trouble convincing a jury of guilt.

I like your thinking, but all of this is assuming that runtime for something stays precisely the same no matter what. Most operations are at least reasonably parallelizable, and I would argue that cryptocurrency depends largely parallel operations, which in general should mean that breaking it is also a parallel operation. Plus with advances in quantum computing, regular computing and storage, it's hard to be sure how long any of this information will be stored for or long long someone would crack it for, or wait for it to be crackable.

Also, you imply that some amazing computational shortcuts aren't ever going to be arrived at. This historically, is hard to be sure of. Not saying everything will be broken, but more of it is all the time.

I'm not sure what your point is. You can get satoshi or any cryptocurrency for that matter anonymously, there doesn't need to be a record somewhere that ties wallets to real people.

One of the more plausible invention stories is that Satoshi was an arms trafficker who needed a verifiable way to pay large sums of cash anonymously, so it isn’t a lot of work to consider that it could be used successfully for such purposes. That won’t stop idiots from being caught by good investigative work - nothing can prevent that! - but it certainly does appear to meet the needs of highly competent criminals, whatever other pros and cons it may have.

> One of the more plausible invention stories is that Satoshi was an arms trafficker who needed a verifiable way to pay large sums of cash anonymously.

Let's leave the conspiracy theories to the pro-Bitcoin folks, it's kind of their speciality.

Previously on HN, 4 months ago, front page, 181 votes, 146 comments:

https://news.ycombinator.com/item?id=20115607

Has the site policy towards this topic shifted since that recent highly-popular post with long-time HN contributors commenting in it?

I'll be the first to apologize for dismissing your comment. The crypto space is full of outlandish claims, wild conspiracy theories and general craziness. I think the way you phrased your comment caused me to dismiss it, and without linking to evidence I took it as "just another (pro-/anti-)crypto conspiracy theory." That article is a great read, though while I’m not sold yet, there’s certainly a compelling narrative there :) I've removed my downvotes.

It’s okay :) I tried to be precise and I’m sorry it wasn’t close enough :(

Satoshi writings show he/she/they knew it wasn't anonymous. If that was the goal, then surely Satoshi would have kept working on it until it got there right?

It is actually the perfect means to buy illegal things if you are the purchaser. A person can use cash at a bitcoin machine and buy them anonymously. Walk up to the machine with a mask on and when you leave no one knows who you are and now you have bitcoin no one knows who owns it. If you order drugs and the police show up you can just say you had no idea why anyone would send those. I don't know how the seller easily gets his money out and wouldn't really care as long as my order went through. The public ledger would show that bitcoin was sent but no identity as to by who. Make a new wallet each purchase and have very little linking you to illegal purchases.

Edit: upon reading up on the bitcoin ATM's it looks like some of them have started requiring phone verification where they will text you a sms, in that case you could need to use a burner phone creating one more step in the process of remaining completely anonymous. But certainly a doable step.

There are many ways to get indirectly caught, either with physical proofs (fingerprints, gait recognition) or metadata (triangulating your cellphone signal to determine where you were approximately at a given time. None of this are definitive proofs, but it adds up.

And showing up at an ATM with a mask will definitely attract some attention. I wouldn't be surprised if they further improve their system and requires facial detection (not necessarily recognition) as well.

Yes but looking at the original post I was replying to "I have never understood the appeal of BitCoin as a means of purchasing or selling illegal materials. The entire transaction history is literally encoded in a public ledger!" The point I was trying to get across is that with some effort bitcoin can be anonymous. Right now the machines don't require facial anything and I can tell you those machines are all over Vancouver. I did not mean walk in with a Halloween mask, although with Halloween coming it would be a fine time to go in to the machine and do such a thing with little people looking at you. Yes there are other risks of being caught, an adjacent store camera or cell tower pinging like you say so you would need to be aware of these and other risks and minimize as many as possible. This is a lot of effort for some people but for others the risk of being caught buying illegal items with cash is way to high. Also, where can you go and buy almost pure drugs, certainly not the streets of Vancouver. The dark net already has a reputation of selling better quality drugs as the sellers get rated on the dark markets. Also the availability of certain drugs just isn't there on the streets where on the darknet every thing imaginable is available. So that is why I believe bitcoin makes an appealing medium to purchase illegal materials. How the person selling these items gets their money I am not sure. Ordering drugs to your door always carries a risk but at least with everything for the payment separate you can deny it. Hand full of cash and drugs when the cops show up it is game over.

Reply on news.ycombinator.com