Hacker News Reader

Comment by ajkdhcb2 | Hacker News Reader

I hope this will get attention. Just so more people will realise that bitcoin is dangerous to use and accept because it is not private. Even if youre doing nothing wrong, would you want to unintentionally receive funds linked to this?

View on HN

I'm not sure of the point here, this seems a bit nonsensical. Do you avoid using cash too because criminals use it?

Using or accepting Bitcoin is not dangerous because of this. And you have no more chance of unintentionally recieving funds linked to this than you have of unintentionally recieving cash used for criminal purposes.

(Not intending to start an argument for or against Bitcoin, and there are other pros and cons of it I'm sure, but this particular one is not really valid)

Cash is private so it doesn't matter. When you pay with it, nobody knows where it came from.

You can have extreme inconvenience for being linked to illegal bitcoin transactions.

Eh, I usually don't like comparing bitcoin to cash, but you can be inconvenienced with cash as well.

I had a roommate who had >$100K tied up into an online poker platform, which was frozen for months because the platform was doing some illegal activity.

That's not quite "cash"

Cash is only private if you never put it in a bank.

But if the reason for taking the payment is legitimate you're going to have no more problems with Bitcoin than you will with cash in this regard.

If your reason for taking the payment is illegal then I agree, Bitcoin puts you at some greater risk. But if that's you're point then perhaps you should be clearer. Bitcoin can be dangerous to use for criminals because it's more traceable. If your use is legal, it's no more or less dangerous than cash.

>But if the reason for taking the payment is legitimate you're going to have no more problems with Bitcoin than you will with cash in this regard.

Nope. You may deposit cash into a bank and explain where it came from. Sure.

This has no relevance to how you can later try to spend your bitcoin and have your transaction frozen + end up in a police investigation where you need to try to explain why chainalysis software says you are linked to terrorism, to people who have no understanding of it. This can be especially bad if you are not in a developed country. It simply means bitcoin is not usable as a "peer to peer cash" as it was intended. With cash you will not have such problem because it has no history permanently linked to it.

You're sort of right, but I don't think I'd any less terrified to have a surprise 1,000,000 dollars arrive in a parcel in my mailbox, than to have the same surprise in my bitcoin account.

That said, I'm not in the position where I have much to fear from the police/government. If I did, that would be different.

We'll have to just agree to disagree on this.

I don't believe that having bitcoin that was in the past involved in criminal use will cause you any problems at all. I'd be interested to see any evidence you have to the contrary.

Something I think people confuse is the concept of 'a bitcoin'. There is no thing that is transferred around like a physical coin or note. A bitcoin 'transfer' is just a change in the balance of two accounts, not an actual transfer of anything physical or digital. There is no change of ownership of anything.

>Do you avoid using cash too because criminals use it?

I probably would if cash were only used by criminals and speculators.

Many legitimate uses of BTC have been accounted for.

Are torrents also bad because pirates often use it?

This is not a discussion of protocols, it's a discussion of being associated with known bad actors.

Suppose that I have a history of doing semi-illegal things and that my wallet is publicly associated with real personhood.

Example. gretch = id 1234; buys drugs which are legal in country x and highly illegal elsewhere

Now one day I come to your completely legal business and make a completely legal transaction

Example. I come to your bakery and get my wedding catered

Now you just received a lot of money from an account which is on several bad actor lists and you have to explain what happened. Okay, you can try to explain that the services rendered were completely legitimate; hopefully the investigators will believe you because that's what all money launderers try to do.

Alternatively, you as the caterer need to research the actor behind incoming transaction for your innocuous service.

Apart from speculation? Like what? It's only really useful for forex if you're avoiding currency controls, for instance.

Torrents are routinely used for distributing Linux isos.

I agree here, he could have just as easily mailed them cash. Pretty much the same result.

> would you want to unintentionally receive funds linked to this?

Unequivocally, yes. Just don't expect to get them back.

You do understand that I can go to your bank and make a deposit into your account with just your name and DOB, right?

You cannot do this in the US without presenting your own ID and electronic fingerprinting.

Well.. exactly. Just like with bitcoin, there's a record of who gave money to who, but there's no need to "accept" or authorize the deposit. You have no way to refusing a donation from some fringe group into your account.

You could also receive funds linked to terrorism if you’re using any other form of currency.

Those funds won't have an immutable public record anyone can study and observe in 5 years with other forms of currency

I suggest the problem is more about you knowing, or the public knowing, that the funds are linked to it. After all, some dollars you receive might have a sordid past, but there's not such an easy way for anyone to publicly demonstrate exactly what it was.

That is what I intended to imply

Dangerous to use if you're not careful. I guess that is one of the many downfalls of not having secure defaults. Taproot and Schnorr are slowly coming to bitcoin. But would this blog post even exist if they had used a coinjoin/payjoin or lightning?

It is essentially certain that strong privacy will never come to bitcoin. Taproot and schnorr will make no meaningful difference, unless you mean it will assist people in doing atomic swaps to a private currency like Monero. Average people will never make the effort to do expensive (or cheap) coinjoins that will make them look suspicious. Lightning network does not have strong privacy guarantees and it continues to struggle to gain adoption, safety and usability.

I may, perhaps, lack imagination, but I really can't fathom how privacy comes to a system where the fundamental artifact of creation is an ever-growing record of every transaction.

It seems like the kernel of Bitcoin is maximally open information, not secrecy. Obfuscation of transaction is possible, but any solution that could actually hide transaction information would be incompatible with the trust model that Bitcoin is based on.

Monero can be traced with CipherTrace.

There is no evidence of this at all.

In fact the US government put out a bounty to trace monero transactions just after Ciphertrace made such claim, and ciphertrace failed to win the bounty, so it appears to be ineffective

The Lightning network in conjunction with Tor will make tracing of transactions nearly impossible in the future.

However right now the technology to properly anonymize bitcoin already exists via coinjoin wallets. The most mature implementation so far is the Samourai Wallet using Whirlpool.

If you are doing it right there is no danger using Bitcoin at all. In fact it might even less dangerous than any other method of anonymous transactions including physical delivery of Gold.

All BTC privacy technologies will be opt-in, and all empirical evidence shows this doesnt work - both from a technical and sociological perspective. On the technical side, analysis is always much more difficult to stop than people think. In terms of people's behaviour, adoption is nearly impossible and services will ban or flag such transactions, if mining pools even mine the transaction.

Sure grandma can just practice output control (that I still struggle with after using BTC for 8+ years) and pay hundreds in fees for coinjoins with every transaction, problem solved /s

> The Lightning network in conjunction with Tor will make tracing of transactions nearly impossible in the future.

I only see papers finding flaws that prevent it from being private, and that people are struggling to get it to work even without thinking about privacy. Scaling is still a difficult and unsolved problem for now, lets not make absurd privacy claims alongside it. Relying on Tor is an issue in itself.

The problem is not that the technologies are opt-in. The problem is that there is no simple UI implementation at this point in time. In the end any anonymized Lightning Wallet transaction will be just as simple as scanning a QR code with a simple slider that lets you choose the level of anonymity. And the ability to "opt-in" will give the market the opportunity to properly price anonymity. This is a feature not a bug.

> Scaling is still a difficult and unsolved problem for now

Scaling is essentially a solved problem thanks to Lightning. Adoption is currently a problem but will become a non-problem as soon as transaction fees rise so much that it is worth the effort for everyone to get Lightning Network running. Right now this is not the case.

It speaks for itself that yours is a very fringe opinion: none of these claims are strongly supported with evidence at this point of time.

Saying the privacy properties are already solved and settled is ridiculous, none of the literature or other information supports that

Only a fool would say it is certain that everyone will have magic instant, scalable, cheap, perfectly private btc transactions and it's already solved and settled

People use cash all the time to fund terrorism. There is no difference. What about the US government using cash to fund future enemies of the USA?

One should always be aware of where one's money is coming from, otherwise one doesn't know who holds leverage over one's future cash flow. Bitcoin is not special in that regard, it's just another instrument for transmitting value.

Depends what you are selling. It is not illegal to sell bread to criminals. Or cars. Maybe if done knowingly? I dont see big risks in accepting bitcoin as a payment method for legal goods and services.

Same thing could be said about the Internet. You are leaving digital traces and fingerprints all the time. Are you going to stop using the Word Wide Web?

Same with a bas of cash, or just a transfer to your account.

Cash is private so it doesn't matter

Bank transfers are not a peer-to-peer system and there are processes in place for anti-moneylaundering

gotta say, people sending me money is probably my very last concern about bitcoin

> Just so more people will realise that bitcoin is dangerous to use and accept because it is not private.

So cash is just as dangerous then as it is also used by criminals?

There are a lot of people who assume that cryptocurrency is an anonymous way to transmit value and while it's somewhat possible for the technically capable, it's good to educate people about the reality. Cash is often more anonymous than a publicly distributed ledger especially when the recipient and sender addresses are known. I of course do not support terrorism or funding terrorism, but I do support educating people so they don't take a risk they shouldn't have in the first place. Better to donate those funds to a local charity in your community that will provide constructive use for your immediate area.

Cash is private so it doesn't matter

Reply on news.ycombinator.com