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Comment by msy | Hacker News Reader

Why would you go through the hassle of trying to anonymously buy bitcoins with cash so it's not traceable when you could just send the cash? Unless you have mined your own coins there's no anonymity to be had via bitcoin. In fact using bitcoin would make it far easier for someone to start tracking anyone who used the service by tracing back the transaction chain from the wallet of the hosting provider.

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> In fact using bitcoin would make it far easier for someone to start tracking anyone who used the service by tracing back the transaction chain from the wallet of the hosting provider.

Assuming all transactions will go to one address or come from "traceable" sender addresses is a bit presumptive.

Why not let the users sign up for the service (over Tor or whatever), then generate a bitcoin address for them to send BTC to? Then every transaction has a new address.

Besides that, there are a ton of ways to keep it anonymous using bitcoin.

There are ways, but I feel you're gilding the lily here. A ten dollar bill in the mail is a pretty decent way of staying anonymous.

Even if every transaction has a new address, you have to get BTC in to the wallet somehow, and the most common method to do this is to buy BTC online with a credit card.

You could buy BTC with cash of course, but then why not just send the cash direct?

I suppose you could also use washers but I'm not sure how reliable those are.

as far as I know most exchanges and gambling sites pay out from a different wallet that you pay in to, so washing coins this way may be possible depending on how long each company keeps track of internal transactions.

As a matter of fact :) : for me, it would actually be more easy to ping one of the local miners in my online contacts (I've traded coins before via localbitcoins), meet with them, hand them the cash, get the coins to a bitcoin wallet, and send them to SDF, were they to accept bitcoins. (The verification could also be automated that way, and would be real quick.) The alternative would be to go to a local exchanger or bank, probably hand in ID even though I'm only buying $1 for local currency, then go to the PO to buy an envelope and stamps, make sure the dollar bill is not visible from the inside, and actually send the letter out.. oh, and wait for 2-3 weeks because outgoing overseas mail originating from here is slow.

..I guess what I'm saying is that, lo and behold, Bitcoin might actually eventually work as an 'exchanger asset'; I've already discussed with a friend in the UK the possibility / advantages of using BTC to send cash [1] to them (bank transfer from this place would cost >= 15 pounds otherwise). They could then use a UK-based BTC exchanger, or -- find a local bitcoin trader (and yes there are some)!

(Also see: [2]) :)

Just saying!

In any case, I root for SDF, Godspeed you awesome people.

[1] Well, effectively cash: if both of us were to use local miners/traders, I would be effectively depositing cash, and my friend would be taking the cash out of the system. (See illustration in [2]) The process could be further abstracted away if my wallet were set up to automatically send all incoming coins to a pre-specified address; that address could my friend's trader's address where they would be sitting, sipping tea and waiting for the incoming coins, or (if my friend were not to care about anonymity at all) an exchanger's address; the exchanger could be set up to automatically make a local wire transfer (so free / very cheap) to a local UK bank account upon incoming coins; et cetera, et cetera.

[2] http://en.wikipedia.org/wiki/Hawala ; & a simple image: http://en.wikipedia.org/wiki/File:Hawala.png

edit expanded footnote1, etc.

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