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Comment by mariusz79 | Hacker News Reader

Well, this is just another reason why bitcoin will not work - you can track money changing hands.. Certain three letter agencies would have not trouble tracking most of the transfers, all over the world.

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i love this

     this is just another reason why bitcoin will not work

5 years later; several orders of magnitude later, so many arbitrary "milestones" met (parity with dollar, can i buy airplane tickets with it?, well we'll see when the government recognizes it)

when do you decide that bitcoin 'works'? i mean; it is absolutely undeniable 100% certainly no-matter-what-you-say currently working RIGHT NOW; the mental dissonance around bitcoin naysayers is becoming hilarious

Size of the current bitcoin economy is "just" $8bln. While it sound like a lot of money, comparing to the rest of the economy it does not even qualify as a pocket change.

So it's definitely worked well enough to create an 8 billion dollar economy?

I was a naysayer until recently. After the senate hearing, I ate crow. Too late to profit at this point though :(

I'm not sure that's true.

What is your price target, if I may ask?

7,000 USD within five years.

More likely to be within 2014 at this velocity and no reason to think it won't be S curve adopted.

one that could turn into a 8 million thing in a day when the speculators stumble and the bubble bursts.

It is larger than more than half of the world's currencies: http://coinometrics.com/bitcoin/bmix

"can i buy airplane tickets with it?, well we'll see when the government recognizes it"

Yes, you can! An air travel agency announced today they started accepting bitcoin (cheapair.com): https://news.ycombinator.com/item?id=6784265

Or why it would be ideal to be used by the government - so we could track how they move money around, prevent corruption and generally keep an eye on the untrustworthy ones.

Or why it was created by the government. We still have no idea who Satoshi is, and bitcoin is obviously robust enough that it had to have been peer reviewed.

It's the perfect honeypot.

If Bitcoin was created by the government, how can they tax it?

Let's say that you pay for Virgin Galactic ticket - that will be a fairly large transaction pointing to your wallet. Someone will be able connect the dots and find out that you also bought Viagra, and a penis enlargement pump. Do you really want that connected to you? Another case - you buy something from one of the stores that accept bitcoins. That store may have the address of your bitcoin wallet. They will be able to use some clever algorithms to see how much money do you have available there, what did you use your bitcoins for, and more stuff like that..

You could create a new Bitcoin Wallet and transfer the bitcoins to your "new" wallet.

Wallets generate addresses and prove ownership of them. On the other hand, it's very difficult (impossible) to prove that a given address is controlled by the same person who controls another address.

In other words, you don't have to generate a new wallet, just a new address.

@Watty even if you create new bitcoin wallet you need to fill it out with bitcoins. You either have to mine them, or get from someone else. Since we can safely assume that mining is out of the question the only other option is to use exchange.. There will always be a point of entry that the transaction can be traced to..and this place/person/organization will know who the user is. From that point forward they can track you..

You can wash BTC of any identifying information by sending them through a conduit -- someone that is willing to operate an address used to obfuscate the eventual destination of transactions.

What if that someone is the NSA ? :)

Or what if that someone is my n other bitcoin wallets that I use in rotation with varying degrees of trade depth?

you don't understand how bitcoin works.

every transaction has a new 'address' (if you choose to.. and this is what happens by default); so when i send a tx to virgin; no one (other than virgin and anyone they tell) will know i sent a tx to virgin.

wallets are made up of lists of addresses; so while the network analysis can be done it is actually no where near the issue you seem to believe it is

Except that Zerocoin and Coinjoin are being developed and may one day become default in Bitcoin. This is still early days. Satoshi did amazing novel things, but he couldn't do everything.

You clearly don't have a clue about how bitcoin works. If two parties want to make their transactions totally untraceable it is possible. As far as I can tell, this transfer could be made by the same wallet, from generated address to the other in order to initiate speculations and show that BTC can actually be used for big un-taxed, non-stoppable money transfer, or it was just a way to show to the IRS what money is missing by not endorsing bitcoin asap.

You just assume that most people will know what to do and how to do it to protect themselves.

I assume that someone with hundreds of millions of dollars does.

You assume that software doesn't automate the process.

Please clarify how the IRS is missing money.

Bitcoin is in Washington[1]. Washington will try to tax bitcoin if it gets accepted as an asset/currency. Moving the discussed amount of money, means that maybe someone (inside?) the USA has a huge amount of money not taxed. This is something regulatory authorities might want to change, as soon as possible.

[1] http://www.bloomberg.com/video/can-the-senate-help-to-legiti...

How is this different from the IRS not endorsing the euro?

Wait, the traditional argument is that its so poorly regulated and occult it cannot succeed. Instead it has quite of bit of transparency and that's suddenly a liability?

Yeah, try moving 150m out of any bank in the world and not having lots of people knowing you just did it. Secret fund transfer on this level is very, very uncommon.

Bitcoin has kind of a backwards privacy model compared to conventional finance. All transactions that have ever been made are public forever, but it's not so easy to prove that any particular person or organization controls any particular address. At least, assuming your client is mixing addresses and handling change transactions properly.

I think this is why it's more likely to work - you can decide who you want to trade with -- and if there's "bad money" discovered, then you can decide to not accept it. That system doesn't exist yet to help facilitate that ecosystem however. I'd like to see it though.

Credit cards work...

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