Sheep Marketplace closes after theft of £3m in bitcoins
bbc.co.uk
bbc.co.uk
And then another blockchain was tracked. (the 90m one) And transactions all end all being chopped up, and redistriuted, with the largest amounts going into wallets like this:
https://blockchain.info/nl/address/1P7hjN2J119r2MoT14PwnvtNk... This
Is this code for vigilante justice?
Can you explain?
[0] http://www.reddit.com/r/SheepMarketplace/comments/1rvlft/i_j...
http://articles.latimes.com/2013/apr/22/business/la-fi-tn-re...
In theory, all it needs is one single non-cooperating gambling or dice site: 1) Split your illegal income up into 10 different addresses 2) Use each address for gambling with a 10 percent chance of winning and 1000% return in case of winning 3) Repeat a couple of times.
That's what the thief done. But a user on reddit seemed to track it all the way through the tumbler[1]
[1]http://www.reddit.com/r/SheepMarketplace/comments/1rvlft/i_j...
Now, maybe he could manage the full 96k btc if he used multiple laundries over many months, but that is time he does not have.
Imagine wallets A,B,F,X,Z.
A contains your money.
B contains somebody else's money.
Move the money as follows, 1BTC in each transaction:
A -> F
B -> F
F -> X
F -> Z
And then, you can simply sell bitcoins for cash on localbitcoins. It's pretty untraceable.
For instance, let's say that A wants to send bitcoins stolen from G to X and B wants to send other bitcoins to Z. G simply approaches F and says "You stole my bitcoins. As punishment, I'm going to chain you to a mattress in a 6x6 cell until you confess." That leaves F two choices. F can stand for his principles, keep quiet, and serve as an object lesson to all other potential anonymizers.
However, if F doesn't want to slowly go mad from a lack of mental stimulation, then F would probably keep detailed accounting records of each transaction and pass them on to G. G might feel gracious and upgrade F to a 10x10 cell with a window.
Granted, most of these options are available with cash, but you don't have the transaction record which shows you who F is. In this way, bitcoin is easier to trace than cash.
You can't possibly track something like that. Most wallets don't have any names attached to them.
And even in this simple example you don't know who F, X and Z are and how to find them. They are just wallet numbers.
Nawww, that is unrealistic, even for FBI.
Which no one will, on such a short notice. Thus you end up owning both A and B, in which case the mixing is useless.
Bitcoin has been mostly good for promoting the Ponzi scheme style of business operation. Bitcoin businesses are divided into exactly two types:
- those that have absconded with all customer funds
- those that are planning to abscond with all customer funds
The chance of that at this point is practically nil. The owner has been doxed, both the FBI and Czech police have been thoroughly notified, and the blockchain movements suggest the owner is panicking and no longer thinking straight (who on earth moves 96k btc through a mixer in a day? that shows they either don't understand the idea of mixing or they are too frantic to realize the futility of it).
Earlier HN discussion: https://news.ycombinator.com/item?id=6828620
The point if bitcoin is that it is decentralized and no entity can affect or effect a transaction apart from the holder of the private key. As long as you can keep your key secret, no government or bank can seize your funds or prevent you from spending them.
Anonymity is possible through laundering techniques that obfuscate the transaction history. But if you provide an address to the recipient of the coins or purchase the coins with a bank account, your anonymity is limited by the privacy protections of the person who ships your goods or of your bank.
If you mine your coins or earn them in a way that does not require the disclosure of your identity and spend them at places that do not require any identifiable information, it is very anonymous.