Bitcoin As A Government Surveillance And Tracking Tool

Discussion in 'Bitcoin and Cryptocurrency' started by Millard Baker, Oct 9, 2014.

  1. Millard Baker

    Millard Baker Member

    Just a reminder that Bitcoin is not necessarily anonymous. Ever single transaction you make is a matter of public record and will remain public forever. The tools for blockchain analysis may allow the government (and it private sector partners) to identify who controls certain bitcoin addresses and who they send bitcoin.
  2. pumpingiron22

    pumpingiron22 Member Supporter

    And The Block Chain is only getting bigger with so many Company Interested. Its a see all Ledger which at one point I did not seem like a big deal because no one was looking but now with so much interest. Everyone needs to be careful. Block chain wants to be main stream.
    But Im glad they have left option of opening wallets over tor no IP no email. But I'm not how long this will be allowed. I fear non too long
    Sector51 and Millard Baker like this.
  3. Millard Baker

    Millard Baker Member

    Let's hope Bitcoin remains censorship-proof and as decentralized as possible.
    Sector51 and pumpingiron22 like this.
  4. Millard Baker

    Millard Baker Member

    Why Bitcoin is Better for Crime Fighters Than Criminals by Jason Weinstein
    Published on April 4, 2016 - Coindesk

    Jason Weinstein is a partner at Steptoe & Johnson LLP and a former deputy assistant attorney general in the Department of Justice in charge of cybercrime and organized crime.

    So wait, it’s not anonymous?

    It’s often said that bitcoin is not really anonymous, but rather pseudonymous.


    But as with banks, law enforcement would be able to obtain information about the address user by serving a subpoena or other lawful process. That’s one of the reasons we have seen, and will continue to see, enforcement actions taken at the "on ramps" and "off ramps" of the blockchain – to incentivize exchanges and wallet services to maintain compliance, so data will be there when law enforcement serves the subpoena.

    But what if someone obtains bitcoins through a source other than a licensed exchange? What if the individual uses techniques for enhancing anonymity – like multiple addresses, or mixing services? Even then, the individual is not truly anonymous.

    Of course, the individual may leave a trail when exchanging bitcoins (however obtained) into fiat currency. But the individual may also leave a trail while engaging in transactions on the blockchain.

    There are existing and rapidly improving techniques to help link those users to their bitcoin addresses and transactions using, among other things, analysis of transaction patterns to make connections among multiple addresses used by the same individual; mining (no pun intended) of data from social media and public sources; and analysis of IP addresses used to conduct transactions.

    As for mixing services, individuals who rely on them are making a leap of faith, trusting that the service won’t cheat them and that the service isn’t keeping records that could be obtained by law enforcement. And of course, the bitcoins you get back from the service could themselves be dirty and be on law enforcement’s radar.

    And here’s the real attribution advantage: the traceability, searchability, and permanence of the blockchain.

    Whether a law enforcement agent identifies the owner of an address tomorrow or two years from tomorrow, the agent will then be able to trace back every transaction involving that address, all the way back to the beginning.

    Moreover, because the ledger is publicly accessible, law enforcement does not have to worry about what type of legal process is required to access the data. And because the ledger is borderless, law enforcement can get the data without having to go through a foreign government. That gives law enforcement the data it needs to "follow the money" in a way that would never be possible with cash.


    And law enforcement’s capabilities in this area will only improve over time, particularly as new analytics tools are developed.

    Of course, innovators are coming up with new ways to increase privacy, whether on the bitcoin blockchain or through other types of cryptocurrencies, so law enforcement will continue to have to evolve and adapt to meet the challenges of new technology.

    Read more: Why Bitcoin is Better for Crime Fighters Than Criminals - CoinDesk
    Eman likes this.
  5. Sector51

    Sector51 Member

    So you mean so-called dark wallets might be illegal or very difficult to create?
  6. So whats the alternative? Whats a better route to go?
  7. Spooby

    Spooby Member

    Why can't LE just hop off our dicks and let us live life? Victimless crimes seen to fill jail cells more than any other. the older I get the more I lean towards anarchy
    KingPin42 likes this.
  8. Millard Baker

    Millard Baker Member

    You can use Bitcoin with a variety of mixing services: third-party centralized services such as Bitcoin Fog, Helix Light and Bitcloak; centralized CoinJoin-based implementations such as DarkWallet and SharedCoin; decentralized CoinJoin-based implementations such as JoinMarket; decentralized mixing protocols such as CoinShuffle; and soon sidechain implementations such as Confidential Transactions.
  9. Dark Wallet says that its still in the Alpha phase and is un=stable and to use at your own risk. Is this a smoke screen or a reality?

    In your opinion, whats the best combination of ways you have a fore mentioned?
    Eman likes this.
  10. Eman

    Eman Member

    I have dark wallet and have been hesitant to utilize it in light of the possible instability of it.
    new to the game likes this.
  11. Millard Baker

    Millard Baker Member

    None of the currently available options are ideal.

    I'm waiting for Confidential Transactions to be released. Then I would say CoinJoin + Confidential Transactions.

    "Confidential Transactions" sidechain element preserves Bitcoin privacy & censorship-resistance

    CoinJoin implementations have had problems in the past (although may have since been resolved):

    Coinjoin And Sharecoin Do Not Provide Anonymity For Bitcoin Transactions

    Furthermore, very few wallets have incorporated Coinjoin solutions. The ones that do - DarkWallet and -- have their own issues to be concerned with.

    JoinMarket sounds very promising but it won't be ready for the masses until bitcoin wallet providers offer support.

    Third-party centralized services like Bitcoin Fog, Helix Light and Bitcloak require that you trust the operators. It could turn into an exit scam at any time.
  12. G.I. Bro

    G.I. Bro Member

    Hopefully CT (Sidechain) is all its cracked up to be. The other services only really offer the illusion of security. That said, loading up on btc through coinbase and making a direct purchase is just asking for your account to be audited and killed for activity. If LE is actually targeting you (unlikely) they're going to isolate your transaction no matter what you used (currently). At the very least, after using a more mainstream service like coinbase to easily purchase btc, transfer some btc to another wallet like blockchain and then make the transaction with that. That's a minimum required step imo.
  13. Tmisatix

    Tmisatix Member Supporter

    Slowly and slowly, we're all losing our privacy. Everything is being bombarded with security now..

    the circle app worries me the most. The fact that it's an app and on a device just seems like a flag. Idk, what would be the best payment, but currently cash in the mail seems like the safest.
    new to the game likes this.
  14. ThE SiCkNeSs

    ThE SiCkNeSs Member

    Dark wallet works fine for me. Hasn't lost my money yet. Just don't let your money linger in it too long.

    Sent from my iPhone using Tapatalk
  15. The more I read and the more I learn...the more I hesitate to do anything. I miss the days of nefarious transfers of goods being done in person with cash...
  16. So in the end, what is better? An ever present trail to you as someone who used a service through bitcoin or using your ID at a western union to send money to some weird foreign name and trying to make up a believable story to the employee as to why you are doing it.
  17. Millard Baker

    Millard Baker Member

    Think of it this way... The Internet is the perfect government surveillance tool. It's also far superior method of transferring/sharing data than anything before it. Just because the former is true doesn't mean it should necessarily be avoided or abandoned. It just means users should take extra steps to protect their anonymity/privacy.

    Similarly, Bitcoin is the perfect government surveillance tool for monitoring financial transactions. It's also a far superior method of transferring/sharing funds than anything else. Just like the Internet, users need to work to protect their anonymity/privacy with Bitcoin.

    Both technologies will/have revolutionized the way things are done. At the end of the day, you'll just need to adapt if anonymity/privacy are important to you.

    There's always the luddite argument but I don't think it's very practical.

    For the record, I think its dangerous territory for most people. People simply suck at protecting their Internet anonymity/privacy out of apathy or ignorance even when confronted with revelations massive government intrusion/surveillance. I have no reason to think the apathy/ignorance won't extend to the lack of effort towards blockchain anonymity/privacy.
    flenser and new to the game like this.

  18. I'd say its lack of information/ignorance and a lack of knowledge of the system that they use and because they do not understand the system or are new to it they dont know enough to know how to protect themselves. I include myself in the "they" haha
  19. Millard Baker

    Millard Baker Member

    BTC transactions are never private. They are ALWAYS public and ALWAYS available for government scrutiny.

    You may benefit from greater anonymity by using a non-US based Bitcoin service since it is much easier for the US to obtain user identity from US-based companies. However, most legitimate BTC services around the world comply with some sort of KYC/AML requirements.

    You should ALWAYS assume that you're anonymity is NOT protected when using any centralized BTC service either in the U.S. or anywhere else in the world.
    Eman and MindlessWork like this.
  20. Millard Baker

    Millard Baker Member

    How can "they" stop it? It shouldn't happen with decentralized and open-source wallet implementations. It will only be stopped if Bitcoin ceases to be Bitcoin.