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ArchivesI owned a BitCoin mining rig, I have done some research on Tor, I understand the distributed nature of BitCoin and I just cannot wrap my head around the recent $1,000,000 Romney tax return extortion. The blackmailers were smart enough to steal some highly coveted documents, but how the hell do they think that BitCoin will help them move the money? BitCoin is distributed and thus all transactions are public record. I can understand small transactions (like those on the silk-road) and the BTC “bank” hacks because no law enforcement will take BTC seriously. If anything BTC only makes it worse because everyone will be watching the blockchain, only law enforcement would be involved in traditional money laundering.
So what the hell, am I missing something or do these people just not understand BitCoin?
Update: Laundry services are not anonymous. I’ve done some real research on strengthening the anonymity of the Tor network and all of the current services are riddled with newbie mistakes (like random timing, etc). Even quants have a hard time getting this stuff right: if a service cannot provide mathematical proof of it’s anonymity guarantee, assume it’s not anonymous at all.
The fundamental flaw with all of theses services is their use of a security model designed for nodes that are unable to coordinate with anyone beyond their immediate neighbors (i. e. Tor). BitCoin’s transactions are all out in the open, each node knows what the other nodes have done. Even if the entire BTC network adopted a mix net, the number of nodes is small enough that a motivated attacker could easily perform a correlation attack.