Subj : Re: Bitcoin's Blockchain : Zero Privacy
To   : warmfuzzy
From : DustCouncil
Date : Thu May 04 2023 03:01:29

 wa> It seems to me that the underground markets such as SilkRoad on TOR (The
 wa> Onion Router) have been using BitCoin without really understanding the
 wa> underlying technology.  If I were to buy some illegal material from one
 wa> of the Darknet's illegal marketplaces, I may think that Bitcoin is
 wa> secure as its called a "crypto-currency."  However, nothing could be
 wa> further from the truth, at least for the most part.  Every transaction
 wa> of Bitcoin is put on a ledger, called the Blockchain.  For *every*

The issue is how people acquire Bitcoin.  Some years ago (2016, I think), I wanted to know:

* Can I register a domain, paying with BTC
* Can I set up virtual hosting, paying with BTC
* Can I do this completely anonymously/pseudonymously

At the time, Bitcoin was the most obvious way to pay for this.  I was able to buy Bitcoin anonymously with cash.  CVS pharmacies had a service where you could pay the cashier cash, and they could somehow wire the equivalent to a service which then worked as a sort of exchange, where it then sent Bitcoin to my wallet.  At no point was any kind of identification provided.

From here, I could connect to the exchange via tor.  

At that point I was able to find a dodgy domain registrar and host in the Cayman Islands which didn't verify registration information and accepted Bitcoin as payment.

In other words, it worked.

The blockchain isn't a weakness; it is to Bitcoin what wetness is to water.  The issue is that you can use the blockchain to trace things back to an exchange, at which point you can then subpoena the exchange for who bought the Bitcoin, or at least, what bank funded the exchange account.

The difficulty at present is finding ways to buy Bitcoin with cash.  The weak link is funding the exchange accounts using identifiable bank accounts.

There used to be a service - don't know if it exists anymore - which allowed you to find people selling Bitcoin in your geographic area.  You'd arrange to meet somewhere, like a Starbucks, and you'd pass the cash over and they'd send Bitcoin to your wallet.

I suppose in this case, as with Bitcoin ATMs, the issue are cameras and whether or not someone can use security footage to somehow tie a Bitcoin purchase to you.

Still, provided you're generating a new wallet address each time you buy Bitcoin in cash, this is probably fairly safe.

Darknet markets have the "last few miles" problem: the post office, or the shipping company.  Either they detect what's in the package, alert police, and the package is watched, or they simply show up at the recipient address and arrest the receiver when they take possession.

The issue is not Bitcoin, but a misunderstanding of how and why Bitcoin can offer a kind of anonymity.  I think a lot of people who use darknet markets don't have a comprehensive understanding of the risks.

That said, I wouldn't use one.

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