[HN Gopher] Chainalysis: A startup that helps governments trace ...
       ___________________________________________________________________
        
       Chainalysis: A startup that helps governments trace crypto
        
       Author : helsinkiandrew
       Score  : 102 points
       Date   : 2022-09-22 12:23 UTC (10 hours ago)
        
 (HTM) web link (www.bloomberg.com)
 (TXT) w3m dump (www.bloomberg.com)
        
       | tb_technical wrote:
       | We will never be free.
        
       | m00dy wrote:
       | Let's see what they can do for Zero-Knowledge proofs.
        
         | atian wrote:
         | Is not a panacea.
        
           | m00dy wrote:
           | that's the foundation of our society 3.0
        
         | xrd wrote:
         | Recent ZK Knowledge podcast recently discussed a lot of this,
         | how you can determine IP addresses inside blockchain
         | transactions, and DDoS, and Chainanalysis usage of IP for KYC.
         | 
         | https://zeroknowledge.fm/246-2/
         | 
         | I'm not clear if the conversation concluded with zk is
         | impervious, or whether it is an active question of research.
        
         | zeroclip wrote:
         | They can't do anything except create harsh regulations for
         | anybody using this kind of math. This is what US is doing and
         | it does work at stripping away user privacy.
        
       | dang wrote:
       | Related:
       | 
       |  _Chainalysis in Action: Justice Dept Demands Forfeiture of 280
       | Crypto Addresses_ - https://news.ycombinator.com/item?id=24306511
       | - Aug 2020 (54 comments)
        
       | GeorgeJIrwin wrote:
        
       | bannedbybros wrote:
        
       | pclmulqdq wrote:
       | As far as I know, the state of crypto privacy is that everything
       | is directly traceable except:
       | 
       | * Bitcoin lightning transactions when the lightning nodes
       | involved are trusted to not keep logs
       | 
       | * Transactions through mixers with a lot of users
       | 
       | * Monero transactions
       | 
       | * Zcash private transactions
       | 
       | And everything is de-facto traceable except:
       | 
       | * Tornado cash users who use standard-size amounts (or users of
       | another equivalently large smart-contract-based mixer)
       | 
       | * Monero users who are careful about their entry/exit
       | 
       | Zcash privacy doesn't have enough users for anonymity, most
       | mixers are too small, and lightning users generally use nodes
       | from exchanges which do log a lot of information that isn't kept
       | on chain.
       | 
       | Am I missing anything? This seems kind of bad for
       | cryptocurrencies in general if everything is basically traceable.
        
         | pcthrowaway wrote:
         | Secret Network has private transactions as well
        
         | olalonde wrote:
         | > Am I missing anything?
         | 
         | Bitcoin transactions that use CoinJoin (e.g. Wasabi Wallet).
         | https://en.bitcoinwiki.org/wiki/CoinJoin
        
           | MerelyMortal wrote:
           | It's been a couple of years, but I thought Chainalysis said
           | they could break CoinJoin.
        
             | olalonde wrote:
             | A 2020 Europol (European Cybercrime Center) report seemed
             | to think it was effective[0]:
             | 
             | > is a very effective decentralised Bitcoin mixer with many
             | privacy-focused options
             | 
             | > provides possibly the most convenient and secure way to
             | mix Bitcoins
             | 
             | [0] https://www.tbstat.com/wp/uploads/2020/06/Europol-
             | Wasabi-Wal...
        
         | acdha wrote:
         | The category of risk I'd add is that a public ledger means you
         | have to also consider the odds of future improvements -- for
         | example, if someone else's data leak contributes some
         | information about a set of transactions[1] or the analysis
         | tools get more sophisticated then people who thought they were
         | secure at the time might turn out not to be. This seems like a
         | fairly risky gamble versus simply not publishing a detailed
         | transaction log.
         | 
         | 1. e.g. what happens if a large exchange's records leak / are
         | subpoenaed, a criminal group being compromised by law
         | enforcement, etc. means that a fair fraction of a mixer's
         | transaction volume at a particular time can be identified,
         | making it easier to focus on the remainder?
        
         | null_object wrote:
         | Genuine question: is there a possibility that Monero is being
         | monitored covertly?
         | 
         | It seems an obvious target to be a Trojan horse in the midst of
         | criminals and tax-evaders.
        
           | cowtools wrote:
           | It is possible but unlikely. It is likely that clearnet use
           | of monero is monitored, for example. But in terms of
           | security, monero users are very cautious. The code has been
           | independently audited, and has generally succeeded where
           | other cryptonote-based cryptocurrencies have taken fatal
           | missteps.
           | 
           | I suspect that most monero black markets are taken down by
           | sting operations. The black markets all have a limited shelf
           | life and these days they tend to intentionally retire before
           | getting "silk-roaded"
        
         | TimJRobinson wrote:
         | aztec.network is a L2 for Ethereum that is private while still
         | allowing interactions with (some) smart contracts on L1. It
         | batches requests to them.
         | 
         | Similar tech to this could become standard on Ethereum L2s in
         | the future after more optimisations.
         | 
         | I'm pretty sure withdraws from Ren darknodes are private as
         | they come from the network itself and aren't correlates to your
         | node.
        
         | zeroclip wrote:
         | Seems about right. More users would use Tornado Cash if
         | regulation was clear and allowed it. Zcash and Monero lack
         | smart contracts which limits their use cases.
         | 
         | ZK based privacy was possible and working fine for many users
         | through TC before the sanctions. Now it is risky as you may end
         | up with locked funds or in jail for seeking privacy.
         | 
         | Edit: Should also mention Aztec and Aleo. These are working
         | currently but in the same position that TC was before its
         | sanctions. Hard to know what regulators will do as these tools
         | allow for absolute privacy which is antithetical to the US
         | government's goals.
        
           | pjc50 wrote:
           | > More users would use Tornado Cash if regulation was clear
           | and allowed it
           | 
           | This is simply not going to happen in the current anti-money-
           | laundering environment. The US made _Switzerland_ give up
           | hiding money, they 're not going to let some random geeks
           | make trillions of dollars vanish.
        
             | TrapLord_Rhodo wrote:
             | >they're not going to let some random geeks make trillions
             | of dollars vanish.
             | 
             | i've heard this sentiment conveyed in the crypto space
             | since 2011... still waiting on this prophecy to come true.
             | 
             | Due to incompetence, profit motive or traitors to their
             | country, who can tell the difference? (Paraphrasing
             | Robespierre here)
        
               | edgyquant wrote:
               | In what way has this not come true? It isn't random geeks
               | getting rich off of crypto anymore it's institutions
        
               | TrapLord_Rhodo wrote:
               | well... these institutions are a bunch of random geeks?
               | Have you ever been to any of the crypto hackathons? From
               | Jump Capital, to Parity It's a bunch of geeks who where
               | obssesed with flipping on the grand exchange in
               | runescape, got into crypto and are now adept at Rust,
               | flipping bots and essoteric coding concepts like
               | "Ownership".
        
             | zeroclip wrote:
             | The blockchain does pose new questions about digital
             | privacy rights. Cryptography that privatizes transactional
             | flow of USDC tokens is indistinguishable from the same
             | cryptography that privatizes transactional flow of digital
             | assets.
             | 
             | Want to purchase an ENS name without corporations and the
             | US government having clear knowledge of it? Too bad, the US
             | government will not allow that. The privacy that we enjoy
             | wish cash purchases will erode as we continue down the path
             | of stripping away privacy in digital transactional systems.
        
               | [deleted]
        
             | notch656a wrote:
             | Didn't US and FATF pressure other nations into giving up
             | 'hiding money' through threats to cut them off from the US
             | or partner financial systems? What happens if some coin and
             | its developers have no interest in being connected to the
             | US financial system -- it seems like then there would be
             | limited ability to influence them and off/on ramps would
             | still exist through criminal networks (and the mere
             | _presence_ of an on /off ramp lends USD/"X" pair value,
             | even if the person using "X" doesn't use the ramp).
        
           | hamiltonians wrote:
           | how would funds be locked
        
             | jl2718 wrote:
             | USDC has a block list in the smart contract. Other
             | possibilities include validator block lists, and of course
             | exchanges.
        
             | zeroclip wrote:
             | Many who had USDC on TC pools have had their assets frozen.
             | Others might have a hard time sending or receiving these
             | assets to typical US-based services because they will be
             | hesitant to touch anything that has been through TC.
        
         | mccorrinall wrote:
         | Can you explain the entry/exit thing of monero? I always
         | thought i'm fine when using monero, but never looked into what
         | ring signatures imply.
        
           | tmoravec wrote:
           | It's about how you purchase and sell it. If you sell Monero
           | for USD on a centralised exchange, they might ask you for
           | your ID, the source of the funds, source of the funds of your
           | source of the funds (really!) and similar.
           | 
           | AFAIK ring signatures hold. It's like a mixer on every
           | transaction so trying to track more than a few transactions
           | back, the complexity explodes.
        
           | pclmulqdq wrote:
           | If you do BTC-XMR-BTC in a specific amount, you can get
           | traced through that. Tornado cash is the same. All the exit
           | points from Monero are non-anonymous, so you need to be
           | careful that you don't enter and exit in ways that can be
           | correlated.
        
             | MerelyMortal wrote:
             | A relatable, simplified, example: If you withdraw $3858.28
             | from a bank under the name Alice, and then deposit $3858.28
             | in a different bank under the name Bob, and those two banks
             | share data, then someone could reasonably say Alice and Bob
             | are connected.
        
           | cowtools wrote:
           | He may be referring to opsec more generally (onramps,
           | offramps), or he may be specificially referring to poisoned
           | output attacks: https://www.youtube.com/watch?v=iABIcsDJKyM
           | 
           | TL;DR Ring signatures, like all sender-obfuscation methods,
           | have a limited anonymity set: it limits you to a pool of
           | possible senders. If Alice frequently sends funds to Bob, who
           | frequently sends funds to Carl, who frequently sends to
           | Alice, she can see that Alice->Bob->Carl->Alice is one
           | possible outcome. She does this because she can trace the
           | coin she associates with Bob to a coin she associates with
           | Carl. There is a ton of plausible deniability at first, but
           | the relationship between Bob and Carl becomes more obvious
           | the more Alice->Bob->Carl->Alice continues to happen.
           | 
           | Alice can be multiple exchanges collaborating using KYC.
           | 
           | How to resist poisoning: limit your risk, churn, bigger ring-
           | size/anonymity set, do atomic swaps (this severs chain of
           | ownership, but is not generally sybil-proof), do multi-output
           | transactions if you are sending to multiple people at once
           | who can co-ordinate (this reduces the number of coins they
           | can co-ordinate).
        
         | hanklazard wrote:
         | A couple of other projects for privacy on ethereum: zk.money
         | and railgun.ch Also dark.fi is a project that aims to produce
         | easy-to-use developer tools for private transactions.
        
           | triyambakam wrote:
           | A doctor that is also interested in privacy and crypto - so
           | interesting. Do you have a blog?
        
         | houstonn wrote:
         | Satoshi's largest error was not making Bitcoin private by
         | default and it strikes me as out of character given his/her
         | level of commitment to being anonymous.
        
           | WHATDOESIT wrote:
           | Perhaps it was a tradeoff they knowingly made to not have it
           | become illegal immediately.
        
             | cowtools wrote:
             | No, it wasn't.
        
               | TrapLord_Rhodo wrote:
               | The BTC core team was highly concerned with the legality
               | of the network due to previous failed currency's (eCash,
               | B-money, Bit Gold, and Hashcash) that ended up driving
               | certain decisions in architecture.
               | 
               | The original btc had a networked pokergame along with the
               | wallet, but was taken out for a couple of reasons,
               | including regulatory issues.
               | 
               | I'm not saying parent is right, or wrong but to dismiss
               | it and to speak for the core team out of hand is folly.
        
               | WHATDOESIT wrote:
               | Please share your reasoning - as the sibling comment
               | mentions, there was a series of high profile online cash
               | cases at the time, KYC being the biggest problem. It'd be
               | weird if they didn't think hard about avoiding the same
               | fate and perhaps this was they way they've chosen.
        
             | rorrim wrote:
             | Nope:
             | https://bitcointalk.org/index.php?topic=770.msg8637#msg8637
        
           | wyre wrote:
           | >Privacy for me, but not for thee
        
           | beauHD wrote:
           | So is it safe to say Monero is a sort of Bitcoin 2.0? I mean
           | if Bitcoin had 'versions' that would be great. Then we
           | wouldn't have to invent entirely new cryptocurrencies, we
           | could just iterate on existing ones, and have our userbase
           | intact without having to 'gain traction' for an entirely new
           | alt-coin.
        
             | cowtools wrote:
             | I suppose the monero userbase has similar attitudes as the
             | early bitcoin userbase, but monero/cryptonote is not a
             | bitcoin fork in the same sense that zcash/zerocoin is.
             | 
             | >we could just iterate on existing ones, and have our
             | userbase intact without having to 'gain traction' for an
             | entirely new alt-coin.
             | 
             | I think there are some fundamental limits to the throughput
             | of a single cryptocurrency due to network latency and
             | bandwidth. Perhaps the solution to scalability is simply to
             | have multiple cryptocurrencies and to facilitate atomic
             | swaps between them. So in this sense, the creation of new
             | cryptocurrencies with minor feature changes (litecoin,
             | bitcoin cash, wownero, cheapeth, etc.) is actually good for
             | network diversity.
             | 
             | That being said, the owners of existing "big"
             | cryptocurrencies will usually want to make changes that
             | increase its usability to compete with these "trivial
             | forks"
             | 
             | Bitcoiners have been soured by the idea of a hard fork
             | since the XT dispute, while the monero userbase has
             | commited itself to regular hard forks every 6 months to
             | upgrade the network.
        
             | grappler wrote:
             | many cryptocurrencies do have 'versions' of a sort. See
             | ethereum's recent one known as "the merge" which moved that
             | currency to a completely different consensus algorithm!
        
             | tromp wrote:
             | No; Monero is not an improved Bitcoin; it just makes
             | different tradeoffs [1].
             | 
             | [1] https://phyro.github.io/grinvestigation/why_grin.html
        
           | imdsm wrote:
           | Bitcoin may not be private but it's pseudonymous, multiple
           | public keys per private key. I think if it had have been
           | private though, it never would have taken off. The
           | transparency and exploitability of blockchains is key to
           | their success. Without Bitcoin & other prominent open source
           | blockchain-based crypto-currencies and crypto-assets, private
           | crypto-currencies and crypto-assets wouldn't stand up.
        
             | cowtools wrote:
             | I couldn't disagree more. Without the silk road, bitcoin
             | would have never taken off. monero has seemingly displaced
             | bitcoin here.
             | 
             | The transparency of the ledger is key to the censorship,
             | control, and abuse of the network.
             | 
             | >open source
             | 
             | Are you implying that the cryptonote/zerocoin projects like
             | monero aren't open source?
        
           | SkyMarshal wrote:
           | I don't recall why that decision was made, but there could be
           | a couple reasons.
           | 
           | First, it isn't easy technically. Especially back when you're
           | designing the very first decentralized cryptocurrency and
           | have no prior experience informing your design. ZCash,
           | Monero, MimbleWimble and others came later after learning
           | from Bitcoin, and there's zero chance they could have come
           | first.
           | 
           | Second, shielded transactions risk undetected inflation bugs,
           | which actually happened to ZCash some years ago.
           | 
           | Third, Bitcoin was designed shortly after the Liberty Dollar
           | founder was arrested and jailed, and everyone in Bitcoin was
           | concerned about that too, including Satoshi. He may have
           | decided just not to push his luck.
        
             | cowtools wrote:
             | Let's not speculate:
             | 
             | https://satoshi.nakamotoinstitute.org/quotes/privacy/
             | 
             | https://bitcointalk.org/index.php?topic=770
             | 
             | It seems like satoshi thought pseudo-anonyminity was
             | sufficient. The integration of zero-knowlege proofs into
             | cryptocurrencies was not really well understood at the
             | time.
        
               | SkyMarshal wrote:
               | Thanks, I knew there were discussions of it back then on
               | bitcointalk and probably bitcoin wizards irc, just not
               | where to find them. The bitcointalk thread seems to
               | confirm #1 - it was just technically difficult to do back
               | then.
        
               | rorrim wrote:
               | Quit it with this revisionist history nonsense, your
               | second link contains where Satoshi specifically mentioned
               | that a ZK-based version of bitcoin would be better, he
               | just didn't know how to do it: https://bitcointalk.org/in
               | dex.php?topic=770.msg8637#msg8637
        
               | SkyMarshal wrote:
               | I wouldn't call it revisionist, he's referencing the
               | source.
        
           | wickoff wrote:
           | He wanted to, but blockspace-efficient privacy cryptography
           | wasn't discovered back then.
        
           | TrapLord_Rhodo wrote:
           | its not an error or oversight but a feature.
           | 
           | Being anonymous to the 'Real world' but carry an identity in
           | the "BTC world". Wallets, mining, interactions are all public
           | within the network and significantly contributed to it's
           | 'Community', 'make btc wallet size go up', and increase
           | account nonce with use.
           | 
           | Early in the community, these metrics where your
           | 'leaderboards'.
           | 
           | BTC never was anonymous, but rather a 'seperate idenitity'.
        
           | earnesti wrote:
           | Dude, he was the inventor of cryptocurrency, did you except
           | him to get everything right at once.
        
             | olalonde wrote:
             | "Alexander Graham Bell's largest error was to not build
             | end-to-end encryption by default in the telephone."
        
         | derangedHorse wrote:
         | When using one's own lightning node it doesn't matter if
         | individual nodes on the path to your destination node keep
         | logs, they can't collect much information besides who the last
         | and next node are in the route. The original and final
         | destination (as well as any other useful payment information)
         | are obscured through onion routing and the information you
         | _can_ learn from traffic analysis is limited and difficult to
         | perform well.
        
           | pclmulqdq wrote:
           | If you use your own lightning node, the other nodes on the
           | path to your destination can still tell which node the
           | information came from, and that can be used to de-anonymize
           | your transaction. If you are the only user of your lightning
           | node, it is trivial for the next person in the chain to
           | attribute transactions to you.
        
       | can16358p wrote:
       | And aren't there any open source tools to do roughly similar
       | analyses?
       | 
       | I'd be surprised if there aren't any. Any large-scale criminal
       | action can be strategically simulated and analyzed on those to
       | make these guys' job harder up to the point that it's no longer
       | feasible for many situations.
       | 
       | (clarification: while I do not support any criminal action, I
       | equally hate government survelliance)
        
         | interleave wrote:
         | I built a tool for myself for Algorand that's (maybe?) somewhat
         | similar to their Reactor offer.
         | 
         | It's called Ballet and it's open source, too!
         | 
         | - Quick demo video: https://www.youtube.com/watch?v=7hnNzSf2-Ak
         | 
         | - Live application: https://alexisrondeau.me/algorand-ballet/
         | 
         | - Github repo: https://github.com/akaalias/algorand-ballet
        
       | frozencell wrote:
       | > Governments
       | 
       | Specifically U.S. and protectorates right?
        
       | drummer wrote:
       | Good luck tracking monero and pirate chain boyzzz
        
       | manholio wrote:
       | This is mostly snake oil, perhaps efficient against the dumbest
       | of criminals. The newer generation coin laundry service, for
       | example Chipmixer, will have pre-funded addresses already waiting
       | in the blockchain before the "client" even makes an account. In
       | exchange for a deposit in a wallet controlled by Chipmixer, the
       | client will receive a set of corresponding private keys that add
       | up to the total value being laundered.
       | 
       | You might trace that the coins went into a laundry, but you will
       | never associate with the previously laundered coins that the
       | client got.
        
       | TobyTheDog123 wrote:
       | >Chainalysis software puts the lie to the idea that Bitcoin
       | guarantees anonymity.
       | 
       | I, for one, am shocked that moving decentralized currency to a
       | centralized service that knows your identity de-anonymizes said
       | currency.
        
         | cowtools wrote:
         | Almost any use of bitcoin will de-anonymize you through some
         | heuristic.
        
           | sampa wrote:
           | Almost.
        
       | Canada wrote:
       | They help anyone who wants to pay trace crypto. Their product is
       | well implemented, and they have skilled and motivated people.
       | There are competitors who offer similar, and in my opinion not as
       | well done, but for considerably money.
       | 
       | I don't like the way any of these companies encourage authorities
       | to impose requirements for KYT, but it's unsurprising.
        
       | wikitopian wrote:
       | I hope the feds hunt down and arrest everybody who used multiple
       | slurp juices on a single ape.
       | 
       | There's XMR, some interesting little projects like DERO, and a
       | vast sea of tokenomic pyramid scheme garbage that governments can
       | and should stop.
        
         | mmastrac wrote:
         | Context for the joke:
         | 
         | https://www.buzzfeednews.com/article/katienotopoulos/you-can...
        
         | Stamp01 wrote:
         | > I hope the feds hunt down and arrest everybody who used
         | multiple slurp juices on a single ape.
         | 
         | Can I get this on a t-shirt? I have no idea what it means, but
         | it sounds amazing.
        
           | easrng wrote:
           | a lotta yall still dont get it. ape holders can use multiple
           | slurp juices on a single ape. so if you have 1 astro ape and
           | 3 slurp juices you can create 3 new apes. tonight's slurp
           | juice mint event is essentially a minting event for both Lab
           | Monkes and Special Forces.
        
       | helsinkiandrew wrote:
       | https://archive.ph/fxWwT
        
       | yieldcrv wrote:
       | > people have the right to financial privacy, but technology
       | shouldn't be "warrant-proof."
       | 
       |  _people_ aren't warrant proof, the government is just used to a
       | brief period of time where they could go to intermediaries
       | instead of doing an actual investigation. this is just a
       | reversion to the mean.
        
       | jqpabc123 wrote:
       | Imagine the outcry if government announced that every transaction
       | you ever do will be recorded in a publicly available database.
       | 
       | Bitcoin as it currently exists will never be a replacement for
       | fiat --- not even close --- for a multitude of reasons.
        
         | vecio wrote:
         | This is a popular layer 2 solution to make Bitcoin anonymous on
         | the public blockchain, already handled more than 30M
         | transactions.
         | https://v2.viewblock.io/mixin/asset/fe6b7788944d328778f98e3e...
        
           | jqpabc123 wrote:
           | https://coingeek.com/bitcoin-mixers-are-illegal-and-
           | anonymit...
        
         | jcbrand wrote:
         | Transactions are moving to layer 2 solutions like the lightning
         | network.
         | 
         | Individual lightning transactions are not recorded on the
         | blockchain and are not subject to chain analysis.
        
           | cowtools wrote:
           | They are not subject to chain analysis, but they are still
           | subject to analysis.
        
             | jejeyyy77 wrote:
             | by that logic, so is every fiat payment processor, bank,
             | what have you.
        
               | cowtools wrote:
               | The privacy characteristics of the lightning network are
               | probably worse than that of the traditional banking
               | system, but this depends on implementations.
        
           | helsinkiandrew wrote:
           | But aren't lightning transactions limited to 0.5 BTC?
        
             | thinkmassive wrote:
             | No, there was a limit in the early days (0.16777215 BTC for
             | channels, 0.04294967 BTC payments) but it's been optimal
             | for about two years.
             | 
             | Direct peers are only limited by channel capacity, and the
             | biggest nodes (exchanges like Bitfinex) keep 5+ BTC public
             | channels (could be much larger unannounced channels).
             | 
             | As far as routing larger payments across the network, the
             | Loop service handles 1.2 BTC swaps today:
             | 
             | https://twitter.com/alexbosworth/status/1570189188091514880
        
           | jqpabc123 wrote:
           | What prevents lightning network operators from making
           | transactions records and details available --- for fun and/or
           | profit?
           | 
           | Better yet, what prevents a lightning network operator from
           | going rogue and draining your account to fund his retirement
           | and then moving to Tonga?
           | 
           | Imagine the outcry if government suddenly announced that all
           | your fiat bank transactions will be routed through small,
           | unregulated 3rd party operators who can do as they see fit
           | with them?
        
             | LN_is_a_scam wrote:
        
             | TimJRobinson wrote:
             | What are you talking about? The lightning network is
             | permissionless, you open channels with other nodes and then
             | you can send funds across them, the other nodes can't take
             | your funds.
             | 
             | Unless you mean signing up with strike or some centralized
             | service in which case the old adage "not your keys not your
             | coins" applies.
        
           | pclmulqdq wrote:
           | Lightning is a lot less untraceable than people think.
           | Settlement payments on a lightning channel are still
           | traceable, and can be matched up. Also, lightning nodes get a
           | lot of information about transactions that they don't publish
           | to the blockchain, and you can bet that most lightning nodes
           | that are around today keep logs. Most of them are run by big
           | crypto companies, several of which are US-based.
        
             | jejeyyy77 wrote:
             | It's not meant to be "untraceable". But it's fast, and as
             | mentioned not a public ledger.
             | 
             | If you want untraceable, you can go out of your way to
             | achieve that using something akin to tornado.cash
             | 
             | I think the point is that the technology is already here
             | and available - it's just not evenly distributed yet.
        
               | pclmulqdq wrote:
               | More people have tried to sell me on the lightning
               | network on the basis that it offers privacy and reduces
               | net transaction fees than on the basis that it offers
               | speed.
        
               | jejeyyy77 wrote:
               | It does all those things to different degrees?
        
             | cowtools wrote:
             | It is quite difficult to compare the obfuscation features
             | of lightning network with that of "conventional" systems
             | like cryptonote-style ring signatures. Consider two
             | different situations:
             | 
             | A) A user picks the economically best peer to open channels
             | with, or chooses peers randomly. Neither of these are sybil
             | proof, which basically means you are transmitting your
             | requests publicly.
             | 
             | B) A user only opens channels privately within a cohort of
             | peers that privately agree not to keep logs, have special
             | means of transmitting requests privately, etc.
             | 
             | I would assume that most users follow some of A's heuristic
             | and some of B's. To the extent that situation B offers
             | privacy, it prevents you from transacting with other users
             | globally in a more general sense.
             | 
             | In other words, it is useful as a privacy mechanism only if
             | you trust your peers not to keep logs, but don't trust them
             | not to double-spend, and also you are not worried about
             | guilt-by-association of owning a channel with these peers.
             | If you were running some sort of dark net market or
             | something, it would be easier to implement some sort of
             | (cryptocurrency-backed?) chaumian cash, as you already
             | implicitly trust the marketplace's sysadmin to some extent
             | (as they can simply MITM your relationships unless you
             | establish them by keypairs out-of-band (this is another
             | sybil problem), which is probably more dangerous than
             | double-spending).
        
         | repomies69 wrote:
         | Most of the transactions with Bitcoin happen offchain,
         | depending of course how you define "transaction". Definition
         | for transaction can be stricter or more lax but for sure it is
         | not only onchain transactions.
         | 
         | For example Bitcoin onchain transactions are routinely compared
         | to Visa network - fairer comparison would also include
         | transactions from lightning network and offchain transactions
         | within services.
        
       | unstatusthequo wrote:
       | Not just governments. I have it and use it.
        
         | guywithahat wrote:
         | Yeah considering in the article he says half of his clients are
         | private sector this seems like a bad title. Maybe they meant
         | because most revenue comes from government? Hard to say
        
       | kache_ wrote:
       | https://en.wikipedia.org/wiki/Ring_signature
       | 
       | sorry, federal government. Keep up
        
         | cowtools wrote:
         | As much as I appreciate the sentiment, ring signatures are not
         | a perfect solution for sender privacy at the moment given
         | current ringsizes.
         | 
         | Almost every cryptocurrency with sender-obfuscation features
         | bumps up against "poisoned output" attacks for low enough
         | anonymity sets: https://www.youtube.com/watch?v=iABIcsDJKyM
         | 
         | But it is good enough for many purposes. The goal is to provide
         | a high level of plausible deniability for the sender.
        
           | gillesjacobs wrote:
           | You'll be glad to hear Monero increased its ring-size from 11
           | to 16 last month making such attacks less feasible.
           | 
           | I sure was.
        
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