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Bitcoin Encryption Privacy The Almighty Buck

Researcher Spots a Drug Buy In Bitcoin's Blockchain 78

Posted by timothy
from the press-one-if-you-have-used-our-system-before dept.
Sparrowvsrevolution writes "It should come as no surprise to Bitcoin users that despite the pseudonymity the cryptocurrency offers, its transactions can be tracked. But University of California at San Diego researcher Sarah Meiklejohn proved that privacy problem more clearly than ever by showing a reporter that she could detect a specific point in Bitcoin's blockchain record of transactions where he had spent Bitcoins in exchange for marijuana on the Silk Road, the most popular online Bitcoin-based black market for drugs. To simulate a law enforcement subpoena, the reporter for Forbes began by giving Meiklejohn a Bitcoin address associated with Forbes' account. But with just that information, Meiklejohn was able to draw on a "clustering" analysis she had performed to identify Silk Road addresses and match them with the one used in the .3 BTC drug buy. She admits that a user who took more efforts to obscure his or her Bitcoin address through a laundering service or other unidentified Bitcoin wallets would be harder to track."
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Researcher Spots a Drug Buy In Bitcoin's Blockchain

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  • New addresses (Score:5, Interesting)

    by vvaduva (859950) on Monday September 09, 2013 @08:47AM (#44796285)

    Just generate a new address whenever you buy illegal things if that's what you are into, or have several wallets that you rotate between to perform your transactions. If you reuse an address over and over again, of course you can be tracked. The safety factor is directly proportional with your ability to understand how this works and how you can be tracked

  • Re:huh? (Score:4, Interesting)

    by Trax3001BBS (2368736) on Monday September 09, 2013 @09:05AM (#44796431) Homepage Journal

    He knew the exact time he made the transaction. He knew the amount. He knew other details.

    So, really, wtf?

    I am not going to read the article. This is some sort of fear mongering.

    Ya stupid article (I didn't read it either). They purchase something safe like marijuana then have the balls to say they purchased drugs.
    Buy some Adderall I've seen lots of that for sale on the silk road.

  • Harder to track? (Score:2, Interesting)

    by dindi (78034) on Monday September 09, 2013 @10:11AM (#44797003) Homepage

    So, you use TOR (I know, NSA yada-yada, just use the latest source and compile yourself ) over a VPN you bought with bitcoins anonymously, with a freshly opened google/yahoo/riseup/whatever account for the store/market/service...

    You use your gaming machine to run for a few days to generate the 0.3 BTC/LTC/whatever coin. You run your miner over tor/vpn/i2p through a service that doesn't need a signup.

    You create a new wallet and you make one transaction.. over VPN (or VPNs and TOR and/or i2p)

    They will see the transaction, but the user will be untraceable..... you can create a new wallet for every buy so a new send address is guaranteed, just move the blockchain (8 gigs) over or mount them over a share.....

    No link to financial info, no link to real identity, no link to IP address of physical location. No previous transaction to look at...

    Of course, if you are ordering drugs to your home address, then why even bother doing the above... if you just want to buy something privately (e.g. digital goods or services) then you are pretty safe (and paranoid following the above)...

    It is like the "NSA can copy your phone contents" .. well, maybe you are using the wrong phone.... email ? probably you shouldn't use gmail/yahoo with your creditcard info and home address there... oh, and force your retarded friends and relatives to install GPG ... how about that for a start :O

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