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Bitcoin Communications Encryption Government Privacy The Almighty Buck

Dark Wallet Will Make Bitcoin Accessible For All — Except the Feds 206

Posted by timothy
from the why-wouldn't-you-trust-the-feds? dept.
Daniel_Stuckey writes "The group, called UnSystem, are self-proclaimed crypto-anarchists led by Cody Wilson—who you may remember as the creator of the controversial 3D-printed gun. After getting himself in hot water with the government for making the digital files to print an unregulated weapon freely available on the internet, Wilson's now endeavoring to bring Bitcoin back to its anarchist roots. Like other Bitcoin wallets, you'll be able to store, send, and receive coins, and interact with block chain, the Bitcoin public ledger. But Dark Wallet will include extra protections to make sure transactions are secure, anonymous, and hard to trace—including a protocol called "trustless mixing" that combines users' coins together before encoding it into the ledger."
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Dark Wallet Will Make Bitcoin Accessible For All — Except the Feds

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  • Deceased owners (Score:5, Interesting)

    by Anonymous Coward on Friday November 01, 2013 @10:09PM (#45308117)

    Would someone please explain what happens to BitCoins whose owners die without passing on their wallets to successors? Without the necessary passwords, what happens to the BitCoins? Are they removed from the system?

    • Re:Deceased owners (Score:5, Informative)

      by Wonko the Sane (25252) * on Friday November 01, 2013 @10:13PM (#45308147) Journal

      Are they removed from the system?

      No, the just remain in the blockchain as unspent outputs.

    • by kajsocc (2955535)
      They are not removed, but they become inaccessible. It's quite like an encrypted message that you've lost the passphrase to. Everyone can see the coins in the ledger but nobody has the keys to access them.

      (Note that it won't be obvious to everyone else that nobody has the key. It could just as easily be the case that the owner just hasn't made any transactions. They will just sit in the blockchain forever.)
    • Re:Deceased owners (Score:4, Informative)

      by gringer (252588) on Friday November 01, 2013 @10:17PM (#45308171)

      Would someone please explain what happens to BitCoins whose owners die without passing on their wallets to successors?

      Until someone can work out what the password / key is, the bitcoins will be unable to be used by anyone else -- the value of the remaining bitcoins will probably increase. If someone *is* able to work out what that password / key is, then the value of all bitcoins will drop.

    • Re:Deceased owners (Score:5, Interesting)

      by pla (258480) on Friday November 01, 2013 @10:30PM (#45308239) Journal
      Would someone please explain what happens to BitCoins whose owners die without passing on their wallets to successors? Without the necessary passwords, what happens to the BitCoins? Are they removed from the system?

      At present, every 5-10 years, the Bitcoin protocol will necessarily upgrade its encryption an d hashing routines to keep pace with processor (whether CPU or GPU or "other") speeds.

      Dead people will, of course, not ever transfer their balances to the newest version, and as a result, after 10-20 years, their BTC will become trivially crackable.

      You can, therefore, expect an entire community of BTC "grave" robbers to develop, who will, instead of wasting CPU time on mining new blocks, waste it on reclaiming old blocks

      Note as an aside, when you see block-0 spent, you can presume the NSA can easily read your old encrypted email.
      • I've never heard of this. Source?

        As far as I'm aware, once the blocks are found and claimed, the only cryptography that happens in bitcoin is signing messages using your wallet keys.

        Old coins in somebody's derelict wallet won't be in "blocks" either (that would be like saying all of the dollar bills in your wallet automatically gain sequential serial numbers once they become yours.)

        The original bitcoin creators have said that when it becomes necessary, we can collectively decide to increase the number of bi

        • by PRMan (959735)
          I don't see any way the number of Bitcoins could be increased (they don't need to be as they are divisible to 8 decimal places already).
          • by hibiki_r (649814)

            Not increasing the monetary base, and just using appreciation leaves open a huge hole for a deflationary spiral that stops any exchanges from happening.

            Imagine keeping money in your pocket was a good investment, because we had an 8% yearly deflation. You'd need very strong reasons to spend the money. Imagine the problems of loans when not loaning the money at all provides such a great rate of return.

            The only way to get a working economy using the system Bitcoin has would be to have said economy grow extreme

            • Not increasing the monetary base, and just using appreciation leaves open a huge hole for a deflationary spiral that stops any exchanges from happening.

              Heavens, what will we do? (Now grasping at pearls and frantically trying to fan my face.)

              It's almost as if... dare I say it... the economy would be based on value instead of money!

              No, that can't possibly happen. We have to do exactly what we've been doing - anything else would be unthinkable.

              (What you've been taught to believe is not logically consistent. Think it through.)

            • by lxs (131946)

              Food shelter and heat are very strong reasons to spend money, at least they are to me.

          • by gl4ss (559668)

            all you need is to get 50+% of the clients to switch over to your new version with some mechanism or another for added coins.

        • by pla (258480)
          I've never heard of this. Source?

          No real "source" required - If you can spoof an arbitrary SHA256 hash, you can "own" any Bitcoin block you want.

          Over time, the need to future-proof the protocol against that possibility makes for an obvious upgrade path. But until someone moves "their"coins to a new wallet, the security of the original hash they used provides an upper limit to the CPU time needed to steal their coins.

          With current CPUs and algorithms, that amounts to centuries or even millennia. Much
          • Re: (Score:2, Informative)

            No real "source" required - If you can spoof an arbitrary SHA256 hash, you can "own" any Bitcoin block you want. Over time, the need to future-proof the protocol against that possibility makes for an obvious upgrade path.

            In other words, you don't understand SHA256.

            I am a Bitcoin developer and have been for years. Your entire theory is garbage.

            • Re:Deceased owners (Score:4, Interesting)

              by pla (258480) on Saturday November 02, 2013 @10:27AM (#45310881) Journal
              I am a Bitcoin developer and have been for years. Your entire theory is garbage.

              Okay, fellow Bitcoin dev - Explain to me what happens when (not "if") someone can generate a given SHA256 hash, and why that doesn't let an attacker write arbitrary transactions into the block chain?

              Not talking about actually cracking the ECDSA pair here (though that would certainly satisfy my claim, and it too will eventually become possible) - I just mean the ability to spoof the hash on the PaytoPubkeyHash transaction to match the provided PK. Bam, transaction validates, done.

              Or do you base your assertion on merely trusting an NSA-designed hash to remain uncrackable forever? If so, I can't help but notice that not all in the BTC dev community share your optimism, judging by how often the topic "should we switch to SHA3 yet" comes up.
      • Re:Deceased owners (Score:5, Informative)

        by girlintraining (1395911) on Friday November 01, 2013 @11:05PM (#45308429)

        You can, therefore, expect an entire community of BTC "grave" robbers to develop, who will, instead of wasting CPU time on mining new blocks, waste it on reclaiming old blocks

        Actually, that ordinarily would be a problem. However, you're not understanding that bitcoin isn't encrypting anything. It's hashing it. The bitcoin system doesn't protect against seizure and use of bitcoins; it protects against ledger fraud.

        Think of it this way: It will always be hard (hopefully too hard) to undo, invalidate, or duplicate a transaction; The older it is, the more secure it becomes. But let's remove the idea of a bitcoin for the moment and instead say that everyone has a user account in this 'BT' system, and after supplying their login and password, can trade any coins they have with anyone else. Any transaction made is secure; until and unless you lose your password or someone else gets it. Then whatever bitcoins you have are now theirs, the end. But they cannot unspend your coins; they cannot change the transactions. They can only spend what's in your wallet now.

        So these "grave" robbers can't reclaim old blocks... they can only decrypt the wallets the coins are stored in. Assuming they were ever encrypted to begin with.

        The bit coin system is not secured against theft of coins. That's your job (either to steal or to protect)... all it guarantees is that transactions are permanent (and public).

        • The bitcoin system doesn't protect against seizure and use of bitcoins; it protects against ledger fraud.

          So these "grave" robbers can't reclaim old blocks... they can only decrypt the wallets the coins are stored in. Assuming they were ever encrypted to begin with.

          Lets assume for a minute that someone dies and their wallet is destroyed. Cracking the encryption on their *wallet* isn't possible because the wallet has been destroyed. But, their bitcoins still "exist" by virtue of the global ledger showing that they were transferred to that wallet and were never transferred from that wallet to anywhere else. It's just that without that wallet, no one can create new entries on the ledger regarding those coins.

          [Many years pass.]

          So now, with enough computational grunt, y

          • by trout007 (975317)

            I don't think you are correct. A bitcoin address has an associated public and private key. The hashing algorithm is a part of the standard. So someone could theoretically take a bitcoin address on the block chain and try to brute force solve for the private key. Right now it costs more to break than to generate a new coin so why do it? Also in the future the encryption will get more difficult. Finally you can always break up the amount you store in any address which makes it not cost effective to break.

  • Hasn't the trend with government agencies *especially* the NSA been to more closely track those who act like they have something to hide. Frankly, such a disposition on the part of the NSA is reasonable and shows to me the taxpayer that they are at least trying to do their job, even if the methods aren't reasonable for the average or the peoples of interest.
    • by sI4shd0rk (3402769) on Friday November 01, 2013 @10:46PM (#45308321)

      Frankly, such a disposition on the part of the NSA is reasonable

      I don't think government thugs harassing people is at all "reasonable."

    • by Bob9113 (14996)

      Frankly, such a disposition on the part of the NSA is reasonable and shows to me the taxpayer that they are at least trying to do their job, even if the methods aren't reasonable for the average or the peoples of interest.

      Similarly, understanding the development of the human genome, it is reasonable for 22 year olds to want to sleep with 17 year olds. Being good members of society, however, they do not. It is that restraint of our baser instincts in service of the common good that elevates us above the anim

      • Being good members of society, however, they do not.

        How does that make one a "good" member of society? Abiding by silly, arbitrary rules automatically makes you "good"?

        The NSA is garbage, however.

        • by dbIII (701233)
          The example given didn't look arbitrary to me. Get a teenage girl pregnant and that drasticly changes the options of how she's going to live her life, especially if the guy who got her pregnant is not in any sort of position to support her. It's human nature for 14 year old girls to flirt with older guys they think are cool without thinking much about it or consequences. What makes the older guy a "good member of society" is making sure they think about consequences and not let things escalate. I'm pret
          • Get a teenage girl pregnant and that drasticly changes the options of how she's going to live her life

            You mentioned nothing of pregnancy, and the same is true for people above 17. The mere fact that you sleep with someone does not mean they're going to get pregnant; there are ways to prevent that from happening.

            You don't go around fucking what society sees as children without fucking up their lives if society finds out what that child was doing.

            Society has many arbitrary, illogical rules. And by the way you made that sound, it's society that fucks up the lives of the 'children,' not the sex.

            I don't care what anyone says; it's not as if people below 18 are innocent little snowflakes and that it's magically 'wrong' to have sexual intercourse

  • by MRe_nl (306212) on Friday November 01, 2013 @10:28PM (#45308227)

    Cash In Advance.

    Secure, anonymous, and hard to trace - including a protocol called "trustless mixing" that combines users' coins together.

  • Bad news. (Score:5, Interesting)

    by girlintraining (1395911) on Friday November 01, 2013 @10:54PM (#45308361)

    including a protocol called "trustless mixing" that combines users' coins together before encoding it into the ledger."

    I got some bad news; The Silk Road tried the same thing. It failed. But I mean, whadda expect... the government likes getting paid. Kindof a lot. And so they have entire divisions of the government setup to make sure they can track down people who try to hide money from them and, well, make them pay.

    But for the moment, let's ignore all that. Some crypto-anarchist hacked something together over the course of a few weekends and that's all solved. Great!

    Next question: The NSA is evil and watching everything, except of course this, which is totally impregnable and would be pretty much the terrorist currency of choice... what compelling moral, ethical, or technical arguments can you provide that dropping my "money" into a e-blender and setting it to frappe will result in delicious privacy juices coming out in the same quantity as I put in, and is totally resistant to attack? I've learned in security that you can get either tamper-evident, or tamper-resistant... but trying to get both is enormously difficult. So I really, well and truly, want to know how you plan on having the necessary robust auditing and controls necessary to ensure that transactions are fair and correctly executed, while at the same time dropping the ledgers into your e-blender... while trusting the now-anonymized agents utilizing such a thing not to find some way to exploit the system... using the system itself to cover their tracks?

    • by PRMan (959735)
      The obvious answer is that it will result in the Feds seizing the entire account just like they did at Silk Road. Anyone who puts their coins into such a mixer is not very smart.
    • by kajsocc (2955535)

      So I really, well and truly, want to know how you plan on...

      Supposedly, like this [bitcointalk.org]. It has its limitations, of course, but it's pretty neat.

      The Silk Road tried the same thing. It failed.

      Silk Road allegedly mixed some coins but, also allegedly, did so poorly. Not surprising given the amounts it was trying to mix. It did not, afaik, use the coinjoin method linked above. Also, the founder wasn't tracked down due to coin mixing or lack thereof anyway.

      • Silk Road allegedly mixed some coins but, also allegedly, did so poorly. Not surprising given the amounts it was trying to mix. It did not, afaik, use the coinjoin method linked above. Also, the founder wasn't tracked down due to coin mixing or lack thereof anyway.

        More to the point.. coin mixing did not prevent the Feds from identifying thousands of people who used the service and were able to match realworld transactions to their bitcoin equivalents. In fact, from what I can tell... it wasn't much more than a slight irritation to their forensic accountants.

        The fact is that crypto-anarchists may be very good at code, but they're very bad at high level analysis. You (and the crypto people too) need to understand that if you take a hundred people, walk them into a room

    • by gman003 (1693318)

      Silk Road failed through secondary methods. The actual mechanism was solid, it's just that DPR was sloppy while setting it up, enabling regular investigative work to find him. I will note that we haven't heard of Silk Road clients being arrested en masse, which means they probably haven't been able to track down many of them. They caught the operator, shut down the site, and seized a large amount of money, but the fact that they haven't been arresting left and right the drug dealers who used it means they a

      • by drinkypoo (153816)

        I will note that we haven't heard of Silk Road clients being arrested en masse, which means they probably haven't been able to track down many of them.

        You're making at least two mistakes. The first is believing that the government really cares about tracking these guys down. That's not the case. They would like to track down enough of them to look like they care. The second mistake is believing that they work that fast. They don't. They work inexorably, but slowly, dire need aside.

    • by Agent ME (1411269)

      The Silk Road tried the same thing. It failed.

      The Silk Road didn't do trustless mixing. They did run a mixing service, though it was successful at that. DPR got caught because he advertised The Silk Road on an account that was publicly linked to his personal email address that had his full name in it.

  • by F34nor (321515) on Friday November 01, 2013 @11:01PM (#45308401)

    Or use your real name in the Word file metadata that you attach... I love it when smart people do dumb things.

  • by dbIII (701233) on Saturday November 02, 2013 @12:45AM (#45308993)
    So after trying to fuck up 3D printing by attracting the attention of law enforcement to the possibility of making guns from something with inferior mechanical properties for that purpose than most types of wood, he's trying to get their attention with bitcoin?

    How much attention should we really be expending on this guy? Is he just an attention seeker? He obviously knew fuckall about guns or 3D printing, how much does he know about the bitcoin pyramid scam? Does he even spot it as a scam or does he really think it's the fictional currency from Cryptonomicon come to life?
  • by Animats (122034) on Saturday November 02, 2013 @12:58AM (#45309039) Homepage

    There's been a huge change in the Bitcoin world recently. There are now exchanges in China where you can buy Bitcoins for yuan very easily. This is a big deal, because exchanging yuan for other currencies is tightly restricted by the Peoples Bank of China via the State Administration of Exchange Control. Bitcoin provides a way around those restrictions.

    This has caused a huge run-up in the price of Bitcoins. That could change at any moment if the People's Bank of China issues "guidance" on Bitcoin. There are comments from Bitcoin users in China that the acceptance of Bitcoins by a small subunit of Baidu was incorrectly interpreted as a signal from the government of China that buying Bitcoins was now OK.

    "The mountains are high and the Emperor is far away."

    • by wvmarle (1070040)

      "The mountains are high and the Emperor is far away."

      That's a saying typically heard in Guangdong. Didn't know Baidu is from there. I do know there are for a long time already plenty of "underground banks" (more accurately: money exchangers) that make moving money between the mainland and Hong Kong fairly easy. And that's from well before Bitcoin made it possibly even easier.

      However the fact that the is quite little liquidity in bitcoin (as proven by the volatile price) means that this bitcoin channel has highly limited capacity.

    • by greg_barton (5551)

      Right. China is sure to be fair and even handed when dealing with bitcoin...

  • The service is accessible to everyone. Federal agents are people. The service is accessible to federal agents.
  • by prefec2 (875483)

    It looks like many of the slashdotters have a problem with the federal state or states in general. They are seen as an unnecessary obstacle to freedom. They seek freedom as in anarchy where there is no government and of course no rules. You could state that people could still agree on rules, but in any case these rules deteriorate over time, as some people do not follow them. Furthermore, rules are not really part of an anarchy. Therefore, losing them is not a problem. But the end would be very unorganized.

    • What don't you understand? The state can ask for taxes in the state currency. I can keep track of my finances, and pay them. Regardless of what currency or investment my wealth is in. This is the current system. Bitcoin changes nothing. True, the government needs to trust me to file my taxes honestly, but that isn't any different than currently. Audits Exist.

      Now, the main problem I have with states and governments in general is that they're fucking bogus! Seriously. No Scientist would agree to be

      • by mellyra (2676159)

        Seriously. No Scientist would agree to be ruled the way governments want to rule: Let's just roll out some country wide plan with zero evidence it'll be successful based on the speculations of ideologues?! Fuck That! Get me a government that incrementally rolls out changes and evaluates the effects at each stage, making adjustments or halting if detrimental. Get me some Scientists and Engineers in power. Then you'll have a legitimate government. Until then, the government is NOT BENEFICIAL. Any who posit otherwise: PROVE IT. Oh, that would require applying science? EXACTLY.

        Beneficial to whom? to the largest number of citizens? to the median citizen? to those who are worst off (Rawls)? ...

        Already you are talking ideology - unless you stick to strict Pareto improvements which will not allow you to take any actions in the real world.

        Once you allow for trade-offs ("this guy is worse off, but those guys are better off and they clearly outweigh his loss of utility") you enter ideological hell as there is no sound basis for comparing utility between persons. Public economics likes t

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